Clean Cooking Solutions
Clean Cooking Solutions
Business Model Description
Promote replacement of traditional firewood stoves with improved cookstoves (including electric rice cookers) or with the use of LPG (green char-briquettes or biogas from a biogester system), and sell induction technology.
ATEC Bio-digesters International (ATEC), founded in 2015, manufactures and distributes bio-digesters. It combines manure or kitchen waste with water to produce fertilizer and gas for cooking. They also provide induction technology to save cost and increase health safety, through pay-as-you-go (PAYGO) solutions, on instalment payment basis for as low as USD 5 per month.
In addition, they have patented their IoT capability which allows them to work with a hybrid revenue model by collecting and selling carbon credits. They have raised total USD 2.3 mn, including USD 1.6 mn in Series B from ENGIE Rassembleurs d'Energies Flexible FCPE in 2019. Other investors include, Phitrust Asia, Clean Cooking Alliance, Foundation Ensemble, IIX Growth Fund. (7)
Khmer Green Charcoal Co. (KGC), founded in 2008, has developed a clean cooking fuel from coconut-shell char and wood-char residues, to provide a sustainable alternative to wood-charcoal consumption. With advanced technology, KGC offers a more energy efficient solution than wood or traditional charcoal, allowing substantial savings for its users. It has supplied its Green Charcoal to >6,500 users.
In 2014, KGC received USD 0.3 mn grant from the Spark Fund of the Global Alliance for Clean Cookstoves with the aim to double its production capacity to >100 tonnes/month, and help KGC build a new warehouse for raw materials. Uberis Capital invested USD 0.8 mn in KGC to double its production between 2015 and 2017.(1)
ACE Energy Solutions (Cambodia) Co. Ltd. (ACE), incorporated in 2016, is a wholly owned subsidiary of African Clean Energy BV with its head office in Amsterdam, Netherlands. Since 2020, ACE has been manufacturing solar-hybrid cook-stoves in Siem Reap, based on efficient pyrolysis of solid fuel which helps reduce users’ fuel consumption. The process can achieve ISO19867 tier 4 efficiency with various fuels. ACE also produces fuel pellets made from sugarcane and bamboo waste to improve the user experience further and encourage the adoption of new technology. The target market is predominantly rural families with inferior access to affordable, clean, and safe thermal energy needs
Expected Impact
Provision of clean cooking solutions to reduce air pollution, and improve the quality of work conditions for cooking staff, women and children.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Cambodia: Phnom Penh
Sector Classification
Renewable Resources and Alternative Energy
Cambodia has one of the highest rates of deforestation in the world as the economy depends heavily on wood, for timber, heat and power generation, while 80% of households use wood or charcoal for cooking. Cambodia lost 2.9 mn hectares of forest (14% of land area) from 1990 to 2010.(1)
National Energy Efficiency Policy 2021-2030 aims to achieve the most efficient transformation of electricity consumption in Cambodia by creating a favorable environment for increasing investment opportunities in energy efficiency. (2)
Despite Cambodia’s recent growth and development, 1 out of 5 households in rural areas remain off-grid, lack access to power provided by utilities, and are unable to access reliable and affordable electricity.
Electricity has traditionally been expensive in Cambodia, than in neighboring countries, and prices historically have been higher in rural areas than in towns and cities as Electricite du Cambodge (EDC) grants licenses to investors to build transmission and distribution lines in rural areas. About 10% of grid-connected households cannot afford the electricity tariff.(3)
Energy access for women contributes to poverty reduction, saving time by substituting manual-labor, and reduces drudgery of fetching fuel wood and water, tasks typically women are responsible for.
In 2021, Cambodia submitted a long-term strategy to be carbon neutral by 2050. Renewable energy, Forestry and other land uses play an important role in this strategy offering many opportunities for investment. Royal Government of Cambodia (RGC) aims that renewable energy sources could account for ~59% of the total installed power capacity.(3)
Recurring challenges include, large capital requirement to set up business, delays in decision making by regulatory authorities, immediate profit motive encouraging short-term extractive businesses over long-term sustainability, and reduction in existing subsidies.
