Alliance selects first four businesses for Spark+ Investment Readiness Program support
Four businesses in East Africa and Southeast Asia have been selected for support from Spark+, a new investment program at the Global Alliance for Clean Cookstoves (Alliance). Spark+ seeks to build the pipeline of investment-ready companies in the clean cooking sector through operational, strategic and investment advisory support and, where appropriate, direct funding.
The Spark+ program is an evolution of the Spark Fund, one of the Alliance’s most successful investment programs. Over its four-year life, the Spark Fund supported 15 enterprises with approximately $4 million in catalytic grants, which was leveraged by $15 million of follow-on investment capital. Spark+ builds on this experience delivering technical assistance and funding, and similarly seeks to identify businesses with the ability to attract co-financing from the private sector in order to sustainably deliver clean and efficient cooking solutions at scale.
“We recognize that there are far too few businesses in the sector with both financially viable business models and the potential for scale that are truly ready for debt and equity investment, and are determined to identify and support those businesses with significant potential to mature so that they may access concessional and ultimately commercial capital for growth,” said Peter George, Director, Investment with the Alliance.
The four businesses selected to date are operational in Cambodia, Kenya, and Tanzania, two of which have previously received support from Spark and other Alliance programs, and a further two which are newer market entrants and are receiving first-time support from the Alliance.
Sustainable Green Fuel Enterprise (SGFE) is a Cambodian char-briquette producer created in 2009 as an NGO project, and that later evolved into a commercial venture. SGFE was awarded the prestigious Ashden Award in 2014 for its innovative production process yielding more sustainable and cleaner burning briquettes from coconut shells and charcoal residue, and has received Alliance support through its Pilot Innovation and Spark Funds in 2013 and 2014, respectively. Since 2016, SGFE has been profitable, and is now seeking to expand its operations within Cambodia and in several international markets.
“SGFE plans to establish an international holding company through which it will replicate its unique model for char-briquette production in new markets, including in Africa where production is often at a smaller scale. Spark+ is supporting our company to face the challenges associated with formalizing this expansion, and to secure the capital necessary for growth in the Cambodian market and beyond,” said Carlo Figa Talamanca, CEO of SGFE.
NewLight Africa (doing business as Heya!) is a Kenyan distributor of clean energy products including solar home systems and solar lights. In addition, since the company’s launch in 2015, NewLight Africa has sold a range of clean cooking solutions including charcoal, ethanol and LPG stoves to its customers in Western Kenya. Over the past year, their top selling product – outselling even solar products – is an LPG stove and fuel solution able to be purchased on an installment basis by those who purchase together with other members of their chama (a form of Kenyan women’s group).
“With support provided through Spark+ to continue to refine our business model and manage our growth, as well as to raise the debt and equity capital required to scale, we aim to become a leading supplier of clean cooking solutions in rural Kenya and ultimately in other markets in Africa,” said Steve Andrews, CEO of NewLight Africa.
EcoZoom is a Kenyan designer and distributor of leading solar and clean cooking products for rural and urban consumers, typically selling in cooperation with micro-finance institutions and agricultural cooperatives in East Africa. A previous recipient of the Alliance’s Spark and Pilot Innovation Funds in 2014 and 2015, respectively, EcoZoom is currently profitable, and is now seeking to accelerate its growth through geographic expansion and an expansion of its sales approach.
“We recognize that we must diversify our sales channels and reduce our dependence on resellers, so as to enable the level of growth we are aiming to achieve in the coming years. The support the Alliance's Spark+ is providing to pilot additional retail approaches and increase the efficiency of our growing sales force will help us effectively drive this growth,” said Oli Raison, CEO of EcoZoom.
KopaGas is a Tanzanian business that is accelerating access to, and improving the reliability of, clean cooking solutions for the urban poor. Since 2015, KopaGas has been improving access to LPG as a cooking fuel by reliabling supplying LPG to dealers through its well-established distribution partnership with Oryx, for whom KopaGas is one of the largest super dealers in Tanzania by volume. It is now seeking to address the high consumer costs associated with switching from traditional biomass to LPG by providing a technology-enabled pay-as-you-go solution.
“Given the tight timelines and budgets associated with this phase of building our business, Spark+ has been great in assisting us with the additional brainpower and funds to progress some of the critical path elements in our growth plan,” said Sebastian Rodriguez, CEO of KopaGas.
The Alliance would like to thank long-time supporters of its investment program including Shell Corporation and the UK Department for International Development, together with newer funders including Bank of America Foundation and Osprey Foundation for making possible this important element of its work.
We welcome future engagement with donors and investors as to how the Alliance will continue to strengthen businesses working to tackle this critical development challenge – one that impacts the lives of more than 3 billion people globally, with wide ranging impacts on climate, health, livelihoods, and women’s empowerment around the world.