GENI GREEN SOLUTIONS LIMITED

Kigali Rwanda

Access to Clean Cooking Energies

Through Sustainable Forest Conservation
(ACCES-FC)

Business Proposal for Funding by….

07th March 2018

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 1

Table of Contents
1.0 INTRODUCTION ....................................................................................................................................... 3
1.1 Company description .......................................................................................................................... 3
1.2 Goal and objectives ............................................................................................................................. 3
1.3 Expected results .................................................................................................................................. 3
1.4 Justification of the initiative ................................................................. Error! Bookmark not defined.
1.5 Relevance of project to policy drivers................................................................................................. 3
1.5 National policies .................................................................................................................................. 4
1.6 Proposed business model ................................................................................................................... 5
1.7 GGS clean energy strategy .................................................................................................................. 5
2.0 PRODUCT DESCRIPTION .......................................................................................................................... 6
2.1 Background ......................................................................................................................................... 6
2.2 Cookstoves technology landscape in Rwanda .................................................................................... 7
2.2.1 Rural areas ....................................................................................................................................... 7
2.2.2 Urban areas ...................................................................................................................................... 7
2.3 Gasifier stoves - Social acceptability ................................................................................................... 8
2.4 Gasifier stoves - Environmental benefits ............................................................................................ 8
2.5 GENI multifuel gasifier stove............................................................................................................... 8
2.6 Production ........................................................................................................................................... 9
2.7 Product costing and pricing .............................................................................................................. 10
3.0 MARKETING PLAN ................................................................................................................................. 11
3.1 Consumer landscape in Rwanda ....................................................................................................... 11
3.2 Marketing management ................................................................................................................... 12
3.4 Competitor analysis .......................................................................................................................... 13
3.5 Monthly sales projections ................................................................................................................. 14
4.0 MANAGEMENT PLAN ............................................................................................................................ 14
5.0 FINANCIAL PLAN.................................................................................................................................... 15
5.1 Financial requirements: Phase one ................................................................................................... 15
5.2 Financial expansion ........................................................................................................................... 15
5.3 Projected cash flow ........................................................................................................................... 15
6.0 GGS COMPETITIVE EDGE ....................................................................................................................... 16
7.0 INTEGRATION OF BEST PRACTICES ....................................................................................................... 18
8.0 WORKPLAN ........................................................................................................................................... 18
9.0 BUDGET ................................................................................................................................................. 19
9.1 Summary Budget ............................................................................................................................... 19

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 2

1.0 INTRODUCTION

1.1 Company description

Gene Green Solutions (GGS) is an eco-friendly private manufacturing company producing wood and non-
wood products from forest resources and recycled materials. It is located in Kigali city with a heavy
presence in the rural areas. GGS was created as a subsidiary of Inclusive Business and Consulting Limited
to take urgent practical action on climate change by engaging in productive utilization of forests for socio-
economic development. GGS is a business entity that has a secure organization structure, financially
sustainable and effective in establishing the broad network of partnerships necessary to make this new
approach to forest management a reality. It aims to make a significant contribution to the sustainable
energy future for Rwanda and the entire East and Central Africa region.

1.2 Goal and objectives

1.2.1 Goal
The goal of this project component is to work in conjunction with different partners to mitigate climate
change by reducing carbon emissions and the degradation of natural resources from the use of dirty and
inefficient cooking devices and fuels including firewood and kerosene.

1.2.2 Primary objective

The primary objective is to work in conjunction with different partners to enhance access to clean energy
for poor and rural communities by strengthening the role of clean energy outlets in the clean cooking
supply chains in Rwanda through product development and entrepreneurship support.

1.2.3 Specific objectives

 Improve the efficiency and sustainability of the traditional wood and charcoal cooking energy
value chain through sustainable forest management and use of clean, high efficient stoves.
 Strengthen local economies through increased production of biomass fuels and stoves by scaling-
up proven business models.
 Develop new biomass energy cooking value chains. This includes pellets, briquettes, biogas, as
well as liquid fuels, such as ethanol, produced from agricultural or forestry wastes.

1.3 Expected results

 Increased energy access in underserved urban and rural communities in Rwanda. 2.4 million
Households with access to clean and efficient cooking stoves.
 Increased number of women and youth involved in the distribution of clean energy technologies.
 Increased business and technical capacity of women and youth entrepreneurs related to clean
energy technologies and solutions.
 Increased income for women and youth entrepreneurs and their families from the sale of clean
energy products.
 Sale of clean and efficient cooking stoves by clean energy outlets increased by 50%.

