Business Case Biogas Kit

8/13/2019 Business Case Biogas Kit

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Disclaimer

The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoeveron the part of The World Bank Group or The Apex Consulting Group, Catapult Design, Inotek Foundation, or GATD Foundation(collectively the Program Partners). Moreover, any views expressed do not necessarily represent a decision or the stated policy of theWorld Bank Group or the Program Partners. Any citing of trade names or commercial processes is included for the information of thereader and does not constitute endorsement, recommendation, or favouring by The World Bank Group or the Program Partners.

Some information contained in this document is derived from carefully selected public sources that have been deemed to be reasonableand reliable; however The World Bank Group and the Program Partners cannot be responsible for its accuracy or completeness. Anyopinions expressed reflect the current judgement of the author and do not necessarily reflect the opinion of The World Bank Group or theProgram Partners. All opinions presented are subject to change without notice. This document is provided for informational purposes only,and is not a solicitation of any investment, monetary or otherwise, and should be read in conjunction with additional materials provided bythe Program. No representation or warranty, express or implied, is made as to the completeness or accuracy of the information. Thisdocument contains forward-looking statements. Such statements are subject to certain risk factors which may cause the concept

commercialisation to differ or results to vary from those expected.


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Table of Contents

Business Case Section Page

Opportunity 1Introduction 2Concept 3Customer Profile 5Business Model 6

Pilot Market 8SWOT Analysis 9Risks 10Numbers 11Way Forward 13About the Program 14


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There is a lack of access to viable biogas systems that canprocess waste into energy in rural Indonesian communities. Theproposed concept addresses the problem and presents apossible solution.

Access to autonomous and affordable fuel production technologythat harnesses the energy potentials of organic waste has thepotential to provide a high level of self sufficiency andalleviation from the financial burden and fuel collection efforts forrural Indonesians at the base of the pyramid.

Dissemination of the biogas digester technology and theproposed commercialisation model will improve the accessibilityof renewable energy and create energy self sufficient ruralcommunities.

This concept introduces an autonomous fuel productiontechnology from organic waste technology for off-gridcommunities. A safe, clean, and affordable biogas digester isbeing designed and tested to meet market demand with the

The proposed concept offers improved affordability, design and technicalproperties to replace existing biogas digesters.

The improved biogas kit is a polyethylene tank-in-tank household biogasproduction system complete with custom biogas stove designed forindividual household cooking.

The system uses custom tanks and functions with 2 kg of organic wastefrom household waste to generate 3 hours of cooking time. It is a non-fixed, above ground unit and can be installed anywhere in the home areabased on the preference of the customer.

The road from market partner engagement to validated marketsolution is estimated to take one year consisting of marketexploration, concept development, testing and ultimatelyintroduction of the market solution.

Selected Market Partner(s) will be offered a range of support,assistance and guidance from the Indonesia Demand-DrivenGreen Innovation Program Partners.

In 2008 it was estimated that 44% of the domestic Indonesian population werenot serviced by a formal waste management system. Access to autonomous fuelproduction that harnesses the energy potential of organic waste has the potentialto provide a high level of self-sufficiency and alleviation from the financialburden/fuel collection efforts.

The fuel subsidy is a major obstacle for the introduction of the use of organicwaste as a fuel, and with the subsidy coming very close to being removed thisyear there was an opportunity for major interest in alternative fuel production; thishas generated a lot of local interest in autonomous fuel production.

The agricultural industry, which is among the largest in the target community,represents a significant potential market in rural Indonesia.

The value proposition for marketpartner/s: Support to pilot and test animproved portable biogas technology thatprimarily uses organic waste inputs. Theimproved technology is cheaper and easierto install. The technology supports theperceived separation from the source ofthe gas to the cooking process.Commercialisation and communityengagement support will further supportthe business model across Indonesia.

The value proposition for target community: Access to anaffordable, reliable, and renewable cooking fuel for households andsmall home industry which, once paid off, provides free cookingfuel for several years.

The total variable cost per Biogas Kit isRp. 1,766,000 which includes the cost ofthe tank, cost of the stove, local deliverycosts, labour cost for installation, and salescommissions for the sales team. The salesprice has been set at Rp. 2,000,000 whichprovides a potential profit of Rp. 434,000for each unit sold.

