Nigerian Clean Cookstoves Market Development Programme

For Nigerian Alliance for Clean Cookstoves

PROJECT DOCUMENT

FOR A PROPOSED NIGERIAN CLEAN COOKSTOVES MARKET DEVELOPMENT PROGRAMME

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NIAF Project No; CG0008

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ABBREVIATIONS

BC Black CarbonBLP Better Life Programme for Rural African WomenCBN Central Bank of NigeriaCDM Clean Development MechanismCKD Completely knocked down partsCME Coordinating/Managing EntityCO Carbon monoxide CSR Corporate Social ResponsibilityDARE Development Association for Renewable EnergiesDFID Department for International DevelopmentDSA Distribution & Sales AgentEDF European Development FundERPA Emission Reduction Purchase AgreementESMAP Energy Sector Management Assistance Programme (World Bank)EU European UnionFAO Food and Agriculture OrganisationFOTE Friends of the EnvironmentFW FirewoodGACC Global Alliance for Clean CookstovesGDP Gross Domestic ProductGHG Greenhouse gasesGoN Government of NigeriaGS Gold StandardsHAP Household air pollution HH HouseholdIAP Indoor air pollutionICEED International Centre for Energy, Environment and DevelopmentISO International Standards OrganisationIWA International Workshop AgreementKfW Kreditanstalt für WiederaufbauLGA Local Government AreaLPG Liquid Petroleum gasMCS Mfamiyen Conservation SocietyMDG Millennium Development GoalM&E Monitoring &EvaluationMFI Microfinance InstitutionMoE Ministry of EnvironmentMoF Ministry of FinanceMWA Ministry of Women AffairsNACC National Alliance for Clean CookstovesNBS Nigerian Bureau of Statistics NCEE National Centre for Energy & Environment NCEEC National Centre for Energy Efficiency and ConservationNCEF Nigerian Clean Energy Facility NCERD National Centre for Energy Research and DevelopmentNCHRD National Centre for Hydropower Research and Development NCPRD National Centre for Petroleum Research and DevelopmentNCCMDP Nigerian Clean Cookstoves Market Development ProgrammeNCCS National Clean Cooking SchemeNESREA National Environmental Standards and Regulations Enforcement

AgencyNIAF Nigerian Infrastructure Advisory Facility

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OM Operations ManualPC Product CenterPCIA Partnership for Clean Indoor AirPOA Programme of ActivitiesPM Particulate matterPMU Project Management UnitPR Public RelationsQC Quality ControlRBF Results Based FinancingRUWES Rural Women Energy Security project SC Steering CommitteeSERC Sokoto Energy Research Centre SGS Swiss Certification company, formerly known as Société Générale de

SurveillanceSM Subsidy MechanismSME Small and Medium Scale EntrepriseSON Standards Organisation of NigeriaUSAID United States Agency for International DevelopmentVAT Value Added TaxTüv German Certification company, technical inspection companyWACCA West African Clean Cooking AllianceWB World BankWBT Water Boiling TestWHO World Health Organisation

CURRENCY

1 Euro = 220 Naira1 USD = 160 Naira

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TABLE OF CONTENTS

ABBREVIATIONS 4TABLE OF CONTENTS 6INTRODUCTION 101 CONTEXT, ISSUES & CHALLENGES 141.1 Cooking Energy Issues...................................................................................................................................................14

1.1.1 Lack of access to modern energy services..........................................................................................................................................151.1.2 A heavy reliance on woodfuel............................................................................................................................................................161.1.3 Cooking with woodfuel is perceived as cheaper................................................................................................................................181.1.4 Relieving the health impact of energy use.........................................................................................................................................231.1.5 Gender aspects.................................................................................................................................................................................. 251.1.6 Impacts on the local and global environment....................................................................................................................................26

1.2 Economic importance of the cooking energy sector......................................................................................................292 A STOVE MARKET AT ITS EARLY STAGES OF DEVELOPMENT 30

2.1.1 Traditional stove use remains the norm........................................................................................................................302.1.2 Fundamental changes occurring at household level......................................................................................................322.1.3 A fragmented market and distribution chain.................................................................................................................332.1.4 Local versus foreign producer capacities.......................................................................................................................342.1.5 Difficulties encountered................................................................................................................................................352.1.6 Lack of clean stove certification.....................................................................................................................................362.1.7 Problems & Attitudes toward changes..........................................................................................................................36

3 INSTITUTIONAL CONTEXT AND SECTORAL PUBLIC POLICIES 393.1 Overview of the stakeholders........................................................................................................................................39

3.1.1 Ministries and local governments..................................................................................................................................393.1.2 NGOs............................................................................................................................................................................. 39

International Centre for Energy, Environment and Development (ICEED).....................................................................39Developmental Association for Renewable Energies (D.A.R.E)......................................................................................39Mfamiyen Conservation Society....................................................................................................................................39Friends of the Environment (FOTE)................................................................................................................................39Project Gaia Nigeria.......................................................................................................................................................40Nigerian Alliance for Clean Cookstoves.........................................................................................................................40

3.1.3 Stove suppliers..............................................................................................................................................................403.1.4 Financing institutions.....................................................................................................................................................40

Alitheia Capital...............................................................................................................................................................41Bank of Industry.............................................................................................................................................................41Atmosfair GmbH............................................................................................................................................................41DevA Access and Empowerment Int'l Limited...............................................................................................................41Informal faith/Social/market based Groups..................................................................................................................41

3.1.5 Universities and Laboratories........................................................................................................................................413.2 Policy environment........................................................................................................................................................424 CURRENT CLEAN COOKSTOVE INTERVENTIONS 434.1 Clean Cookstoves Interventions by NGOs and private firms..........................................................................................43

4.1.1 National Stove testing centre........................................................................................................................................434.1.2 USAID/ICEED’S Energy Efficient Woodstoves Project....................................................................................................434.1.3 Developmental Association for Renewable Energies (D.A.R.E)......................................................................................434.1.4 Mfamiyen Conservation Society....................................................................................................................................434.1.5 SOSAI.............................................................................................................................................................................434.1.6 SMEFUNDs.....................................................................................................................................................................434.1.7 Toyola Energy................................................................................................................................................................444.1.8 Quintas Energies............................................................................................................................................................444.1.9 OANDO- Clean Cooking Fuel Initiative...........................................................................................................................44

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4.1.10 Tower Aluminium..........................................................................................................................................................444.2 Clean Cookstoves Interventions by Government...........................................................................................................44

4.2.1 Nigerian Clean Cookstoves Alliance...............................................................................................................................444.2.2 The Renewable Energy Programme of the Federal Ministry of Environment................................................................454.2.3 Jigawa State’s Alternative Energy Fund.........................................................................................................................454.2.4 Lagos state government................................................................................................................................................454.2.5 Niger state government.................................................................................................................................................45

4.3 Current Stove Activities with Carbon Financing.............................................................................................................454.3.1 Envirofit.........................................................................................................................................................................464.3.2 C-Quest..........................................................................................................................................................................464.3.3 Atmosfair.......................................................................................................................................................................46

4.4 Reflection for future intervention..................................................................................................................................475 REVIEW OF INTERNATIONAL BEST PRACTICES 485.1 Enhance Demand...........................................................................................................................................................48

5.1.1 Understanding and motivating the consumer...............................................................................................................485.1.2 Consumer Finance.........................................................................................................................................................485.1.3 Innovative Manufacturing and Distribution Methods....................................................................................................495.1.4 Access to Finance (social investment, working capital, carbon)....................................................................................495.1.5 Entrepreneur training and capacity building.................................................................................................................49

5.2 Foster an Enabling Environment....................................................................................................................................495.2.1 Standards and testing....................................................................................................................................................495.2.2 Fuels and technology.....................................................................................................................................................495.2.3 Monitoring and evaluation............................................................................................................................................505.2.4 Building the evidence base (research on impacts and benefits)....................................................................................505.2.5 Champion the sector and engage national stakeholders...............................................................................................50

6 MAJOR ISSUES 516.1 SWOT Analysis...............................................................................................................................................................516.2 Discussion of the Main Issues........................................................................................................................................527 PROGRAMME OBJECTIVES 547.1 Programme development objective..............................................................................................................................547.2 Specific objectives.........................................................................................................................................................548 PROGRAMME DESCRIPTION 558.1 Concept......................................................................................................................................................................... 558.2 Description....................................................................................................................................................................55

8.2.1 Component 1: Promotion and awareness raising..........................................................................................................568.2.2 Component 2: Quality control and stove certification...................................................................................................578.2.3 Component 3: Financial Support Mechanism................................................................................................................598.2.4 Component 4: Monitoring and Evaluation.....................................................................................................................618.2.5 Component 5: Support to local producers.....................................................................................................................618.2.6 Programme management..............................................................................................................................................63

8.3 Geographical scope.......................................................................................................................................................639 INSTITUTIONAL FRAMEWORK AND IMPLEMENTATION ARRANGEMENTS 649.1 Institutional and legal framework..................................................................................................................................64

9.1.1 National level.................................................................................................................................................................649.1.2 State level......................................................................................................................................................................659.1.3 Stakeholder mapping.....................................................................................................................................................66

9.2 Stakeholders..................................................................................................................................................................699.2.1 Beneficiaries..................................................................................................................................................................699.2.2 Possible collaborating entities.......................................................................................................................................699.2.3 Contracting authority and implementation agency.......................................................................................................71

Contracting authority....................................................................................................................................................71Implementation agency.................................................................................................................................................71

9.2.4 Supervision....................................................................................................................................................................71