1.5 Relevance of project to policy drivers

GGS engagement in clean energy and more specifically gasifier stove production is in line with the global,
regional and national policy driver. The intervention of GGS directly contributes to the Sustainable
Development Goals (SDGs) listed below:

1.5.1 Sustainable Development Goals

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 3

Goal 3: Ensure healthy lives and promote well-being for all at all ages: By 2030 end preventable deaths
of new-burns and under-five children.

Goal 7: Ensure access to affordable, reliable, sustainable, and modern energy for all: By 2030 ensure
universal access to affordable, reliable, and modern energy services.

Goal 12: Ensure sustainable consumption and production patterns: By 2030 achieve environmentally
sound management of chemicals and all wastes throughout their life cycle in accordance with agreed
international frameworks and significantly reduce their release to air, water and soil to minimize their
adverse impacts on human health and the environment.

Goal 15: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage
forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss: By
2020, promote the implementation of sustainable management of all types of forests, halt deforestation,
and restore degraded forests, and increase afforestation and reforestation by x% globally.

1.5 National policies

Provoked by rapid deforestation and energy supply concerns in Rwanda, GGS clean energy interventions
will be implemented strictly within the existing energy policies and strategies. These include but not
limited to the policies (1.5.1) and strategies (1.5.2) below.

1.5.1 National policy drivers on energy

 National Energy Policy and Strategy (MININFRA, 2011)
 National Forestry Policy (NAFA, 2010)
 Organic Law No. 04/2005 of 08/04/2005 Determining the Modalities of Protection, Conservation
and Promotion of Environment in Rwanda (Central Government, 2005)

1.5.2 National strategies on energy

 National Climate Change and Low Carbon Development Strategy (REMA, 2011)
 Strategic Plan for the Forest Sector 2009-2012 (NAFA, 2010)
 Biomass Energy Strategy (Ministry of Infrastructure, 2009)
 Five-Year Strategic Plan for the Environment and Natural Resources Sector 2009- 2013 (Ministry
of Natural Resources, 2009)
 Rwanda Decentralization Strategic Framework (MINECOFIN, 2007)
 Rwanda Vision 2020 (MINECOFIN, 1999).

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 4

 Table 1: MTF Survey presented to both Electricity Access and Biomass TWGs

Recommendations:

 Based on the survey results, therefore, it is recommended to continue to

expand the use of improved cookstoves to as many households as
possible.

 67 percent of households are still using a three-stone stove or a

traditional stove as their main cookstoves, so the potential benefits for
the use of improved cookstoves are significant.

 Given the overwhelming evidence of the negative impact of indoor air

pollution on health, efforts should focus on expanding access to higher
tier stoves as much as possible (Tier 4 –5).

 The latter will require overcoming the affordability barriers, as higher

performance stoves also tend to be more expensive.

Source: MTF Implementation Survey in Rwanda (Nov-Dec 2016)

1.6 Proposed business model

The household sector constitutes the largest share of total primary energy consumption and is thus a
major focus of GGS clean energy interventions. The GGS stoves business model consists of free lease to
customers of a natural draft biomass gasifier stove which is considered the cleanest and most efficient
type of solid biomass stove. The lease will be done on condition that the households may only use it with
GGS Biomass Fuel Pellets (BFP). Urban, previously charcoal using customers purchase BFPs through GGS
supported clean energy outlets based in all the sectors in the country. Rural or peri-urban customers
receive BFPs in exchange for supplying raw biomass (mostly agricultural residues, waste wood, old
furniture small tree branches and even sawdust will also be accepted) at the clean energy outlets which
will double up also as collection centres.

The combination of standardized BFPs and the highly efficient natural draft gasifier stove will allow GGS
to serve more urban households (HHs) from every rural biomass-supplying customer, which still require
those HHs to collect less biomass than they otherwise would have needed. The high efficiency of the
system and the price of charcoal mean that GGS can charge a sufficiently high price to recover the cost of
the leased stoves in a reasonable time period, whilst urban HHs still pay less for BFPs than they otherwise
would for the same amount of charcoal-based. Overall, the amount of woody biomass required across
customer households is expected to decrease by around 90% once the households start to use the GGS
stove and pellets.

