DATABASE

Case study

Cambodian fuelwood saving project (CFSP)

ongoing



Link
www.cambodia.geres.eu


Abstract

The project aims at the production and sale of the New Lao Stove, a venture making cheap and environmentally friendly stove produced by small enterprises to promote local community development, reduce biomass consumption and smoke emission. It consumes 22% less fuelwood than a traditional stove. In a decade some 2,000,000 stoves have been sold.


Project Description

More than 80% of Cambodians live in rural areas depending almost exclusively on biomass for their cooking needs. The high dependence on firewood combined with the demographic trend put a lot of pressure on local resources and is a major burden for families in terms of fuelwood cost and time spent for its collection. The CFSP aims at reducing fuelwood consumption by the introduction of an affordable improved stove to achieve energy and environmental targets and promote income generating opportunities with particular focus on woman groups. The project was started by the Ngo GERES in collaboration with Energy and Cooperation Ministries. It started with a preliminary socio-economic assessment (1997-2002) resulting in a strategies to disseminate improved cookstoves, a commercialization model and the validation of a stove design that would fit the social, economic and cultural background of the people. Subsequently the project started implementing the strategy supporting its action with training activities. At date the value chain is organized into 42 production centers for a monthly output of 35,000 stoves, bulk wholesalers, distributors and retailers. Most of the people working are women. The stove selling price ranges between 3.5 and 5$ compared with traditional models around 1,5$. The CFSP is possibly one of the projects with the largest impact on the target population. It is well supported by a wide assessment and documentation material.


BENEFICIARIES

2,000,000 stoves sold with an approximate estimation of over 500,000 households benefiting from its use over a population of 15M; the association of New Lao Stove producers and distributors (ICOPRODAC) gather some 250 indipendent business owners.


Results

In a decade 2,000,000 stoves were sold. The monthly production capacity has reached 35,000 stoves. The stove is the main income for some 3,000 people. The construction of improved stoves generates an income almost four time higher than the traditional stove. The better efficiency, 25% as compared to the traditional stove, brings positive impacts in household economic and health conditions. On average a household sees a fuel saving of some 2,5$ per month and benefits of reduced exposure to smoke, since better combustion is assured. The pay-back time is less than 2 months and given a lifespan of three years the overall saving is calculated in some 85$. Over the period 2003-2011 a total amount of 1.5 MtCO2eq saving have been certified for an annual saving of some 180,000 tCO2eq corresponding to the average annual energy consumption of 625,000 Cambodians. The impact on forest conservation has been estimated in a territory equivalent to over 10,000 football pitches of forest degradation.


Business Model

The large scale stove dissemination strategy splits the value chain of the New Lao Stove into 4 steps. Production of stoves is done in small workshops, usually upgraded from traditional stove production, then the stoves are sold in bulk to wholesalers at a reference cost of 0,50$ and hence disseminated through a network of distributors owning their own transport means to retailers. All participants are members of an association to monitor costs and protect the product quality.


Lessons Learnt

The project achievements are the result of a 15-year activity. A number of pilot producers were identified to develop the technology at the beginning. This has built up a know-how that makes innovation possible to meet the continuous customers’ feedbacks. A lot of effort is needed for product quality control. The production process implies some changes from traditional practices and producers have to be motivated to abandon the traditional design. The product needs to be protected from counterfeits, often the solution is to include producers in the business by providing adequate training. The opening of the stove producers association helps protecting product quality.


Key Feature

A 10 years assessment report is available with the project logical framework to be used as implementation guideline. Five steps are identified: - Initial diagnostic study: to design the product with the best chances of success, to build up a multidisciplinary team in partnership with R&D laboratories to optimize stove performances with other socio-economic needs. - Final development of the new equipment: to verify the customers’ feedback and improve the stove in permanent liaison with pilot producers. - Initial work with producers and distributors, training, fixing a fair price, build up an embryonic product dissemination and open an interprofessional structure to assure full ownership. - Promotional strategy, involving a communication expert to promote the product and scale up the business. - A long term strategy: a well-prepared large-scale dissemination, opening of the market, monitoring to assure product quality and project sustainability, assessment and training.


Other significant information

CFSP is one of the first efficient stove projects to run CO2 emission credit evaluation and access the opportunity of carbon finance. The project has obtained emission certification by Det Norske Veritas. GERES managed to operate on CO2 markets on a small grant from the World Bank. Besides the direct benefit, carbon markets impose a methodology for emission calculation that offers an opportunity for monitoring project results. The CDM circuit was not considered, given the limited opportunity offered to biomass savings. In fact, while in general carbon markets could play a beneficial role in supporting energy projects, in the specific case of efficient stoves the CO2 credit system can only help to scale-up the project as credits are issued according to the number of stoves sold. Moreover CO2 credits support projects for 10-20 years whereas a project usually lasts a shorter time. Consequently, credits are sold into voluntary markets. Yet, the credibility of voluntary markets is not enough to assure the funding of large scale cooperation projects.


Main Donor

European Union
(Government)

Implementing Actor

Groupe Energies Renouvelables, Environnement et Solidarités (NGOs)