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10 DURATION, COSTS AND FINANCING PLAN 7210.1 Project implementation planning.................................................................................................................................7210.2 Indicative costs.............................................................................................................................................................7210.3 Financing plan...............................................................................................................................................................7310.4 Carbon financing possibilities.......................................................................................................................................7311 MONITORING AND EX POST EVALUATION 8211.1 Evaluation criteria and indicators (as mentioned in the logical framework).................................................................8211.2 Evaluation ex-post plan.................................................................................................................................................8211.3 Communication plan.....................................................................................................................................................8212 JUSTIFICATION OF DONOR CONTRIBUTION 7612.1 Contribution to the economic and social development of beneficiary populations.....................................................7612.2 Significant impact on the global environment..............................................................................................................7812.3 Innovation and exemplary nature.................................................................................................................................7912.4 Collaboration and inclusiveness....................................................................................................................................7912.5 Demonstrable and replicable effects............................................................................................................................7912.6 Economic and financial sustainability after the project................................................................................................8012.7 Ecologic and environmental sustainability....................................................................................................................8012.8 Social and cultural sociability........................................................................................................................................8113 RISKS ASSESSMENT 83APPENDIX 86

FIGURES

Figure 1 Fuel use in Nigeria....................................................................................................................................................17Figure 2: Average fuel prices in 3 states of Nigeria................................................................................................................19Figure 3: Comparison of cooking fuel costs in three states (2013) on an end-use basis........................................................19Figure 4: Cost of cooking in 3 states in Nigeria......................................................................................................................21Figure 5: Fuel quantities usually purchased...........................................................................................................................22Figure 6 Monthly fuel costs....................................................................................................................................................23Figure 7: total wood off-take for cooking purposes...............................................................................................................28Figure 8: wood off-take savings by type of fuel......................................................................................................................28Figure 9: Nr of different stoves in use....................................................................................................................................33Figure 10: Main reasons for preferring a stove......................................................................................................................38Figure 11: Indicated reasons for justifying a national stove programme...............................................................................38Figure 12: Stakeholder arrangements at national level.........................................................................................................64Figure 13: Stakeholder arrangements at state level..............................................................................................................66

TABLES

Table 1: Main source of cooking energy used........................................................................................................................17Table 2: Collected Wood........................................................................................................................................................18Table 3 Comparison of Cooking Fuel Prices in Nigeria, based on survey data in 3 states (2013)...........................................20Table 4: Cooking fuel availability............................................................................................................................................22Table 5: fuel price data in different countries........................................................................................................................23Table 6 Major causes of deaths in Nigeria.............................................................................................................................24Table 7: Summary of the Status of Evidence on the Health Effects of IAP.............................................................................24Table 8: Health Impact of using cooking stoves.....................................................................................................................25Table 9: Perception of woodfuel availability changes............................................................................................................26Table 10 Estimated potential monthly fuel savings and payback time...................................................................................27Table 11 Estimated Annual Cooking Energy Quantity and Value...........................................................................................29Table 12 Indicative stove price table......................................................................................................................................31Table 13: Prevalence of eating out of the home....................................................................................................................32Table 14: Fuel preferences.....................................................................................................................................................32Table 15: Reasons for being an ideal fuel...............................................................................................................................32

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Table 16: Type of electric cooking or water heating appliance..............................................................................................34Table 17 SWOT Analysis of the Nigerian clean stove Context................................................................................................51Table 18: Carbon registration scenarios.................................................................................................................................73Table 19: Carbon off-take scenarios.......................................................................................................................................74Table 20: Operating Scenarios...............................................................................................................................................74Table 21: Expected benefits of NCCMDP to 2020..................................................................................................................77

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EXECUTIVE SUMMARY

Nigeria successfully made the transfer to middle-income country, as witnessed by a high economic growth, a modernizing infrastructure for transport, electricity and ICT. Still lagging far behind is a modernization of the cooking energy systems: Nigerians still use the same traditional cooking systems as their ancestors, leading to high economic costs from poor health and sanitary conditions, rampant deforestation, and high greenhouse gas emissions.The Government’s strategy to alleviate cooking problems is based on the provision of a large annual budgetary allocation intended to reduce the price of kerosene for cooking by the poor. However, in reality only a small portion of the subsidy ends up with the intended beneficiaries. As a result, some 90+ percent of the population continues to use woodfuels for most of their daily cooking. Nigeria is endowed with large liquid and gaseous petroleum resources, much of which are exported at the moment. Some 4m t of LPG is exported annually compared to an entire consumption of Nigeria of 300k t per year. The most likely ultimate solution for modernizing cooking energy in Nigeria is LPG. This was confirmed by a NIAF 1800 household energy survey in three States, which showed that households indeed prefer LPG over kerosene but are afraid for the high costs. If all households and small businesses were to switch instantaneously to LPG, the annual consumption would be on the order of 6.5m t per year. Large scale economies as a result of the increased supply would reduce the cost of cooking to affordable levels for a majority of households. However, LPG pricing is based on international prices and is not made available to the suppliers at localized prices. At the moment the use of LPG is constraint both by the supply and the demand: a chicken and egg situation persists, whereby there are not enough bottles to satisfy the demand, and there is often no supply in regions with demand. In addition, there are some regulatory issues with suppliers - retailers and with equipment that needs attention before LPG can be used on a larger scale.The way out is a strategy that promotes LPG for all households and small businesses, and fuel-efficient wood stoves for those households that cannot afford LPG in the short-term. The Government should take the lead in implementing this strategy, even though most activities will be implemented by private parties. More precisely, the proposed strategy to modernize cooking energy in Nigeria comprises the following:• PR campaign, informing the public about the strategy to quickly switch to LPG or clean

woodstoves, announcing which type of support is available to realize this, and request collaboration to realize this switch quickly

• Immediately stop the kerosene subsidy, and instead use part of the money to facilitate the procurement of LPG bottles and stoves by private companies buy down the costs of clean and fuel-efficient woodstoves

• Improve the regulatory framework for LPG supply and use• Launch a program to supply clean woodstoves• Assist private LPG supply companies to set up a safe country-wide LPG supply

infrastructure.It is proposed that the Government’s financial support for the cooking energy sector thus transforms from an annual fuel subsidy to a one-time capital investment subsidy, and leads to far greater economic benefits. Indeed, the entire strategy can be financed over a 7 year period using the sole annual amount now spent on kerosene subsidies. Estimates for the level of effort for the proposed multi-stakeholder programme show that some USD 420 -740 million will be needed to reach the goal of a majority of households in Nigeria with modern cooking access by 2020, depending on the penetration grade of LPG stoves. This document presents therefore two separate scenarios, (i) a programme focusing on clean wood

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stoves mainly, with a modest switch to kerosene and LPG (woodfuel scenario); and (ii) a programme focusing on a maximum switch to LPG (LPG scenario).In both scenarios, penetration rates of clean stoves in urban areas are close to 90% and in rural areas 40% for the wood scenario and 50% for the LPG scenario. End-user energy savings are 16% for the woodfuel scenario and 23% for the LPG scenario.Overall, estimated economic benefits for the woodfuel scenario (net present value) from fuel savings (if any), better health conditions, employment generation, reduced in CO2 emissions, protection of forest cover, and time to procure fuel amount to nearly USD 3595 million by 2020 as compared to a NPV of the total programme costs of 307 million, which shows that implementing the programme is highly justified. Not valued in this analysis are reduced deaths from improved indoor-air pollution and increased well being from abolishing the use of wood fuels. Fuel savings may not be obtained when households switch from woodfuels, but other non-quantifiable benefits exist (such as the equivalent of the consumer surplus for rural electrification), and this will furthermore mainly depend on reduced LPG price as a result from the obtained scale economies. The NPV of the LPG scenario are 529 million US$ giving a total benefits of 2972 million US$. While this is somewhat lower than for the woodfuel scenario, the benefits far exceed the costs with a ratio of 5.6. The Government will need to indicate its priority with regards to LPG versus woodfuel based solutions.

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INTRODUCTIONThe Nigerian Clean Cookstoves Market Development Programme (NCCMDP) is an initiative by the Government of Nigeria (GoN) through the Federal Ministry of Environment (MoEnv). It has been developed with assistance from the Nigerian Investment Advisory Facility (NIAF) in collaboration with the Global and the Nigerian Alliance for Clean Cookstoves (GACC, NACC). The development of the programme is financed by DFID through NIAF, with contributions from GACC and USAID-Nigeria. Lack of access to modern cooking energy solutions in Nigeria results in high economic costs through environmental degradation, poor health conditions in households, institutions and small businesses from air pollution, and unnecessary cooking fuel expenditures. Poor urban and rural households both experience these issues. The proposed programme is designed to improve the above conditions rapidly, and eventually throughout the entire country. The Development Objective is to increase access to modern and clean cooking energy for households, small businesses and institutions in Nigeria, with an emphasis on the poor. This is expected to lead to considerable economic benefits accruing to poor households as well as the country as a whole. Given prevailing demographic trends, it is proposed to accelerate a commercially oriented programme as much as possible through financial incentives. The priority is to give access to clean cooking energy solutions for as many beneficiaries as possible in a relatively short period of time before addressing the sustainability of the clean stoves supply chain. One should keep in mind that there are about one million additional households every year as result of population growth, so any programme that reaches less than one million stoves per year might not really be worth the effort. While this is the first time in Nigeria that such an ambitious programme is being developed, the timing is right. Clean cooking solutions have become global front-page news, and Nigeria is one of the countries with the largest potential for improvements in terms of sheer numbers. Now that is clear that poor cooking conditions lead to local and global environmental problems, it has been recognized that there is an urgent need for a solution. There are not only environmental benefits: the economic benefits of a fuel saving programme are large too, as the market for commercially sold cooking fuels such as firewood, charcoal, kerosene and LPG in Nigeria is estimated to be in excess of USD 3 billion per year. This number is increasing, as Nigerians purchase rather than gather fuels now more than ever before.The principles and major conditions for such programme have clearly been identified and firmly established. The five interrelated components are:

(i) Raise public awareness and communicate benefits of adopting clean and efficient stoves;

(ii) Ensure stove quality and performance at entry as well as during their operational life, with clearly defined benefits for all supported stoves;

(iii) Maintain a financial support mechanism to accelerate adoption of clean stoves; (iv) Realize substantial monitoring and evaluation activities, feeding stove performance

back to the programme design; and (v) Support private production and assembly of clean stoves in Nigeria. The programme

will support all types of stoves that satisfy agreed performance criteria, irrespective of the fuel, and after verification in the national stove-testing laboratory.