Alternative Energy
Biomass burning accounts for 74% of energy use by Cambodians, with 80% of biomass used for cooking. 2.5 mn Cambodian families use traditional cookstoves fueled by forest biomass (charcoal and wood), impacting their health, causing deforestation, and contributing to climate change. Only 32% Cambodians have access to a clean cooking stove. (4)
National Bio-digester Program (NBP) was established in 2006 to build and maintain household bio-digesters in Cambodia. (5) Policy on Bio-digester Development in Cambodia 2016–2025 establishes a government-supported National Advisory Committee to facilitate increased support and expansion of the National Bio-digester Programme (NBP) through 2025. (6)
With a low rate of access to the electrical grid or clean cooking fuel (specifically in rural areas), population relies heavily on traditional methods of cooking, with 90% resorting to wood, coal or charcoal, which damages the environment and their health.
Women in particular, face severe health issues resulting from using traditional cooking methods. ~14,000 Cambodians die annually due to household air pollution. World Health Organization (WHO) warns that inhaling tiny soot particles during cooking with wood and charcoal can cause respiratory, pulmonary and cardiovascular diseases and lung cancer.
Women and children (take care of cooking) are most at risk as the fumes created by poor stoves disproportionally affect them and can create respiratory diseases. Children take care of the stove when smoke is at its worst, ignited with plastic, rubber or twigs that release chemicals and harmful particles.
Unhealthy air quality inhaled causes diseases such as, pneumonia, which is an issue with children in particular. There are also safety concerns as women in rural areas are responsible for collecting wood. (4)
Long-term strategy for carbon neutrality by 2050 aims for a 100% switch to electricity for cooking. U.N. Food and Agriculture Organization (FAO) and the U.N. Development Programme (UNDP) expect global charcoal consumption to grow until at least 2035.(4)
Changing cooking habits requires a mindset transformation and requires adequate behaviour change communication. Lack of education, affordability, and the inability to quickly scale up stove changeover are also potential hindrances for expansion.(4)
Biofuels
Pipeline Opportunity
Clean Cooking Solutions
Promote replacement of traditional firewood stoves with improved cookstoves (including electric rice cookers) or with the use of LPG (green char-briquettes or biogas from a biogester system), and sell induction technology.
ATEC Bio-digesters International (ATEC), founded in 2015, manufactures and distributes bio-digesters. It combines manure or kitchen waste with water to produce fertilizer and gas for cooking. They also provide induction technology to save cost and increase health safety, through pay-as-you-go (PAYGO) solutions, on instalment payment basis for as low as USD 5 per month.
In addition, they have patented their IoT capability which allows them to work with a hybrid revenue model by collecting and selling carbon credits. They have raised total USD 2.3 mn, including USD 1.6 mn in Series B from ENGIE Rassembleurs d'Energies Flexible FCPE in 2019. Other investors include, Phitrust Asia, Clean Cooking Alliance, Foundation Ensemble, IIX Growth Fund. (7)
Khmer Green Charcoal Co. (KGC), founded in 2008, has developed a clean cooking fuel from coconut-shell char and wood-char residues, to provide a sustainable alternative to wood-charcoal consumption. With advanced technology, KGC offers a more energy efficient solution than wood or traditional charcoal, allowing substantial savings for its users. It has supplied its Green Charcoal to >6,500 users.