The GGS business model will pass through trials and is expected to evolve overtime. The model is
dependent on the willingness of existing charcoal users to purchase BFPs, which appears to be the case
as long as BFPs remain functionally cheaper, given the additional benefits of cleaner and faster cooking
from adoption of their stoves. Peri-urban customers have also shown a high level of willingness to
exchange biomass for BFPs, although the company may explore alternate sources of biomass (e.g.
professionally managed plantations) as their operations expand. IGS have support from the Ministry of
Infrastructure for their program.

1.7 GGS clean energy strategy

GGS scope of interventions will be wide. This will relate to, but not limited energy, women and youth
empowerment, capacity building, research and innovation and knowledge management.

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 5

1.7.1 Market transformation of cooking fuels and devices: Engage in the design, production, testing, and
up scaling production of improved cooking devices and fuels.

1.7.2 Standards and labeling: Contribute to development of technological standards for cooking fuels and
devices in terms of efficiency and health impacts.

1.7.3 Networking for research and innovation: Contribute to knowledge and experience sharing in terms
of technologies and innovations and link with research centres.

1.7.4 Demonstration/pilots projects for scaling up: Establish and conduct demonstration/pilot centres
on innovative and clean fuels and devices.

1.7.5 Gender responsive actions: Promote economic empowerment of women through increased
involvement in the clean energy value chains.

1.7.6 Capacity building: Develop capacity building manuals and train locals on various aspects of clean
energy technologies; and build capacity of clean energy outlets owners on entrepreneurship and business
skills.

1.7.7 Knowledge management: Document and disseminate best practices on efficient, clean and safe
cooking fuels and stoves.

1.7.8 Development of project pipeline: Develop new programs to promote adoption of renewable energy
products and services; mobilize private investment and involve donors and banks in funding sustainable
cooking energy investment projects initiated by GGS; Exploit carbon financing opportunities.

2.0 PRODUCT DESCRIPTION

2.1 Background
Improved Cook Stoves (ICS) are capable of wood savings of 60% or more in addition to the health benefits
compared to the basic stoves in use today (see table below). Natural draft gasifier and fan or forced-draft
gasifiers have substantially better performances, and can potentially perform close to those LPG stoves.

The International Standards Organization identified four performance tiers for cook stoves depending on
their efficiency, environmental and health impacts: Tier 0 includes unimproved traditional cooking
methods; Tier 1 relates to measurable improvements; Tier 2 substantial improvements; Tier 3 currently
achievable technology for biomass stoves; Tier 4 stretch goals for targeting ambitious health and
environmental outcomes. GGS will strive to manufacture clean and highly efficient gasifier stoves suitable
for Tier 3.

Table 2: Cook stove efficiency ratings for proposed ISO Tiers

Proposed ISO Tier Illustrative stove type Efficiency Energy savings relative to Tier 0
Tier 0 3-stone fire <15% 0%
Tier 1 ICS >15% 23%
Tier 2 Rocket stove >25% >40%

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 6

 Tier 3 Forced draft >35% >57%
Tier 4 LPG / advanced biomass >45% >67%
Source: World Bank ACCES project

The above classification proposed by the World Bank ACCES project includes not just energy criteria, but
also health criteria.

2.2 Cookstoves technology landscape in Rwanda

2.2.1 Rural areas

In rural areas, most people use traditional stoves followed by improved woodstoves, often made of
ceramic or mud.

Table 3: Types of stoves adopted in rural areas

Stove Efficiency Market share Availability

1. Traditional Very inefficient and High High
Stoves produces a lot of emissions
2. Improved Considerable reductions in Medium - high Medium - high
woodstove fuel use and emissions
mud possible
3. Improved Efficiency gains are limited Medium - high Medium
woodstove
ceramic
4. Biogas stove Very clean. Minimal Low
Designed to last for 20 years
with no costs for fuel.

Source: GACC Rwanda Market Assessment Sector Mapping (2012)

2.2.2 Urban areas

In urban areas, charcoal stoves are common and ‘improved versions’ are increasingly common. A new
alternative is the metal woodstove.

Table 4: Types of stoves adopted in urban areas

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 7

Source: GACC Rwanda Market Assessment Sector Mapping (2012)

Analysis of the table 3 and 4 present a good case for a serious large scale engagement in an in-country
manufacturing of gasifier stoves. GGS identified this opportunity in the stoves sub sector and is currently
engaging in the production of clean and highly efficient multifuel and firewood gasifier stoves. (Test results

1. Improved woodstove Greatly reduces the quantity of Minimal Medium

metal wood required

2. Charcoal stove Limited efficiency charcoal stove, Medium High

sometimes with a liner
3. Improved charcoal Still requires charcoal - efficiency is Medium Medium - high
stove limited by the charcoal quality

4. Gas and electric Clean and efficient Minimal Medium

stoves

5. Gasifier stove Very safe and pleasant cooking Minimal Currently not
experience; exceptionally low available in Rwanda
emissions of carbon and IAP at a large scale.
to be availed by CREEC-Uganda).