Required Investment: Rp 107,000,000

Return on Investment: 8.92 %

Revenue year 1: Rp 2,103,200,000

Profit Margin: 8.50 %


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Over the past several months, ProgramPartners of the World Banks IndonesiaDemand-Driven Green Innovation

Subprogram (IDDGIS) have explored andscreened energy related challenges fromthe target community. These challengeshave been narrowed down to the five mostpressing energy-related challenges facingthe target community. From these fivechallenges, a number of concepts havebeen generated to provide solutions toimprove conditions for rural Indonesians.Program Partners work to provide specificinformation and analysis in areas thataffect commercial and financial viability aswell as the impact potential on the targetcommunity.

The next stage of the IDDGIS is to source potentialMarket Partner(s) to support and assist in deliveringthe most commercially viable concepts to the market.The design concepts are presented to potential MarketPartner(s) through this Business Case as well asthrough the delivery of business presentations.

This Business Case seeks to assist potential MarketPartner(s) to make an informed decision of whether ornot to engage further with the IDDGIS in thecommercialization of the technology. Through this

Business Case, potential Market Partner(s) will gain an insight into the technical and commercialdetails of the concept, provide answers to questions such as the concepts target market, where is theconcepts target location, what are the characteristics of the ideal Market Partner(s) for implementationof this concept, the commercial viability of the concepts implementation in the target location, whatsocial and environmental benefits are likely to be generated from this concept, and what is the

recommended way forward to commercialize the concept.


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Each concept in IDDGIS is developed to meet a particular demand that has been identified as a key energyrelated challenge in the target community. The underlying challenge for this concept was to provide viablesystems for community scaled conversion of organic waste into fuel. The Indonesian stable and warm climate isideal for use of biodigesters, but existing systems are not ideal for use in rural Indonesia due the stationary, morecostly, and less user-friendly design.

This unique concept is a polyethylene tank-in-tank household, warung, or small restaurant biogas productionsystem complete with custom biogas stove designed for individual burner cooking. The system uses customtanks and functions with 2 kg of organic waste to generate 3 hours of cooking time. It is a non-fixed, aboveground unit and can be installed anywhere in the home area based on the preference of the customer,alternatively the unit can be moved from location to location based on the end-users needs.

Our research indicates that the commercialization of this concept will generate the following commercial Benefitsfor Market Partner/s:

Improved product capability to be sold to existing and new customers;

Reduced R&D costs for product innovation; Access to expanded markets (moveable unit dramatically increase saleability); Reduced risk and cost for market expansion; Access to local networks and customer channels; and Community education will increase overall market demand for the product.

Our research indicates that the introduction of this concept to the market will generate the following value forrural Indonesians:

Improves access to autonomous cooking fuel production; Reduction of workload, mainly for women, in firewood collection and cooking; Reduces cooking fuel expenditure to zero over the long run; Transforms organic wastes into high quality fertilizer; Improvement of hygienic conditions through reduction of pathogens, worm eggs and flies; Overcomes the installation complexities of biogas systems, and the fear of gas explosion; Eliminates the dangers of indoor air pollution reducing healthcare costs and increasing

productive days; Environmental advantages through protection of forests, soil, water and air; and Cutting CO2 emissions


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A polyethylene tank-in-tank household biogas production system

(complete with custom biogas stove) designed for individualhousehold cooking. The system is based on a proven ARTI system,but uses custom tanks rather than manually adapting existing watertanks. It functions with 2-4kgs of organic waste to generate 2-4 hoursof cooking time (variable to substrate used and temperature). It is anon-fixed, above ground unit, is easily maintained, and can beinstalled anywhere in the home area based on the preference of thecustomer. When used with vegetable waste it is low odor, and thedigested material can be used as a quality garden fertilizer. Theestimated cost of the complete kit is USD $200.