Several stakeholder consultations have taken place, in Nigeria and abroad, trying to identify the main issues, barriers, and solutions. Consultations for the USAID-Nigeria Efficient Wood Stove Project yielded information about key barriers and opportunities for expanding access to clean cooking solutions at the state level. A NIAF financed 1800 household survey in Kaduna, Kano, and Rivers identified and quantified main cooking issues and perceptions about proposed solutions. The GACC has been very helpful in the networking process, by organising two of the meetings and by bringing global experiences and best practices to Nigeria. Dialogue with the

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GACC, World Bank, EU, DFID, Shell, KfW and other is underway to identify possible participation in realising the programme. As a matter of principle, it is impossible for one single programme or project to cover the entire market, instead there is room for simultaneous initiatives. What the NCCMDP sets out to do is to define the general framework for guiding these initiatives. As long as the same principles are adhered to, different initiatives are only expected to enhance each other. Nigerian demographics impose one principle: initiatives need to be large as there is really no time to waste efforts on small and insignificant activities. Another important principle is that every household selects its own clean cooking solution: there is really not one size that fits all. Households have a free choice of stoves, but there shall not be any free stoves disseminated!. The program will not promote preferences for certain stoves, but rather promote any stove that meets predefined performance criteria. Every stove model that seeks to be promoted under the programme therefore needs to be tested in an independent national stove-testing laboratory. All stove models promoted under the programme necessarily satisfy the same performance conditions, irrespective of the fuel used. Institutional arrangements depend on the specific circumstances in a State, and design work on essential components should therefore be state-based, such as the detailed financial support and tracking mechanism, the M&E mechanism. Prospective approaches should be tried and developed so that lessons can be learnt for the nation-wide roll-out. To immediately gain experience with the proposed approach, several large-scale pilot projects are expected to be implemented in states with significant buy-in:

(i) In Niger State, the Governor announced his intention to roll out a state-wide programme for clean cooking stoves, provided substantial budget for this, and requested technical assistance from NIAF for realizing this program1;

(ii) In Katsina State, the EU delegation has recently made available a substantial amount of funding for two projects with agroforestry and clean stove activities (about 8 million Euros, with >20% co-funding requirement); ICEED and Oxfam with GACC support are jointly developing the work plan for these activities in 7 LGA, while it is still unknown who will be developing a similar programme in 5 other LGAs in Katsina;

(iii) The Rural Women Energy Security project of the Federal Ministry of Environment (RUWES) focuses on disseminating solar lighting and clean cooking equipment throughout the country; NIAF assistance was requested for scaling up, and a capacity needs assessment will be carried out to determine how to best organize this assistance;

(iv) Similarly, the Better Life Programme for Rural African Women (BLP) requested NIAF assistance to start a stove dissemination pilot through women’s groups in 3 states;

(v) In Jigawa State the Governor signed an MoU with NIAF and requested assistance, but the level of co-funding has not been assigned yet.

Implementing such programme successfully will only be possible if the Government, Development Partners, NGOs, private commercial firms, academia, and the financial sector are willing to contribute towards the same goal under the same stringent conditions. This will be a challenging approach, but no-one said it would be easy. Fortunately, benefits for the individual beneficiaries are also considerable, increasing chances of accepting to commit to the implementation of the programme.

1 The work plan will be developed once the Steering Committee is established and a Project Management Unit appointed. This is expected in March or April 2014.

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1 CONTEXT, ISSUES & CHALLENGES

1.1 Cooking Energy Issues With a population of 170 million people, Nigeria is the most populous country in Africa. It is expected that Nigeria will be the 4th most populated country in the world by 2050 if current growth rates persist. This gives the scale of the issues to be tackled and of the potential impacts, making it critical to act quickly and decisively.In this context the stove programme needs to satisfy quite a few separate criteria to realize an impact, whether this is on fuel consumption, wood off-take, indoor air pollution, or global environment:

(i) Population growth is a major influencing factor, and any programme that intends to be based on building commercial markets needs to take this into account. Between now and 2020, there are likely to be 5 million more households. An ambitious stove programme intending to reach 10 million households over a 7-10 year programme is thus in reality less than half as effective, or alternatively it needs to reach 15 million households to obtain its original target: the programme thus needs to be large indeed;

(ii) Therefore, a “shock intervention” could be a good solution, whereby temporary incentives are given to households to quickly change their behaviour, by buying a new stove and/or start using a new fuel in the short term;

(iii) Fuel markets are considerably distorted: kerosene is available at submarket prices, competing with firewood, charcoal, and LPG that are free market goods. Recent information shows that the Federal Government spent in excess of USD 1 billion per year on this subsidy2. However, the supply at subsidized prices is limited and few households may actually be able to benefit directly from this. Survey data show that households buy, on average, kerosene at parity with diesel prices3 but this is despite the fact that 30% - 50% of the households buy in small quantities: prices for quantities less than a litre would normally increase the per-litre price above the normal pump price. This implies that at least some of the subsidy indeed ends up with households, but far less than intended. It is unlikely that the kerosene support subsidy will be lifted any time soon due to possible social unrest, although there are signs that there is political willingness to address the efficiency of the subsidy distribution. An alternative would be regulatory intervention to provide additional benefits for using other fuels;

(iv) There is a quasi-total lack of information on forestry resources, biomass fuel chains, and households’ practices on cooking and fuel use. This makes it very difficult to develop a programme purely based on market development, as it is not known if and how sustainable markets could develop. Cursory evidence shows that biomass resources throughout the country are disappearing indeed, but the three states survey shows that households using biomass resources for cooking do not feel much pressure. Lack of information makes it very difficult to predict what can be done in a sustainable manner; however, from a practical point of view, since 50% or more of all households in Nigeria use biomass fuels, and they use it inefficiently, a programme to increase the efficiency and reduce the fuel consumption will help to create a more sustainable situation than before;

(v) The survey shows that a considerable number of households use kerosene or LPG for all or some of their cooking, in urban as well as in some rural areas. In rural Kaduna

2 The chairman of the House Committee on Petroleum (Downstream) indicated in November 2013 at a congress that the purported subsidy has never benefited the masses, which has hitherto been suffering to get the product at regulated price, noting that the amount was spent between 2010 and 2012, adding the breakdown of the figure to about N110 billion spent in 2010; N324 billion in 2011; and N200 billion in 2012.3 Kerosene and diesel are interchangeable products; normally, prices for both products should be equal.

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40% of households reported using kerosene for cooking on a regular basis, and 84% in urban Rivers. Some 23% of surveyed urban households use LPG in Rivers (16% in Kano and 10% in Kaduna), while in rural areas this ranges between 1.5% to 6%. The transition towards modern fuels is in full swing, evidently in some states more than in others. As a consequence, the programme should fully integrate the promotion of both modern biomass stoves and high efficient kerosene and LPG stoves;

(vi) Not many households use charcoal (except in Kano); this is fortunate, as the multiplier effect makes it a wasteful fuel.4 It is recommended for the programme to refrain from actively promoting a switch to charcoal, although efficient charcoal stoves can be (quietly) promoted so that these are available to households who must cook with charcoal.

(vii) Finally, the survey revealed that health impacts of cooking with wood on open fires (whether indoor or outdoor) are felt by those who cook with it, which suggests that a national clean stove market development programme should look at both reducing exposure to cooking smoke from wood and promote switching to cleaner fuels, as well as educating women on the risks to themselves and their children.

1.1.1 Lack of access to modern energy servicesIt is recognised that access to modern energy services— including electricity, clean and renewable fuels and efficient and clean stoves—is important to the achievement of most of the Millennium Development Goals.For example, access to modern energy services is critical to improve agricultural productivity and to generate employment opportunities in small enterprises that are likely to help eradicate extreme poverty and hunger (MDG1). Women in households with access to modern energy services are likely to be able to shift from time-consuming wood collection and preparation of daily meals to devoting time to other economic or educational activities as a way to promote gender equity (MDG3). This is a reality in Nigeria, as the 2013 survey indicates that gathered wood is a major fuel in rural areas of the three surveyed states with roughly half of rural households collecting wood and makes a substantial contribution toward meeting the cooking fuel need of urban households in Kaduna and Rivers state. Likewise, maternal health can be favoured (MDG5) and child mortality reduced (MDG4) through the use of clean cooking equipment and/or cleaner fuels. In rural areas of Kaduna, Kano and Rivers and in urban Kaduna, where wood is the main cooking fuel, the frequency of respiratory problems is highest, the study showed. Access to modern energy services thus strengthens prospects to escape the poverty trap.

Box 1 Importance of modern energy in achieving the Millennium Development Goals

Goal 1. Eradicate extreme poverty and hunger. Access to modern energy facilitates economic development by providing more efficient and healthful means to undertake basic HH tasks and the means to undertake productive activities. Modern energy can power water pumping, thus providing drinking water and increasing agricultural yields through the use of machinery and irrigation.Goal 2. Achieve universal primary education. In impoverished communities, children commonly spend significant time gathering fuelwood, fetching water, and cooking. Access to clean cooking fuels or technologies facilitates school attendance. Electricity also facilitates communication and education, particularly through information technology but also through providing such basic needs as lighting.Goal 3. Promote gender equality and empower women. Improved access to electricity and modern fuels reduces the physical burden associated with carrying wood. Access also frees

4 It takes 7-12 kg of wood to produce 1 kg of charcoal; even if the efficiency of a charcoal stove is twice as high as a firewood stove, a charcoal stove still uses more wood than a firewood stove for the same cooking task.

