The Road to Zero Interest

The potential role of concessional consumer financing in energy access.

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Concessional consumer financing (CCF) is a public funding mechanism used to address affordability through offering zero or low-interest loans to end-users, often over extended repayment periods. CCF has a long track record in the energy sector in the Global North but has not been widely deployed in the Global South. The report identifies a range of CCF delivery models which could be adopted in energy access settings and positions CCF as a potential new tool in the toolbox of public funding interventions. The report is for governments, aid agencies, foundations and programme implementers interested in exploring how CCF can be used to overcome affordability constraints and help to achieve Sustainable Development Goal 7 (SDG7).

The report evaluates different CCF models to provide affordable access to finance for people with low incomes to purchase energy efficient products. The CCF models explored in the report include financing through energy service providers – including utilities, mini-grid developers and pay-as-you-go (PAYG) companies, and financing through third parties – including development banks, microfinance institutions and non-profit organisations.