PayGo Energy, one of Gearbox corporate members is transforming the cooking fuel business among low-income urban households in Kenya. The company is enabling this population to access Liquid Petroleum gas (LPG) at quantities and cost that fits within their daily budgets.
The Kenya informal settlements, where the company is currently carrying out its operations, is home to almost 56% of the total urban population. These households spend an average of ksh 50 daily to cook on charcoal or kerosene – LPG tanks and stoves require an upfront investment that prices out this customer segment. PayGo Energy developed a smart meter that attaches to the gas cylinder and allows for pay per use gas in small quantities – and delivers a service that allows people to cook from day one on their own stove and pay only for the gas used per day.
The detrimental effects of using cooking fuels like charcoal or kerosene on people’s health and the environment are well known, their fuel efficiency is also very low. By working with households in urban Nairobi, PayGo Energy has shown that cooking on LPG is faster, cleaner and just as affordable per day if customers can have a flexible payment structure that suits the dynamics of their life.
PayGo Energy prototyped their smart metering technology at Gearbox. PayGo Energy replaces the gas cylinder before running out – offering a continuous supply of gas for their customers. They also tapped into Kenya’s world renowned mobile payment platform to support the micro-payment structure.
By reducing the high up-front cost of the stove and cylinder deposit, and by smoothing the cylinder refill costs into affordable micro-payments, they are hoping low-income households will adopt LPG as their primary cooking fuel.