19 November 2014: The Asian Development Bank’s (ADB) Energy for All Program organized a business development workshop for cookstove manufacturers and distributors, which aimed to help them articulate business models and investment proposals to financing institutions. This process also helped them to understand the risks that must be addressed in order to build a sustainable business.

The workshop, organized in collaboration with the German International Cooperation (GIZ) on 12 Nov 2014 in New Delhi, India, brought together nine clean cookstove manufacturers and distributors. Participants learned that manufacturers cannot rely on a simple retail model to support products’ overhead costs, since sales only provide a one-time revenue stream during a product’s lifetime, which is not enough to support maintenance and warranty costs. To address this issue, some manufacturers have collaborated with microfinance institutions in order to transfer the distribution risk to those institutions. However, this decreases profits and separates manufacturers from end-users.

Participants also learned about emerging business models, such shifting revenues from cookstove sales to biomass pellets so that cookstove and maintenance costs are built into the profit margins of the pellets, simultaneously reducing upfront costs and ensuring continuous revenue for the manufacturer. Another model integrates cookstoves with biogas digesters, where revenues come from the cost of installing the digester and cookstove infrastructure.

Energy for All intends to continue to build stronger ties between clean cookstove manufacturers and distributors. [Energy for All News Story] [Energy for All Website]