(An example of this type of product can be found for sale in Tanzania,but with some additional feature at a sales price of USD $60012)

1www.simgas.com/products/urban/gesi2000/item30 2completebiogas.com
http://www.simgas.com/products/urban/gesi2000/item30http://www.simgas.com/products/urban/gesi2000/item30http://www.simgas.com/products/urban/gesi2000/item30http://www.completebiogas.com/http://www.completebiogas.com/http://www.completebiogas.com/http://www.completebiogas.com/http://www.simgas.com/products/urban/gesi2000/item30


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The value proposition for market partner/s: Support to pilot and test an improved portable biogas technologythat primarily uses organic waste inputs. The improved technology is cheaper and easier to install. Thetechnology supports the perceived separation from the source of the gas to the cooking process.Commercialisation and community engagement support will further support the business model acrossIndonesia.

The value proposition for target community:Access to an affordable, reliable, and renewable cooking fuel forhouseholds and small home industry which, once paid off, provides free cooking fuel for several years.

Commercialisation Strategy

The commercialisation strategy for the Biogas Kit is as follows:

CommercialPillars

Phase I (Pilot)January to June 2013

Phase II (Scaling)June 2013 to June 2014

Market - Sleman, Gunung Kidul, Bantul, Kulon Progo in Jogjakarta - Kalimantan, Sumatra, NTT, and NTBCustomers

-Individual households, Warung and small restaurants

-Individual households, Warung and small restaurants

Manufacture

- The biogas stove will be purchased from an establisheddomestic stove manufacturer

- The tanks will be purchased from an established domestictank manufacturer

- Design support will be provided to make the necessaryproduct features and to design the assembly process

- An organisation will be engaged to complete the assemblyof the final product and provide short-term storage inJogjakarta

- The biogas stove will be purchased from an establisheddomestic stove manufacturer

- The tanks will be purchased from an established domestictank manufacturer

- An organisation will be engaged to complete the assemblyof the final product and provide short-term storage inJogjakarta, Pekanbaru and Makassar

Distribution

- Input components (tank, piping and stove) will be deliveredto the assembly facility in Jogjakarta

- The components will then be assembled locally- The local organisation will then deliver the product and

assist with installation at the customer location based onsales orders

- Input components (tank, piping and stove) will be deliveredto the assembly facility in Surabaya

- The components will then be assembled locally and sent toregional distribution centres in Jogyakarta, Pekanbaru andMakassar

- The local organisation will then deliver the product andassist with installation at the customer location based onsales orders

Sales &MarketingStrategy

- A local motor bike sales team of four people will bedeployed to educate and inform the communities of thisproduct and make direct sales on a commission basis.

- This product could be also included in the mobile RE shop.- Four pilot product trials will be offered to hamlets heads and

other buying influencers so that customers can see thesystem in action

- A local motor bike sales team of four people will bedeployed to educate and inform the communities of thisproduct and make direct sales on a commission basis ineach location.

- This product could be also included in the mobile RE shopas part of the catalogue.

- Two pilot product trials will be offered to hamlets heads andother buying influencers so that customers can see the

system in action in each locationRetailPricing

- Each unit will be sold at Rp. 2.2 million- Price includes installation and initial training for users - Each unit will be sold at Rp. 2.2 million- Price includes installation and initial training for users

End-UserFinance

- End-user financing will be made available to assistcustomers to purchase the unit.

- An initial down payment of 30% to pay upfront withinstalments made over 24 months to an external financeinstitution.

- The portability of the unit allows for effective reclaiming ofunits that are not paid for as scheduled.

- The reclaimed units could be offered at reduced price or asrental options.

- End-user financing will be made available to assistcustomers to purchase the unit.

- An initial down payment of 30% to pay upfront withinstalments made over 24 months to an external financeinstitution.

- The portability of the unit allows for effective reclaiming ofunits that are not paid for as scheduled.

- The reclaimed units could be offered at reduced price or asrental options.


