Global Partnerships Invests $100,000 in PayGo Energy

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The Global Partnerships/Eleos Social Venture Fund (SVF) has made a seed investment of $100,000 in PayGo Energy based in Nairobi, Kenya. PayGo Energy is a distribution service that provides an affordable supply of clean cooking fuel to homes in East Africa.


Urban households living at the base of the pyramid spend a relatively large amount of income ($0.50/day) on ‘dirty’ fuels like charcoal that expose households to health and safety risks, and are currently priced out of Liquefied Petroleum Gas (LPG) market.


This impact investment is the first in GP’s new Cookstoves investment initiative, which is designed to enable low income clients to access clean and affordable stoves and fuel for cooking. 500 million families in developing countries face serious health risks by the pollution from traditional cooking methods. Each year, 4.3 million people die from inhaling indoor air pollution. Collecting and using traditional cooking fuels like wood and charcoal are inefficient and can be the single largest household expenditure.


“We began our engagement with PayGo Energy over a year ago by funding strategic advisory work that helped the company refine its business plan and position itself for significant investment,” said Jim Villanueva, SVF Managing Director. “More recently in February of this year, our $100,000 investment provided critical catalytic funds to enable the company to continue its growth trajectory and complete its fundraising by attracting over $1 million in equity investment in April.”


PayGo Energy provides an improved stove/storage system and innovative smart metering technology that eliminates upfront costs and enables customers to access ‘clean’ LPG on a pay-as-you-go basis.


The potential market for PayGo is an estimated 650,000 households in Nairobi alone. Households value the health benefits of using ‘clean’ cooking fuel, especially for indoor use. Clients are willing to pay a reasonable premium for the flexibility to purchase in smaller quantities. The health and economic impact is significant particularly when compared to the most widely used alternative fuel sources like kerosene and charcoal.


“Me and my husband made the calculations and decided to start a new business, said Esther, one of PayGo’s early customers. "Because of PayGo gas, we could afford to start making and selling mandazis” (Mandazi: Kenyan donuts).


SVF’s seed investment in PayGo Energy will help the early-stage social enterprise to build a strong local team and prove its economic model in order to scale and reach more households living in poverty. PayGo Energy will also gain insights from its customers in order to refine their product to maximize social impact.


“A billion households are forced to cook with dirty fuels everyday, which is not only a serious development challenge, but also a significant market opportunity," said PayGo Energy CEO, Nick Quintong.  "This financing will allow us to invest deeply in our technology, build a service that our customers love and prepare for commercial roll-out.”