Biogas PAYGO Key Success Factors

ATEC Biodigesters International offers commercially scalable plug-and-play biodigesters that are designed to work in challenging environments. ATEC sold biodigesters its customers via a micro finance loan. ATEC conducted market research to explore product diversification and grow its market. The outcome of the study suggested Cambodian customers would benefit from a PAYGO product. ATEC consequently developed PAYGO hardware and software for its systems and piloted in Cambodia during the second half of 2019. To support this project, ATEC solicited Enea’s assistance to gain a deeper understanding of the PAYGO business model and develop a business strategy.

Household biogas, such as the biodigester developed by ATEC, is one solution to deliver clean, sustainable and cheap cooking fuel to farmer communities in emerging countries. Micro-biodigesters allow farmers to produce biogas from manure, human, kitchen and green waste. This not only saves farmers money that would otherwise be spent on cooking fuel and  fertilisers but also minimises the environmental and health implications of relying on solid cooking fuels.

PAYGO business models, in a range of technologies, have the potential to improve access to clean cooking. They allow products and services to be paid in instalments thus lowering the upfront cost which constitutes a prohibitive barrier for first-time adopters. However, launching a PAYGO business model requires retail companies, such as ATEC, to become more vertically integrated and take on new responsibilities and risks that come with the consumer financing  component of the PAYGO model.

To assist ATEC, Enea reviewed and advised  on PAYGO product pricing & credit assessment process. Enea further identified six key success factors to develop ATEC’s PAYGO model.  A year after the project, ATEC successfully implemented a PAYGO business  in Cambodia. In November 2019, Enea’s work, moreover, facilitated ATEC’s Series B fund raising (US$ 1.6 MN).