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The Competitive Environment

The Biogas Kit has competition from several alternative sources of cooking fuel including other biogas systems.Existing biogas systems mainly use livestock waste as the primary source of fuel conversion. Other existing

technologies and substitute products being used for household cooking fuel include:

Existing biogas digesters: The existing systems offer similar benefit and technology as this Biogas Kitconcept. However, most of the existing systems use livestock waste as the basis for waste conversion(which has been resisted by many parts of the community). Most of the existing systems are installedpermanently and require a higher cost to assemble in each household. These biogas digester technologiesare being offered to the target market from a range of different organizations with different business modelsand different motives to disseminate their technology:

o Private companies: These are companies who are commercially offering their own technology forbiogas energy production, importing this technology, or developing it with commercialisation in mind.

o Socially motivated organisations: Initiatives, programs and donations sourced from corporations oruniversity CSR, Non-Government-Organisations, and Multilateral organizations.

o Local Government:National, provincial, regional or rural government initiatives that offer partial or fullsupport to install biogas digesters and provide education to the communities.

LPG fuel:The Indonesian government is dedicated to disseminate 3kg LPG gas canisters for Indonesians inan effort to replace the use of kerosene and wood as cooking fuels. LPG gas canisters are a less costlyalternative to kerosene. The government owned PT Pertamina has a monopoly in this market both inproduction and distribution.

Firewood/charcoal fuel:A majority of rural Indonesians use wood for their daily cooking fuel. Wood andtwigs are available in the forest around many rural communities. Firewood can also be purchased at an

average price of Rp. 1,000 per kg from local entrepreneurs. Charcoal and other fuels maintain a strongmarket share in the target location.

Barriers to Entry

The following points create potential barriers to enter for first movers into this market:

Communication barriers with the community due to language and culture barrier; Difficulties to change community mindset due to assumed expense and change concerns (e.g. switching

cost associated with currently owned solutions); Community hesitance to use organic waste in cooking fuel production; Changing community mindset on assumed technology advantages; Competition from established alternative solutions providers and technologies; Patents and proprietary knowledge of existing biogas digester providers might restrict entry; and Government operational licensing requirements.Barriers to entry for subsequent market players include:

Identifying innovations and solutions which are able to make a more attractive offering; Acquiring target community acceptance for waste conversion to cooking fuel solution provider; Access to ideal target locations for Biogas Digester operation in the target market; Competitive Responses from established first mover and alternative solutions providers; Access to optimal distribution channels as potential distributors gain increased bargaining power; and National, provincial, regional or rural government regulations limiting competition and endorsing first mover.


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Indonesia is the national target market for Biogas Kitcommercialization. Indonesia is the largest country in South-EastAsia both in area and in population. It has an estimated

population of 237 million of which 28 million live in themetropolitan area of the capital, Jakarta. Indonesia consists of33 provinces located across 5 major islands and thousands ofsmall islands. The country is an archipelago contains 17,508islands. The Indonesian economy is the world's sixteenth largest by nominal GDP. Indonesias 2011 GDP isestimated to be USD 845.68 billion with GDP per capita estimated to be USD 3,508. Despite the countrys 6.4%economic growth in 2011, Indonesia still faces unemployment and poverty challenges. In 2011, the poverty ratewas estimated to be 13.3% and the unemployment rate 7.9%.

The Pilot MarketThe target community is the community in which the Program is

focusing its activities for pilot commercialization. The local communitysparticipation from this location has been the key to the success of theprocess so far. After assessing different possible locations, the SpecialRegion of Yogyakarta was selected as the best suited location for pilotcommercialization of the concept. The province is located near thesouthern coast of Java. In 2010 registered population in Special Regionof Yogyakarta is 3,452,390 inhabitants.

The Special Region of Yogyakarta consists of four districts:

1. BantulBantul district consists of 17 sub districts, 75 villages, and 933 hamlets. The total population in 2011

was 1,035,635 inhabitants with total 311,934 people as head of households. Several subdistricts are stillin off-grid areas and most rural areas do not have access to Drinking Water Local Company(Perusahaan Air Minum Daerah). Bantul district has six rivers that flow all year long. Industries locatedin Bantul are typically small industries. In 2010, there were total of 18,146 industries in the area.

2. GunungkidulGunungkidul district consists of 18 sub districts, 144 villages, and 1,416 hamlets. The total population in2010 was 674,408 inhabitants. The economy of Gunungkidul Regency is dominated by the agriculturalsector. Traditional home craft industry, food processing, and agricultural products are all the sectorswith significant potential for further development.

