Energy 4 Impact has awarded the National Oil Corporation of Kenya (NOCK) a prize of $50,000 for its design of a non-wood cooking concession that could increase the usage of LPG cooking gas to refugees and communities living in and around Kakuma and Kalobeyei camps in north-western Kenya. Under the concession designed by the Moving Energy Initiative (MEI) and NOCK, refugees and the host community would access the clean cooking fuel and entrepreneurial opportunities such as retail or distribution of LPG and accompanying kits.
The provision of adequate fuel for household and institutional use in displacement settings is a huge problem for local authorities, humanitarian agencies, local communities and refugees. Many of the over 185,000 refugees in Kakuma and Kalobeyei rely on firewood or charcoal for cooking. Women and girls bear the burden of wood collection and cooking. They also face heightened risks of sexual violence when they venture out of the camps to collect firewood. MEI estimates that 64,700 acres of forest (equivalent to 49,000 football pitches) are burned each year by forcibly displaced families living in camps. In many displacement settings a crisis point is being reached in which firewood from the local environment is no longer available and no alternatives exist.
Increasing the distribution and uptake of non-wood fuels in displacement settings can potentially mitigate some of these negative impacts. The non-wood cooking Prize presented this challenge to the private sector who have the necessary experience and expertise of establishing supply chains and venturing into new markets, to see what solutions they would design. The prize aimed to test whether the private sector view these markets as a business opportunity in which they could potentially invest with support from a concession and partners on the ground.
According to MEI report, Prices, Products and Priorities: Meeting Refugees’ Energy Needs in Burkina Faso and Kenya, released early this year, a majority of refugees in Kakuma are ready to pay something for sustainable clean energy products. However, introducing them at scale requires significant investment and increased partnerships among diverse players in private, government and humanitarian sectors to tap into the commercial viability of this market. The MEI, a DFID-funded consortium involving Energy 4 Impact, Chatham House, Practical Action Consulting, the Norwegian Refugee Council and UNHCR, believes this approach will help create a viable and sustainable market for clean energy products.
According to surveys completed by MEI the average household energy consumption in Kakuma is 9.05MJ/day – with a cost of KES 19 (equating to KES 570 / USD 5.6 per month). The concession proposed by MEI set this as the price cap that households were able to pay with the remaining cost of the clean cooking solution being subsidised by the concession payments. The competition asked the private sector to propose designs for this concession and how it could be implemented on the ground.
A number of private sector companies took part in the competition with NOCK winning the prize due to its strong track record in supply and distribution of LPG, consideration of consumer financing needs and clear strategy for sales and marketing of its product. As part of the strategy to introduce LPG to the camps and in surrounding areas, NOCK’s design looks to integrate the existing fuelwood traders to become LPG vendors. This aims to lessen potential conflict resulting from the traders losing income with LPG’s displacement of firewood use. Furthermore, plans to involve local leaders in the implementation of the LPG cooking gas concession aims to earn their support. NOCK also proposed to undertake market awareness activities to sensitise refugees and hosts to adopt LPG as a healthier and more efficient cooking alternative to firewood or charcoal. Through implementation of the concession NOCK predict that 5,400 of the 30,891 refugee households in Kakuma and Kalobeyei, could convert to LPG use in two years.
By engaging the state agency to help pioneer the delivery of LPG for cooking in and around Kakuma, MEI aims to move towards a sustainable cooking fuel market. This concession could fit into and be supportive of NOCK’s large scale initiative to deliver 3.6 million 6kg gas-filled cylinders to households across Kenya in the next five years under a government subsidy programme aiming to accelerate LPG use among poor households.
says Laura Patel, MEI Programme Manager at Energy 4 Impact.
Households in displacement settings face similar challenges as other poor families in accessing clean cooking technologies. Some of these include high upfront costs for acquiring cylinders and accompanying accessories and limited knowledge on safe use of LPG. NOCK has proposed to use the prize money to set up a revolving fund of $50,000 for refugee households to finance the LPG kits over a 3-month period. The households will only be required to make a 25% down payment to acquire the LPG kits. The balance will be made in agreed instalments.
Estimates by NOCK are that this revolving fund will have the potential to support 1,200 households to purchase LPG kits in the first three months and an additional 200 households per month thereafter for a 24-month period to reach a total of 5,400 households.
Whilst MEI will not fund the implementation of the concession the competition aimed to generate ideas from the private sector, engage them in providing solutions to displacements settings and allow them to better understand the market opportunities. Whilst the prize will allow NOCK to take steps towards increasing the supply of LPG in the area there is a need for further funding and investment to tackle this challenge more widely.