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valuable time, especially for women, widening their employment opportunities. In addition, street lighting improves the safety of women and girls at night.Goals 4, 5, and 6. Reduce child mortality; Improve maternal health; and Combat HIV/AIDS, malaria, and other diseases. Most staple foods require cooking. Reducing HH indoor air pollution through more healthful cooking fuels and stoves decreases the risk of respiratory infections, chronic obstructive lung disease, and lung cancer (from burning coal). Electricity and modern energy services support the functioning of health clinics and hospitals.Goal 7. Ensure environmental sustainability. Modern cooking fuels and more efficient cookstoves can relieve pressures on the environment caused by the unsustainable use of biomass fuels. The promotion of low-carbon renewable energy is congruent with the protection of the local and global environment. Using cleaner energy also reduces greenhouse gas emissions and global warming.Goal 8. Develop a global partnership for development. Electricity is necessary to power information and communications technology applications.Source: IEA (International Energy Agency). 2010. World Energy Outlook 2010Until recently, the Federal Government had not attached high priority to promoting access to modern cooking energy services, nor provided any budget lines. Instead, it is concerned with the access to electricity. This focus of priority accorded to electricity access by the federal government is echoed by donors in their support efforts for Nigeria. An overview of donor funding from 1999 to 2007 indicates that energy and environment received a dismal 1% of total grants5 made available to Nigeria.

1.1.2 A heavy reliance on woodfuelIt is generally accepted that energy and development are mutually reinforcing factors6. Energy poverty can be evaluated through the reliance of the population in developing countries on solid fuels – including traditional woodfuel (firewood and charcoal) and coal- for cooking and heating. Households in Nigeria predominantly rely on firewood for cooking purposes as this fuel is used by 72.2% of the population. Firewood provides energy for poor and barely monetised populations, hence most of rural and periurban households. Firewood can be collected on woody formations around villages and towns and lower quality woody biomass is also gathered around the house and the fields. According to the NBS socio-economic survey on Nigeria (2010) the use of firewood has been decreasing from 79.6% in 2009. This may come from a reduced access to such resource (scarcity, prices) or fuel switching and modernisation trends.As illustrated in Figure 1, the NBS survey shows that 56.5% of the population gathers firewood, 23.8% use kerosene, and 15.7% purchases firewood. Charcoal is used by 1.3% of the population and LPG by a mere 1.0%. LPG consumption in Nigeria has increased only very slowly over last 30 years and per capita consumption is far behind many other countries in Africa, even though Nigeria is a major exporter of LPG. The main urban fuel is kerosene with 53.7% of the households using it, followed by almost equal split between firewood collected and purchased. The main rural fuel is collected firewood followed by an almost equal split between purchased firewood and kerosene.Electricity is hardly used, which may well be related to the quality of supply rather than the number of connections: the overall electricity connection rate is about 47%. However, the rate of connecting new customers is lower than the population growth, resulting in an overall percentage of the population with electricity decreasing. Although the above data are somewhat old and shifts may have taken place, it is safe to say that both firewood and kerosene are the two main fuels used for cooking. What is unknown is the extent to which firewood is still gathered instead of purchased, which may have changed

5 Expanding access to pro-poor energy services in Nigeria, ICEED, 20126 World Bank (2005), Energy services for the Millennium Development Goals,

http://www.unmillenniumproject.org/documents/MP_Energy_Low_Res.pdf

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considerably. Also, it is thought that the demand for charcoal for cooking is on the increase following scarcity and high cost of affordable kerosene.7

The above data, and more, will be collected in the GHS expanded general household survey that will be launched by NBS soon with a national coverage, and is expected to be repeated regularly in the future.

Figure 1 Fuel use in Nigeria

urban rural total0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

otherelectricityLPG KeroseneCharcoalFW purchasedFW collected

Source: NBS socio-economic survey on Nigeria (2010)In the meantime, the 2013 NIAF household consumption survey carried out in Rivers, Kano and Kaduna states gives some indications about current fuel use patterns. The table 1 below shows the results broken down for three different situations: all households (to determine what is the main fuel in absolute terms), when they use one fuel only, and when they use more than one fuel. A total of 60% of the households indicates to cook with one fuel only. Of these, the majority uses firewood in all rural areas and in urban Kaduna, and kerosene in the other areas. Likewise, of the households using more than one fuel for cooking, the majority uses firewood in Kaduna (urban and rural), rural Kano and Rivers, and kerosene in the other areas. The fuel transition is in full swing in Rivers and Kano, and less so in Kaduna, but more households now use other fuels than firewood compared to 2010.

Table 1: Main source of cooking energy used

KADUNA KANO RIVERSUrban Rural Urban Rural Urban Rural

All households (100%)FW 73% 91% 22% 79% 18% 60%Kerosene

16% 5% 49% 8% 62% 35%

Charcoal 2% 2% 12% 11% 1% 1%LPG 6% 0% 13% 1% 14% 2%

Use one fuel only (60% of households)FW 84% 93% 24% 86% 13% 51%kerosene 13% 4% 55% 6% 78% 46%charcoal 2% 1% 10% 6% 1% 1%LPG 1% 0% 11% 1% 6% 1%

Use more than one fuel only (40% of households)FW 57% 86% 19% 61% 26% 67%kerosene 20% 8% 41% 13% 40% 27%charcoal 2% 5% 15% 25% 1% 1%

7Rising charcoal business, Nigeria News World, 13 August 2012

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LPG 13% 0% 17% 1% 25% 2%

Source: NIAF 2013 household consumption survey.In this sample, which is not representative of Nigeria, some 57% use mainly firewood, 29% kerosene, while LPG and charcoal are used by 6% and 5% respectively. This confirms the trends indicated by the NBS survey and shows further progress towards other fuels than firewood. However, the variations are large; in urban Kano and Rivers, combined use of kerosene and LPG is far higher than the use of firewood. Kaduna is a firewood state; Rivers and Kano use mainly kerosene and to a lesser extent charcoal (Kano only) and LPG.Another trend is that households increasingly use purchased firewood instead of gathered. The three state survey found that only in Rivers, which is overwhelmingly forested, the majority of households gathers wood (75-80% of the wood energy used is collected). In the more sparsely forested areas of Kaduna, less than 1/3rd (rural, urban is 26%) gathers firewood, and 25% in rural Kano (2% in urban Kano). More and more households resort to purchasing firewood compared to the earlier NBS survey. Charcoal is not used much, except in Kano, where the survey showed that 45% of the wood energy for urban dwellers and 26% of rural ones comes from charcoal. In Rivers (urban) and Kaduna (urban & rural) about 10% of the wood energy is in the form of charcoal.

Table 2: Collected Wood

KADUNA KANO RIVERS

Urban Rural Urban Rural Urban Rural

Firewood gathered 35.9% 55.1% 3.9% 43.4% 21.7% 60.2%

Source: NIAF 2013 household consumption survey.It is noted that there are no reliable measurements of the total quantities of fuel used. Estimates made by the consultant show that kerosene consumption for cooking in 2010 could be as much as 564 thousand cubic meters. The 2013 survey collected some information about quantities used for each type of fuel. For those collecting wood, between 80 and 180 kg of collected wood are used monthly, with somewhat larger amounts in River state (where households collect more) and in rural areas. For those buying wood, the estimated monthly consumption averages between 120 and 200kg. Charcoal use is mainly concentrated in Kano where 50 to 60 kilograms are used monthly while kerosene users consume an average 5 to 15 litres per month for cooking. Although Nigeria is an oil exporting country, it reimports most of its end-user products. Liquid Petroleum Gas (LPG) is produced in the country at a rate of 3 million tons per year, most of which is exported despite a recent increase in local consumption to an estimated 300 thousand tons from the 100-150 thousand tons per year it has been for the past decade8. Much of the additional gas that could be transformed into LPG is flared off, which is less expensive for petroleum companies than transforming it into LPG.

1.1.3 Cooking with woodfuel is perceived as cheaperWoodfuel prices are said to have recently increased in Nigeria as a result of scarcity and high price of kerosene and cooking gas.9

In the recent NIAF survey, uneven fuel prices can be observed across states and rural or urban zones, see Figure 2. It is particularly striking that all types of fuels are more expensive in Rivers state. The price of firewood in Rivers is roughly double than in Kaduna and Kano so it not surprising that this fuel does not play a major role there. Mean prices for kerosene are remarkably constant across all survey areas. They show that most households pay market 8 Consumption was 50,000 t in 1983 and 100,000 t in 1993; source: ESMAP/World Bank; LPG companies

recently reported that consumption is increasing. Current consumption levels are estimated from the 2013 NIAF survey.

9http://allafrica.com/stories/201201231050.html

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prices and do not benefit much from the kerosene subsidy. One possible explanation for the relatively high cost of charcoal is that it needs to be transported longer distances than wood because of pressures on the resource base10. Cooking gas is a very high quality fuel that carries a premium price. It is used only by urban dwellers with very few exceptions. Survey results indicate that there is a price premium of at least 50% in Rivers relative to Kano and Kaduna.

Figure 2: Average fuel prices in 3 states of Nigeria

Urban Kaduna

Rural Kaduna Urban Kano Rural Kano Urban Rivers Rural Rivers0

50

100

150

200

250

300

350

400

Average fuel prices (N/kg or l)

FirewoodCharcoalKeroseneCooking gas

Source: NIAF 2013 household consumption survey.Woodfuels are commonly thought as the most economical solutions when compared to modern fuels such as electricity and all liquid and gaseous fuels (mainly LPG and kerosene). However, a comparison of the cost of cooking using different kind of fuels shows a narrowing gap, see Figure 3.

Figure 3: Comparison of cooking fuel costs in three states (2013) on an end-use basis

Urban Rural Urban Rural Urban RuralKADUNA KANO RIVERS

0

0.5

1

1.5

2

2.5

3

3.5

4

Average prices (Naira per delivered MJ)

Collected WoodPurchased Wood (kg)Charcoal (kg)Kerosene (l)Cooking Gas (kg)

10 Since there are only a few observations for charcoal users in Rivers, and for rural cooking gas users in Kaduna and Kano, the results are essentially unreliable.

