This paper explores the complexities associated with the diffusion of small-scale photovoltaic systems in rural areas of developing countries. It describes in particular the experience of the GEF Solar project in Zimbabwe and the impact that this project has had on the domestic solar industry. The authors draw a number of valuable lessons from these experiences. Donor-driven energy projects bring about direct benefits to the users and can help to stimulate technology transfer and capacity building initiatives. However, such projects also have a tendency to distort marker prices, hence directly undermining the already feeble renewable energy industry, and quite often they are predisposed to focus on activities occurring only during the project's lifetime. The authors argue that the Zimbabwean experience illustrates that a sustainable energy development programme requires a multi-pronged intervention that is well co-ordinated with a clear view of specific engagements beyond the donor commitment period.