Stoves fuelled by sawdust and data
Stoves fuelled by sawdust and data
Cooking with charcoal causes tremendous damage to forests, health and the climate, and yet decades-long efforts to replace charcoal as a fuel source have struggled to find solutions that stick. African kitchens have therefore seen decades of attempts to replace this fuel source. There are many alternatives available, but as for any technology, the affordability of fuel and stoves is an unavoidable question. Price is the main constraint to a mass shift in cooking practices, especially for off-grid households.
Emerging Cooking Solutions (ECS) began in Zambia in 2013 with an idea that put affordability first and entered the market with the SupaMoto branding. The social enterprise manufactures clean-burning stoves and a new class of fuel to heat them: pellets made of sawdust from Zambia’s sustainable timber plantations. Formerly a waste product, sawdust is now part of a fuel value chain that is renewable, generates jobs, and – in a breakthrough for a homegrown fuel source – costs substantially less than charcoal. The pellets burn efficiently in SupaMoto’s gasifying stoves; in fact, a new design that can be fine-tuned remotely with sensor data broke new ground by achieving the highest efficiency and lowest emissions ever recorded in biomass stove tests at the Aprovecho Research Center.
If the fuel is affordable, the stove distribution model offers an even better deal. SupaMoto stoves are offered free to households that buy pellets, being effectively loaned out and monitored through an Internet of Things platform. The model became possible for SupaMoto because the fuel from their 15,000-tonne-a-year pellet factory, produced from a waste product, proved a strong enough revenue stream to sustain the company by itself.
However, this highly energetic enterprise felt the temperature drop, like many others, with the coming of the COVID-19 crisis. It only survived with multiple loans that pushed it into unsustainable debt. In 2022, a senior impact lender came close to issuing a default letter, which would have jeopardised a decade of progress.
The GET.invest Finance Catalyst, which for five years has been providing SupaMoto with strategic advisory services, financial modelling for a convertible debt raise, fundraising and transaction support, helped the company find a path out of the crisis, and indeed thrive beyond expectations. In the financial aftermath of COVID-19, this transitioned into a new service for GET.invest: loan restructuring support. The advisors supported negotiations with two impact lenders and reviewed the loan restructuring agreements, obtaining both haircuts and longer tenors.
Back on track, SupaMoto also asked the GET.invest Finance Catalyst for support with the next stage of the plan for their unique fuel source: drawing financing momentum from the carbon market. The GET.invest Finance Catalyst supported the structuring of carbon finance proposals that saw the company raise pre-finance from a Dutch fund focused on clean cooking solutions. In parallel to launching into the Voluntary Carbon market by being one of the very first programs registering with Gold Standard under the new Metered and Measured methodology, the advisors supported the ambition of ECS to implement an innovative blockchain and digital-MRV (measurement, reporting and verification) -based carbon credits programme. This solution has been up and running since July 2023 in cooperation with the ixo Foundation and has recently been endorsed by Berkeley.
In addition, the advisors engaged the GET.invest and A2EI (Access to Energy Institute) data initiative Prospect which also played a critical role in delivering the real-time, digital MRV-based validation mechanism, triangulating data on the Prospect platform using a data fingerprint approach, thus ensuring ECS’s carbon offsets are backed by traceable, third party-verified datasets.
SupaMoto has recently signed a result-based grant with Nefco, a strategic partner of GET.invest, through the Modern Cooking Facility for Africa Facility. The fundraising activities and financial model developed through the GET.invest Finance Catalyst has also raised interest from equity investors, three of which are in due diligence for multi-million-euro investments, as well as from a crowdlending platform interested in structuring a loan facility.
The first carbon credit pre-finance deal is smaller but highly significant, as it speaks to the enormous potential of thousands of SupaMoto stoves connected to the Internet of Things, recording millions of cooking sessions. SupaMoto and ixo have been producing carbon credits that operate through blockchain and smart contracts and are based on near-real-time stove use data, which has been triangulated, verified and traced via the Prospect platform. This is one of the very first actual implementations ever of digital-MRV – which has been hailed by many experts as the future of carbon credits. They area leap forward in precise, verifiable measurement for carbon credits, as they are linked to actual cooking hours with SupaMoto’s low-emission fuel pellets.
Having come through crisis, SupaMoto is running at full steam again with secured financing, a proven data-led model and an ambitious growth plan. It is looking ahead to the day when sawdust won’t be enough to meet the scale of demand, and is already evaluating other renewable fuel pellet sources, such as fast-growing grasses. The company notes that the carbon mitigation potential of clean cooking worldwide is a full 2% of global emissions, on par with the entire airline industry. With the affordability question answered, SupaMoto believes that potential can be met.