How London charity is helping Kenyan energy entrepreneurs break distribution barriers

NAIROBI, KENYA: Kenyan businesses, like in most of sub-Saharan Africa, face numerous roadblocks on the way to delivering clean energy products to ‘hard-to-reach’, low-income customers in rural regions. A number of issues, such as poor infrastructure, dispersed consumers, low product awareness and low purchasing power have made it a hurdle for clean energy products to penetrate. 

In a bid to address these challenges, a London-based charity, GVEP International, is testing different approaches to get biomass briquettes and energy efficient cookstoves across that 'last mile' to millions of potential consumers across the country. These include working with micro-entrepreneurs embedded in local communities; establishing partnerships with existing networks that penetrate low-income markets; and partnering with financial providers to facilitate consumer finance. 

The charity is working with a women’s group from Kisumu, Keyo Pottery Women’s Group in the production of improved cookstoves and briquettes. They are known to the local market for the quality of their products. Over the years GVEP has supported the group in various ways: it has provided technology mentoring to improve the products’ performance; supported them to access bank loans to increase the scale of production so as to lower the cost; enhanced their marketing know-how and expanded their customer reach through a series of market development events. 

Dorothy Apondi, a group member says these kind of targeted interventions have enabled customers in new markets to access their products. 

“Because of our steady production and push marketing campaigns we now attract clients from across the country, including individual buyers, distributors engaged in bulk supplies and assemblers who come to us for cookstove liners. We also sell directly to schools as well as to Kenya’s Ministry of Energy, who in turn sell them to farmers,” says Apondi. 

A number of organisations involved in renewable energy also purchase the products from them directly for onward selling. In total, the group has 42 stable customers who purchase from them on a regular basis. In a month the group sells an average of 2,000 cookstove liners each retailing at Ksh 25 ($ 0.24) and between 50 and 60 cookstoves per month at Ksh 1,000 ($ 9.8) per piece. Apondi adds that having access to additional capital has been instrumental in scaling up production to meet the increased demand. “GVEP has made it possible for us to access loans from banks by guaranteeing us for the credit facilities,” says Apondi. 

GVEP also facilitates networking for all players in the value chain, in order to ensure effective reach of energy products to the market. “We bring together all stakeholders who include policy makers, entrepreneurs, retailers and end users to explore different ways of ensuring the energy products get to the people who need them the most,” says GVEP Kenya Business Development Services Coordinator Maurice Onzere.

Another effort to boost the distribution of energy products has been through a partnership between GVEP and the Kenya Rural Enterprise Program (K-REP) Development Agency (KDA) that was penned in late 2014 to pilot a last mile distribution model for cookstoves. Under the partnership, GVEP linked small and medium enterprises in the renewable energy sector it mentors to the financial services associations identified by KDA. Makers of improved domestic cookstoves and briquettes are then linked to members of the financial service associations and village banks (Saccos), who act as distributors of the energy products.