3. Kulon ProgoKulon Progo district consists of 12 sub districts, 87 villages, and 917 hamlets. The population of KulonProgo is 388,869 people. Majority of inhabitants occupations in Kulon Progo are farmers. Water supplyfor irrigation in Kulon Progo is taken from Progo and Serang River.

4. SlemanSleman district consists of 17 sub districts, 86 villages, and 1,212 hamlets. The total population in 2011was 1,125,369 inhabitants with total 305,376 people as head of households. The biggest Slemaninhabitants occupations are in the field of agriculture and services. In 2009, the number of registeredsmall industries is 15,012. In 2009 there were 181 Solar Power Generators, 3 Micro Hydro PowerPlants, and 105 livestock waste biogas installations registered in Sleman area.

Sleman

BantulGunung

Kidul

Kulon

Progo


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The technology behind the Biogas Kit effectively converts organic waste into cooking fuel. The unit requires areliable source of organic waste to operate and continuously produce sufficient cooking fuel. The market isalready populated with alternative technologies and alternative biogas digesters. Should government efforts andsubsidies to support LPG become greater, the concept may not be able to compete with LPG pricing. Currentlythe government has removed subsidies on kerosene and are actively encouraging the use of LPG.

The concept is dependent on the ability to engage end-user financiers as the system represents a largeinvestment for rural Indonesian households. The concept offers installation that can be placed in a wide range oflocations in a household, or even be moved. Conventional biogas digesters need to be placed under ground orcemented into large containers. The market potential of more accessible and end-user-friendly yet affordablealternatives has been identified.

A brief analysis of the concepts existing Strengths, Weaknesses, Opportunities, and Threats as well asConstraints and Dependencies follows below:

Strengths Weaknesses

The biogas kit offers an alternative for households areplacement of fossil fuels as an energy source for cooking;

The biogas kit uses organic waste as input to create biogasfuel;

Placement on the end-users property empowers them to takecontrol of their own energy production and consumption;

The kit is practical to transport and can be easily installed; The biogas kit offers a safer energy source than potentially

explosive LPG; Using biogas reduce household workload in collecting

firewood; and The model can be expanded to include several regional and

national markets.

This current alternatives and biogas technology may still beunfamiliar to members of the target community;

The unit requires a certain amount of organic waste tooperate at maximum capacity;

Incorrect handling and usage of the gas may lead to firehazard;

The concept currently cannot accommodate severalhouseholds to share the use of one unit biogas ki t;

Reliance on the motorbike sales team ability to obtainmarket acceptance;

Potential agents need training and education before theycan successfully market, install, and provide maintenanceeducation for the end-user; and

End user financing model is necessary.Opportunities Threats

Many Indonesian households still rely on fossil fuel andfirewood, this biogas kit offers options to convert organicwaste from food to be cooking fuel option;

Safety concerns associated with the use of LPG and healthhazards of using biomass for cooking are alleviated by thebiogas system;

The technology improvements and cost-sharing model, onceaccepted and established, can generate new ideas in otherareas and a change in attitudes that mutually benefit allmembers of the community; and

Community preference to choose lower price options wouldmake the system the community choice compared to current

biogas digester technology.

Competition with other social based institutions or initiativesinstalling biogas systems at no cost or very low cost;

The government is actively encouraging the increased use ofLPG in the target community;

Decrease or lack of purchasing power in the target marketswould have significant implications for the success of thissystem; and

Technology improvements can meet resistance in the targetcommunities and be rejected before they are introduced andthe benefits have been fully presented.

Constraints

Some of the traditional cooking methods in the target community rely on firewood or charcoal; The price level of alternative energy sources limit the financial benefits of this concept; The availability of technological expertise in the target location may be limited and there may be a need for extensive training; Only household with certain amount of regular organic food waste can generate desired conversion of b iogas fuel; and Government efforts to increase LPG dissemination limits demand growth.

Dependencies

Manufacturer ability for to produce the desired system; Availability of components needed to mix produce gas; Maintenance and service knowledge in the organisation; Consistent daily production of organic waste; The trust and acceptance of the technology and the product from the local communities; and Availability of appropriate end-user finance providers.


