SMEFUNDS

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Overview

SMEFUNDS is an international NGO fighting to end poverty through the promotion of sustainable enterprise development in Africa.

Overview

Headquarters Lagos, Nigeria
Established 2011
Impact Areas Nigeria & West Africa
Type Hybrid
Energy Sectors
Business Model Types
Staff Size 50
Annual Budget $2,700,000
Major Funders Owners, UN Foundation/Global Alliance for Clean Cookstoves
Awards 2012: Bank of Industry / UNDP Award2012: UN Global Compact Social Investment Pioneer Awards Winner2013: West Africa Overall Best Clean Energy Investment (CTI-PFAN, USAID)2014: WJF Chuck Dell Sustainable Business Award

 

ABOUT

SMEFunds

SMEFUNDS is an NGO that manages multiple business and non-profit initiatives, notably Green Energy & Biofiels and KIKE Green Cook. Green Energy & Biofuels sells safer and cleaner ethanol gel for use with a patented cookstove. They are the first in Africa to commercialize waste-to-ethanol. They have successfully launched one of the largest and fastest growing ethanol production and clean cooking programs in Africa. KIKE Green Cook is a cookstove manufacturer that supplies clean-burning, fuel-gel powered cookstoves for Green Energy & Biofuels.

 

Energy Products/Services

  • SMEFUNDS has developed a process to manufacture cellulosic ethanol gel from waste products such as grass, food, and agricultural waste.
  • They are also developing a method to convert water hyacinth, an invasive species, into cellulosic ethanol.
  • GEB sources its cookstove through KIKE Green Cook, a sister enterprise that is managed by SMEFUNDS.

Target Market

  • SMEFUNDS is targeting the 10-20 million Nigerian households that pay for unsafe and polluting cooking fuels.
  • The people who would benefit most from the technology make less than $4 a day.

 

SMEFUNDS

Revenue Streams

  • Revenue is generated from the sale of biogel and cookstoves.

Value Proposition

  • SMEFUNDS provides clean, low-cost alternatives to kerosene and other dangerous cooking fuels to homes in Africa, with the goal of displacing their usage.

Problem Addressed

  • Indoor air pollution results from burning traditional fuel sources such as biomass and kerosene; this pollution leads to diseases that kill 4.3 million annually.
  • The problem is especially bad in Nigeria, where many rely on kerosene or biomass as a fuel source. Both are expensive in terms of time and money and dangerous to one’s health.
  • Lack of availability and price spikes lead to the country’s poor spending $5 billion USD annually on cooking fuel.
  • The use of biomass fuel also contributes to deforestation; Nigeria has a deforestation rate of 3.5% per year.
  • Nigeria’s waterways are also being invaded by the water hyacinth, a non-native species that was introduced from the Americas.
  • Ethanol gel is a clean-burning fuel that does not create significant levels of indoor air pollution like other fuels.
  • Ethanol gel can also be produced from the invasive water hyacinth; harvesting water hyacinth for production of biogel is an effective form of population control.

Where They Are Now

Impact to Date

  • 200,000 cookstoves sold.
  • 40% reduction in price of ethanol gel, making it competitive with kerosene.
  • 600 tonnes of carbon dioxide emissions sequestered.
  • Less indoor air pollution compared to 94% of the cookstoves on the market.
  • 71 jobs created directly and 16,144 jobs created indirectly.
  • 17,500 women empowered.

Milestones

  • 2014: First official partners in UN SE4ALL High-Impact Initiative for Sustainable Bioenergy in Africa.
  • 2014: Recipient of Global Alliance for Clean Cookstoves’ Spark Fund.
  • 2014: Sold 200,000 stoves and 1.6 million liters of cooking gel as of Q2.

Growth Plan

  • 2015: Complete construction of scale-up biogel plant in Lagos.
  • 2016: Complete scale-up ethanol plant in Lagos and 6 micro-plants around Nigeria.
  • 2017: Establish significant operations in at least 4 other markets.

How They Deliver

Product Sourcing

  • All feedstock is acquired from abundant local sources, such as sawdust, agricultural waste, and the invasive water hyacinth.
  • The fuel gel is also produced at local plants, and distributed locally.
  • The cookstove is sourced from KIKE Green Cook another branch of SMEFUNDS; they have it manufactured in China.

Distribution

  • SMEFUNDS utilizes a social marketing model to deliver its products to the consumer and achieve last mile distribution.
  • The fuel itself is taken to distribution centers, where it is given to trained social entrepreneurs to sell.
  • The social entrepreneurs sell the product and then encourage customers to get others to buy the product through referral-based marketing.
  • This business model empowers over 15,000 social entrepreneurs while simultaneously helping to achieve last-mile distribution.

Affordability

  • SMEFUNDS seeks to maximize affordability by driving down the prices of fuel gel to a point where it is more cost-effective than kerosene.
  • They hope to achieve this by building a new plant, thus reducing costs while simultaneously increasing production.

Financing

  • SMEFUNDS receives funding primarily from private investors.
  • They also receive grants from awards and the Global Alliance for Clean Cookstoves.

Scaling

  • The Green Energy & Biofuels arm of SMEFUNDS first seeks to scale throughout Nigeria.
  • After sufficiently meeting the demand of the target market, they plan on expanding into other countries.
  • They also have plans to explore the transport fuel market.
  • They hope to achieve an economy of scale by building a larger plant, thus driving down production costs.
  • They also seek to establish smaller micro-plants throughout Nigeria to make it easier to achieve last mile distribution.

SOCIAL IMPACT

  • SMEFUNDS seeks to have an impact that is broad in scope, improving the livelihoods of as many people as possible.
  • They seek to reach 1 million people by 2017.

 

 

Technology

Description: Ethanol gel, a form of chafing fuel, is a flammable, slow-burning fuel that comes in gel form. Most are familiar with ethanol as drinking alcohol, but it is also a biofuel that is often used as a gasoline additive in the United States. Conventional ethanol production uses corn, sorghum stalk, or sugarcane as feedstock, but in recent years methods have been developed that can turn the lignocellulose in plant fibers into ethanol. This allows for the conversion of normally useless agricultural and plant waste products into carbon neutral, sustainable biofuel. The biofuel is then processed into gel form, which is more convenient for use in cookstoves.

The cookstove is manufactured by KIKE a subsidiary of SMEFUNDS, who rents out a factory in China that manufactures the stoves. The stove is non-pressurized, and the gel is housed in a container within the stove to reduce burn risk. It comes in two models, the KD1, which has a single burner, and the KD2, which has two burners. The stove is durable, affordable, safe, and non-polluting, making it ideal for use by BOP consumers.

smefunds fuel

Manufacturing Process:

production process smefunds

A flowchart detailing the cellulosic ethanol manufacturing process used by SMEFUNDS’ subsidiary, Green Energy & Biofuels.

More Resources

Online Resources

Contact Information

18B Ogundana Street, Allen Avenue
Ikeja, Lagos, Nigeria+234 8025739694f.oye@smefunds.com