What do clinics in Africa need to access reliable electricity?

Khushneet Sandhu, Betty Syanda, James Ogada, Amrita Singh, Morgan Tompkins

SECTOR

Inclusive Finance

PROJECT TYPE

Mixed-methods sequential design

DOI

https://doi.org/10.62372/SGNP3674

Location

Kenya

BEHAVIORAL THEME

Risk perception, financial decision making

OVERVIEW

This Aha! Moment examines what private healthcare clinics in Africa need to access reliable electricity and the financing barriers that prevent Energy-as-a-Service models from scaling. Drawing on research with healthcare facilities, energy service providers, local financial institutions, and donor organizations in Kenya, the study finds that the key constraints are the upfront deposit gap, risk perceptions, and market structures that prevent affordable capital from reaching healthcare facilities. The findings point to blended finance combining concessional capital, guarantees, and affordable financing as a pathway to expand reliable electricity access for healthcare clinics.

Research Questions

What do private healthcare clinics in Africa need to access reliable electricity?
What financing barriers constrain the adoption of reliable electricity solutions by healthcare facilities?
How do healthcare facilities, energy service providers, financial institutions, and donors perceive and respond to the financing and risk barriers?
What financing mechanisms could enable Energy-as-a-Service models to scale?

Methods

The study used a mixed-methods sequential design, grounded in an updated secondary literature review. Between November 2024 and November 2025, researchers conducted 46 semi-structured interviews with key stakeholders to understand how adoption and financing decisions are made, followed by structured quantitative micro-surveys with 37 respondents to quantify adoption barriers, financing requirements, and guarantee preferences. The research covered Siaya, Kajiado, and Makueni counties in Kenya.

THEMATIC AREAS

Key Findings

The deposit gap is real but can be closed. Healthcare facilities can mobilize 10–30% of system costs, while providers require 51–70% upfront, creating a substantial financing gap.
The deposit gap is linked to provider capitalization constraints. Most providers fund growth through equity at costs above 12% and structure deals as capital sales, requiring them to recover investment immediately.
Lenders perceive risk because standardized frameworks do not exist. Default rates match lenders’ broader portfolios, yet 75% of lenders demand guarantee coverage above 76%.
57% of lenders price facility revenue case-by-case, reinforcing perceptions that healthcare reimbursement is unpredictable.
Financing barriers are interconnected: facilities cannot meet deposits, providers cannot scale, lenders remain outside the market, providers cannot access affordable debt, and donor capital targeting deals above USD 2 million struggles to find suitable channels.
The research concludes that the risk is manageable, but the market structure prevents capital from flowing where it is needed.

Implications for Policy or Development

For donors and DFIs: Provide concessional capital, deposit grants, equipment credit lines, and first-loss protection, while matching funding sizes to facility needs.
For policymakers: Create standardized frameworks for revenue treatment in collaboration with lenders. The study suggests this could shift lending appetite more cost-effectively than large guarantees.
For local financial institutions and EaaS providers: Share performance data and embed standardized monitoring in contracts to reveal actual risk and enable better underwriting.
For healthcare facilities: Form aggregations and coordinate maintenance planning to make portfolios investable and protect system performance.
Future research should examine which aggregation structures are feasible at scale, how data infrastructure, capital instruments, and results-based financing can be sequenced, and how to build a stronger pipeline of women-led enterprises.

How to Cite: Busara. 2026. What do clinics in Africa need to access reliable electricity? (The aha! moment No. 38). Nairobi: Busara. DOI: doi.org/10.62372/SGNP3674