MICROCAPITAL BRIEF: CGAP, GOGLA, IFC’s Lighting Global Launch PAYGo PERFORM Standards, Seeking to Boost Investment in Off-grid Solar

Two NGOs, US-based CGAP (Consultative Group to Assist the Poor) and the Netherlands-based Global Off-Grid Lighting Association (GOGLA), along with the Lighting Global program of the World Bank Group’s International Finance Corporation (IFC) recently launched a framework for measuring the outcomes of selling off-grid solar products on a pay-as-you-go (PAYGo) basis. The PAYGo Performance, Reporting and Measurement (PAYGo PERFORM) plan “offers the PAYGo solar industry a standardized and transparent set of key performance indicators (KPIs)…[so that] companies can track, benchmark and improve performance while presenting a more accessible profile to investors, stimulating capital investment.”

GOGLA Executive Director Koen Peters stated, “By 2020, PAYGo companies had reached an estimated 27 million people who were not served by traditional utilities and financial services providers before. But to keep growing and reach millions more low-income households, the industry needs a lot of capital investment. The lack of a standardized reporting framework has made it difficult for mainstream investors to analyze companies’ performance and channel capital to them.”

PAYGo PERFORM outlines 36 KPIs across the following categories: (1) Company and Operational, focusing on peer-to-peer company comparison and investor education; (2) Portfolio Quality, including risk assessment and analysis; and (3) Unit Economics, comprising profitability and liquidity.

Based in the US city of Washington, CGAP conducts research and tests “innovative solutions” for developing of inclusive financial systems, particularly for women. In this work, CGAP seeks to emphasize “income generation,” “essential services” and “protecting basic standards of living.” For the 2020 fiscal year, CGAP reported total donor contributions of USD 20.4 million. The organization is co-located with the offices of the World Bank Group.

Founded in 2012, GOGLA has 180 members. It offers market information; discussion and learning forums; and information on best practices in business, finance and technology as they relate to the off-grid solar energy industry.

IFC Lighting Global is a platform that aims “to support sustainable growth of the international off-grid solar market as a means of rapidly increasing energy access to the 789 million people living without electricity.”

Founded in 1956, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. During the 12 months ending June 2020, IFC reported total disbursements of USD 26 billion, closing the period with total assets of USD 96 billion.

By Harriet Ritchie, Research Associate

Sources and Additional Resources

CGAP press release
https://www.cgap.org/news/new-reporting-standards-could-energize-grid-solar-industry

CGAP Annual Report 2020
https://www.cgap.org/sites/default/files/minisites/annualReport_2020/index.html

Findev Gateway profile on PAYGo PERFORM
https://www.findevgateway.org/paygo-perform-kpis

GOGLA homepage
https://www.gogla.org/

IFC homepage
https://www.ifc.org/

Lighting Global homepage
https://www.lightingglobal.org/

World Bank Group homepage
https://www.worldbank.org/

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