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Looking at the end-use cost of cooking fuels, all cooking fuels are logically still more expensive in Rivers. Higher prices may reflect higher incomes in Rivers. Perhaps wood and charcoal come from longer distances. Subsidized kerosene, more frequently available in Kaduna and Kano, may be holding woodfuel prices down there.In Kaduna and Kano it appears that cooking gas is only about 30% more expensive than kerosene on an end-use basis. Purchased wood is very low cost in comparison. And of course, collected wood costs nothing out-of-pocket but the time and effort of family members who gather it. Table 3 presents data calculated from the NIAF survey and combined for urban and rural areas11. It shows that firewood remains the cheapest source of energy when bought in the city or countryside alike, affordable for the poorest, about one third cheaper than charcoal and more than two times cheaper than kerosene and cooking gas in a rural context. This is partly due to the fact that firewood price does not reflect true costs of supply; particularly the cost of replacement (i.e., the trees that were cut to make firewood or charcoal) is not incorporated in a context of unsustainable supply.

Table 3 Comparison of Cooking Fuel Prices in Nigeria, based on survey data in 3 states (2013)

Fuel Stove efficiency

* (A)

Energy content of fuel**

(B)

Efficient energy content (C=A*B)

Average selling price

urban*** (D)

Average selling price

rural** (D)

Price per MJ efficient

urban

Price per MJ efficient

rural(E=D/C) (E=D/C)

MJ/kg (l) MJ eff/kg (/l) Nairas/kg (/l)

Nairas/kg (/l)

Nairas/MJ eff

Nairas/MJ eff

Firewood (purchased)

17,5% 17 3,0 16,0 12,7 5,4 4,3

Charcoal 20% 29 5,8 42,2 30,8 7,3 5,3Kerosene 35% 35,5 12,4 147,9 152,4 11,9 12,3Cooking gas 55% 42,7 23,5 292,2 346,5 12,4 14,8

Source: MARGE calculation *) to be updated when the national laboratory becomes operational; **) as commonly found in handbooks; ***) from 2013 NIAF survey Kerosene already is an interesting cooking fuel options for households if they can find it at the subsidised price, which is about half the real supply costs. But as kerosene can rarely be found at this price, it is as expensive to use for cooking as cooking gas in rural areas and more expensive in the city, the survey revealed. The cost of cooking with charcoal in urban settlements is higher than in rural areas (where charcoal can be obtained at a cheaper price) and comes very close to that of “modern fuels”, cheaper than kerosene but more expensive than cooking gas there. Finally, based on survey results, cooking gas is competitive with kerosene and with charcoal in urban settings. However, this is only true when these fuels are used on traditional cooking stoves. The figure 4 below gives a comparison of cooking costs with improved cookstoves.

11 Note that data for charcoal users in Rivers and cooking gas users in rural Kaduna and Kano is essentially unreliable because of the limited number of observations there.

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Figure 4: Cost of cooking in 3 states in Nigeria

firewood charcoal kerosene cooking gas0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Cost of cooking in 3 states (Nairas/MJ eff)

Rural NowRural ICSUrban NowUrban ICS

Source: MARGE calculation from 2013 NIAF survey12

Households do however usually rely on more than one fuel for cooking (40% in the NIAF survey); they are equipped for this too and have a variety of cooking stoves in their kitchens. Reasons for this include fluctuating fuel prices, ease of fuel procurement, specific cooking habits or preferences (i.e. charcoal for slow cooking and roasting, firewood for fast cooking and frying), taste (charcoal for barbequing), and even availability of cash at a particular time in the week or month. Since kerosene, firewood and charcoal can be acquired in very small quantities, always, and often close to home, this is a fall-back position often applied, particularly when there is no time for gathering free fuel. It is perceived cheaper to buy on a daily basis even though the per-unit costs may be higher in this way compared to bulk purchase once a month. The size of the usual quantity acquired is a proxy for the poverty level: household buying once a month generally are richer than households buying on a daily basis. The majority of households in the 3 state sample purchase (45% of the sample) small quantities of fuel only (firewood, charcoal and kerosene); they lack the cash to buy in bulk at lower per kg prices. Some 22% are somewhat well to do and buy in bulk at the first of the month if and when they have money, and the richest 23% always buy in bulk.

12 Assuming the following ICS performances: 25%, 30%, 45%, and 55% for woodstoves, charcoal stoves, kerosene stoves and LPG respectively (no variation for the latter).

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Figure 5: Fuel quantities usually purchased

0%

20%

40%

60%

80%

100%

120%

Urban Rural Urban Rural Urban Rural

KADUNA KANO RIVERS

Purchasing quantities

na

bulk

1st of month

small quantities

Source: NIAF, 2013 Household consumption survey As mentioned earlier, firewood gathering is practised by many rural and peri-urban households, and sometimes even urban households. From earlier national data, it appears that the trend is towards the purchase of firewood, even in rural areas. This is likely to increase the deforestation rates, as the commercial supply of firewood is less sensitive to preserving tree and forestry resources. However, it is not known to what extent this is practiced at the national level but it is expected that the trend is similar in other areas. Travel distances are unknown, as well as whether these increase. Where firewood becomes less easily available for free gathering, it instead has to be transported from more remote locations for purchase. The population density and state of resources in a particular area will determine whether this is still feasible. Since commercial supply involves labour, transport, increased transaction costs, this raises the cooking costs for households. Although there are considerable differences between the three states, availability of fuels appears to be relatively good except subsidized kerosene, with more than 60% of the households reporting that charcoal, firewood and kerosene at market prices are usually or always available, LPG at 50%, and subsidized kerosene at less than 20%. Both firewood for gathering and LPG appear to be problematic in Kano.

Table 4: Cooking fuel availability

Fuel LPG KeroseneN50/litre

KeroseneMarket price

charcoal FW purchased FW gathered LPG

Always 36% 6% 38% 31% 38% 46% 36%Usually 14% 13% 22% 30% 29% 23% 14%Sometimes 38% 28% 35% 34% 29% 23% 38%Rarely or never 11% 53% 4% 6% 4% 8% 11%

Source: NIAF, 2013 Household consumption survey Figure 6 below shows total monthly cooking fuel costs for the survey regions; there is a large variation (urban cooking costs are in Kano: 4000 Naira/m; in Rivers: 3000 Naira/month; and in Kaduna 2000 Naira/m). In rural areas the costs are far lower, primarily because of a larger contribution from gathered firewood. If the programme could reduce fuel costs by 10%, households would reduce fuel costs by USD 10-30 per year. This is a substantial amount of money, which would certainly justify the investment in a clean stove.

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Figure 6 Monthly fuel costs

Urban Rural Urban Rural Urban RuralKADUNA KANO RIVERS

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Average monthly cost (N/HH/mo)

Cooking GasCooking KeroseneCharcoalPurchased WoodCollected Wood

Source: NIAF, 2013 Household consumption survey Compared to other countries, energy prices observed in Abuja are not out of line, see Table 5. Certainly, petroleum fuels are cheaper, in part because of the kerosene subsidy, but firewood and charcoal are comparable or lower priced. In view of progressing deforestation, petroleum fuels are likely to play a more prominent role in the future: even at the prevailing retail prices, they remain in fact a cheap source of cooking energy.

Table 5: fuel price data in different countriesMonrovia,

LiberiaKigali,

RwandaMaputo,

MozambiqueAbuja, Nigeria

Other

Firewood price (US$/t), for purchase of small quantities (for a week)

na 56 70 25

Charcoal price (US$/t), purchase in bag

153 450 400 320

Dar es Salam,

Tanzania: 555

Kwa Zulu Natal: 775

Kerosene price, US$/m3, what people reasonably pay

1314 1100 930 760

LPG price, US$/t for a bottle of 12-25 kg

2300 3000 2070 1690

Source of dataConsultant observations, May 2011

Consultant observations, Dec 2012

Consultant observations, Dec 2012

Consultant observations, Jan 2013

The Charcoal Project, 2012

While it is true that the immediate costs of cooking are lower for firewood than for kerosene and LPG, this is not necessarily so when external effects are taken into account: the health and environmental costs of cooking can be considerable, as described in the next few sections.

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1.1.4 Relieving the health impact of energy useSmoke contains large quantities of particulate matter (PM) and gaseous pollutants that are emitted when burning solid fuels in traditional stoves. Typically PM is composed of particles with a size of 10 micrometres or less (PM10), and the smaller the size the more dangerous it is for human health. Wood smoke contains a lot of PM2.5 and PM1 which penetrates deep into the lungs to cause permanent long-term damage. Smoke is a sign of poor combustion characteristics of the stove, as much of the smoke can actually be burnt and turned into energy. In addition, absence of excess air can cause carbon monoxide (CO) to be produced and emitted in the exhaust gases. CO in certain concentrations is immediately deadly. Inefficient combustion of woodfuels in poorly designed stoves thus results in high levels of indoor air pollution (IAP), from a mixture of PM, carbon monoxide, hydrocarbons, formaldehyde, and benzene that often go well beyond levels considered harmless.In developing countries, cooking habits involving poorly performing stoves using woodfuel or coal result in high daily exposures for most women and children to pollution from indoor cooking smoke up to 20 times higher than the maximum recommended levels of the WHO and other environmental agencies around the world13. Nigeria is no exception with more than 95,000 annual deaths caused by smoke from cooking with wood and the loss of almost 4 million years of life according to the WHO, mostly women and children.14This makes it the third cause of deaths, behind malaria and AIDS as shown in Table 6. The burden of disease attributable to solid fuels is the highest in Africa and the sixth highest in the world

Table 6 Major causes of deaths in Nigeria

Causes Annual DeathsMalaria 225,000HIV/AIDS 192, 000Indoor air pollution from solid fuels 95, 000Road accidents 9, 000

Source: World Health Organization, National Burden of Disease Estimates 2010 Because mothers and their young children are the main household members who regularly breathe such smoke, they are disproportionately affected by the related health issues. Many studies have revealed the extent of health issues linked to IAP, as compiled in Table 7.

13WHO (World Health Organization).2005.WHO Air Quality Guidelines Global Update 2005.Copenhagen: World Health Organization.14 WHO March 2009, Estimated deaths & DALYs attributable to selected environmental risk factors, by WHO Member State, 2004. Department of Public Health & Environment

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Table 7: Summary of the Status of Evidence on the Health Effects of IAPHealth outcome Nature and extent of evidenceALRI* (children under 5)COPD** (adults)Lung cancer

10-20+ studies from developing countries; fairly consistent results across studies; but confounding is not dealt with in many studies; supported by studies of ambient air pollution and environmental tobacco smoke (ETS) and, to some extent by animal studies.

