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What does the clean cooking market look like in the DRC? A Business and Health Assessment of the clean cooking market in the Democratic Republic of Congo

The future of sustainable development in the Democratic Republic of Congo (DRC) rests on its ability to manage its diverse environmental ecosystem and forest reserves. But like many other developing countries, the DRC’s forest resources are under pressure.

The country is home to the world's second largest tropical forest massif after the Amazon with nearly 155.5 million hectares of forest (R. Eba'a Atyi, N. Bayol, 2009). Forests in the DRC (60 percent of the Congo Basin) are rich in animal and plant biodiversity (5th in the world) and provide important goods and services (non-wood forest products, timber, wood energy, bushmeat, traditional pharmacopoeia, etc.) on which the lives of thousands of rural people depend.

The future of sustainable development in the Democratic Republic of Congo (DRC) rests on its ability to manage its diverse environmental ECOSYSTEM and forest reserves.

Population growth, poverty, poor governance and the administrative deficit are the underlying causes of deforestation and forest degradation in the DRC. However, the intensity or magnitude of these causes varies by province.

Biomass resulting from fuelwood logging remains the principal source of cooking energy for more than 90 percent of the population in the DRC. Households and street vendors rely heavily on charcoal (or firewood) for daily cooking (87 percent in Kinshasa). Companies, such as bakeries, breweries, restaurants, brickmakers and forgers in aluminum, also depend on firewood or charcoal for their daily work.

The volume of the woodfuels market in Kinshasa and Kisangani alone (4.9 million m3) exceeds the official volume of national wood production by more than 12 times (400,000 m3, (ITTO 2011)). In Kinshasa, the capital of the country with about 12 million inhabitants, the total value of the charcoal market was estimated at US $143 million in 2010 (and about US $150 million today). This represented 3.1 times the value of domestic softwood lumber exports (US $46 million in 2010 (FAO 2011)). While cooking is mostly a female activity in most parts of the country, fuel and stove companies are more often run by men.

In Goma and the surrounding Virunga National Park, charcoal sales are estimated to be over US $60 million per year. As the population increases and neigbhoring countries like Rwanda’s conservative wood policy prevent domestic consumption, there will be increased pressure on the remaining North and South Kivu forests.

The United Nations Capital Development Fund’s clean cooking market incubation programme aims to reduce reliance on wood fuel as a clean cooking energy source. This will be done by supporting the distribution of improved, efficient cooking solutions (that consume less-to-no wood fuel). In 2019, UNCDF established a locally-based team of clean energy experts, who embarked on a detailed market scoping. This included business health and investment readiness assessments of over 50 enterprises involved in clean cooking activities, and efficiency and consumer field testing of over 24 clean cookstoves, LPG systems and electric stoves to benchmark the quality of products currently in the market.

The scoping resulted in an incubation programme design that will use a Challenge Fund mechanism to put enterprises on three tracks:

  1. Incubation via direct technical assistance or workshops
  2. Performance-based grants
  3. Concessional loans or guarantees.

This programme will be implement in partnership with the United Nations Development Programme (UNDP), the REDD + National Fund (FONAREDD), and supported by the Central African Forestry Initiative (CAFI).

Business Health Assessments

It is critical to do assessments and work closely with enterprises already in DRC to better understand their needs and to design sharp interventions accordingly. This is especially the case in a market where there have been many donor-funded interventions for the clean cooking sector that have focused on product design versus market development through distribution and financing.

Thus, based on market scoping, technical assistance and funding to support to each company in their roadmap to commercialisation, will be based on UNCDF’s understanding of:

  • the stage of development of the clean cooking sector;
  • the critical needs of the sector; and,
  • the enabling conditions and key barriers currently present in the sector

There are a large range of clean energy company categories to consider in DRC. Of these, capacity, performance, willingness and commitment to invest, and product quality to meet efficiency standards are critical to understand.

Why?

