UNCDF’s CleanStart programme helps foster access to clean energy for the poor through microfinance. CleanStart, in partnership with the Embassy of Sweden in Uganda, provides grants to the private sector through its Renewable Energy Challenge Fund (RECF). These grants are awarded to business ideas that demonstrate innovative approaches to delivering clean energy solutions and share a common vision for concrete social impacts by targeting underserved customers, in particular for youth and women in rural areas.
In early 2017, CleanStart opened its first RECF window focused on clean cookstoves in Uganda. This window had an unprecedented outreach, with 161 companies interested in the opportunity, and 64 formal Expressions of Interest (EOIs) received. Through a rigorous screening of the EOIs based on technical merit, levels of innovation, development impacts such as women and youth job creation, and sustainability, CleanStart selected 6 partners whose business models present innovative features to deliver clean cookstoves to the last mile.
Why clean cookstoves in Uganda?
Uganda aims to become an upper middle-income country by 2040. Universal access to energy is critical to achieve this goal. In 2014, 80% of the Ugandan population did not have access to electricity (Census 2014) and 71% used firewood for cooking, a carbon-intensive energy source.
According to the Global Alliance for Clean Cookstoves, traditional open fires and inefficient cookstoves using solid fuels cause a range of harmful impacts that impede economic and social development. With current improvements in price and performance of off-grid solar products, efficient appliances and fuels, rural households and businesses can leapfrog to a more modern, energy efficient way of living.
Transforming the clean cookstove market in Uganda has tremendous potential to foster local job creation and know-how in a dynamic sector, while providing access to affordable, clean and reliable energy sources to rural populations.
CleanStart catalyzes clean cookstove innovations in Uganda by investing in early stage and high-risk ideas while setting energy small and medium sizes enterprises (SMEs) on a pathway for scalability. Transforming the clean cookstove market in Uganda has tremendous potential to foster local job creation and know-how in a dynamic sector, while providing access to affordable, clean and reliable energy sources to rural populations. From our Challenge Fund window, CleanStart was able to gather insights across the sector that will assist our selected grantees in implementing their solutions.
Who applied?
CleanStart received 64 expressions of interest (EOI) from various actors of the clean energy sector. The majority of applicants have their company headquarters in Uganda (87%), showing a dynamic domestic clean energy sector, led by private sector companies with 95% of applicants being registered as for-profit companies.
The EOIs show a clean cookstove sector primarily focused on improved cookstoves (charcoal and wood), followed by briquette stoves and solar home systems for clean cooking, and these predominantly at the household level for a direct impact on people’s livelihoods.
EOIs from companies involved in the production of clean cooking fuel mainly focus on the production of briquettes and biogas that recycle waste from agriculture crops or pit latrines for biomass. Interestingly, a few companies also act as pioneers in the clean cooking market, proposing LPG or pellet solutions.
Applicants show innovative solutions to providing clean cooking to the last mile. The use of agro waste in partnership with farmers and households was cited as a revenue sharing model and a mean of including prospective customers in the value chain. Companies show strategies to better service rural underserved customers by decentralizing distribution hubs to facilitate last mile distribution, establish trust and increase understanding of clients’ needs.
Innovative technology solutions show a dynamic market better equipped to service clients through smart meters, PAYG payment methods, geospatial analytics for distribution channels, apps to facilitate sales and after sales services. Innovation of products were also highlighted in the EOIs, notably through the product features of cookstoves and fuel, which are cleaner, more affordable and more efficient. Finally, several applicants engage in socially responsible revenue-sharing models by including women and youth as well as farmers in the value chain, and by sharing carbon market revenues.
Successful innovations to advance access to clean cookstoves
Through a competitive process, 6 companies have been selected to receive cost-sharing grants from CleanStart, to implement in the Ugandan markets over the next two years. The portfolio of clean cooking solutions is expected to reach more than 40,000 households, businesses, and institutions such as schools, create over 700 jobs and income earning opportunities especially for women and youth, and off-set approximately 400,000 tons of CO2 by 2020.
1. Fenix International Uganda
Clean Cookstoves for Creditworthy ReadyPay Customers
Fenix International designs, manufactures, sells and services lease-to-own solar home systems for rural Ugandan households living off-grid. Utilising their unique credit score created during the customer's lifetime, Fenix will also offer clean cookstoves as an upgrade, thereby contributing to improved air quality in homes to help further improve quality of life. Fenix will make cookstoves affordable by offering financing to customers using a PAYG instalment method paid for via MTN Mobile Money. To date, Fenix has sold over 150,000 solar home systems across the country, and aims to bring life-improving products and services to millions of customers across the country.
2. Green Heat Uganda
Alternative Fuels for Clean Cooking in Rural Communities
Green Heat provides commercially viable alternative fuels, biogas and briquette, while delivering onsite waste management services to the poor. Green Heat works in partnerships with female-led distributors to sell its briquette products. Their biogas value chain involves youth through hiring and subsequent knowledge transfer on biogas digesters. Green Heat leverages waste as a resource, transforming a development hurdle into an investment opportunity.
3. Simoshi Limited
Improving Household Clean Cooking Through School Consolidated Networks
Simoshi is a social enterprise dedicated to improving the livelihoods of children and their families in Uganda. Simoshi’s energy efficient project linked to carbon finance is capable of bringing a cleaner, healthier and environmentally friendly technology to low-income individuals, especially women and children. Simoshi outsources institutional improved cookstoves (IICS) from local manufactures and sells/distributes them to schools and institutions. The continuous use of the IICS enable both the participating schools and Simoshi to recycle a percentage of the stream of carbon credit returns, to introduce new investments in those same schools within the education, hygiene and food nutrition sectors while providing free annual IICS maintenance.
4. WANA Energy Solutions
Implementing Last-Mile Clean Cooking Energy Distribution through a Smart PayGo Technology
WANA offers a reliable, affordable and efficient cooking energy from Liquefied Petroleum Gas (LPG) by selling complete cooking components - gas, accessories, cylinder and cookstove. WANA aims to deliver high-quality LPG supply at a low price point in underserved markets by using smart meters and PAYG technology. WANA therefore focuses on peri-urban and rural areas, and particularly women.
5. Josa Green Technologies
Briquette and Stoves: Clean and Affordable Energy Solutions for Schools
Josa Green Technologies is engaged in production and selling of briquettes and improved cookstoves as alternative clean cooking solutions to institutions and households. Josa Green Technologies uses public-private partnerships to work with institutions to provide them with access to stoves that are compatible with briquettes.
6. Raising Gabdho Foundation (RGF)
Enabling Low-Cost Cooking Energy Access through ICT and Last-mile Distribution
Raising Gabdho Foundation (RGF) provides clean energy to low income urban and peri-urban communities in the form of honeycomb briquettes. Additionally, RGF provides training to communities in briquette production and sales management, with an emphasis on reaching out to women and girls. The RGF also currently works with an urban refugee community center in Rubaga, Kampala providing both training and employment of refugees under a livelihood and lifesaving programme. RGF will expand its operations in the refugee settlements starting with Rhino Camp settlement.