Managing e-waste from off-grid solar systems in Kenya: Do investors have a role to play?

Over the past decade, the market for off-grid solar (OGS) systems providing affordable sources of energy has seen a remarkable expansion in many developing countries where coverage by the electricity grid is limited. The observed market growth has been fuelled by the provision of finance by a variety of foreign investors to private suppliers of such systems.

The development of the OGS market plays an important part in meeting the development imperative of ensuring access to sustainable and affordable sources of energy for all. However, increasing awareness and criticism have emerged about the generation of electronic waste (e-waste) from solar products as an unintended negative side effect of their diffusion.

In this paper, we explore whether and how investors of dominant OGS system providers in Kenya, a country that has experienced rapid growth in its OGS market, have reacted to concerns about solar e-waste by changing their funding modalities and practices. Our analysis is based on in-depth interviews carried out with a diverse sample of international investors and industry experts.

We find that most investors have not incorporated requirements for managing e-waste beyond a mere box-ticking exercise in their due diligence and monitoring and compliance mechanisms. Hence, e-waste is currently not seen as a priority for investors, which raises questions about the overall environmental sustainability of such investments.

To the extent that some investors have devoted attention to improving e-waste management, such efforts appear to have been motivated by the potential risks to their reputations. We also find that the Global Off-Grid Lighting Association – a global industry association for the off-grid solar sector – plays an important role in making investors aware of the link between their investments and the adverse environmental impacts of e-waste.

Since most of the solar supplier firms are start-ups that are concerned with developing viable businesses, we find that investors do not want to impose another cost burden on them by requiring the introduction of elaborate e-waste management as part of their investment criteria. Furthermore, our interviews highlight the lack of adequate waste transport and recycling infrastructures and the lack of pressures from waste management regulation as key barriers to the management of e-waste.

We discuss the relevance of these findings for strategies on how best to tackle the emerging problem of e-waste from OGS devices.