2.3 Gasifier stoves - Social acceptability

Gasifier stoves are metallic biomass-fuelled cooking stove designed in a way that the fuel is first converted
into combustible gases through intense heating which then burns with a clean flame. In comparison,
combustion in conventional open fire is not controlled and results in production of smoke and other forms
of harmful gases such as carbon monoxide. Therefore, gasifier stoves allows for cleaner cooking than
traditional cook stoves. Gasifier stoves can be used to cook food and heat water. They are compatible to
the cooking habits of the rural majority in East Africa that currently rely on firewood as fuel, and could be
used as substitute for other conventional stoves such as charcoal cook stoves or three stone fireplace.

2.4 Gasifier stoves - Environmental benefits

A particular advantage of a gasifier stove is the low environmental impact due to:
 Significant fuel savings over traditional three stone fireplace.
 Clean burning: less air pollution than many types of biomass stove, including charcoal cook stoves
that releases a lot of carbon monoxide.
 Fast cooking.
 Use of readily available biomass materials, such as agricultural residues.
 Modern appearance yet affordable (e.g. from less than US$10 to US$100) can potentially offer
the following benefits over traditional biomass fuels (firewood or charcoal).

2.5 GENI multifuel gasifier stove

The Geni Multifuel Gasifier Stove (GMGS) uses the Push and Pull technology. The Push and Pull technology
ensures that there is complete combustion of fuels used. The final product is over 95% ash. The ash
produced is a raw material for making organic fertilizer.

2.5.1 Pellet function

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 8

GMGS is designed to operate on pellets as the primary fuel and it is therefore important to note that that
all accessories (detachable parts) that come with this stove must be in place for the gasifier function to
work. The diagram below shows a complete set up of the stove when the gasifier function is ready to go.
The pellet’s combustion chamber is filled with the fuel to the level that is enough to prepare food for the
number of people available. The detachable pot-rest must also be in place.

2.5.2 Charcoal function

GMGS easily switches to charcoal function at the end of the gasification process by removing the wood
shelf through the main air inlet door. The base streamliner cover will come off the pellets combustion
chamber and fall on to the rocket function fire crate below and then removed through the main air inlet
door. Charcoal formed as a result of gasification process of wood/pellets will be retained by the pellets
combustion chamber fire crate. It is advisable to open the base streamliner while the wood/pellets are
still burning to ensure a smooth transition from gasification to charcoal use. Since the amount of charcoal
in the pellets combustion chamber reduces as gasification process takes place. The user is at liberty to
add more charcoal if there is need. It is advisable also to ensure the main air inlet door is shut and let the
base doors to be used to regulate the stove power.

2.5.3 Rocket stove function

Rocket stove function allows the stove to open completely when all the detachable parts are removed.
One can choose to either use the fixed pot-rests or the detachable ones depending on the amount of fire
power required: the fire power of the rocket stove is determined by the amount of firewood fed into the
stove. More firewood means more power and to free the increased power for the draft to flow naturally,
higher pot-rests are required. This rocket stove function generates a lot of power as air used in the
combusting the firewood on the rocket fire crate is pre-heated by pieces of hot charcoal falling on to
another fire crate below it.

2.6 Production

2.6.1 Workshop location

The stoves workshop for the plot phase will be located in prime land in an industrial zone within Kigali
town. This will be on a property owned by GGS. The choice of location will be guided by availability of
facilities and infrastructure relevant to the business. GGS will construct a warehouse facility at a cost of $
20,000. The multipurpose structure will also house pellet and ash fertilizer production lines. The
production capacity of the stove production unit will be expanded once a good market base is established.

The stove production facility will be housed in the same building with fertilizer and pellets production
facilities. The first diagram below shows the entire building and nominal sizes to be occupied by each of
the three production facilities. The space allocated for stove production is as shown in this diagram at the
top left corner. The three other incomplete spaces are as indicated: fertilizer and pellets production.