Cancer of nasopharynx and larynxCataractsTuberculosis

2-3 studies from developing countries; consistent results across studies; supported by evidence from smoking and animal studies.

Low birth weight 2-3 studies from developing countries; supported by evidence from ambient air pollution and ETS.Perinatal mortality

Acute otitis mediaCardiovascular disease

No studies from developing counties, but an association may be expected from studies of ambient air pollution and studies of wood smoke in developed countries.

Asthma Several studies from developing countries, but results are inconsistent; some support from studies of ambient air pollution, but results are also inconsistent.

Source: World Bank. 2011. Household Cookstoves, Environment, Health, and Climate Change. Washington, DC: World Bank.* Acute lower respiratory infection**Chronic obstructive pulmonary diseaseThe 2013 household survey in Kaduna, Kano and Rivers showed that people do not often experience respiratory diseases caused by smoke from the kitchen as these are well ventilated, but if they do, it is mostly from the cookstove. Households also seem to keep very young infants away from the kitchen. These results are indicative only, as they cannot be extrapolated to the national situation.

Table 8: Health Impact of using cooking stovesHealth Impact of using cooking stoves KADUNA KANO RIVERS

Urban Rural Urban Rural Urban Rural

How often do you or any other person who cooks in your house suffer from a bad cough or other respiratory problems?

Almost never 57% 60% 71% 41% 65% 58%Sometimes 41% 37% 23% 55% 26% 31%Frequently 2% 3% 3% 4% 2% 3%Very frequently 1% 0% 2% 0% 5% 7%Continuously and severely 0% 1% 0% 0% 2% 1%

What do you think causes this problem?

Smoke from kitchen 74% 84% 79% 89% 65% 70%A simple cold 23% 14% 16% 10% 34% 27%Smoke from wood 3% 1% 5% 1% 0% 2%Dust 1% 1% 0% 0% 1% 2%

How often is a baby exposed to smoke when you or someone else is preparing food using a stove or open fire?

Almost never 59% 55% 71% 46% 76% 75%Sometimes 38% 36% 23% 51% 16% 16%Frequently 2% 7% 4% 1% 4% 3%Very frequently 1% 2% 2% 3% 3% 5%Continuously and severely 1% 0% 0% 0% 1% 1%

Source: NIAF, 2013 Household consumption survey Kerosene and cooking gas are generally recognised as “cleaner fuels” since their combustion characteristics depend less on user influences than “dirty” fuels such as charcoal and firewood. Nevertheless, poorly designed or operated kerosene and LPG stoves may also emit considerable soot and smoke. Solid fuel stoves are typically more difficult to control than kerosene or LPG stoves, and this could influence their combustion performance. For instance, to reduce the power output of a firewood stove, wood need to be taken away from the fire, and some users will be able to realize this with more (or less) smoke emissions than others; the power output of charcoal stoves usually can be better controlled through a lever or a door, although households often forget after some time that this is possible. Nevertheless, low levels of pollution can also be obtained with woodfuel stoves, but only if the stove and fuel are well

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adapted to each other. In Mongolia it was shown that the combustion quality of a good lignite stove can be on the same order of magnitude as good as a cooking gas15 stove as long as the user knows how to properly operate the stove.A comprehensive stove programme targeting the entire spectrum of fuels, and inviting users to upgrade their cooking energy solutions, could substantially improve the health-related impacts in a solid fuel dominated society. This will in turn alleviate the burden on the national public health system. An evaluation of total health benefits generated by a widespread use of improved cookstoves through the intended intervention taking into account time saved and costs for health care occurring for households and public health systems leads to over USD 240 million economic benefits by 202016.

1.1.5 Gender aspectsThe reliance on inefficient cookstoves and fuels leads to enormous burdens that disproportionately impact women and girls, particularly because cooking and the procurement of fuel remains primarily a woman’s responsibility. It has been observed that women and girls spent hours walking far distances to collect fuel for their families’ cooking needs, and faced increased vulnerability to gender-based violence and other safety issues in some regions. The time spent collecting fuel and preparing and cooking food can take numerous hours, which leaves less time for the completion of other responsibilities, income-generation opportunities, education, and rest. In addition, the health of women and children is negatively impacted by the inhalation of smoke from unclean fuels for cooking. However, this has not been systematically documented and there are few reliable statistics to analyse this better.

1.1.6 Impacts on the local and global environmentNigeria has one of the worst deforestation rates in the world. Between 1990 and 2010, Nigeria lost 47.5% of its forest cover, an average of 409,650 ha or 2.38% per year, or around 8,193,000 ha in total.17 Approximately half of the country’s population relies on the forest for energy, fodder, construction materials, income, and medicine18, and will be seriously inconvenienced if they cannot continue these practices. The main driver of deforestation in Nigeria is agriculture but in the north of the country, over grazing and clearance of trees for firewood share a significant responsibility as well, while logging leads to increasing fragmentation of the southern forests. Other factors include general infrastructure development and urban expansion. The aforementioned factors are aggravated by outdated forest laws and weak law enforcement capacity, a lack of manpower in the forest sector and a general lack of resources for forest management at all levels.19

So although wood collection is not the central cause of deforestation, it certainly contributes. Illegal charcoal production and even export20 – as was recently reported in newspapers – certainly contributes as well. Charcoal is the worst fuel from the environmental point of view (both from the deforestation and the CO2 point of view), but end-users often prefer it over firewood for its superior combustion characteristics. Collected firewood often comes from trees outside the forest (and are thus not counted in the forest statistics), and in addition people do not cut whole trees but collect dead wood, branches, twigs and leaves instead. There are no reliable statistics on the state of the resources used for firewood and charcoal production. It is noted that ESMAP, in both Energy Assessment Studies (1983, 1993), already warn for overexploitation of forestry resources, even though the population was much smaller than it is now.15Personal communications (MARGE) about the results of PM2.5 and PM1 emission tests for solid-fuel (lignite) heating stoves in Mongolia. 16 Consultant calculations from GTZ data in “Economic evaluation of the improved household cooking stove dissemination programme in Uganda”, 2007.17 FAO Global Forest Resources Assessment Nigeria 201018 Supplement to Expression of Interest in Joining the Forest Carbon Partnership Facility (FCPF), December 6, 201119 FAO Global Forest Resources Assessment Nigeria 201020 Thy consultants published the following manual in 2013: How to be rich exporting wood charcoal

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Households in the 2013 survey are not aware of the supply deficit, see Table 9 below; they report largely that there are no changes compared to 1-2 years ago, and in Kano and Kaduna they are a bit more optimistic than in Rivers about the wood availability. However, without further investigation this may be without significance as they could easily confuse (commercial) availability of the fuel with state of the resources. The decline in forestry resources, both public and private, is real and well documented, but the population may be unaware of this. Given the continued availability of commercially supplied firewood and charcoal, households may confound this for a sustainable supply, unaware of or ignoring destruction that occurs in further away areas.

Table 9: Perception of wood fuel availability changesAvailability of firewood,Compared with 1-2 years ago

KADUNA KANO RIVERSUrban Rural Urban Rural Urban Rural

More 23% 28% 36% 15% 22% 16%equal 56% 49% 39% 67% 44% 58%less 21% 23% 25% 17% 33% 26%

Source: NIAF, 2013 Household consumption survey It is thus not surprising that “reducing deforestation and protecting the global environment” are cited in the survey among the least important reasons for launching a national clean stove programme in Nigeria (2013).A marketing and awareness campaign should inform the general public of these issues so that they understand the rationale behind the national stove programme: the country’s natural forestry resources are rapidly disappearing, and this will have consequences for them in the medium to short term, as prices of these fuels are likely to increase.Besides the local impacts, wood harvested unsustainably (i.e., through deforestation or forest degradation) contributes to global warming. In addition, wood fires are important sources of black carbon whether or not wood is sustainably harvested, and are a major source of greenhouse gases. These emissions are determined by the combustion characteristics of stoves using particular fuels. Thus stoves that reduce wood consumption do not necessarily reduce black carbon emissions, but stoves with better combustion characteristics do. Measurements on heating stoves using coal in Mongolia showed that some 90% of all PM emissions are generated during the first 10 minutes of starting up the fire, almost irrespective of the quantity of fuel used. Stoves with better combustion characteristics were able to reduce both the period over which these emissions were generated (i.e., 3-4 minutes only) as well as the absolute level of emissions (mg of PM emitted per second). Although specific behaviour may be different when firewood is used, the principles remain the same.A national cookstove programme would thus help relieve pressure on both local forest resources and the global climate. Ideally an associated but separate intervention should ensure that the supply of wood products from the forest is sustainable, i.e. that the total supply does not exceed the replacement value. Table 10 below gives potential monthly fuel savings and average payback time in the proposed intervention for an upgrade in firewood, charcoal and kerosene stove efficiency. At the user level, this would result in financial savings, freeing up money for other purposes (health, education, food…).

Table 10 Estimated potential monthly fuel savings and payback time21

Fuel type Monthly savings (Naira) Payback time (months)Urban Rural

Firewood 581 431 5,8

21MARGE calculations, derived from estimated monthly expenditures from NIAF survey 2013. Baseline: 17,5% efficiency for woodstoves, 20% for charcoal stoves, 45% for kerosene stoves, Intervention: 25%efficiency for woostoves, 30% for charcoal stoves and 55% for kerosene stoves. .