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The following is a selection of high-level risks, risk events, and suggested mitigation measures to be consideredwhen a comprehensive risk management plan is developed in relation to the potential commercialization of thisconcept.

# Risk Categories Risk Events Risk Mitigation Strategy

1Technology: risk of technology failureortechnological obsolescence

Proposed dual tank technology fail Vegetable waste produces insufficient

gas Stove/unit incompatibility

Testing, prototyping for extendable solutions, evaluatemultiple options to enable commercialization, implement andoperate an active management of obsolescence

2Business/strategic:risk affecting theviability of the business model andcommercial strategy

Marketing strategy fails Pricing points exceed purchasing

power Customers reject payment model

Identify lessons learned from previous success andresearch, pilot selected commercial strategies in a containedenvironment prior to scale-up, Develop contingency plans forkey areas of the commercial strategy

3

Environmental and Health:risk of damageto the environment or health caused duringmanufacture or installation and the liabilityarising from such damage

Unknown health risks from product use Significant odour creates environmental

disturbances

A Health, Safety and Environment Plan will be developedand implemented (including staff, supplier and contractortraining)

4Financial:risk of insufficient access tocapital, employee fraud end-user financingfailure

Loss of revenue due to theft Insufficient start-up capital Operational capital delays End-user finance model fails

Required capital will be secured prior to the launching of thepilot, a fraud prevention plan will be developed, multiplefinance alternatives will be locked into long-term servicecontracts;

5Manufacture and Supply Chain:riskrelating to plant closure, input resources,plant damage, component failure, cost base

Unplanned plant closure Increase in product/component cost Assembly model fails

Development of a supply chain risk management planincluding the preparation of simulation models with mitigationand impact reduction strategies

6Distribution: risk of non-delivery, increasedlogistics costs, transportation relatedbreakage

Logistic supplier is unreliable Trucking accidents Damaged product during transportation Significant increase in distribution costs

Qualify local distributors and logistics providers, maximizepayloads, use alternative modes of delivery distributionnetwork design, insurance coverage

7Operational: risk relating to the operationalmanagement strategy and implementation

Product failure/defects cannot be fixed Customer service is insufficient Prepare a business continuity and resiliency plan thatdocuments scenario analysis and impact reduction strategies

8 People: risk of not attracting sufficientlyskilled and experience people with the rightattitude who can consistently deliver

Inability to hire staff as required

High staff turnover Staff damage community relations

Emphasizing social mission of the organization, strictemployment screening and Implementing a performancemeasurement and reporting framework

9Demand:risk of not creating sufficientmarket demand during the pilot phase andbeyond

Marketing strategies fail Sufficient demand cannot be created Scale is unachievable

Extensive relationship building with pilot system users,regular evaluation of product value to the community,assessment of the effectiveness of marketing andadjustment as necessary

10

Community Acceptance: risk of thecommunity not embracing the offering,business model or local salesrepresentatives

Community rejects product offering Community rejects organisation Respectfully engaging with the community, defining mutualexpectations and monitoring the their fulfillment

11Business Partnerships: risk infailure ofpartnerships between business partners

Partners refuse to remain workingtogether

Suppliers fail or discontinue supply Tank/Stove suppliers will not participate

Seeking multiple alternative suppliers, locking in majorsuppliers through long-term service contracts; ensuring allbusiness partners commit to a shared vision and set of

values12

Competition: risk relating to early movercompetition in the market

Competition occurs too quickly Non-Profits undercut pricing model Maximizing first mover advantages through acceleratingspeed-to-market, utilizing competitive intelligence strategies

13

Political/regulatory:risk of a change inpublic energy policy, export/importregulations and business enablingenvironment

Import restrictions relating oncomponents

Government restrictions on biogasinstallations

Frequent and detailed communications with policy makers,industry bodies, media, consumers, and environmentalgroups

14Natural Disaster and force majeure:riskof a significant natural disaster in the pilotmarket location

Landslide, flood, road closures Earthquake, Tsunami or volcanic

eruption

Develop an emergency management and businesscontingency plan


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This following section provides information on the financial viability of the first year of the pilot commercialization.The total variable cost per Biogas Kit is Rp. 1,766,000 which includes the cost of the tank, cost of the stove, localdelivery costs, labour cost for installation, and sales commissions for the sales team. The sales price has beenset at Rp. 2,000,000 which provides a potential profit of Rp. 434,000 for each unit sold.

