Promoting diffusion of solar lanterns through microfinance and carbon finance: A case study of FINCA-Uganda's solar loan programme

This paper discusses a case study of the energy lending programme of FINCA-Uganda. It addresses two questions. First, it investigates whether FINCA can alter the energy transition of its clients by providing loans for solar lanterns. Through an industry analysis, including a contingent valuation survey of FINCA's borrowers, barriers to the diffusion of solar lanterns in rural Uganda are identified, and strategies to overcome them are proposed. Second, this paper examines the potential for FINCA to generate carbon credits through the diffusion of solar lanterns. Potential sources of carbon revenues were assessed including voluntary markets, through the company MicroEnergy Credits, and the Clean Development Mechanism.

► Case study conducted with FINCA-Uganda’s Solar Microfinance Programme. ► Contingent valuation used to appraise rural demand for solar lanterns. ► Strategies to overcome barriers to diffusion proposed. ► Potential carbon revenues per solar lantern estimated using different methodologies.