Detailed workshop design and quotation for a 3,000 monthly stove production workshop will be
developed after confirmation of financing. For the purposes of this business plan, budgetary capital costs
has been estimated with assistance from tools and machine suppliers and stoves sub sector experts led
by WilOk Innovations, P.O. Box 2001-20100, Nakuru, Kenya. Email: wilsonokwako@yahoo.com. Mobile:
+254723179568.

2.6.2 Production tools and equipment

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 9

The production of Geni multifuel gasifier stove will be mechanized. This will require a wide range of tools,
machines; equipment and accessories. The cost of mechanizing the gasifier stove production process is
about $ 14,050. Once the workshop is set up, the bulk of the investment would be on working capital.
Raw materials make up the biggest cost, and are relatively high compared to traditional cookstoves. The
balance sheet in the financial analysis section assumes that each unit will produce 100 stoves a day using
a labourforce of 20 people at a daily cost of $100. This is a relatively challenging target that will require
active, focused marketing activity to achieve. However, the business will be profitable even when the
initial working capital loan repayments and salaries/wages are factored.

2.6.3 Stove components

 The total height of the stove column is 48cm. Height without pot-rests is 44cm.
 The stove has the following parts as seen in picture 3 above.
 The outer casing
 Inner casing / heat retainer
 Combustion chamber wall (CC wall) and stopper rods (R8)
 Combustion chamber’s base streamliner cover (BS liner cover)
 Wood shelf/stopper for base streamliner cover (WS/stopper)
 Top cover/combustion chamber anchor/ pot-rest anchor (TC)
 Stove stand/base
 Air inlet door system
 Fire crate system
 Metal sheet rings at the base and top of the stove (MR)
 Main door cap/main air-inlet door top ring (MDC)
 Vermiculite/insulation wool

2.7 Product costing and pricing

2.7.1 Product costing

The total cost of producing one unit of Geni multifuel gasifier stove is estimated at $21.75. This includes
materials costs for making all the stove parts mentioned above.

Direct costs
Items No. of Units Price per Unit ($) Total Cost ($)
1 Raw materials 1 stove 17.5 17.5
2
Total 1 stove 17.5

Indirect costs
Items No. of Units Price per Unit ($) Total Cost ($)
1 Transportation 1 stove 1.0 1.0
2 Labour 1 stove 1.6 1.6
3 Electricity 1 stove 0.15 0.15
4 Miscellaneous 1 stove 1.5 1.5
Total 1 stove 4.25

Total cost per unit

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 10

 Items No. of Units Price per Unit ($) Total Cost ($)
1 Direct Costs 1 stove 17.5 17.5
2 Indirect Costs 1 stove 4.25 4.25
Total 1 stove 21.75

2.7.2 Product pricing

Price setting
Product Package (Units) Price per Unit ($)
1 Cost of product 1 stove 21.75
2 Mark up @ 40% 1 stove 8.70
Selling Price 1 stove 30.45

3.0 MARKETING PLAN

3.1 Consumer landscape in Rwanda

3.1.1 Market segmentation: The consumer landscape in Rwanda the population can be segmented based
on four key areas.

Table 5: Consumer segments

Market (Rural / Urban / Institutional)

Household fuel type (Wood / Charcoal / Other)
Economic situation (Collect or buy fuel)
Geographical situation (wood fuel deficit / surplus)

3.1.2 Target market identification: The largest customer segments are biomass collectors in rural areas
and represent 56% of all households. This presents a good rural market potential for GGS gasifier stoves
in the rural areas, given that the potential market for a cookstove intervention in Rwanda is approx. 2.4
million households.

3.1.3 Segment profiles: The targeted population can be segmented into four groups: 1) Households which
purchase charcoal for cooking. 2) Households which purchase firewood for cooking. 3) Households which
collect firewood in areas with a large wood fuel deficit and poverty. 4) People who collect firewood in
other areas.

3.1.4 Customer segmentation summary: Segments 1 and 2 households which are purchasing fuels will be
more easily targeted with the GGS cookstove business as they have a greater ability and willingness to
pay. These segments will also be reached more easily. This implies that GGS will provide different
cookstove solutions, tailored to the needs of each segment on variables such as price and consumer
messaging, are needed to reach the whole target market.

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 11

3.2 Marketing management
Marketing will be a responsibility of the workshop manager. The Rwandan stove market is presently under
development. GMGS will be sold to rural, peri-urban and urban households. Regional markets will also be
explored in the next two years upon successful launch of the product in the Rwandan market.

