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PayGo Energy: Cooking on Your Terms

Posted 16th January 2017

Following a $230,000 debt investment from the Global Innovation Fund, PayGo Energy is expanding its customer base in Nairobi to test and improve its technology, service delivery and distribution networks. PayGo’s smart metering systems enable customers to pre-pay for clean cooking gas, by monitoring customer gas consumption and predicting when gas is going to run out. This allows PayGo to provide an uninterrupted supply of affordable, clean gas to its customers.

There’s a Kenyan saying which goes something like “you can’t scratch an itch you can’t reach.”

It’s an adage which resonates with many low-income households across the country, for whom affordable access to safe cooking fuel is a remote prospect. For many families it is a fact of life that a large proportion of household income (around $0.50 a day) must be spent on purchasing small quantities of fuel that can be safely stored and used for cooking, heating and lighting. For this customer segment, the accessible fuels are charcoal and kerosene. These are popular for their easy access and low price, but also strongly associated with fumes, slow cooking and health risks such as burns, respiratory diseases and cataracts.

The PayGo model

So what is stopping low-income households from adopting clean gas such as Liquefied Petroleum Gas (LPG) as their primary source of cooking fuel?

More than anything else, people are priced out of making the switch due to the high upfront and recurring costs of adopting clean fuel. Whether it is the cost of the stove, the deposit required on a full gas cylinder or the cost of refilling a cylinder when it empties, many people have little option other than to settle for harmful and less environmentally friendly fuels.

PayGo Energy’s model tackles this problem at its core.

We have developed a smart metering system that enables customers to prepay for clean cooking gas based on their disposable income at the time, and with the added convenience that payments can be made using mobile money (Kenya is a frontrunner when it comes to the dispersion of mobile money, which allows anyone with a phone to transfer small or large amounts of money at the click of a button).

Our smart meters monitor customers’ gas consumption, and are able to predict when gas is running out based on usage patterns. This, combined with customer intelligence and smart logistics, enables us to tackle last-mile delivery challenges as well as to an uninterrupted supply of affordable gas an option for households that currently can only choose for dirty fuels.

Our mission is to unlock clean energy for the 2.9 billion people worldwide who have to resort to dirty fuels. By adopting LPG as their main fuel source, not only are households choosing better health for themselves as well as fast and affordable cooking – they are also helping to reduce harmful emissions that can lead to illness and environmental degradation.

GIF’s investment will enable product development and testing with 100 household customers in Nairobi. Ultimately, our ambition is to develop a service – for and with our customers – that will grow to provide clean cooking energy for billions of people across the world.