Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia

Tarekegn Mamo Legamo

doi:doi:10.11648/j.ajere.20200504.12

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Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia

Tarekegn Mamo Legamo

Received: 22 October 2020 Accepted: 3 November 2020 Published: 9 November 2020

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Abstract

In attempt to meeting energy demand via provision of renewable energies such as biogas technology, credit arrangements and local involvement in decision-making are key elements for low-income countries in Africa, while the link between investment cost, affordability, financing, and other socioeconomic differences may affect investment in biogas energy. In this article, a survey of 298 households is used to establish the derivers of investment in biogas energy; the findings being conditioned on credit access with flexible loan repayment options. The estimates of marginal effects from conditional (multinomial) logit model show that flexible loan repayment options might encourage a broader spectrum of households to invest in biogas energy. The key derivers of willingness to invest in short-term loan repayment options were the education and gender of household heads, access to fuelwood sources and waste-water systems, and, livestock ownership. Similarly, households’ willingness to invest in biogas energy funded via medium term financing varies with the level of formal education of household heads, wastewater system, and livestock ownership. However, willingness to fund biogas energy with long-term loans was positively correlated with the area of land in use. Policy implications are that local authorities should work with financial institutions to provide credit at market rates, but with flexible loan repayment options. This will reduce the burden of the biogas market on both users and supplier’s, increase functional sustainability, and promote biogas technology among low-income communities.

DOI	10.11648/j.ajere.20200504.12
Published in	American Journal of Environmental and Resource Economics (Volume 5, Issue 4, December 2020)
Page(s)	86-96
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Biogas Energy, Determinants, Investment Decision, Flexible Financing, Ethiopia

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Tarekegn Mamo Legamo. (2020). Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia. American Journal of Environmental and Resource Economics, 5(4), 86-96. https://doi.org/10.11648/j.ajere.20200504.12

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ACS Style

Tarekegn Mamo Legamo. Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia. Am. J. Environ. Resour. Econ. 2020, 5(4), 86-96. doi: 10.11648/j.ajere.20200504.12

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AMA Style

Tarekegn Mamo Legamo. Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia. Am J Environ Resour Econ. 2020;5(4):86-96. doi: 10.11648/j.ajere.20200504.12

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@article{10.11648/j.ajere.20200504.12,
  author = {Tarekegn Mamo Legamo},
  title = {Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia},
  journal = {American Journal of Environmental and Resource Economics},
  volume = {5},
  number = {4},
  pages = {86-96},
  doi = {10.11648/j.ajere.20200504.12},
  url = {https://doi.org/10.11648/j.ajere.20200504.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajere.20200504.12},
  abstract = {In attempt to meeting energy demand via provision of renewable energies such as biogas technology, credit arrangements and local involvement in decision-making are key elements for low-income countries in Africa, while the link between investment cost, affordability, financing, and other socioeconomic differences may affect investment in biogas energy. In this article, a survey of 298 households is used to establish the derivers of investment in biogas energy; the findings being conditioned on credit access with flexible loan repayment options. The estimates of marginal effects from conditional (multinomial) logit model show that flexible loan repayment options might encourage a broader spectrum of households to invest in biogas energy. The key derivers of willingness to invest in short-term loan repayment options were the education and gender of household heads, access to fuelwood sources and waste-water systems, and, livestock ownership. Similarly, households’ willingness to invest in biogas energy funded via medium term financing varies with the level of formal education of household heads, wastewater system, and livestock ownership. However, willingness to fund biogas energy with long-term loans was positively correlated with the area of land in use. Policy implications are that local authorities should work with financial institutions to provide credit at market rates, but with flexible loan repayment options. This will reduce the burden of the biogas market on both users and supplier’s, increase functional sustainability, and promote biogas technology among low-income communities.},
 year = {2020}
}

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TY  - JOUR
T1  - Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia
AU  - Tarekegn Mamo Legamo
Y1  - 2020/11/09
PY  - 2020
N1  - https://doi.org/10.11648/j.ajere.20200504.12
DO  - 10.11648/j.ajere.20200504.12
T2  - American Journal of Environmental and Resource Economics
JF  - American Journal of Environmental and Resource Economics
JO  - American Journal of Environmental and Resource Economics
SP  - 86
EP  - 96
PB  - Science Publishing Group
SN  - 2578-787X
UR  - https://doi.org/10.11648/j.ajere.20200504.12
AB  - In attempt to meeting energy demand via provision of renewable energies such as biogas technology, credit arrangements and local involvement in decision-making are key elements for low-income countries in Africa, while the link between investment cost, affordability, financing, and other socioeconomic differences may affect investment in biogas energy. In this article, a survey of 298 households is used to establish the derivers of investment in biogas energy; the findings being conditioned on credit access with flexible loan repayment options. The estimates of marginal effects from conditional (multinomial) logit model show that flexible loan repayment options might encourage a broader spectrum of households to invest in biogas energy. The key derivers of willingness to invest in short-term loan repayment options were the education and gender of household heads, access to fuelwood sources and waste-water systems, and, livestock ownership. Similarly, households’ willingness to invest in biogas energy funded via medium term financing varies with the level of formal education of household heads, wastewater system, and livestock ownership. However, willingness to fund biogas energy with long-term loans was positively correlated with the area of land in use. Policy implications are that local authorities should work with financial institutions to provide credit at market rates, but with flexible loan repayment options. This will reduce the burden of the biogas market on both users and supplier’s, increase functional sustainability, and promote biogas technology among low-income communities.
VL  - 5
IS  - 4
ER  -

