De-risking equity investment for productive use integration in mini-grids: Designing a first-loss demand-risk guarantee for e-mobility in Kakuma refugee camp, Kenya

Achieving commercially viable mini-grid operations in remote areas of sub-Saharan Africa remains constrained by uncertain electricity demand, contributing to investor hesitancy, particularly among equity investors. Productive use of electricity can improve asset utilisation and strengthen revenue generation, but its integration requires additional investment that remains exposed to revenue risk when early-stage demand uptake is uncertain. This paper designs and evaluates a first-loss demand-risk guarantee for electric two-wheeler battery-swapping integration into the solar mini-grid of Kakuma refugee camp, Kenya. Methodologically, the case study is grounded in design science research and combines system sizing, financial modelling, scenario analysis, and guarantee stress testing. The system analysis identifies a technically feasible configuration of 200 electric two-wheelers and 140 spare batteries without additional generation or storage capacity, which is used as input for the financial model. The financial model shows that the business case reaches the equity investor threshold, defined as a 15% equity internal rate of return, only under high vehicle utilisation and with a 25% capital subsidy on charging and swapping infrastructure. The proposed guarantee addresses the resulting utilisation-driven revenue risk through partial first-loss coverage, a utilisation-based activation window, annual payout caps, and a cumulative exposure cap. Scenario results show that the guarantee improves equity returns across all eligible utilisation-shortfall scenarios. It raises the base- and best-case scenarios above the investor threshold and substantially reduces the return gap in the worst-case scenario. The study contributes a project-level design framework for developing demand-risk guarantees as development-finance de-risking instruments for productive-use integration, while highlighting the need for case-specific calibration, robust verification, and further testing across additional mini-grid contexts.