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More than 3.5 million people die prematurely each year from indoor air pollution caused by using solid fuels such as wood and animal dung for cooking and heating. Sixty percent of those who die are women and girls. In households that cook with solid fuel, girls spend up to 18 hours a week, on average, gathering fuel. In all, some three billion people in the world have no access to clean cooking solutions.
Some individuals and enterprises are able to see real humans beyond those statistics, and design and successfully implement strategies to meaningfully address those problems. One example is ATEC Biodigesters in Phnom Penh, Cambodia, which has for the past three years helped hundreds of Cambodian households emerge from the health traps in and around their kitchens. An estimated 14,000 Cambodians — mostly women — die every year of smoke-related illnesses, according to Ben Jeffreys, CEO of ATEC Biodigesters. ATEC’s solution is its “biodigester,” which converts animal, green and kitchen waste into smoke-free cooking gas and fertilizers.
The biodigesters include a biogas rice cooker, and cost between $500 and $650 each. Microfinance makes them affordable with monthly payments of $30 over two years. Jeffreys explains the math: The households save about 20 hours a week they earlier spent on collecting firewood, and the biodigester also produces some 20 tons of fertilizer annually. The combined savings are worth about $30 a month for each household, and their investment in the biodigesters leaves them with a net surplus of between $5,000 and $7,000 over its 25-year lifespan.
At last count, the company had sold 600 of its systems in Cambodia. Its long-term goal is to deploy a million biodigesters in five countries by 2030, including Myanmar, Indonesia and Bangladesh.
Spreading the Word
Enterprises like ATEC Biodigesters could of course find valuable support from advocacy groups in expanding adoption of clean cooking solutions. One is the Global Alliance for Clean Cookstoves, a nonprofit based in Washington D.C. and hosted by the United Nations Foundation. Founded in 2010, it promotes awareness and adoption of clean cook stoves and clean fuels through its network of more than 1,800 partnerships that include NGOs, private sector enterprises, donors and academia.
“Quite often, the woman becomes a bit more of the product champion, because she experiences the problems more deeply than does the man of the household.”–Ben Jeffreys
The work canvas of the Alliance is spread across eight countries: China, India, Bangladesh and Ghana, Guatemala, Nigeria, Kenya and Uganda. So far, it has helped distribute more than 116 million cook stoves in its markets, of which some 80 million are either clean or fuel-efficient.
According to Dymphna van der Lans, CEO of Global Alliance for Clean Cookstoves, most of the cooking still continues to be done by women in the in countries in which her organization is active. “If you think about the impacts of women cooking for their families over open fires, they’re doing it in really horrible circumstances, with indoor air pollution just incredibly impacting their own health and their family’s health,” she said. She summarized her current mission: “Just take that simple belief that women shouldn’t die from preparing food for their families, then make sure that issue reaches a global audience.”
Jeffreys and van der Lans shared insights with from their experiences with Knowledge@Wharton for its podcast series “From Back Street to Wall Street.” The series is being produced in partnership with Impact Investment Exchange (IIX), a Singapore-based organization that serves as a bridge between investors and development goals in Asia. (Listen to this episode using the player at the top of this page. Here are links to the first, second, third, fourth and fifth episodes.)
A Clean, Modern Kitchen
ATEC Biodigesters is a joint venture with two partners. One is the Australian chapter of Engineers Without Borders, a nonprofit that works to bring sustainable engineering solutions to disadvantaged communities, which had developed the prototype for the biodigester. The other is the Australian arm of Live & Learn Environmental Education, another nonprofit that works to promote environmentally sustainable practices. Jeffreys said he wanted to bring his experience in business development and the social enterprise sector to commercialize the biodigester.
Even as the biodigester brought health, social and environmental benefits, “the tipping point” for Cambodian households in deciding to buy the system was “the aspiration of modernizing the house,” said Jeffreys. Wood smoke makes kitchens “black and dirty,” and they liked the idea of “a modern and clean kitchen,” he added.
Nuances of Selling, Pricing, Financing
Selling the biodigester is “about being good listeners, and being strategic in asking questions,” said Jeffreys. He explained that his sales team would spend three-quarters of their pitch discussing the problems related to cooking, fertilizers and associated costs, and then talk about the benefits and savings from the biodigester. “You take them through that four-step process of problem, cost, solution and value. By the time you get to the solution, the product has already sold itself.”
Since the biodigester is not a trivial investment, both heads of the household are involved in the purchase decision, Jeffreys said. “Quite often, the woman becomes a bit more of the product champion, because she experiences the problems more deeply than does the man of the household.”
ATEC Biodigesters was conscious that it had to be sensitive in pricing its product. “If we were to generate commercial returns off those sales, the only way we were going to do it was by charging quite a high price to rural Cambodians,” said Jeffreys. “That’s not what we wanted to do. We wanted to be a profitable social enterprise providing a good return to investors, but not at commercial rates, considering the social and environmental outcomes.”