As a development programme, we want to ensure that enterprises we provide tailored technical assistance and funding to, will manufacture and distribute clean cooking technologies that improve peoples’ lives, while reducing fuel wood consumption and therefore de-forestation. Solutions in market are rapidly evolving, requiring frequent testing and consumer feedback to ensure they also meet the needs of customers too.

From assessments of over 40 clean cooking enterprises (including clean cookstove distributors, manufacturers, and general clean energy distributors) in Goma, Bukavu, Lubumbashi, and Kinshasa, the key takeways were:

  • The size of the clean cooking market is larger than expected, and includes not only stove producers and distributors but also energy and hardware distributors/retailers who are adding clean cooking solutions to their product offerings.
  • Different areas of the country have different needs: for example, the north and south Kivu areas have many clean cooking producers as a result of development programmes focused on stove production. However, many of these entities need support in becoming formally registered businesses and learn how to operate a commercial entity. In addition, areas around Lubumbashi have better developed LPG providers who, as privately registered entities, can participate in local tenders.
  • Clean cooking enterprises need support in financial management, and understanding what type of funding their businesses require.
  • Consumers are very price sensitive, thus, enterprises should work with financial service providers and learn how to develop consumer credit models.

Parts of the country are recovering from a long conflict period that created heavy reliance on development and humanitarian assistance. The clean cooking sector is not excluded from this.

UNCDF has assessed the progress of these humanitarian-driven approaches to clean cooking, and has intentionally designed the programme based on a market-led commercial approach. Where possible, the programme will aim to orient all programme supported value-chain actors towards business models that allow them to break even and reach scale as quickly as possible.

This will ensure business sustainability in the long term, facilitated through the existence of the cookstove producers and associated distribution channels. By emphasizing quality control and consistency in production but also focusing on helping entrepreneurs apply a business model that keeps the operational team lean, the stove quality can remain consistently high while the prices can remain low and thus affordable and accessible to a wider population.

Product Consumer and Field Testing

In addition to the business health assessments, UNCDF also tested the available cooking energy products and devices on the market. This product assessment complements the business health assessment and provides a more complete picture as to what is needed in developing a sustainable cookstove market.

Products were tested for quality, consistency (standardization), efficiency & fuel consumption. Consumer feedback was also gathered. This includes cookstove preferences, willingness to pay and capacity to pay. This helps UNCDF assess the production capacity and cookstove quality of readily available products, and provides insight into the required support for companies to become more sustainable and increase distribution through the use of tailored technical assistance.

The information generated in the field testing helps the programme and manufacturers build a roadmap towards commercialization by understanding:

  • consumer cooking and energy consumption habits (locally/regionally)
  • consumer taste (what appeals to them and will drive demand)
  • the value proposition for potential products

The field testing complements the business evaluation and together they inform the design of the incubation programme, as it sheds light on how potential partners’ products perform in the field and their potential demand.

It is important for all stakeholders to understand that the challenge in any cookstove programme is finding the appropriate stove or stoves that will be successful with the specific context of the selected country or geographic area of intervention. This requires that the programme look not only at a stove’s design and manufacturing potential, including costs associated with importing material and stoves; but also at human and cultural issues, such as the cooks biases and priorities, traditional cooking processes, the types of foods cooked, the cooking environment and the factors that can influence a stove purchase. Consumers, above all else, want a stove that is fast, clean and easy to use. It is a major benefit if the stove is safe, efficient, visually appealing and able to be within a competitive price range with some traditional stoves.

Stove testing process

The information from the testing covered:

  1. Consumer performance and preference on models, price, behavior and usage-market orientation
  2. More accurate measurements of fuel consumption of the stoves in households-can calculate fuel and emissions reductions (stove performance)- Baseline Consumption Measures
  3. Value proposition of potential products

For the manufacturers, the results from the testing can help manufacturers’ improve the product in efficiency, design, and consumer appeal. The technical feedback from the testing results combined with the factory evaluation will help manufacturers understand options and tooling for get to scale.