In 2014, KGC received USD 0.3 mn grant from the Spark Fund of the Global Alliance for Clean Cookstoves with the aim to double its production capacity to >100 tonnes/month, and help KGC build a new warehouse for raw materials. Uberis Capital invested USD 0.8 mn in KGC to double its production between 2015 and 2017.(1)
ACE Energy Solutions (Cambodia) Co. Ltd. (ACE), incorporated in 2016, is a wholly owned subsidiary of African Clean Energy BV with its head office in Amsterdam, Netherlands. Since 2020, ACE has been manufacturing solar-hybrid cook-stoves in Siem Reap, based on efficient pyrolysis of solid fuel which helps reduce users’ fuel consumption. The process can achieve ISO19867 tier 4 efficiency with various fuels. ACE also produces fuel pellets made from sugarcane and bamboo waste to improve the user experience further and encourage the adoption of new technology. The target market is predominantly rural families with inferior access to affordable, clean, and safe thermal energy needs
Business Case
Market Size and Environment
< USD 50 million
2.5 mn families use traditional cookstoves fueled by forest biomass (charcoal and wood) (4)
ATEC has a potential of mitigating 30,139 tons (CO2e pa) of Greenhouse Gas (GHG).(8)
The customer market for biomass fuel includes both industrial and household users. There are >617,000 households that use firewood for heating and cooking, which results in an annual demand of >10 mn tons of biomass briquettes.
KGC's products have a high demand, and has supplied its Green Charcoal to >6,500 users, saving 4,500 tons of CO2 in 2013 and 6,500 trees by 2014. Users of Premium briquettes save ~USD 60 per year.(1)
KGC's production capacity is 7 tons/month of coconut char and 50 tons/month of briquettes. It uses ~10% of the capacity of its current suppliers of coconut shell. As wood-fired electricity generation is growing rapidly, because of the acute shortage of power in Cambodia, there is ample waste char for processing.(1)
Indicative Return
15% - 20%
KGC's Retail prices: Premium briquettes-~USD 0.34/kgand Diamond briquettes-USD 0.70/kg.(1)
KGC started its sales in 2010, and sold 653 tons of briquettes by 2014 (626 tons-Premium and 27 tons-Diamond). Production is increasing rapidly from ~5 tons/month in 2011 to 22 tons/month in 2013 and 47 tons/month in 2014. Current production can serve up to ~1,250 households or ~6,300 people. (1)
ATEC's bio-digester system (including the bio-digester, kitchen connections, a cookstove and rice cooker) initially costs USD 700, which is a financial burden for a farm families. However, its PAYGO program allows customers to pay via a monthly USD 30 fee over 27 months, with no collateral.(4)
ATEC has surpassed its 5-year goal, achieving >8,000 installations, reaching 12% of villages in Cambodia. Their bio-digesters have generated >552.8 mn liters (146 mn gallons) of biogas and 28,400 tons of organic fertilizer.(4)
Investment Timeframe
Medium Term (5–10 years)
As per expert consultations, expected gestation periods range from 5 to 10 years.
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Market - Volatile
Capital - Requires Subsidy
Impact Case
Sustainable Development Need
Charbriquettes provide a safer solution for cooking (than wood charcoal) as they are less hazardous and protect users by reducing fire induced health risks. (4)
Innovative solutions can help reduce 300,000 tons of charcoal consumed annually across Cambodia.(4) Char-briquettes produce less health damaging air pollution, because of their lower volatile content. They are less fragile, and easier and cleaner for both users and traders to handle and store. (1)
Bio-digesters help reduce GHG emissions, decrease chemical fertilizer use, and reduce hazardous soot and wood smoke which impacts health of users. Globally, total emissions from cooking with biomass are the same as that from the aviation industry. (4)
Gender & Marginalisation
Provision of renewable biogas for cooking and organic fertiliser can help reduce the dependence of rural households and remote communities on wood for cooking, thereby reducing environmental damage. (8)
Expanding market reach can help generate employment opportunities, thereby providing an improved livelihood. KGC employs 3 managers and 20 factory staff (8 women and 15 men), belonging to the informal workforce (rubbish collectors and the like), at a minimum salary of USD 85 per month.(1)
Usage of clean fuel can help farm families in saving costs in the long-term and provide them with an improved yield. Using ATEC biogester enables farmers to save USD 500 per year with free gas generated, and to produce ~20 tons of organic fertilizer each year to increase crop yield. (4)
Expected Development Outcome
Promote renewable and clean sources of energy which can help reduce pollution levels and GHG emissions, especially in regions where fossil fuels are used for energy generation.
