The UN Office of South-South Cooperation (UNOSSC) and the India-UN Partnership Fund partnered with UN Capital Development Fund (UNCDF) and the Zambia Ministry of Finance to digitalize utility payments and thus drive digital and financial inclusion for many of Zambia’s underserved customers. One intervention on electricity payments involves the Rural Electrification Authority (REA) mini-hydroelectric power station at Kasanjiku, in North-Western Province, that will generate 0.6mW of power to an area with a radius of about 50km and about 23,000 people. This project will serve the Ntambu and Sailunga communities.

UNCDF understands how critical the need for reliable electricity is for the people in this area and partnered with REA to implement a digital payment ecosystem for electricity-use for the community, which includes Luwi Mission Hospital and nursing school. The partnership aims to increase access to electricity and use of digital payments for power and other services. To achieve this, UNCDF is providing a grant and technical assistance to develop a digital payment solution which will ensure that the mini-grid has a reliable and efficient channel of payment.

Under UNCDF’s support REA targets 2,000 household and commercial electricity connections by the end of 2022, with 180 connections completed by June 2022.

The need for digital payments for electricity and other subsequent services is underscored by this area’s remote location. The nearest bank is 120km away. When community members or hospital staff need to get cash to pay for utility services and restock their supplies, they must travel almost two hours to reach the bank branch and draw sufficient funds for all services needed until the next trip to the bank. This poses risks such as theft and can be inconvenient as they may not be able to attend to unexpected items. By bringing this service to the area, REA and UNCDF will increase the use of digital financial services for people of this area, particularly women, and will also enable the community to gain control of their utilities payments and household expenses.

Additional activities in this project involve:

• UNCDF to facilitate the integration of the electricity meter platform with the mobile network operators -Airtel, MTN and Zamtel - for mobile money payments. The integration, through a local fintech Probase Group, will allow payments to reflect in real time, giving customers instant access to electricity.
• To ensure adequate uptake and usage of the digital payment method, UNCDF will sensitize community-members whose homes or businesses are wired with electricity on how to purchase electricity using their mobile money, thus deepening their financial and digital skills. Bringing digital payments for electricity to this area will contribute to the growth of a larger digital ecosystem for the people of the Ntambu and Sailunga area. This ecosystem will include mobile money agents and merchants, which consequently offer additional employment opportunities.
• A community needs assessment to understand what issues were important in the Ntambu and Sailunga communities and to learn more about their thoughts on accessing electricity through the power station and how they would adapt to digital payment methods. The community was receptive to the new activities and is looking forward to having reliable electricity that they can pay for easily. While about 40 percent of the participants in the meeting did not have mobile phones, the upcoming REA activities encouraged community members who do not yet have phones or share phones in one household, to consider how getting a new or even additional device.

“Using a digital payment method will make a big difference for us here at Luwi Mission Hospital. This way, we can focus on the important tasks and not worry that our power be cut off. We can also plan and manage this better.” – Sr Chrispine, Sister-in-Charge of Luwi Nursing College.

The new digital system will enable Luwi Mission Hospital and the two communities to buy electricity as needed and enable better management of funds for electricity. There are further benefits to using these digital payments, such as greater efficiency in how community-members travel to resupply goods and seek financial services, savings in fuel and other travel-related expenses, as well as a developing digital payments ecosystem that enables young people to be employed as digital finance agents and merchants in the community.