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Charcoal 758 439 4,4Kerosene 354 253 13,6

Source: Best estimates by the consultants based on NIAF survey data

At the national level, the level of wood savings depends largely on the solution adopted by beneficiaries: switching to kerosene and LPG would induce larger wood savings (on the household level) than using improved stoves. However, if households switch to charcoal, which is a more convenient solid fuel than firewood, pressure on wood resources would effectively increase. This is due to the inefficiencies of the charcoal production process in which a lot of wood is wasted22. The total reduction of wood off-take depends on the difference of: (i) efficiencies of stoves used; (ii) the types of fuel used; and (iii) behaviour of users and their knowledge about fuel saving techniques, when compared between today and the future when the programme is implemented. This is by all means a complex situation as many independent parameters can influence the results. Modelling was undertaken, and some of the results are presented in the figures below as indications of the expected results. Some of the conditions used in the woodfuel scenario include:

Some 35% of urban 25% of rural kerosene users would switch to cooking gas by 2020 as well as 35% of urban and 20% of rural charcoal users and 15% of purchased firewood users in urban areas and 10% in rural areas.

A fuel saving gain of 20% for modern kerosene stoves combined with a penetration rate of such stoves of 30% in urban areas and 15% in rural areas by 2020, and charcoal users switching to kerosene by 2020: 35% of urban and 25% of rural households;

A fuel saving gain of 20% for charcoal stoves23 combined with a penetration rate of improved stoves of 85% in urban areas and 50% in rural areas by 2020 and purchased firewood users switching to charcoal: 15% of urban and 10% of rural households;

20% fuel saving gain for wood stoves using purchased wood and a penetration rate of improved stoves of 85% in urban and 50% in rural areas;

30% fuel saving gain for wood stoves using gathered wood and a penetration rate of improved stoves of 50% in urban and 25% in rural areas.

In the LPG scenario the price of LPG is considerably reduced through regulatory intervention and many household adopt LPG as a major cooking fuel; the main differences with the firewood scenario are the following:

Improved wood stoves and charcoal stoves are used by 75% of the urban and 50% of the rural population by 2020; there are no improved kerosene stoves;

There is no more kerosene and charcoal use in 2020, all households using these fuels have adopted LPG

Some 25% of urban users of purchased firewood and 20% of rural users switch to LPG by 2020;

Some 50% of urban users of gathered firewood and 20% of rural users start purchasing their firewood by 2020.

22 100 kg of wood typically results in 12-15 kg of charcoal.23 I.e., the new charcoal stove uses 20% less fuel than the stove in use now.

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Figure 7: total wood off-take for cooking purposes

1 2 3 4 5 6 7 8 -

5

10

15

20

25

30

35

40

45

total wood offtake (m.t/yr, LPG scenario)

with NCCSMDPbusiness as usual

Source: consultants’ estimatesFigure 7 shows that the total wood off-take can be reduced from 41 million t per year to 31.7 million t in 2020, a 26% reduction in the case of the woodfuel scenario, or a reduction of 38% in the LPG scenario. Which scenario is pursued, wood will remain a major cooking fuel and longer-term supply options will need to be investigated soon. Switching to liquid or gaseous fuels is important, but it is unlikely to reduce the wood off-take on a signification scale in the short term: in the woodfuel scenario, 83% of the end-use energy comes from firewood or charcoal, in the LPG scenario this is reduced to 77%.Figure 8 shows that the emphasis should be on charcoal and purchased firewood. It is noted that although there are only a few charcoal users compared to (purchased) firewood users, the impact is quite large. It would require intervention among many more firewood users to obtain the same impact as obtained among a few charcoal users.

Figure 8: wood off-take savings by type of fuel

1 2 3 4 5 6 7

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

differential wood off take (thousand t, LPG scenario)

gathered firewoodpurchased firewoodwood for charcoal making

Source: consultants’ estimates

Assuming that 26% of the wood resources saved thanks to the programme contribute to the preservation of forest cover in Nigeria24, such intervention could generate a benefit worth 50 million USD per year by 2020.

24 Source: Economic evaluation of the improved household cooking stove dissemination programme in Uganda, GTZ, 2007

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1 2 3 4 5 6 7 8 -

5

10

15

20

25

30

35

40

45

total wood offtake (m.t/yr, wood scenario)

with NCCSMDPbusiness as usual

1 2 3 4 5 6 7

-18,000

-16,000

-14,000

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

differential wood off take (thousand t, woodfuel scenario)

gathered firewoodpurchased firewoodwood for charcoal making

1.2 Economic importance of the cooking energy sectorThere are a number of predictable economic benefits when cooking energy issues are resolved, accruing from fuel savings, additional supply chain activities for fuels and stoves, health benefits, and environmental benefits. However, an upgrade in fuel (e.,g, to LPG), may not result in financial savings, although it most likely will result in health, convenience, and time benefits. The total estimated financial value of the market for cooking energy in Nigeria is large as can be seen in Table 11. However, put in perspective, this represents just over US$ 120 per household per year.

Table 11 Estimated Annual Cooking Energy Quantity and Value

Fuel type Total valueQuantity (million t/yr) Value (million US$/yr)

Firewood *) 28,6 1 868Charcoal 1,2 407Kerosene **) 1.1 1 035LPG 0.32 490

Source: best estimates by the consultants based on projections from NIAF survey 2013 data*) the Quantity contains purchased and gathered firewood; the latter has zero value; **) Kerosene in million m3Support to the local cookstove producers will create jobs and wealth among artisans, SMEs, distributors etc. all along the chain from sourcing raw materials to delivering to the customer. Women should be particularly involved in the latter tasks. Once large and sustainable markets for clean cookstoves are in place, this will be an incentive for research & development and further investment in the sector, at least in order to keep up with the demographic dynamics.Forest resources constitute a significant element in Nigeria’s economy, as the sector accounts for about 2.5% of the Gross Domestic Products (GDP) and employs 1.8 to 2 million people to supply fuelwood and poles, together with 75,000 people working in logging activities in the south. Any policies with a positive impact on forest conservation are thus likely to help maintain the sustainability of the sector while the demand for forest goods and services continues to rise25.

FAO/Wisdom data suggest that per 1 t of charcoal, some 38 man-days of work are associated with the production of charcoal, including cutting of wood, transport and retailing (Driego, 2012, Rwanda). The estimated production level of 1,2 million tons of charcoal thus would provide full time employment to about 45 000 people. This could well be underestimated, as there are no reliable statistics and recent newspaper articles cite charcoal making as a lucrative business with rapidly raising production26.

25 See footnote 1226 http://dailytrust.info/index.php/environment/15483-how-booming-nasarawa-charcoal-is-taking-over-other-businesses

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2 A STOVE MARKET AT ITS EARLY STAGES OF DEVELOPMENT

2.1.1 Traditional stove use remains the normTraditional woodfuel stoves account for the most widespread cooking technology in Nigeria. They are neither efficient nor clean in using energy, resulting in unnecessarily high fuel consumption and indoor air pollution. Local culinary practices and habits vary a lot, reflecting the ethnic diversity that is larger in Nigeria than anywhere else in Africa. There also are many different types of traditional stoves being used, satisfying these culinary practices.

According to the Nigerian Alliance for Clean Cookstoves, 90 million Nigerians of which the greatest part of rural households, and almost all public institutions, cook with wood on the traditional “three-stone fire”. Small commercial operators such as small caterers often rely on open fires as well. People who purchase wood and charcoal usually have a simple metal stove, manufactured by local welders27.

Traditional metal woodstove28

Kerosene users rely on stoves of varying quality causing varying levels of pollution but typically use low-cost imported stoves (Chinese or Indonesian), although some locally made ones exist. Kerosene and LPG stoves use is concentrated in urban, peri-urban areas and towns.

Chinese kerosene stove Indonesian kerosene stoves

The 2013 NIAF survey confirmed that wood stoves are the dominant cooking device in all rural and some urban areas and that almost all firewood is used in a “3 stone” stove. No improved wood stoves were encountered during the survey, showing that the use of improved stoves is negligible.

Modern efficient stoves reduce fuel consumption (possibly by 20% or more), are easier to cook with and could show reduced emissions (PM and CO and CO2). However, so-called “improved 27 Own observations28 http://www.area-net.org/fileadmin/user_upload/AREA/AREA_downloads/AREA_Conference_11/Presentations/THE_SAVE_80_WOODSTOVE_CDM_Project_2711_Yahaya_Ahmed.pdf

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stoves” range from NGO promoted self-constructed cheap improved stoves with limited efficiency and emission gains to imported modern devices with good performance and high prices attached. The latter category thus remains unaffordable for the majority of Nigerians. However, it is an issue that households do not know which stove to select. Under the proposed programme, this issue will be solved by promoting only eligible stoves. Eligible stoves have been declared eligible, based on tests in a national laboratory to see if a few nationally established performance and safety standards have been met. The process of “declaring eligible for support under the programme” is a formal process, ultimately giving users rights to certain benefits: first of all, the performance of these stoves should under normal conditions continue to meet the standards; secondly, the stove supplier must give a warranty for the quality and performance of the stove; and thirdly, certain financial support will be available for accelerating the adoption rate of eligible stoves,

Second generation wood and charcoal stoves are already being promoted in Nigeria; these stoves have been tested in other laboratories but not in Nigeria. Envirofit, Save 80, StoveTec and others are operational in Nigeria and are able to sell stoves. They typically use carbon financing to reduce the initial purchase price to the user so that the price difference with traditional stoves becomes less: clean stove cost USD 25 or more, while traditional stoves are free or cost a few USD only.

Envirofit woodstove Save 80 woodstove O-Gas 3KG Cylinder, Stove & Gas

Oil multinational companies such as Oando and Techno Oil29 are developing cooking gas stoves at affordable prices. Oando has recently put on the market an “all in one” cooking gas products with the launch of a 3 kilograms combo cylinder and stove that reduces the upfront investment cost.

Table 12 below gives indicative prices of basic and advances cooking technologies that can be found in Nigeria at the moment.

