Powering healthcare: What we learned about financing healthcare electrification in Kenya

Sandhu Khushneet, Betty Syanda

SECTOR

Inclusive finance | Health

PROJECT TYPE

Qualitative & quantitative research

DOI

https://doi.org/10.62372/TNNE9132

Location

Kenya

BEHAVIORAL THEME

Blended Finance | Healthcare Electrification

OVERVIEW

This Groundwork builds on Busara Groundwork No. 28 by testing whether the financing barriers identified in the literature are reflected in the lived experiences of healthcare facilities, energy providers, financial institutions, and donors in Kenya. Through primary research across four stakeholder groups, the study finds that healthcare electrification is constrained less by demand, technology, or credit performance than by how capital is structured, risk is perceived, and financing actors are coordinated. It reframes healthcare electrification as a coordination and financing design challenge, offering practical recommendations for unlocking investment and scaling reliable energy access for primary healthcare facilities.

Research Questions

What financing barriers prevent private primary healthcare facilities in Kenya from adopting reliable electricity solutions?
Do the assumptions identified in Busara Groundwork No. 28 accurately reflect the realities experienced by healthcare facilities, energy providers, financial institutions, and donors?
How do different stakeholders perceive and allocate financial risk within the healthcare electrification market?
What financing models and market interventions could unlock investment and accelerate healthcare electrification in Kenya?

Methods

The study combined updated secondary research with qualitative and quantitative primary research conducted between November 2024 and November 2025. Researchers conducted 46 semi-structured interviews and 37 structured surveys with private primary healthcare facilities, Energy-as-a-Service (EaaS) providers, local financial institutions, and donors across three counties in Kenya. Findings from the different stakeholder groups were synthesized to diagnose market-wide financing constraints and identify opportunities for system-level intervention.

THEMATIC AREAS

Key Findings

The main constraint to healthcare electrification is not demand, technology, or repayment behavior, but the way capital and risk are structured across the market.
94% of healthcare facilities are willing to adopt solar, but most can only pay 10-30% upfront, while providers typically require 51-70% deposits.
Local financial institutions perceive the sector as high risk despite healthcare lending performing similarly to their broader loan portfolios.
Energy providers remain dependent on upfront CAPEX sales because affordable debt and enabling conditions for service-based financing are largely absent.
Donor funding is available but often targets projects that are too large for fragmented, facility-level demand.
Weak coordination between facilities, financiers, providers, and donors creates a self-reinforcing cycle that prevents market growth.
The study identifies the deposit gap, risk perception, data infrastructure, and capital structure as the most actionable barriers to scaling healthcare electrification.
Gender exclusion is structural, with women largely absent from ownership, governance, and financing relationships across the healthcare electrification ecosystem.

Implications for Policy or Development

Financing solutions should prioritize closing the healthcare facility deposit gap through blended finance and concessional capital.
Governments, donors, and financial institutions should improve risk-sharing mechanisms and develop standardized frameworks for assessing healthcare lending.
Building shared data infrastructure and performance monitoring systems is essential for scaling results-based financing and attracting private capital.
Market interventions should focus on coordination across stakeholders rather than isolated financing products.
Long-term financing models must account for operations, maintenance, and system performance, not just installation costs.
Gender inclusion should be embedded into financing design by addressing structural barriers to ownership, governance, and access to capital.