Resolve both, waste and energy issues. KGC buys biomass materials, which would otherwise go to waste, and converts them into high-quality char-briquettes that are sold as a direct replacement to conventional charcoal, for cooking in homes and restaurants. (1)
Develop products which are easy to handle for both users and traders, thereby improving export prospects. (1) ATEC's bio-digester is an “off the shelf” product and has a great potential for export, additional scaling up and reaching an exciting new market.(8)
Gender & Marginalisation
Address not only the health issues associated with cooking with wood, but also impact the lives of women and children, who are usually tasked with collecting firewood. (8)
Provide a clean, safe and free energy source (after the initial investment) to low-income households, thereby contributing to the prosperity and livelihood of its customers. ATEC's bio-digester produces ~20 tons of organic fertilizer per year, saving an average family ~USD 254 per year. (8)
Encourage rural communities to trade in their traditional stoves for modern cooking alternatives, including gas stoves or clean charcoal that can ensure prosperity for the users and reduce deforestation or environment degradation.(4)
Primary SDGs addressed
7.2.1 Renewable energy share in the total final energy consumption
2375.4 Mtoe in 2015 (9)
5066.2 Mtoe in 2030 (9)
11.6.2 Annual mean levels of fine particulate matter (e.g. PM2.5 and PM10) in cities (population weighted)
4.0 % in 2015 (9)
10% in 2030 (9)
13.2.2 Total greenhouse gas emissions per year
Percentage of greenhouse gas emission through reduced activities when comparing to the projection of usual gas emission 3.5% in 2015 (9)
Percentage of greenhouse gas emission through reduced activities when comparing to the projection of usual gas emission 18% in 2030 (9)
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
Use of new methods for cooking would result in disappearance of traditional indigenous culinary cultures that rely on the use of firewood.
Without focusing on education and promotion within communities, many people may not be convinced about switching to cleaner methods of cooking.
In the absence of regulations/controls, vulnerable buyers may be exploited by profit making enterprises.
Gender inequality and/or marginalization risk: As target market is low-income households, financial support in the form of subsidies or rebates from the government or concessional financing schemes would be required, in the absence of which there scale up of such business models to communities will be difficult.(4)
Impact Risks
Poorly fed Waste to Energy (WtE) facilities may emit concentrated toxins (dioxins/furans and heavy metals) with potential health risks.
Lack of education, affordability related challenges, and the inability to quickly scale up stove changeover, households may prefer using wood and coal, instead of switching to cleaner fuels. (4)
Gender inequality and/or marginalization risk: With reduction in time spent in cooking, women may be overburdened with other tasks against their will.
Impact Classification
What
Offering clean cooking solutions without any negative externalities in the form of health hazards or environmental damage.
Who
Various; Cooking staff or women in low-income households benefit from clean, safe and affordable cooking methods. Environment benefits from reduction in GHG emissions.
Risk
Limited supply of raw-material may limit expansion of business operations and its ability to meet the growing demand/need for clean fuel.
Contribution
Each ton of charcoal briquettes saves 10 mature trees. (1)
How Much
2.5 mn families use traditional cookstoves fueled by forest biomass (charcoal and wood) (4)
Impact Thesis
Provision of clean cooking solutions to reduce air pollution, and improve the quality of work conditions for cooking staff, women and children.
