For many startup ventures, the road to achieve success isn’t typically an easy one, at least not initially. The SNV Improved Cook Stoves project in Lao PDR knows this firsthand.
Starting with only 20 retailers in 2011, the project now includes 660 retailers, of which 90% are women. Greenhouse gas emissions from cook stoves have been reduced by as much as 1 metric ton per stove per year. The stoves boast a 95% satisfaction rate among consumers, an enviable statistic for any business. As of 2015, two years after the upscaling phase of the program began, SNV and its partners celebrated the production of the 50,000th cook stove. Most exciting, perhaps, is SNV Sector Leader Bastiaan Teune’s observation that “the market expanded by itself to new provinces, and retailers and producers increasingly knocked on our door to participate instead of us looking out for interested people like [we did] in the beginning.”
The Improved Cook Stoves are more expensive than traditional stoves, selling for at least 4.5 Euros, giving pause to consumers and retailers alike. But, as Teune points out, “It [the cook stoves] was a simple, logical, and understandable win-win proposition for producers, retailers, and to users. The ICS was a very good business model compared to the baseline stoves and it fit perfectly with the cooking requirements of households.”
In 2010, SNV and its partners conducted a market analysis to determine why higher quality, more energy efficient Improved Cook Stoves (ICS) were not making their way into low-income homes in Lao PDR. Armed with their analysis, SNV developed and executed a pilot study in Savannakhet Province. The success of the pilot project allowed SNV to scale up the techniques used in Savannakhet. “[We] took a methodological and careful step-wise approach that paved the way,” says Teune, “we were never afraid to work with different specialists and let them share their knowledge and experience.”
SNV invested in the development of a cook stove-testing program and provided market training to retailers. Soon, retailers became more informed on the benefits of Improved Cook Stoves and were able to explain energy and cost savings to their customers. Most compelling from a financial perspective, Improved Cook Stoves save consumers about 2 Euros and 20 minutes of cooking time each month, last 18 months longer, and require almost 30% less fuel than traditional stoves. The reputation of the Improved Cook Stoves grew, and now customers specifically request the product. Says Ms. Sookthavee, a retailer in Savannakhet Province, “I am able to make more of a profit on the improved cook stoves because customers are willing to pay more for the quality now.”
The SNV Improved Cook Stoves project operates much like a business start-up. Building on their initial success, SNV is developing its relationship with Nexus, a nonprofit cooperative group that provides financial support to low-carbon projects. “Nexus [will] provide inputs and support to bring the carbon development to a good end, and they shall be financed by claiming priority on the carbon [credits]. This elegant modality makes Nexus our partner and shareholder rather than contractors, and this works very well,” Teune says.
The partnership with Nexus will ensure that SNV can continue to expand the distribution of Improved Cook Stoves in Laos and continue to regulate the cook stove market. Ultimately, Teune believes that the SNV Improved Cook Stove project “showcases that with relatively little public money a lot can be done by following the right approach, and that despite all difficulties sustainable development is viable and possible.”
Addressing social and economic causes and effects
Market mechanisms, Technology
—Dagmar Zwebe, Sector Leader Renewable Energy, SNV
"When women can access the opportunity they can make a difference and stimulate national economic growth. Women have important knowledge and skills in natural resource and energy management that supports households and communities to mitigate and adapt to climate change, and need to use these skills creatively as it is women who are disproportionately affected by climate change."