Newsletter - September 2017

GLPGP September 2017 Newsletter

Dear Friends,

This past quarter, we have made excellent progress in assisting local communities and in supporting developing country governments to advance their national LPG agendas, programs and projects.

We entered into our first regional partnership to develop a regional LPG policy, with the Economic Community of West African States (ECOWAS). This is supported in part by a new grant from the OPEC Fund for International Development (OFID) and by our partners at the ECOWAS Renewable Energy and Energy Efficiency Center (ECREEE).

Our development finance institution partners have increased their focus on LPG and the work of GLPGP. Our constellation of partners has continued to expand. And our multidisciplinary team of deeply experienced experts and managers continues to grow.

This newsletter describes some of these exciting developments in more detail.

Please read on — and don’t forget to follow us on Twitter @globalLPG.

The 6-month first phase of GLPGP’s microloan pilot program Bottled Gas For Better Life is concluding at the end of September 2017 with encouraging results for impact and scale-up. The groundbreaking program, designed by GLPGP and executed by GLPGP and multiple local partners, provides credit to lower-income households in southwest Cameroon to help them afford the switch to LPG for cooking from charcoal, wood and kerosene to improve their lives, family health and the environment. It is a first-of-its-kind LPG lending program in Cameroon. This pilot has been funded in part by grants from the OPEC Fund for International Development (OFID) and the Clif Bar Family Foundation. Key local partners have included the community lending network Mutuelle Financière des Femmes Africaines (MUFFA), the Ngango Association Batoke, Glocalgaz, and the University of Liverpool, UK.

The program led to significantly increased adoption and sustained use of LPG, and generated useful data on repayment patterns. As of this writing, 71% of participating households have fully repaid their loans. (Payments are still coming in as we go to press.) Word-of-mouth endorsements from consumers and village leaders also resulted in neighboring villages expressing keen interest in adopting LPG for cooking through the microloan program.

Bottled Gas For Better Life marks the first time that Cameroonian microfinance institutions are addressing consumer demand for LPG finance. Researchers from the University of Liverpool, UK, through an independent evaluation as part of the LPG Adoption in Cameroon Evaluation (LACE) studies, have collected data on the health and social impacts from LPG adoption for cooking by the program’s participants in comparison to a control village that did not receive loans.  These data are currently being analyzed for expected publication of the findings later in 2017. Results from this evaluation will be used to guide the next phase of the program.

GLPGP’s Cameroon Country Director, Ms. Bessem Enonchong, said, “We are very encouraged by the results from this pilot phase of Bottled Gas For Better Life. We look forward to growing the program in the coming year, and hopefully showing on a larger scale that LPG microfinance can be commercially viable, and an effective tool to drive consumer demand for LPG in Cameroon.”

The second phase of the project, to be implemented over the next 12 months using repaid capital from the first phase and additional support from OFID and the EU, will extend the microloan offering to an additional 800 households across more regions of Cameroon. The loan recipients will include a mix of rural, peri-urban and urban households from lower income backgrounds that rely on biomass and/or kerosene for their daily cooking. The longer-term objective is to develop and launch a successful nationwide LPG microlending program, supported by a network of Cameroonian microfinance and banking institutions that would be fully responsible for loan funding and collections on a commercially sustainable basis, incorporating an LPG loan product within their regular lending portfolios.

In July 2017, the OPEC Fund for International Development (OFID), the development finance institution established by the Member States of the Organization of Petroleum Exporting Countries (OPEC), awarded a €180,000 grant to GLPGP, which will be directed, alongside matching donor funds, to support the design of a West African regional policy framework around cooking with LPG. Funds from OFID will also be used for the second phase of the Bottled Gas For Better Life microfinance project.

The 15 countries in the Economic Community of West African States (ECOWAS) collectively comprise around 350 million people. This includes several countries with the lowest current levels of clean cooking adoption on the continent, as well as others with the highest rates of deforestation, in part caused by from woodfuel gathering for cooking.

GLPGP is working in partnership with the ECOWAS renewable energy center (ECREEE), to develop this regional policy framework on clean cooking with LPG. The framework will be consistent with the countries’ own national targets for clean cooking with LPG and will follow a process based on prior successful ECOWAS regional policy development for energy efficiency, renewable energy, and gender and energy.

On July 11, 2017, Mr. Renzo Bee, Chair, Policy, Regulatory and Development Advisory of GLPGP, spoke on a panel at the 4th annual African LPG Summit in Johannesburg, South Africa, about making LPG more accessible and affordable throughout Africa. Mr. Bee’s presentation highlighted that distribution capability, not the relative price of LPG to other cooking fuels, has been the key bottleneck to sustainable LPG scale-up in many countries. He urged stakeholders to “let investment in cylinders become reality”. He noted the need to have sufficient cylinders in circulation, along with the proper legal, regulatory and enforcement environment to encourage the private sector to invest in cylinders and cylinder safety and in extending LPG access to the last mile.

Through a new webinar series, GLPGP will be sharing periodic updates on its overall work and country activities with a wider audience over the coming months. The first in the series was co-hosted with the Global Alliance For Clean Cookstoves on September 18, 2017. 