3.2.1 Distribution channel

When selling wood pellets to different customers in Rwanda, GGS will sell through Clean Energy Outlets
(CEOs) owned and managed by agents. Well packaged quality stoves will be transported by road to the
CEOs managed by agents. The agents will include; individual business owners, organized women or youth
group enterprises, farmer co-operatives as well as others who will be identified in the course of
conducting business. The agents will be recruited prior to commencement of production and adequately
trained about the products and business skills. The agents will be identified in all the sectors to enable the
end users have easy access to GGS products and services.

GGS will recruit competent businesses to provide last mile distribution services by stocking and selling the
gasifier stoves to the end users. The CEOs will not be owned by GGS but will remain independent entities.
All the CEOs recruited will get market development support from GGS periodically in order to create
consumer awareness and stimulate demand.
The marketing and distribution strategy will explore three options namely;
 Distribution channel 1: Producer - wholesaler - retail outlets - end users.
 Distribution channel 2: Producer - retail outlets - end users - Most recommended
 Distribution channel 3: Producer - End users.

3.2.2 Selection criteria for CEOs

The CEOs managed by various independent agents will be carefully selected using but not limited to the
factors listed below;
 Should be physically located near customers to save on transportation expenses.
 Should be able to link GGS to an expanded market base.
 Should have good knowledge of improved cookstoves markets, customers, and prices.
 Should be able to collect raw materials (firewood and ash) on behalf of GGS from the households
for production of fertilizer and pellets.
 Should be able to exchange gasifier stoves, pellets or fertilizers for ash or firewood.
 Should help expedite transportation of products and raw materials collected.
 Should be able to assist customers in the event of product claims.
 Should be financially strong to carry out regular inventory and pay promptly.

Although one disadvantage of selling through agents is that they need a share of the product value in
order to stay in business, and since GGS will not employ adequate in-house marketing expertise, it will
rely on the marketing experience of the agents. GGS will continue to provide periodic market
development support as will be necessary for the growth of the businesses.

3.3 Geni gasifier stove customers

Many would-be consumers of GGS products may have never seen or heard about gasifier stoves. This
means active marketing and consumer awareness activities will be needed to enhance market

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 12

penetration. This will include activities such as public demonstrations, targeted free product trials and
tent pitching. Through continued research and innovation in partnerships with different stakeholders,
GGS will produce gasifier stoves to be sold mainly to institutions within Rwanda.

Chart 2: Nationwide stove stacking

Source: MTF Implementation Survey in Rwanda (Nov-Dec 2016)

The following marketing strategies will be exploited:

 Households currently cooking with firewood using an improved stove: Sales could be either from
consumers looking to replace equipment at the end of iits life, or active decisions to change to
the GGS gasifier stove. Appropriate and careful pricing will be very important.
 Households cooking with firewood in a 3-stone fireplace: If people are willing to switch from using
a 3-stone fireplace, the GGS gasifier firewood stove will demonstrably be a worthwhile
investment. If firewood is currently collected for free, other benefits, such as the reduced smoke,
rather than fuel economy will require emphasis through marketing.
 Businesses (e.g. street food vendors) cooking with firewood: Such enterprises will likely be
receptive to the fuel (and money) saving benefits of gasifier multifuel stoves.
 Institutions: Large sized gasifier stoves would work very well in institutions such as schools or
hotels, which are heavy consumers of charcoal and fuelwood.

3.4 Competitor analysis

The Ministry of Infrastructure and its implementation arm EWSA are currently the key government
agencies that deal with cookstoves in Rwanda. The private sector is dominated by smaller players, with
no larger organization importing or manufacturing stoves at scale yet.

Table 6: Competitor analysis

Practical Action Inyenyeri Enedom Manna Energy

Consulting
What Consultancy working Importing and Importing Save80 Institutional stove
alongside EWSA to distributing clean stoves from manufacturer/distrib

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 13

 implement the gasified stoves which Germany, and uter. Looking to
improved cookstoves will be used to burn the assembling/ enter the household
projects after company's biomass distributing them cookstove sector
winning the RFPs for pellets. Capable of in Rwanda. The
both the urban and implementing the end- stoves are
rural project in 2009 to-end project subsidized by
management: means of carbon
research/manufacture/ financing
distribution/monitoring
Challenges Restricted by Needs to build Potentially The institutions are
available additional pelleting difficult to keen to realize the
government funding capability to expand - achieve long term cost
large amount of capital Government savings, but lack the
expenditure required. backing since it capital upfront.
Also needs to build a rivals the EWSA Manna Energy
sizeable infrastructure stoves cannot provide
network to support the financing support at
business model present

