In Papua New Guinea (PNG) over 80% of the population don’t have access to grid electricity.

This means that people turn to expensive, unreliable and unsustainable energy sources for their everyday needs. Without access to electricity people can really suffer; children are unable to do their homework, business owners can only operate during daylight hours, and people have to spend longer completing household tasks. That’s why SDG 7 aims to ensure access to affordable, reliable and environmentally friendly energy for all.

SolaPayGo, an off-grid energy start-up which received funding from UNCDF’s Pacific Financial Inclusion Programme in August 2019, are tackling this problem by providing affordable and durable energy solutions. Since launching they have supplied 3,100 customers with pay-as-you-go, or PAYGO, solar power kits to light up homes and small businesses. The kits contain solar panels, lights, a mobile charging bank and a torch or radio.

These customers show the difference that a reliable source of electricity can make to people’s ability to make a living; one customer uses his power kit to increase chicken production, to light a snooker hall and to have longer opening hours for his store. But PAYGO solar energy not only enhances people’s ability to earn but also may lead them to access digital financial services for the first time.

Why pay-as-you-go?

Solar power kits give people access to clean energy in remote and rural areas which aren’t connected to the electricity grid. But these power kits are too expensive for many of these customers. By using a pay-as-you-go model SolaPayGo can lease kits to customers who pay towards ownership of the kit in installments which provides them with energy access at the same time. Once customers reach the end of the lease, if they have made payments throughout, they own the kit. Already more than half of the 3,100 of SolaPayGo’s customers have successfully paid off their kits and most of the remaining customers are still making regular payments.

What are the challenges?

PNG is one of the least densely populated countries in the world, with some 87% of people living in rural areas. It’s those rural people who most commonly don’t have a connection to the electricity grid and who are, therefore, SolaPayGo’s target customers. This is SolaPayGo’s main challenge; the customers who are most in need of their solution are the most difficult to reach.

Partnerships are key to overcoming this challenge. PFIP supported MiBank with the integration of a PAYGO solution with their mobile money account in 2017. SolaPayGo and MiBank have collaborated to offer loans to buy the kits which can then be paid off through MiBank’s mobile money account. Since then they have also brokered a partnership with BSP, who will offer top-up tokens for the kits through their mobile money platform.

How does PAYGO solar energy lead to financial inclusion?

PAYGO solar energy gives people a reason to begin and continue using digital financial services. As they need to continue making regular payments they become used to the mobile money platforms. SolaPayGo have also invested heavily in on-the-ground staff who conduct ‘roadshows’, explaining both their products and the methods of paying for them in-person. This helps to onboard people who may otherwise have trouble engaging with digital financial services. Recent research by UNCDF indicated how important this might be; over half of survey respondents in PNG said that they didn’t know what a mobile money agent was, and some reported not engaging with mobile money and microinsurance as they did not understand it.

What’s next?

Over the next four years SolaPayGo aim to supply 10,000 solar power kits throughout PNG. The knock-on effect of reliable energy means that the owners of those 10,000 kits will be able to improve their livelihoods and may well access formal financial services for the first time. By bringing Papua New Guineans clean power SolaPayGo hope to have an exponential impact on their lives; as Marge Tekwie, their Operations Manager, says “Light is an essential utility of any household or business; a necessity for families, communities, or individuals, wanting to improve their quality of life.”