At the end of year one, the company will retain 35% of its earnings while the remaining Rp. 116,547,600 will bereturned to investors; investors will see an 8.92 % ROI. This supports the companys sustainability by providingadditional operational funds in year two of approximately Rp. 62.8 million.

The initial Investment required will cover 6 monthsof operational costs, with no sales assumed.

Total Required Investment: Rp 107,000,000Repaid to Investors End Y1: Rp 116,547,600Return on Investment: 8.92 %

Revenue year 1: Rp 2,103,200,000EBITDA year 1: Rp 179,304,000Profit Margin: 8.50 %

Risk

Value

Estimated Return on Investment: 8.92 %

Estimated Payback Period: One Year

0

3040

50 60

70

96 100114

128132136

0

50

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150

1 2 3 4 5 6 7 8 9 10 11 12

Monthly Unit Sales

66

110154

220

281.6299.2

0

50

100

150200

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350

1 2 3 4 5 6 7 8 9 10 11 12

Monthly Revenue in Million Rupiah

66110

154

220

281.6299.2

0

50

100

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350

1 2 3 4 5 6 7 8 9 10 11 12

Monthly Revenue & Expense in Million Rupiah

Revenue Expense

5%

4%0.28%

91%

Expenses

Payroll

Operating

Utilities &

Maintenance

Cost of Sales


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Projected P / L Year 1


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The Indonesia Demand-Driven Green Innovation Subprogram (IDDGIS) supports pro-poor clean energyinnovation by facilitating the generation and market deployment of new business models, products and services.Its objective is to help the private sector identify and exploit opportunities for clean energy innovation. IDDGIS isexecuted by a core team of local and international private sector and non-profit implementing partners.

IDDGIS is funded by the World Bank Group, the Asia Sustainable and Alternative Energy Subprogram, and theNorwegian Trust Fund for Private Sector and Infrastructure. It is implemented by The Apex Consulting Group asMarket Facilitator and Program Coordinator, Catapult Design as Global Design Partner, INOTEK Foundation asLocal Design Partner, and GATD as Mentor-Gatekeeper.

The focus of the IDDGIS is to serve the clean energy needs of poor communities in Indonesia. This is achievedby identifying needs, generating promising concepts, and designing new products and services in partnershipwith market partners. IDDGIS is organised as a tournament whereby market ideas compete for successiverounds of deeper and broader support. Ideas that do not receive sufficient market buy-in are progressivelyscreened out of IDDGIS. This ensures that minimal time and resources are spent on working on prototypes that

will never be commercialised.

The IDDGIS has six stages, and begins by identifying a target community to work with. This is followed byidentifying critical clean energy needs that are prospective market opportunities. Needs are identified through acall for challenges campaign, through field research and through stakeholder workshops. Promising initialconcepts are then systematically developed through iterative rounds of design, prototyping and testing beforethey culminate into market-ready offerings. Once the product/service is market ready it must be implemented, aprocess that involves manufacturing, distribution chains, infrastructure creation. Only when the product orservice is available commercially on the market is it considered commercialised.

IDDGIS approach to clean energy innovation involves the development of product and service solutions usinghuman-centred design methods. In addition to relying on in-house teams, IDDGIS engages the community for

which it is designing in the process of creation. As the solution progresses, IDDGIS also involves local MarketPartner(s) in the refinement of the design relying on them for the full implementation of a commercialisedproduct or service.

More information about IDDGIS and the Program Partners can be found at:www.greeninnovation.or.id

www.worldbank.org

www.apex-cg.com www.catapultdesign.org www.inotek.org www.gatd.org
http://www.greeninnovation.or.id/http://www.greeninnovation.or.id/http://www.greeninnovation.or.id/http://www.greeninnovation.or.id/


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Business Case Biogas Kit

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