Enabling Environment
Policy Environment
National Energy Efficiency Policy 2021-2030 aims to achieve the most efficient transformation of electricity consumption in Cambodia by creating a favorable environment for increasing investment opportunities in energy efficiency. (2)
National Bio-digester Program (NBP) was established in 2006 to build and maintain household bio-digesters in Cambodia. (5)
Policy on Bio-digester Development in Cambodia 2016–2025 establishes a government-supported National Advisory Committee to facilitate increased support and expansion of the National Bio-digester Programme (NBP) through 2025. (6)
Financial Environment
Investment Law: Under article 24, green energy technology contributing to climate change adaptation and mitigation is entitled to investment incentives described under article 26 such as income tax exemption for 3 to 9 years, prepayment tax exemption and minimum tax exemption. (11)
Investment Law: Under article 27, besides the basic incentives above, QIP will receive additional incentives such as VAT exemption for the purchase of locally made inputs, deduction of 150 % from tax base for activities such as research development and innovation. (1)
Regulatory Environment
Sub-Decree 65, 2 May 2012: aims to determine the organization and functioning of the Secretariat of the National Committee for Safe-Bio. (10)
Marketplace Participants
Private Sector
Corporates: ATEC Biodigesters International, Khmer Green Charcoal, ACE Solar Cooking Investors: ENGIE Rassembleurs d'Energies Flexible FCPE (in 2019), Phitrust Asia, Clean Cooking Alliance, Foundation Ensemble, IIX Growth Fund, Spark Fund, Uberis Capital
Government
Ministry of Environment, Ministry of Mines and Energy, Ministry of Agriculture Forestry and Fisheries
Multilaterals
Netherlands Development Organization, Asian Development Bank, United Nations Development Programme, Oxfam
Non-Profit
Smoke Free Village, initiative of SVN, Commune Committee for Women and Children, Clean Cooking Alliance, Geres, EnergyLab Cambodia, Neighbor of Cambodia
Public-Private Partnership
Clean and Improved Cooking, Global Alliance for Clean Cookstoves
Target Locations
Cambodia: Phnom Penh
References
- (1) Ashden. (2014). Ashden Winners. https://ashden.org/winners/sustainable-green-fuel-enterprise/
- (2) Hyman, J. (2018). Assessment of the Cambodian National Biodigester Program. https://www.sciencedirect.com/science/article/pii/S0973082618302588
- (3) Hean, S. (2021). Cambodia's Mismatch of Solar Potential and Energy Harvesting. https://earthjournalism.net/stories/cambodias-mismatch-of-solar-potential-and-energy-harvesting
- (4) Carruthers, M. (2021). Green Charcoal Could Curb Deforestation. https://nowthisnews.com/earth/green-charcoal-could-curb-deforestation
- (5) Curruthers, M. (2021). Cleaning Up Cambodia's Kichens Could Curb Deforestation, Climate Changeg. https://news.mongabay.com/2021/06/cleaning-up-cambodias-kitchens-could-curb-deforestation-climate-change/#:~:text=About%2014%2C000%20Cambodians%20die%20annually,15%2C000%20die%20from%20smoking%20tobacco.
- (6) National Biodigester Programme. (2020). http://nbp.org.kh/
- (7) ATEC. (2019). ATEC Biodigesters secures US$1.6M Series B with support from the Clean Cooking Alliance and Impact Investment Exchange (IIX) to scale clean energy access in Asia. https://iixglobal.com/tag/atec/
- (8) The Private Financing Advisory Network. (2022). ATEC Biodigestation International Cambodia. https://pfan.net/projects_and_stories/atec-biodigesters-international-cambodia/
- (9) Royal Government of Cambodia. (2018). Cambodian Sustainable Development Goals (CSDGs) Framework (2016-2030). https://data.opendevelopmentmekong.net/dataset/3aacd312-3b1e-429c-ac1e-33b90949607d/resource/d340c835-e705-40a4-8fb3-66f957670072/download/csdg_framework_2016-2030_english_last_final-1.pdf
- (10) DFDL. (2012). Legal and Regulatory Updates in Cambodia. https://www.dfdl.com/resources/legal-and-tax-updates/legal-regulatory-updates-in-cambodia-8/
- (11) Royal Government of Cambodia. (2021). Law on Investment of the Kingdom of Cambodia. https://www.cambodiainvestment.gov.kh/en/law-on-investment-2021.html