3.5 Monthly sales projections

SALES MONTHS TOTAL

1st 2nd
3rd
4th
5 th
6th

Units sold in cash 3,000 3,000 3,000 3,000 3,000 3,000 18,000
Cash sales ($) 0 91,350 91,350 91,350 91,350 91,350 456,750
Units of stoves
exchanged for ash
Quantity of ash
collected (kgs)
Units of stoves
exchanged for wood
(pcs)
Quantity of wood
(kgs)
Units (pcs) 0 3,000 3,000 3,000 3,000 3,000 18,000
Total Cash ($) 0 91,350 91,350 91,350 91,350 91,350 456,750
Ash (kgs)
Wood (kgs)

4.0 MANAGEMENT PLAN

4.1 Plant management and operation

One salaried employee is required to manage each plant at a cost of about ($1,000 per month). Four
salaried employees (stove experts) will be involved in operating the stove production machines at a cost
of about ($2,400 per month) per employee. About 16 temporary employees will be required to work in

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 14

the different stages of stove production. Each temporary employee will be hired at a cost of about ($6,000
per month). The plant manager and plant operators will be identified by GGS in good time to allow them
participate in the pellet plant establishment process. GGS will maximize on recruitment of high-quality
people for the various positions from within the location of the plant.

4.2 Labour requirements

Phase No. of Full time Salary per Temporary Wages per Total no. of Total cost of
Plants employees month($) employees month ($) employees labour per
month ($)
Phase one 1 4 2,400 16 2,400 20 4,800

Phase two 0 4 2,400 30 4,500 34 6,900

5.0 FINANCIAL PLAN

5.1 Financial requirements: Phase one

Capital requirement Component Total ($) Component Total ($) Personal
Contribution ($)
Investment capital
Equipment/Tools 14,050 14,050 14,050

Working Capital ( 1 month) ( 3 months) ( 3 months)

Raw materials 52,500 157,500 157,500
Transportation 3,000 9,000 9,000
Labour 4,800 14,400 14,400
Electricity 450 1,350 1,350
Miscellaneous 4,500 13,500 13,500
Total working capital 65,250 195,750 195,750
Total (Investment + Working ) 79,300 209,800 209,800

Note: It is assumed that the business will require working capital for 3 months’ production. This is because
sales are expected to pick gradually overtime.

5.2 Financial expansion

Phase No. of plants Amount required ($) Source

1 Pilot phase 1 209,800 Equity
2 Expansion phase 0 209,800 Grant / Loan
Total Amount 1 419,600 Equity/ Grant / Loan

5.3 Projected cash flow

5.3.1 Cash flow statement

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 15

 Forecast for the 1st six months.
Item 1 2 3 4 5 6
1 Initial cash 209,800 130,500 142,550 154,600 166,650 178,700

2 Inflows
Sales 91,350 91,350 91,350 91,350 91,350
Loan
Savings
Total inflows 91,350 91,350 91,350 91,350 91,350
3 Outflows
3.1 Direct cost
Equipment and tools 14,050
Raw materials 52,500 52,500 52,500 52,500 52,500 52,500

3.2 Indirect Costs

Transportation 3,000 300 300 300 300 300
Labour 4,800 4,800 4,800 4,800 4,800 4,800
Electricity 450 450 450 450 450 450
Maintenance
Marketing 300 300 300 300 300
Miscellaneous 4,500 750 750 750 750 750
Sales commissions
Total outflows 79,300 79,300 79,300 79,300 79,300 79,300
Balance =
Total inflows – Total
outflows 130,500 142,550 154,600 166,650 178,700 190,750

6.0 GGS COMPETITIVE EDGE

6.1 Some evidence
6.1.1 Cooking habits: Although regional and income differences exist, cooking habits across Rwanda are
similar with beans and cassava at the heart of many meals and women responsible for cooking that takes
place indoors. The opportunity is that GGS gasifier stove designs fit with cooking habits such as the long
cooking of beans and the use of pots of different sizes. GGS stoves for rural areas can burn different
types of biomass.

6.1.2 Fuel usage and availability: Wood (biomass) is the dominant household fuel in Rwanda, accounting
for 93% in rural and 45% in urban areas. Charcoal accounts for 51% in all urban areas combined, and for
65% in the capital Kigali. The opportunity is that given the heavy reliance on wood fuels, the GGS
designed stoves are able to cook on wood (biomass) or charcoal or provide the fuel as a part of the
intervention.
6.1.3 Livelihoods: Most rural households spend hardly any money on fuels for cooking, but charcoal
production does contribute a large amount to the rural economy. The opportunity is that GGS clean
energy interventions takes into account the impact on the rural economy.