The process included:

  • Manufacturers informed of testing and business health evaluation opportunity to participate
  • Willing manufacturers who want to participate communicate participating with programme through providing basic information about their businesses and stoves they produce or sell
  • Stoves were purchased in local markets where possible and other arrangements will be made for those products not yet on the market—those not on the market were asked to provide a plan for how they intend to bring their products to market by the start of the incubation programme (especially international manufacturers)
  • Testing in the field occurred from August to November 2019 with products from those manufacturers willing to participate
  • Women were recruited and trained to carry out the cooking
  • During testing, focus groups and individual interviews of cooks were carried out to gain feedback on stove usage, learning curve, appeal etc.
  • After testing, results feedback is provided each individual manufacturer
  • The manufacturer has a chance to respond to the results, and the response is integrated into report
  • The manufacturers are invited to incubation workshop to learn general and specific technical assistance for immediate improvements with business and product

Stove testing results

Testing showed our team that there is an existing, albeit nacent, improved cookstove market in the DRC. While there is at least one local improved cookstove manufacturer in every provincial capital where testing occurred, the quality and consistentcy of the products vary. Many, if not all, could benefit from both the technical advice and tooling that the programme can provide through its Challenge Fund and incubation.

For Goma, the market price of an improved cookstove (ICS) does not reflect the actual quality of the stoves. For example, Stove A might cost only US $5, but can really help households save money and reduce charcoal while Stove B costs US $15 and if used with charcoal, will increasingly cost households more money.

Local cookstoves, when used by local ladies, can be equally efficient and effective at reducing charcoal consumption than the imported advanced cookstoves.

It is important to remember that cooking behaviour often is contrary to energy efficiency. Humans want to cook fast with minimal effort. Cooking devices should help modify human behavior to improve the efficiency without making the person feel like they are sacrificing something else in the process. When designing clean cooking programmes, the following should be considered:

  • Ethical questions of carbon assets developed during the life of the programme and co-benefits to DRC and local communities.
  • Policy makers and private partners should perform holistic assessments of key supply and demand drivers and identify critical investment needs to improve market penetration of the fuels as well as address environmental inefficiencies.
  • Advocacy and partnerships should focus on working with the government to reform tax/tariff/Value Added Tax (VAT) policies for both fuels, efficient stoves, and efficient production technologies and materials.
  • In the case of LPG , strict enforcement of regulations to maintain cylinders and prevent illegal refilling and cross-filling of LPG cylinders.
  • Governments should ensure that actions with other goals do not have unintended consequences that could affect access to cleaner and more efficient fuels.

The value proposition and selected results from the Controlled Cooking Tests will allow the programme to provide targeted technical assistance to stove designers that are motivated to continue the stove design process. The data produced can also be used by manufacturers, retailers, the Government of DRC, and other stove programmes during marketing and awareness campaigns. The value propositions for each stove in terms of potential annual savings and the stoves payback period are clear. This information can help consumers make cost and energy effective decisions for their households.

Keep in touch with UNCDF in the DRC as we roll out incubation and challenge fund selection processes in 2020.

About UNCDF work on Energy

The UNCDF programme focused on energy contributes to achieving SDG 7 on affordable and clean energy for all, and SDG 8 focusing on decent inclusive work, economic growth and, more specifically, financial inclusion. The Programme aims to improve access to clean energy finance for poor and low-income people. By partnering with energy and financial service providers and offering capital, data analytics, capacity building and policy advocacy services in the off-grid energy finance markets, UNCDF CleanStart has scaled energy business models for cleaner, efficient and more effective sources of energy for poor people. As of 2019, UNCDF digital energy finance activities have enabled over 375,766 low-income families and small-scale businesses to access renewable energy technologies (RETs) through micro and PayGo financing.

UNCDF Energy Access work is supported by: