Learning

Reinvigorating the ‘second wave’ PAYG sector

man displaying solar unit to sat down audience in Africa

The Pay-as-you-go (PAYG) sector will be a critical component of reaching SDG7 – and requires appropriately-funded commercial enterprises to open entire new consumer markets.

In this new report, SF and Persistent present learnings from their experience in venture building PAYG companies in multiple African markets, including a case study from SolarWorks! in Mozambique, where 20 million people live without access to electricity.

The report offers six lessons for why growth of PAYG companies has slowed since an initial first wave, before offering five recommendations for so-called ‘second wave’ companies on how to bridge the funding gap and grow sustainably:

  • Building distribution networks
  • Addressing customer habits
  • Controlling overhead costs
  • Reinventing the wheel
  • Raising capital

Persistent estimates needs of second-wave companies to be in the range of $3-5bn in equity, debt and other support over the next five years, and call on the donor and impact investor community to redouble its efforts to bring this sector to commercial scale.

Read the report [pdf, 256kb]