Mr. Alex Evans, Chairman of GLPGP’s Operating Committee, presented GLPGP’s ongoing work with the Government and LPG sector of Cameroon and in communities, to support the policy, planning and investment - including consumer financing - needed to expand LPG distribution safely and efficiently nationwide, including into previously unserved peri-urban and rural areas. Ms. Bessem Enonchong, GLPGP’s Country Director for Cameroon, shared results and preliminary analysis of data collected from the Bottled Gas For Better Life microfinance pilot (see related article), including key lessons learned and next steps. Dr. Dan Pope from the University of Liverpool, a GLPGP research partner in Cameroon, concluded the webinar by sharing key initial findings from an independent evaluation of LPG adoption and resulting health benefits, conducted as part of the LPG Adoption in Cameroon (LACE) study and focused on the communities in southwest Cameroon where the GLPGP microfinance pilot took place.

A video recording of the 18 September 2017 webinar is available here. Make sure to follow us on Twitter @globalLPG for announcements around the next in the webinar series.

Clean Energy for Better Health Event in Limbe, Cameroon (26 September 2017). As part of The LPG Adoption in Cameroon Evaluation (LACE) Studies, the University of Liverpool, UK, with support from GLPGP is hosting Clean Energy for Better Health, a public engagement and stakeholder event in Limbe, Cameroon today, 26 September 2017. The event is showcasing key findings from the University’s research in the Limbe and Buea regions of Southwest Cameroon, to understand how best to support households to switch from traditional polluting fuels to clean-burning LPG. There will be a photographic exhibition from the “Photovoice" research project, in which participants had used photography and discussions to share their views on barriers and solutions for adoption and sustained use of LPG in their communities. Attendees will include representatives from government ministries covering energy, development, and health, community leaders, microfinance groups and local LPG and stove suppliers. It will present an opportunity for two-way engagement between communities and other stakeholders, as one avenue to facilitate households to adopt LPG at scale. 

LPG for Development Summit in Marrakech, Morocco (3 October 2017).  GLPGP and the World LPG Association (WLPGA) will co-host the LPG For Development Summit on 3 October 2017 in Marrakech, Morocco. This special event is being sponsored by GLPGP in cooperation with the 30th World LPG Forum, to combine the voices of policy and industry leaders in lively discussions about scaling up and financing LPG for clean cooking at national scales in a development context. Ms. Rachel Kyte, Special Representative of the UN Secretary General and CEO of Sustainable Energy For All, will deliver a keynote address. Confirmed speakers include senior public and private sector representatives from Morocco, Kenya, Indonesia, and the African Development Bank. GLPGP will be live Tweeting from the event, so please follow along on Twitter via #LPGfordevelopment.

Clean Cooking Forum in New Delhi, India (24-26 October 2017).  Next month, GLPGP team members including Mr. John Hauge, CFO, and Ms. Richenda van Leeuwen, Chair, International Institutions, will discuss aspects of GLPGP’s work and role in the broader clean cooking sector at the Clean Cooking Forum 2017, the flagship event of the Global Alliance for Clean Cookstoves, in New Delhi, India on 24-26 October 2017. Mr. Hauge will be speaking about GLPGP's microfinance experience in Cameroon on a panel focused on addressing the affordability gap for clean cooking solutions through consumer financing innovations, and Ms. Van Leeuwen will discuss GLPGP's work in the broader energy access sector and GLPGP’s contributions to achieving the Sustainable Development Goals.

GLPGP is continuing to build its international expert and country level teams in 2017 to support ongoing policy, investment and technical operations.

GLPGP also welcomes to its team of experts Mr. Robert O’Brien, as Senior Advisor, Financing and Investments, to guide investment planning, structuring, transaction design and finance arranging for LPG infrastructure, cylinder and logistics projects in Cameroon and other priority countries. Mr. O’Brien brings a wealth of experience from the financial sector, having served in senior positions at Chase Manhattan, Salomon Brothers, Bear Stearns and Laidlaw Holdings, where he established an investment banking department and created a Morocco private equity fund. From 1996, Mr. O’Brien worked exclusively in emerging markets, advising numerous governments in Africa and Asia on privatizations, infrastructure financing, and clean energy related projects.  Mr. O’Brien also served as a transaction advisor for the U.S. Government’s multi-billion dollar Power Africa initiative.  Mr. O’Brien holds a BA in Mathematics and Physics from Boston University, and an MBA from Columbia University.

GLPGP is also in the advanced stages of engaging national Country Managers in Kenya and Ghana.

·         Kenya is rapidly advancing its LPG reform agenda and launching a major LPG expansion for clean cooking, spearheaded by its state enterprises.

·         The Government of Kenya in June 2017 announced the Mwananchi Gas project, an initiative via the National Oil Corporation of Kenya, to distribute 4.3 million subsidized 6kg LPG cylinders to new LPG households over the next three years.

·         The project is being implemented at a cost of Sh5 billion (US$48 million). Initial retail price of a 6kg gas cylinder is expected to decrease to Sh2,000 (US$19) from Sh4,400 (US$39).

·         The project will also include marketing and communications campaigns to LPG end users, improvements to LPG storage and distribution, and potentially include consumer financial tools such as microcredit and pay-as-you-go.

·         The Government’s goal is to nearly double national LPG consumption from 2.8kg to 5kg per capita by the end of four years, with the objective of reducing biomass and kerosene use for cooking among 69% of the population.