“Just take that simple belief that women shouldn’t die from preparing food for their families, then make sure that issue reaches a global audience.” –Dymphna van der Lans
When ATEC Biodigesters raised money in an investment round in August 2017, Jeffreys encountered a range of investor perspectives. “In impact investing, every investment is seen even more cautiously than regular investments are, and from many different angles,” he said. Some were cautious and somewhat risk-averse, while others were philanthropists for whom the actual impact in changing livelihoods was more important than financial returns on their investments. His advice to other startups seeking impact investments: “You have to get in and start early, because it does take time.”
Confronting Realities, Taking Action
Dutch-born van der Lans also had started early in trying to find solutions for women who have inferior cooking alternatives. She had encountered them from close quarters during 25 years of experience in the areas of climate and clean energy before she joined the Alliance as CEO in April 2018. She has lived in India, China and Kenya, and worked with island nations in the Indian and Pacific Oceans to help them move away from polluting diesel fuels to renewable sources of energy.
Trees, of course, get destroyed when they are used as the firewood for kitchen fuel, but van der Lans is troubled by the fact that most of the time, it’s the women and the girls who are collecting it. She noted that the actual preparation of the food doesn’t take that much time, but the process of getting ready to prepare the meals requires a substantial effort. Women and children often have to walk long distances to collect the wood, or to get clean drinking water for their families. “We’re not just talking about clean cooking,” she said. “We’re also talking about creating sustainable livelihoods for the families … [which needs] to be addressed much more holistically.”
How Advocacy Helps
The Alliance’s advocacy efforts are critical because issues related to clean cooking are “often overlooked and not always put at the same level and same sense of urgency that some of the other development goals get,” said van der Lans. “My job is making sure that this doesn’t get forgotten and gets increased focus and increased awareness [among] global audiences.” Those efforts will hopefully help governments to create the right policy environments to address issues related to clean cooking, she added.
A positive policy environment is necessary to address those issues, van der Lans said. That means a sustainable, market-based approach. “We want to create an environment in which companies are able to sell products that give our customers access to clean cooking solutions.” That could mean paving the way for appropriate tariffs for imported inputs that manufacturers may need, or tax breaks to support emerging enterprises, she noted.
The Alliance targets its challenges in promoting the adoption of clean cook stoves from multiple directions. Its advocacy efforts help spread awareness of clean cooking stoves and also drive suitable policy-making in its target countries. The Alliance also promotes demand for the stoves through “evidence-based communications” and steering potential buyers to microfinance options.
It eases entry barriers for manufacturing of the stoves by establishing technology standards, and by setting up testing facilities for stoves and fuels through partnerships. It also helps investors find business opportunities that suit their specific requirements, and channels funding from those investors to help enterprises commercialize their technologies and achieve scale.
The Alliance’s awareness campaigns and related programs focus not just on clean cook stoves, but also on clean fuels and other issues. It also guides enterprises in creating the right designs for their cook stoves and making them affordable. “If it’s not affordable, then that still doesn’t give them access to clean cooking solutions,” van der Lans said.
“If it’s not affordable, then that still doesn’t give them access to clean cooking solutions.”–Dymphna van der Lans
The goal of the Alliance is to reach 100 million households adopting cleaner and more efficient stoves and fuels by 2020, and universal adoption by 2030. In order to achieve that, it has set a target of attracting $1 billion in investments to support enterprises in the sector.
In an effort to remove barriers to investments, the Alliance has developed a half a dozen funding options for investors such as its Pilot Innovation Fund, which provides grants of up to $150,000 for game changing technology and business model innovations. Its Spark Fund provides grants of up to $500,000 to help business enterprises in its space reach commercial viability.
Consumer financing is one area where the Alliance is seeing innovation to broaden access. Van der Lans talked of experiments around a pay-as-you-cook model in Africa and elsewhere, for example. “They aren’t necessarily focused on technology innovation; they’re focused on business model innovation,” she said. The goal, she added, is to “create a business model that allows for the consumers to pay for the stove, either through a down-payment and then paying small increments for the fuel use, or just using an ATM-type machine, where they can go and pay a certain amount of money to buy the appropriate amount of fuel that they can afford at that particular moment.”
Van der Lans said the market for clean cooking solutions is still nascent and emerging, and therefore the Alliance is working on market-strengthening efforts to help enterprises be financially more viable. That includes programs where it works with emerging enterprises and business owners to help them optimize their business models, systems and processes, or their products using creative ways. Its financing mechanisms such as the Spark Fund help achieve those objectives, she added.
“We identify and work with what we call the ‘pioneers’ in the market — the companies where we see real potential for industrialization of their operations,” van der Lans said. For example, the Alliance’s efforts might help an enterprise scale production from 6,000 units per week to 60,000 units per week. “Although 60,000 doesn’t sound like a lot, when you start adding a couple of these companies within a country, you can start thinking about penetrating that market and making sure that the issue within that country is addressed.”
In attracting more investments to her sector, van der Lans is also exploring options like blended financing, by marrying development financing and philanthropic grants with private equity or debt structuring options for enterprises. Here, she is working to loop in investors like the International Finance Corporation or the World Bank.
Such efforts to shape investor appetite is important, because the businesses in clean cooking solutions have “a different risk profile and a different payback period, and so they call for a different way of thinking about how to create systems that are good for the consumers to grow this business.”