Riding On Rural Networks To Bridge The Last Mile For Clean Cookstoves

Having a great solution is all very well but it’s simply no use if you can’t get it to the person who needs it. The challenge, as any social entrepreneur will tell you, is that whilst the right technology might be available to solve a problem, the poorest people remain disconnected from retail markets and have a low power to spend. The distribution channels simply don’t exist to get products across the so-called “last mile” – creating an issue of both access and affordability.

A recent article by Diana Jue (of the MIT’s Department of Urban Studies and Planning) in the Stanford Social Innovation Review records four innovative ways in which social enterprises in India are trying to bridge the “last mile” to create a more efficient market for clean cookstoves.

One option is to team up with NGOs and Microfinance Institutions to take advantage of a pre-existing network of relationships. First Energy reaches out to small local NGOs while Envirofit leverages the distribution system of MFIs. The bundling of the stove with other financial products also enables the MFI channels to subsidize the cost of the stoves.

Second, working with rural dealers whose network markets, sells and distributes products. Oorja, for instance, uses Adharam Energy which deploys female village-level entrepreneurs and members of self-help groups who give live demonstrations and identify prospects as well as Villgro Stores which operates village shops.

Third, riding on the existing rural networks of other companies. For example, Prakti Designs is promoting its stoves through SELCO which sells home lighting systems.

Finally, companies such as Envirofit have realized that a good solution lies in the traditional rural trade networks with its established chain of distributors and retailers. Combining store presence with mass media advertising, Envirofit reaches out to a demographic cluster that makes its purchases from these stores.

The common factor seems to be the growing realization that to create a well-functioning market, integrating products such as cookstoves into existing market systems is extremely important. Creating a distribution network of their own is neither feasible nor viable but using existing channels at least ensures a pipeline that may not be perfect but can at least be adapted to reach the last mile.

Photo courtesy: Envirofit

Read the full article on: Innovations That Address the Last-Mile Distribution Challenge

“Strong Innovative Partnerships Are Key To Solving The Problem Of IAP” Says Shell Foundation’s Pradeep Pursnani

For three years, the Shell Foundation has been testing the effectiveness of new and innovative routes to market for clean cookstoves in rural villages across India. Here Pradeep Pursnani, Business Director of Shell Foundation’s program to tackle Indoor Air Pollution, discusses the importance of partnerships to address challenges of awareness-raising, distribution and affordability.

What initiatives make up Shell Foundation’s ‘Room to Breathe’ campaign?

Room to Breathe is a campaign aimed at raising awareness of IAP and enabling greater availability of clean cook stoves as a solution for some of India’s poorest consumers. It started in the Shimoga district of Karnataka, South India, as a village-level engagement program that encompassed stove demonstrations, street-theatre and interactive games and ran concurrently with a mass media campaign.This new

type of social marketing is proving to be quite successful and generated a huge amount of market data.

We’ve since built on this by working with micro-finance institutions such as Grameen Koota, NGOs like Art of Living and rural entrepreneurs like Dharma to use their extensive networks to create new distribution channels; and to come up with options to make stoves more affordable. The partnerships have resulted in both outright and credit-based sales.

In terms of geography, our work brings together a wide range of partners in different parts of the country. These include Anganwadi workers, self-help groups, rural retail and distribution enterprises and regional entities, establishing alternative routes to market in Tamil Nadu, Andhra Pradesh, Maharashtra, Bihar, Assam and Uttar Pradesh.

What key challenges is Shell Foundation seeking to address in the IAP domain?

The fundamental challenges of dealing with IAP have been well-established: First, creating awareness about the health risks of IAP while propagating the economic benefits of clean cookstoves; second, making improved cookstoves available at the last mile both in terms of sales and maintenance, and third, most importantly, providing access to finance or making stoves affordable without either price discounting or short-lived subsidies.

To that end, we have stayed flexible in our approach, working with strong local partners who can tackle two of the issues on their own: outreach and affordability.

Our partnership with Art of Living and Dharma is a great example of two organizations working jointly to address the challenges.  Art of Living builds on its existing efforts in the community and educates people on the issues of IAP and the solution to address it.  Dharma, through its entrepreneurs is responsible for commercial aspects around the distribution and sale of the stoves at the last mile.

Another area with strong potential are institutional alliances. For example, tea plantations in the North-East of India where plantation workers are heavily dependent on wood for fuel. It is in the interest of the plantations to facilitate ownership of stoves that not only improve indoor air but also cut fuel consumption. 

Are there any additional advantages of partnering with an MFI like Grameen Koota?

The partnership with Grameen Koota specifically aims to address the affordability conundrum by offering low-cost loans for clean cookstoves whilst benefiting from the networks and credibility of Grameen  at village-level to market and distribute the improved stoves.

Grameen Koota’s loan officers are well known and have a good reputation in the community they serve. Their credibility amongst the people in the area helps with raising awareness of the ill-effects of IAP and the benefits of using an improved cookstove. They are trained to raise awareness of the benefits of clean cookstoves, and hold stove demonstrations for the gathered community to highlight the savings possible with the more efficient Envirofit stoves.

Finally, Grameen Koota keeps distribution channels informed about potential orders, thereby ensuring stoves are available when customers reach the retailers.

Will Shell Foundation work with other manufacturers, groups and the Government of India to combat IAP?

The answer is simple – for a problem this big we need to work together. Through a combination of partnerships, campaigns and innovations that span across a wide range of manufacturers, NGOs, financial institutions, academicians, local governments and village leaders we’ve managed to demonstrate new, more effective routes to market.

For truly national scale, the Government needs to play a huge role and the Ministry of New and Renewable Energy has been implementing some excellent ideas to achieve this. In the future, we see the National Improved Cookstoves Programme becoming the flag bearer for a national awareness campaign, as well enabling stove manufacturers to reach their customers.

Making The Most Of Carbon Financing: A New Guide For Energy Entrepreneurs

For a small-scale energy producer in an emerging market, one of the biggest constraints to survival is access to appropriate levels of finance. The rapid growth of the carbon finance industry in recent years could offer a lifeline – emissions trading or ‘carbon credits’ represent a valuable source of income for energy businesses and create financial incentives for cleaner sustainable energy provision – but so far it is mainly larger providers that have been able to benefit.

GVEP International, an international non-profit created to reduce poverty through ‘accelerated access to modern energy services’ aims to change this. Recognising the potential of carbon trading to enable the expansion of innovative social enterprises who deliver development impacts in addition to carbon reductions, GVEP has teamed up with the Ashden Awards for Sustainable Energy to produce a guide for energy entrepreneurs who wish to link their businesses to carbon finance.

“GVEP International often gets asked questions on carbon finance from the many enterprises it is working with. Thus, we tried to make this guide very practical.” says David Disch, co-author of the guide.

“There is so much written on carbon finance but most of it is theoretical and very detached from the questions a small-size biogas enterprise or a cookstove manufacturer has. Drawing on input from various experts and illustrative case studies, this little guide can help small and medium enterprises to understand the complexities and allows them to evaluate the pros and cons of the financial and technical requirements to access carbon finance.”

The partnership has produced a very useful and instructive manual for new entrants into the carbon finance market, addressing questions such as: 

•    How do I assess the potential carbon revenue my business could deliver?

•    What level of investment do I need up front?

•    What challenges will I face in getting carbon credits?

•    How will investors assess the feasibility of my project?

•    How do I approach possible carbon credit buyers?

You can download the guide to Carbon Finance from the GVEP website here. 

 Read the full story on: Carbon Finance: A Guide for Sustainable Energy Enterprises and NGOs.