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Author Information

Tarekegn Mamo Legamo

Department of Economics, Hawassa University, Hawassa City, Ethiopia; Faculty of Humanities, Charles University PhD Environmental Studies Programme, Prague City, Czech Republic

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Tarekegn Mamo Legamo. (2020). Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia. American Journal of Environmental and Resource Economics, 5(4), 86-96. https://doi.org/10.11648/j.ajere.20200504.12

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ACS Style

Tarekegn Mamo Legamo. Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia. Am. J. Environ. Resour. Econ. 2020, 5(4), 86-96. doi: 10.11648/j.ajere.20200504.12

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AMA Style

Tarekegn Mamo Legamo. Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia. Am J Environ Resour Econ. 2020;5(4):86-96. doi: 10.11648/j.ajere.20200504.12

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@article{10.11648/j.ajere.20200504.12,
  author = {Tarekegn Mamo Legamo},
  title = {Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia},
  journal = {American Journal of Environmental and Resource Economics},
  volume = {5},
  number = {4},
  pages = {86-96},
  doi = {10.11648/j.ajere.20200504.12},
  url = {https://doi.org/10.11648/j.ajere.20200504.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajere.20200504.12},
  abstract = {In attempt to meeting energy demand via provision of renewable energies such as biogas technology, credit arrangements and local involvement in decision-making are key elements for low-income countries in Africa, while the link between investment cost, affordability, financing, and other socioeconomic differences may affect investment in biogas energy. In this article, a survey of 298 households is used to establish the derivers of investment in biogas energy; the findings being conditioned on credit access with flexible loan repayment options. The estimates of marginal effects from conditional (multinomial) logit model show that flexible loan repayment options might encourage a broader spectrum of households to invest in biogas energy. The key derivers of willingness to invest in short-term loan repayment options were the education and gender of household heads, access to fuelwood sources and waste-water systems, and, livestock ownership. Similarly, households’ willingness to invest in biogas energy funded via medium term financing varies with the level of formal education of household heads, wastewater system, and livestock ownership. However, willingness to fund biogas energy with long-term loans was positively correlated with the area of land in use. Policy implications are that local authorities should work with financial institutions to provide credit at market rates, but with flexible loan repayment options. This will reduce the burden of the biogas market on both users and supplier’s, increase functional sustainability, and promote biogas technology among low-income communities.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - Flexible Financing and Investment in Renewable Energy Sources: The Case of Biogas Energy in Sidama Region, Ethiopia
AU  - Tarekegn Mamo Legamo
Y1  - 2020/11/09
PY  - 2020
N1  - https://doi.org/10.11648/j.ajere.20200504.12
DO  - 10.11648/j.ajere.20200504.12
T2  - American Journal of Environmental and Resource Economics
JF  - American Journal of Environmental and Resource Economics
JO  - American Journal of Environmental and Resource Economics
SP  - 86
EP  - 96
PB  - Science Publishing Group
SN  - 2578-787X
UR  - https://doi.org/10.11648/j.ajere.20200504.12
AB  - In attempt to meeting energy demand via provision of renewable energies such as biogas technology, credit arrangements and local involvement in decision-making are key elements for low-income countries in Africa, while the link between investment cost, affordability, financing, and other socioeconomic differences may affect investment in biogas energy. In this article, a survey of 298 households is used to establish the derivers of investment in biogas energy; the findings being conditioned on credit access with flexible loan repayment options. The estimates of marginal effects from conditional (multinomial) logit model show that flexible loan repayment options might encourage a broader spectrum of households to invest in biogas energy. The key derivers of willingness to invest in short-term loan repayment options were the education and gender of household heads, access to fuelwood sources and waste-water systems, and, livestock ownership. Similarly, households’ willingness to invest in biogas energy funded via medium term financing varies with the level of formal education of household heads, wastewater system, and livestock ownership. However, willingness to fund biogas energy with long-term loans was positively correlated with the area of land in use. Policy implications are that local authorities should work with financial institutions to provide credit at market rates, but with flexible loan repayment options. This will reduce the burden of the biogas market on both users and supplier’s, increase functional sustainability, and promote biogas technology among low-income communities.
VL  - 5
IS  - 4
ER  -

Copy | Download