ISSUE 23 | MARCH 2021 Image Source: ©Drevs / Shutterstock.com An ESMAP-funded grant facility that began in 2017, implemented by the Private Sector Foundation Uganda (PSFU), put in place market incentives that established eight new manufacturer-distributor partnerships. The facility intro- duced five types of new, high-efficiency, quality-assured biomass stoves. Well exceeding the target goal, over 72,000 of these stoves were delivered and adopted by Ugandan households as of September 2020. These fuel-efficient stoves led to a 30 percent decrease in CO2 emissions (compared to those they replaced) and save 20,740 tons of charcoal per year. They have also led to savings in cooking time and money. About 95 percent of Ugandans still use solid biomass fuels such as firewood for cooking. Uganda ranked in In 2017, the $2.2 million Uganda Clean Cooking Sup- the top 10 largest clean cooking access-deficit coun- ply Chain Expansion Project—funded by ESMAP tries (by proportion of people) and third largest by through a grant to the World Bank Uganda energy overall population size deficit, according to the ESMAP portfolio and implemented by the Private Sector -funded Sustainable Energy for All (SEforALL) Tracking Foundation Uganda (PSFU)—set up the Distribution SDG7 Energy Progress Report 2020. On average, a Challenge Fund, a grant facility to address gaps in household spends as much as $26, about 14 percent the supply chain for quality-assured, efficient of their total monthly income, for a 75 kg bag of char- biomass stoves and enhance companies’ efforts to coal that lasts about a month. These prices are on the engage consumers via marketing and awareness- rise; in early 2020 charcoal prices were 40 percent raising campaigns. PSFU managed the disburse- higher compared to 2 years earlier—well above ments and liaised with clean cooking enterprises Uganda’s average annual inflation of 5 percent. Some and the independent verification agency, which veri- of the factors responsible for this high access deficit fied the stove sales for each payment period. rate include: the inability to access improved and efficient stoves due to missing supply chain links, Image Source: ©Envirofit limited awareness regarding existing products on the market, and insufficient household incomes to make such a purchase. The sector had long endured a market inundated with stoves of patchy quality, offering limited value to households, and supply was driven by vertical delivery models where manufacturers financed and distributed their stoves across the country using limited distribution infrastructure. This combination was not conducive to delivery scalabil- ity, nor was it able to meet the quality that custom- ers need or want. The fund comprised several lines of support designed as market incentives to attract new players in the sec- tor and establish partnerships. The Distribution Chal- lenge Fund provided one-off upfront matching grants and ongoing results-based financing for scaling up distribution networks for select products. It also fund- ed cost-sharing high-impact marketing campaigns and consumer engagement to raise awareness and enable flexible payment methods. The design was based on a multi-phase, comprehen- sive preparation period preceding the project. Activi- ties included: six-month consumer trials in house- events in strategic hotspots around the city and holds to test product compatibility and consumer will- suburbs, radio advertisements, digital marketing, ingness-to-pay, as well as laboratory and field-based and social media outreach (Facebook, Twitter, and product performance and durability assessments in Instagram), plus trivia competitions and use of order to avoid promoting poor-quality products. community influencers. Four long-term and five These preparation activities ensured that only prod- short-term sales access points were set up by the ucts that met the minimum quality criteria (at least 35 campaign organizers in strategic locations in the percent thermal efficiency per the International Or- Kampala and Wakiso districts. These interventions ganization for Standardization (ISO) performance tar- proved to be crucial in raising awareness about the gets for cookstoves) and met consumer expectations products supported by the program. They also pro- were eligible to compete. vided a medium through which users could explore different models and choose the best product for their needs. Throughout the project’s implementation, the Bank coordinated with GIZ, the German Development To maximize results during project implementation, it Agency, which had been supporting artisanal manu- was important to understand why some customers facturers of biomass stoves through improved kilns purchased stoves and others did not and to deter- and production facilities. The ESMAP grant facilitated mine what drives customers to make such decisions. the distribution of