Results-based financing: A promising new tool for energy access

1.06 billion people still do not have access to electricity, and 3.04 billion people still rely on solid fuels and kerosene for cooking and heating (IEA and World Bank 2017). Despite significant progress in recent decades, achieving universal access to modern energy services by 2030 will not be possible without stepped-up efforts by all stakeholders.

This assessment, as part of the World Bank’s State of Energy Access report, Vivid Economics, alongside GiZ, RVO, and SNV, explore the role of the results-based financing as a new tool that can help meet this challenge. Under RBF, incentive payments are received based on the results achieved to businesses that deliver pre-specified outputs such as the number of new electricity connections or advanced cook stoves that are sold. By doing so, it tries to overcome market failures that constrain private sector delivery of modern energy services.