Innovative Financing of Energy Connections for Low-Income Households in Rural Senegal

Electricity is essential for development, particularly in rural areas where irrigation is integral for agriculture. However, Senegal’s rural electrification rate remains at 35 percent. Past rural electrification projects have made progress, but the cost to connect has been a barrier for customers. Despite the general improvements in financial inclusion, gaps remain for women, youth, and rural communities. There are issues around access to financial services in rural areas, as the distribution of financial services tends to be concentrated in urban areas.

In this project, the SIPA workshop team worked with the UN Capital Development Fund (UNCDF) regional offices in Bangkok and Dakar as part of a wider study that UNCDF is conducting for the Millennium Challenge Corporation (MCC). The study explores how access to electricity finance in five rural regions of Senegal can best be leveraged to increase access to grid electricity and electric equipment for women and youth.  The SIPA team’s methodology included literature review, expert interviews, and analysis to create a summary of best practices on innovative financing mechanisms for rural electrification. The team also utilized a human-centered design approach called “designing for extremes,” through the use of fictional personas, which helps to assess how different electricity financing models might suit different customers and their potential electricity demand needs in rural Senegal.