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 16

6.1.4 The role of gender: Women play an integral role in the cookstove market, with all sectors utilizing
their experience and networks across the board, from raising awareness, product development to
marketing and sales. The opportunity is that GGS will ensure continued presence of women and youth in
the sector, improve their ability to connect with end consumers and increase their growth potential.

6.1.5 Standards and testing: There is currently no testing facility in Rwanda that can test stoves for
emissions; there are no standards for IAP and stoves yet, although the first stove standard is currently
being discussed. The opportunity is that GGS will be a key player in working with the GoR in improving
testing capabilities and setting standards present major opportunities to create a more enabling
environment for the cook stove market.

6.1.6 Available Cook stove Cost: The prices of artisan produced ICS range between RwF 2,000 - 12,000
($3 - 20) depending on material and model. Industrially produced stoves are typically much more
expensive. The opportunity is that GGS will ensure affordability and availability of their improved stoves.
This will be achieved through partnerships for stove subsidies with support of different partners.

6.2 Some evidence

The Rwanda cook stove sector has significant potential with a strong case for the use of ICS, a supportive
government and quickly growing cook stove sector.

Macro Social Impact Consumer Cookstove Carbon Finance

Industry
 Strong  Number of IAP  Relatively high  Limited  Very attractive
government related health awareness of capability to CF market
supports and problems creates improved stoves reach last mile characteristics
drives adoption of a strong case for  Consumer customers  CDM and VCM
ICS change segments are  No in-country projects in
 High  Huge reliance fairly similar, production at country  High
deforestation rate on biomass fuel enabling large large scale fraction of non-
presents strong means almost scale  Quality control renewable
case for national entire population interventions  is an issue; no biomass
adoption of ICS belongs to target Awareness of IAP testing facilities  The current
 Little industry market and last mile and standards projects are still in
present, import is  ICS can save availability of their infancy
hindered by lack many people a lot good stoves
of seaports and of money or time remain an issue in
railroads rural areas

Moderately Favourable Moderately Moderately Favourable

Favourable Favourable Favourable

Implications: GGS has significant potential for market growth if consistent quality, last mile distribution
and economic accessibility is ensured and consumer awareness can be increased.

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 17

7.0 INTEGRATION OF BEST PRACTICES
GGS will strive to:  Build skills of local artisans.  Work with several major players in Rwanda and
internationally including Aprovecho (who speak highly of the stove improvements) as well as local
educational institutions e.g. KIST.  Proactively focus on training women and youth in ensuring they are
involved in all stages of the clean energy value chain.  Utilize a very strong grass roots presence in the
poorest communities to understand consumer desires and establish buy-in from the community. The
cooking experience is very pleasant - simple to use, clean flame, easy to control, high temperatures
easily obtained.  Emissions are dramatically reduced.

8.0 WORKPLAN

Primary Activities, Deliverables and Milestones Dec Jan. Feb. Mar. Apr. May Jun Jul.
. 17 18 18 18 18 . 18 . 18 18
1. Project design:
Develop a project Implementation plan X
Develop a profile of potential service providers X
Identify service providers X
Conduct initial meetings X
Develop business plans for clean energy project X X
2. Stove design:
Develop 2 stove prototypes X X
Testing of stove prototypes X X
Test results and improvement X X
Production of final stove X X
Acquire machines for stove production X
Set up production workshop X X
3. Market development:
Identification of CEO operators X X
Orientation training for CEOs operators X
Delivery of first batch of products X
Development of visibility and promotion materials X X
4. Research and innovation:
Development of other stoves types
Improvement of existing stove types
Establish demonstration centres
Development of new project pipelines
5. Capacity building:
Train local artisans on production of stoves X
Recruitment and orientation of staff X X X
6. Knowledge management
Document lessons and best practices X X
Networking and linkages X X X X X X X X

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 18

9.0 BUDGET

9.1 Summary Budget

Item Amount ($)
A Design 5,000
B Stove design 45,000
C Market development 2,500
D Research and innovation 50,000
E Capacity building 3,000
F Knowledge management 1,500
G Total project cost 152,000
H Cost share if applicable 10,000

GENI GREEN SOLUTIONS LTD: Gasifier Stove Business Proposal Page 19