For millions of households in developing countries, cooking is associated with long hours spent collecting wood and other fuels, which become increasingly scarce and costly.
In addition, smoky kitchens and the use of high intensity carbon fuels such as charcoal lead to dangerous emissions, which affect both health and the environment. It is estimated that air pollution caused by inefficient stoves leads to 1.45 million premature deaths each year – more than those from malaria, tuberculosis and HIV/Aids.
Not to mention that gathering fuel - generally a women’s activity – is hazardous for they are at risk of rape or attacks.
GVEP is tackling this issue by supporting the development of markets for fuel-efficient, affordable cookstoves. We’re working with small cookstoves manufacturers and distributors throughout East Africa by providing technical guidance, business development support including marketing to reach a wider range and number of people to gain access to modern energy technologies.
Carbon finance fuels market for cleaner cooking technologies
Consumer uptake of improved cookstoves, like solar powered technology, has lagged behind expectation in East Africa.
GVEP runs a number of technical and business training initiatives to help East African entrepreneurs to improve product quality and expand their businesses.
Carbon finance and the UN’s clean development mechanism (CDM), which allows developed nations to reduce their carbon emissions through funding clean energy projects in developing countries.
The Ashden Awards for Sustainable Energy commissioned GVEP to produce an accessible guide to carbon finance. The guide is designed to help energy entrepreneurs to understand better whether they should consider carbon finance more closely in their business plans, and to provide recommendations on the first steps to assess their potential.
GVEP has recently signed a memorandum of understanding with the Uganda Carbon Bureau, one of the pioneers of carbon finance in East Africa, to help improve access to carbon finance for small cookstove producers.
From NGO to social business
Improved stoves and solar lanterns are affordable for many Kenyans. They save people money as well as having health benefits. John Maina is determined to make these products available to a wide number of people and he’s using commercial marketing methods to achieve this goal. John is the director of an NGO called SCODE based in Nakuru, Kenya, which is evolving into a social business.
SCODE has been in the energy sector for many years. John and his team have installed around 500 biogas units across Kenya and he also produces and sells improved stoves. Now he’s extending into selling solar-powered lanterns thanks to a loan from EcoBank which GVEP helped to facilitate. The loan from EcoBank enabled John to buy a small stock of lanterns to test in the market. These were an instant success. He sold 50 lanterns in 2 weeks, and is already ordering more. He stocks two sizes of lanterns: D-Light’s powerpack which sells at 6000 Kshs and the smaller Firefly from Barefoot Power, selling for 1600-1700 Kshs. The smaller lantern, which comes with a phone charger, is particularly popular. SCODE has a network of 15 local distributors who have been selling its stoves for some time. Now the same people are starting to stock the lanterns.
The EcoBank loan allows John to offer his distributors 30 days credit on 50% of the cost of purchasing stock. The other 50% has to be paid up front. The distributors also extend credit to some of their customers, giving them a little longer to find the money to complete a purchase. Because they know their customers the distributors are able to minimise any risk of non-payment. Customers also deal directly with SCODE. John told me an order had come in from the Ministry of Health for 15 lanterns for rural health posts around Nakuru.
The lanterns will make it much easier for the nurses to work at night. He’s confident he will get more such orders. As well as facilitating the loan for SCODE through a partial risk guarantee, GVEP has been providing business advice and is helping SCODE develop a brand and professional marketing materials. The staff and distributors will all be trained in marketing in a bid to help them increase sales. The SCODE stoves are of high quality but are not branded, so they appear indistinguishable from poorer-quality stoves. More distinctive colouring and labels will in future help customers identify a SCODE stove. ‘We need to strengthen our sales and marketing,’ John says. ‘The training will be very useful. GVEP has helped us a lot.’ GVEP has been able to provide loan guarantee funds thanks to its partnership with the Garfield Weston Foundation.
Selling energy efficient stoves in rural Tanzania
Verediana Salala lives in Mbela, a small village about 50 Kms from Mwanza, Northern Tanzania. She is a small producer of energy efficient cookstoves. Had you asked her, two years ago, what net profit she was making from the sales of her stoves, she would not be able to answer. This is because she did not keep any records of her income, or expenditure.
Through dedicated training and support, GVEP has helped her business take off. She now boasts a sound business plan that looks at cash flow, sales projections, product costing, marketing and risk assessment. Thanks to her business plan, she knows how much she earns and what share of her income to reinvest in her business on a monthly basis.
Today she produces about 10 stoves a day and often sells a load every two weeks at the local market. Over the last year she has made an average of 27,000 Tanzanian Shillings a month (about US$300) from sales alone. When the opportunity arises, she takes part in trade fairs to market her products further. In this family business, her children help her to transport and sell the stove in the local markets. "Since receiving training and business development support, I adapt my products to my customer's needs and listen carefully to what they have to say. I longer wait for them to turn up at my door step but I go out to find potential new markets and this has helped to increase my sales", says Verediana. See Verediana's photo story.