Request for proposal for a market study in Niger for CARE Denmark
The overwhelming majority of households in Sub-Saharan Africa do not have access to clean cooking solutions (Africa Energy Outlook 2022), with 80% households being dependent on wood as their primary cooking fuel. The dependence on wood-based cooking has devastating impacts for local tree cover, biodiversity, and local capacities to adapt to, or absorb, shocks relating to climate change. In this context, the use of biodigesters has emerged as a proven source of renewable energy, especially in dryland areas where households have access to a reliable source of manure (along with water, the primary input for biogas digesters), due to households traditionally owning cattle.
By replacing firewood and charcoal, small scale biogas digesters for cooking, work to reduce tree cover loss, increase biodiversity, but also reduce time spent (largely by women) collecting firewood. They also work to reduce security risks associated with collecting firewood and have important health benefits for women who cook, since smoke from burning wood is avoided. Whilst these benefits are true for all clean cooking solutions, the advantages of biodigesters, in contrast to most other clean cooking solutions, is their potential to generate income through the sale of slurry, a byproduct of biogas digesters, as organic fertilizer.
CARE Denmark, through the Danida Green Jobs Project in Niger, has demonstrated a clear local demand for biogas digesters. The households that have received the biogas digesters use them for all their cooking, and sell the compost, adding an important and diversified income stream to household income. A mistake often made by development practitioners is conflating ‘demand’ with ‘willingness to pay’.
Whilst the biogas digester is clearly a profit-making investment, there are still other factors that may influence willingness to pay, such as how much investment risk vulnerable households are willing to take, how to finance the relatively large upfront investment, and whether income generating investments in clean cooking is considered a priority (is $500 today perhaps worth more than $1500 over a year, or $4500 over 3 years).
SUPPLY SIDE: While the Green Jobs project has trained masons to build and maintain biogas digesters, questions remain about the capacities required for trained masons to establish a business, and what kind of business to establish. For example, each mason may be a separate business, increasing competition, and perhaps driving down prices of biogas digesters. Alternatively, the masons may form a cooperative, and share costs of inputs (cement, bricks, pipes etc.) and profits.
MARKET STRUCTURES: Unlocking willingness to pay, and the business making potential of biogas digesters will require market development and establishing a series of market structures, including, for example, innovative financing models such as loan facilities so that households can make the upfront investments, a cooperative of masons, a cooperative of compost sellers, with access to market prices. Which market structures require necessitates a thorough market analysis.
The assignment aims to identify and analyze the barriers (demand and supply side barriers) that hinder market-based scaling of biodigesters in the market among other factors.
We believe that the right market study will significantly enhance CARE Danmark's success in the scaling of biogas digesters in Niger and Northern Togo. We eagerly await proposals from vendors who can support our vision and help us drive even greater change in the world.
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