these products into the market (in To this end, a behavioral diagnostic study was com- addition to the ones that were industrially manufac- missioned, exploring these nuances and providing tured) by strengthening the supply chain. actionable recommendations that were subsequently implemented through a market activation campaign. The study was carried out in collaboration with the World Bank’s Mind, Behavior, and Development Unit. The study utilized a behavior-change framework to identify “beneath-the-surface” behavioral barriers in consumer choices, including the preferences and roles of men and women. The interventions imple- As of September 2020, 72,535 stove sales have been mented, as a result of this study’s recommendations, supported by this program, well exceeding the included use of project-supported brand activation 45,000 pilot target. The project stoves are used an average of twice a day, and female household heads report they are much more fuel efficient and fast compared to other stoves on the market. Image Source: ©Supa Sugiri 2 ESMAP IMPACT | Issue 23 Image Source: ©Sophie Ganon / Biolite The stoves have led to the reduction of 60,831 tons Under the new scaled-up operation, the Bank plans of CO2 per year—a 30 percent emission reduction to expand Uganda’s clean cooking program by rate compared to the baseline, and a savings rate establishing a debt facility for financing off-grid solar of 20,740 tons of charcoal per year. This represents and clean cooking solutions (supplier financing and about a 36 percent average monthly fuel consump- consumer financing), as well as a results-based tion reduction for households and an equivalent financing mechanism for clean cooking solutions. amount in financial savings. Women also report The solutions will expand beyond biomass efficiency the stoves free up 30–90 minutes per day to do to include clean fuels such as LPG, ethanol, biogas, other household chores, spend time with children, and electricity. Technical support will finance small- or rest. and medium-enterprise business development and strengthen the monitoring and measurement of The project closed September 30, 2020. their new impacts. The experience, momentum, successful implemen- tation, and intermediate results of this innovative pilot project demonstrated the necessity for con- tinuing to develop a market for clean cooking. The Through ESMAP’s Clean Cooking Fund (CCF), other project’s lessons helped inform the design of and partners are now contributing towards leveraging facilitated the inclusion of a clean cooking invest- IDA and private sector financing and scaling up clean ment activity in the upcoming Electricity Access cooking activities under the Electricity Access Scale- Scale-up Project, a $340 million IDA-financed pro- up Project. ject. This operation allocated $10 million in IDA The CCF is a $500 million fund that provides financial financing, with a $10 million matching grant from and technical support, primarily through results- ESMAP’s Clean Cooking Fund. This investment is based funding grants, to help countries incentivize expected to leverage another $10 million in private the private sector to deliver modern cooking ser- sector financing. The funds will support both bio- vices. Its goal is to help accelerate progress toward mass efficiency and transition to clean fuels. universal access to clean cooking by 2030. ESMAP IMPACT | Issue 23 3 ESMAP’s 2020 State of Access to Modern Energy Cooking Services Report provided recommendations for countries to improve their cooking energy ecosys- tem. These include: • Mobilizing data and financial resources, creating inno- vative technologies, and developing partnerships • Making clean cooking a political priority to help develop the enabling environment through national policies, strategies, and energy planning • Developing regulations and standards contextualized to local conditions to promote better market development for clean cooking solutions • Leveraging clean cooking infrastructure and investment resources within each country, while reflecting house- hold cooking needs for sustained adoption Image Source: ©World Bank The Energy Sector Management Assistance Program (ESMAP) is a partnership between the World Bank and 19 partners to help low- and middle-income countries reduce poverty and boost growth through sustainable energy solutions. ESMAP’s analytical and advisory services are fully integrated within the World Bank’s country financing and policy dialogue in the energy sector. Through the World Bank Group (WBG), ESMAP works to accelerate the energy transition required to achieve Sustainable Development Goal 7 (SDG7) to ensure access to affordable, reliable, sustainable, and modern energy for all. It helps to shape WBG strategies and programs to achieve the WBG Climate Action Plan targets. 1818 H Street, NW Washington DC 20433 www.esmap.org esmap@worldbank.org