A Refugee Marketplace in Kenya

To highlight the types of opportunities that exist or might be possible for the private sector, IFC interviewed companies already operating in Kakuma camp and town or considering entering the market. The sample covered a variety of sectors, including retail, sanitation, and energy. Key aspects of each company’s business model and the incentives to enter refugee camps provide a sense of the potential.

The potential for energy consumption and provision in Kakuma camp is considerable due to the large population, high density, and presence of street markets. Despite this opportunity, the energy market remains largely informal, and at the time of publishing this report, the Kenyan government had no plans to connect the camp to the grid.
Energy in the camp is provided by refugees running gensets, which are mostly clustered around market areas to serve local businesses such as stores, barbers, internet cafés, grain mills, and even photo studios. Most informal energy providers have more than one generator with 100–150 connections.

Rates are negotiated connection by connection, and the amount is based on a rough estimate of usage. For example, a photo studio with a computer, printer, and lights was charged KES 1,500 a month and only provided power in two four-hour blocks. When a household connects to a genset, it typically pays KES 500 a month per lightbulb connected and KES 500 a month for power outlets to charge phones, and it is provided power only in two four-hour blocks. Solar
home systems have also begun entering the camp, and there are agents for popular home solar providers in the town. A World Bank-commissioned study found that refugees in Kakuma camp currently spend between KES 1,000 and KES 2,000 per month on energy services.58 Power provision is costly, inefficient, environmentally
unfriendly, and a fire hazard due to the use of old and poorly maintained gensets and the ad-hoc stringing of low-hanging power lines. Despite all this, the market
has been viable due to existing demand and has the potential to support a more formal energy market
provided by commercial firms. Considering the high prices for energy in the camp,home solar solutions such as those provided by M-Kopa and D.light could gain entry into the market.