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Shedding (sun)light on risks: Perceived risks and access to finance on the off-grid solar market in Kenya
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2018 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

The market for off-grid solar solutions in Kenya has developed rapidly the recent years. The

growth has required capital and access to finance, which has been mainly provided by foreign

investors. This thesis examines the perceived risks on the market for off-grid solar solutions in

Kenya through a series of interviews with actors engaged in the market. The purpose of the

thesis is to investigate the access to capital and highlight the perceived risks that might

constrain a continued positive development of the market in Kenya.

The findings of this thesis categorize the perceived risks on the market as political, economic,

social, technological, legal and environmental (see full report table 2 in section 8 for sub

categories). The companies engaged in the market for off-grid solar solutions should be

differentiated based on their business model. This since their different value chains entails

specific in risks. This study uses two modified value chains to highlight the differences in

retail and distribution between the two defined market segments: product and utility. The

product segment includes small-scale solar products often referred to as PICO-products and

Solar-Home-Systems (SHS), which by being sold on installment now provides basic

electricity to a growing number of people in Kenya. The utility segment includes minigrids

with solar energy as power supply. This segment is subject to specific regulations regarding

installations and operations, which is one of the main contributing factors to the difference in

risks compared to the product segment. The other main factor is the way the respective

segment distributes and retails their products/electricity. The distribution for the product

segment is done by regular land transportation and customer interaction through sales agents,

providing basic access to electricity. While the minigrids uses a local distribution grid to

provide access to electricity. This leads to specific risks within the categorizes social,

technological and legal risk.

This study shows that the lack of understanding of the different market segments and their

context specific risks, pose a risk to the market reputation and the local actors access to

finance. The absence of knowledge about the difference in risks causes generalizations to be

done, both from financiers who might place their funding elsewhere, and the customers who

might choose other solutions than solar to fulfill their energy needs. The uncertainty of the

future development and the position of the national regulations on the market together with

the two segments creates barriers for future access to finance. Access that is required to build

and boost the market even further.

Place, publisher, year, edition, pages
2018.
Keywords [en]
Off-grid Market, Renewable Energy Finance, Perceived Risks, Solar Technology, Risk
National Category
Social Sciences
Identifiers
URN: urn:nbn:se:uu:diva-356339OAI: oai:DiVA.org:uu-356339DiVA, id: diva2:1236851
Subject / course
Business Studies
Educational program
Systems in Technology and Society Programme
Supervisors
Available from: 2018-08-07 Created: 2018-08-06 Last updated: 2018-08-07Bibliographically approved

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CiteExportLink to record
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