Soros Economic Development Fund Invests in Clean Cookstove Project

A little over a year ago, I wrote a about CleanStar, a multi-faceted, collaborative program in Mozambique that simultaneously addresses the issues of deforestation, land degradation, hunger, poverty, indoor pollution and carbon emissions, on a small scale, all through a for-profit business structure. The program, which is alive and well, is centered around the replacement of traditional charcoal cooking stoves with alcohol-fired stoves that can be fueled by sustainably produced bio-ethanol. The fuel is produced in a local plant designed to process locally grown cassava while creating jobs at the same time. Charcoal stoves are problematic on many levels. They are responsible for deforestation, which contributes to global warming, as well as respiratory illness and early death.

CleanStar Mozambique, a collaboration between CleanStar Ventures, Novozymes, ICM, Zoe Enterprises, Dometic, Impact Carbon, and Bank of America Merrill Lynch, really hit the jackpot on this one with their holistic, systems approach that took into account not only the fuel, but the way it is produced and its potential impact on both the local environment and the local economy.

CleanStar’s integrative approach impressed us so much that six months later we went to Mozambique to observe the opening of the new ethanol plant in Dondo a town of 80,000 people. You can read all about that visit here. It's such an interesting story that we wanted to check back in and find out how the project is progressing. There have been some big developments.

The Soros Economic Development Fund and the Danish Industrialization Fund for Developing Countries just recently  announced combined investments of nearly $9 million in CleanStar Mozambique, with the option to invest more in potential pan-African expansion. This brings the total investment in the project up to $20 million. This latest investment will create 1,000 new jobs there, while at the same time increasing market demands for some 2,000 local farmers who will be growing cassava for both food and fuel consumption. The farmers will receive assistance with using sustainable agriculture practices, as opposed to their traditional slash and burn methods, with the primary emphasis on food, the excess going into fuel production. The funding will allow CleanStar and its partners to now focus fully on implementation, rather than the time-consuming process of fundraising. They expect that their retail fuel distribution infrastructure will reach 80,000 customers in Maputo, the capital of Mozambique, by 2014. This looks to be the next chapter in a great story. With a $10 billion market for charcoal-based cooking across the rapidly-urbanizing continent, CleanStar’s business model is likely to be feasible in over 40 major African cities.

Stoves are currently sold out of stores and door-to-door. Over 2,000 stoves have been sold to date and there is a backlog of orders which will be fulfilled when a new production line in Durban, South Africa opens and meets qualifications. This demand exists despite the fact that these stoves can cost as much as four times the cost of the charcoal stoves they are replacing. However, the charcoal stoves have to be replaced an average of four times a year, while the clean cookstoves last many years. It shows that even among the poor, immediate cost is not the only factor when making a purchasing decision. Locals may not fully understand the global impacts of deforestation, but they certainly value the health, safety, convenience and cleanliness clean cookstoves bring.

According to Thelma Venichand, CleanStar’s Director of Sales and Marketing. “City women are tired of watching charcoal prices rise, carrying dirty fuel, and waiting for the day that they can afford a safe gas stove and reliable supply of imported cylinders. They are ready to buy a modern cooking device that uses clean, locally-made fuel, performs well and saves them time and money.”

CleanStar Mozambique plans to have 100 stores open by 2014, where these stoves can be purchased. Of course, as the sales of stoves rise, so will demand for the biofuel, called NDZiLO.

From an economic standpoint, this produces revenue for the farmers, for the people working in the plant, those selling the stoves, and those selling the fuel. This goes so far beyond teaching a poor man how to fish, rather than just giving him a fish.

Novozymes decided to get involved with this project after being inspired by the 1997 UN Millenium goals. Located at the intersection of biology and technology, the company is in a position to help realize the possibility of a bio-based economy, one of the hallmarks of a sustainable future. And that is an opportunity they are keenly aware of. Novozymes wanted to get involved in Africa, where they feel there is great potential for agricultural development, and they were looking for a project that would be a good fit. CleanStar satisfies the tenets of Agenda 21, the 2002 Johannesburg Declaration on Sustainable Development, and the Millennium Development Goals. After completing a Life Cycle Analysis (LCA) on the project and seeing the broad-based benefits, they decided to go ahead.

After the plant opened in May, there were some delays before production could begin in full. According to Anders Tuxen, Energy Strategist at Novozymes, “We still needed the biofuel production license from the Mozambique government, and in Mozambique the process to get that license can only start when the plant has been built and is ready for the required inspections. We finally got the license last month. After we received the license, a team from the engineering company ICM that designed and helped built the plant went to Mozambique to start up actual production.”

Now, production is finally underway at about 25 percent capacity. While waiting for the plant to begin operations, the team was able to enroll additional farmers in the program - they are currently building up their cassava stocks so that by the next harvesting season, they will be able to run the plant at its full capacity of 30,000 liters a week, a little over 400,000 gallons a year.