Table 12 Indicative stove price table

Basic woodstove

Basic charcoal stove

Improved woodstove

Improved charcoal stove

Kerosene stove

LPG stove

Price $3 $3-5 From a few dollars (1st

generation) to $20-$100 (2nd

generation)

From $13-25

From $10 for small Chinese stoves to over $100 for Japanese stoves

From $50 for combo 3 Kg cylinder and burner, then $30 for a refill

29http://www.ventures-africa.com/2013/02/techno-oil-launches-gas-stove-for-low-income-earners/

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Source: As observed in Abuja Garki II market, Lagos market and indication from stove producers

2.1.2 Fundamental changes occurring at household levelThere are a number of important changes to daily life observed in Nigeria. As life gradually becomes more urban due to the rapid population growth, households move into more permanent buildings. This may have consequences, as building regulations sometimes prohibit the use of firewood, forcing households to adopt other fuels. This switch to other fuels also occurs through a drive for modernization as households look for multiple ways to improve their life. As a result, they slowly start picking up the use of more modern fuels, to complement the use of more traditional fuels. In Rivers state this process has gone far and most households now use kerosene or LPG, and very few use firewood. Although rich in wood resources, the price of woodfuels is the highest in Rivers state. The number of mobile phones in the 2013 household survey in Kaduna, Kano and Rivers was shown to be on average almost 3 phones per households, irrespective of whether or not they have electricity at home. Ultra-modern phones and ancient cooking stoves do not go well together, people want progress on several fronts simultaneously. Since more modern stoves and fuels are available, households slowly reflect and start adopting these. The urbanization also gives opportunities that were not available before, such as being able to buy breakfast, lunch or dinner on the street. Small food shops provide value for money, as one can eat without having to prepare the meal at home, thereby saving time and money on food preparation and fuel while only spending small amounts of money for the rapid provision of a meal. This phenomenon reaches more than 30% of the households in Rivers state, urban as well as rural, and is quite visible in Kaduna and Kano as well. This has consequences for the design of the stove programme and improving fuel efficiency among food vendors should be included in the programme.

Table 13: Prevalence of eating out of the home Eating out KADUNA KANO RIVERS

Urban Rural Urban Rural Urban RuralShare of HH members eating breakfast out 3.5% 1.7% 6.4% 2.3% 11.7% 9.6%Share of HH members eating lunch out 12.5% 8.0% 13.4% 9.4% 30.3% 28.6%Share of HH members eating dinner out 1.9% 1.3% 3.1% 2.5% 2.9% 2.7%

Source: NIAF, 2013 Household consumption survey

When asked about identifying their ideal fuel, households responded overwhelmingly preference for kerosene (Kaduna, Kano) and LPG (Rivers). It is clear that the national stove programme should take these preferences into account.

Table 14: Fuel preferencesKADUNA KANO RIVERS

Preference for ideal fuel Urban Rural Urban Rura

l Urban Rural

None 9% 7% 9% 13% 7% 4%Firewood gathered 16% 23% 1% 22% 5% 13%

Firewood purchased 14% 15% 9% 26% 1% 3%Charcoal 1% 3% 8% 13% 1% 1%Kerosene 43% 44% 42% 23% 27% 37%

Cooking gas 14% 7% 23% 3% 52% 36%Electricity 3% 1% 8% 0% 7% 7%

Source: NIAF, 2013 Household consumption survey

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The reasons why these fuels have been indicated as ideal fuel are given in table 15 below, mainly dealing with features of modern life: speed of cooking, ease of using it, lowest costs, and less smoky.

Table 15: Reasons for being an ideal fuelKADUNA KANO RIVERS

Reasons for being ideal fuel Urban Rural Urban Rural Urban RuralIt is faster 24% 22% 24% 18% 30% 26%It is easier to use 22% 13% 17% 12% 10% 18%It is cheaper 5% 6% 17% 30% 16% 9%It is less smoky and clean 16% 18% 10% 2% 9% 11%It is Available 8% 9% 10% 20% 3% 4%It is does not blacken the pot

4% 4% 9% 7% 12% 10%

It is convenient 8% 9% 5% 5% 3% 3%It is safer 2% 2% 6% 2% 8% 8%It is Accessible 5% 9% 3% 4% 1% 4%It is free 5% 7% 0% 1% 3% 6%It is durable or lasts long 0% 1% 1% 1% 5% 1%Gives good taste and aroma 0% 0% 0% 0% 1% 0%

Source: NIAF, 2013 Household consumption survey

2.1.3 A fragmented market and distribution chainSeveral improved stove suppliers with second generation stoves have been active in Nigeria and a number of organisations have initiated pilot cookstove programmes over the last ten to fifteen years. So far none has achieved the scale required to make an impact, let alone serve the entire country. Scaling up such programmes into a sustainable industry, as has been the case in quite a few other West African countries, has not occurred either. A different approach is therefore needed.There is hence an enormous theoretical potential cookstove market in Nigeria ready for the development to serve a large market across both rural and urban areas: the initially estimated value could be around 650 million dollars30. Although the companies currently present on the clean cookstoves market may have sold a few thousands of units, if they continue to rely just on market development by their company only, millions of Nigerian households which are in need of a better stove will have to wait a very long time.Figure 9 below shows the total number and variety of different stoves that are reported by the respondents. At a minimum (in rural Kaduna and Kano) there are 1.3 stoves per household on average, and this is almost 1.6 in urban Kano. It does not mean that they are used, but they are present in the homes.

30 MARGE estimates on year 7: assuming 2,1 million clean stove users among firewood gatherers ($5 stove), 6,9 million clean stove users among households who purchase wood ($35) stoves, 1,6 million clean stove users among charcoal users ($35 stoves), 2,5 million improved kerosene stove users ($50) and an additional 3,3 million LPG users ($65).

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Figure 9: Nr of different stoves in use

0

100

200

300

400

500

600

KadunaUrban

Kaduna Rural Kano Urban Kano Rural Rivers Urban Rivers Rural

electricity

LPG

kerosene

other biomass

charcoal

firewood

Source: NIAF, 2013 Household consumption survey Another element to realize is the fact that households using a particular fuel have more than one stove: respectively 11%, 5%, 14%, and 26% for wood, charcoal, kerosene, and LPG. Table 16 below shows the distribution of different electric cooking and water heating appliances available in the homes of the respondents. Indeed, the situation of one household one stove is no longer valid and has been overtaken by a situation whereby households own different cooking appliances, using different fuels and may switch fuels or stoves at any time or if conditions change.

Table 16: Type of electric cooking or water heating appliance

kettle 32%range 18%grill 16%

microwave 11%rice cooker 8%

other 15%

Source: NIAF, 2013 Household consumption survey A few suppliers and manufactures are present in a number of states and sell first generation improved stoves but mainly operate on a local scale only, without broad distribution channels. They usually target specific areas or communities in particular states only, and rely on a limited number of sales points or agents, providing both limited supply and access. In addition, it is unknown how well these stoves preform, as there is no quality assurance programme in place.This is valid also for some second generation stove producers, such by Quantas Energies, for example, who disseminates T-lud gasifier stoves using a few sales representatives going around Ondo and Lagos states and the federal capital territory. Some NGOs work at the community level, engaging with or training women or other type of “ambassadors”. Tower aluminium which recently started partnering with Envirofit by assembling the products locally is organising their distribution through its own existing network, with the ultimate potential to go national. Oando is selling its combo cooking gas stove in designated gas stations and SMEs (small and medium scale enterprises) in 5 pilot states/cities: Lagos, Abuja, Kaduna, Port Harcourt and Warri.

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There is a need to organize the supply and make it more responsive to the potential market. The market is large enough so that there is room for many – if not all – suppliers interested to participate in this idea to professionalize the supply chain. There is a need to identify a few market aggregators, who are able to scale up the supply of stoves, both in terms of quantities and in terms of locations.

2.1.4 Local versus foreign producer capacitiesThe capacity of local producers is more often than not limited in terms of production potential, availability of trained staff, investment capacity etc. In the absence of assistance they are likely to experience issues in scaling up production levels and/or improving the stove quality. A national cookstove programme should ensure that stove producers are indeed able to deliver the quantities needed to satisfy the market, and to get the products accessible to consumers. This is most likely effective if both local and foreign stove manufacturers are involved.It is often said that employment generation should be the driving force of the activity, and therefore local production should be promoted, but this needs to be put more in perspective. The production process itself leads to fairly limited employment, which in addition is often highly qualified labour. Distribution and sales of stoves leads to a much larger employment potential so that imports are not always negative, particularly if imported stoves can be supplied at lower prices than from local production.Imported industrial type stoves or those assembled locally (Envirofit, Stovetec, TLUD) are easier to acquire quickly in large numbers than locally produced ones. But, they would only represent a small part of the overall market as many households will find it unaffordable to upgrade to such modern and efficient technologies. Quite a few of the 2nd generation stove models are already for sale in Nigeria, but the numbers do not match the needs in case the national clean cookstove market development programme starts: up to 200,000 stoves per month, whereas current annual sales of all 2nd generation stove combined is probably less than one-tenth of this.

For LPG, the stove should be considered together with the cylinder and given the target population, with a preference for 3 and 6 kg cylinders. These used to be manufactured in Nigeria, but are now cheaper to import (e.g., from India). Lack of scale economies is one reason, but high import duties on steel are another reason. Employment generation should be an important driving force for the programme, although a trade-off between low-cost cylinders and local production needs to be carefully evaluated: the employment generated for filling, distributing, and transporting of cylinders is far higher than from the manufacturing. Oando is currently looking at increasing the supply of cylinders as this is the only way to increase the consumption of gas.

It is interesting to note that local welders manufacture basic charcoal stoves as well as kerosene and LPG stoves, but of poor quality and reliability. The stove programme intends to only promote reliable stoves with a minimum warranty period, which might be difficult to meet by these producers without further assistance and training. Therefore one should consider reinforcing these local entrepreneurs to deliver larger numbers of stoves that meet an agreed national quality standard and associated safety guarantee.

At the same time, it appears that some local companies are becoming active in the field of assembling more efficient biomass stoves (e;g; Quintas T-Lud gasifier stove). Although the number of such companies in Nigeria remains small, in the future they may have a larger role to play in the transition to cleaner cooking energy solutions. They could cover upper market segments with larger financial means available such as institutions and small businesses as well as urban woodfuel users.Other foreign businesses are seeing the opportunity to integrate into the Nigerian stove market as is the case for Toyola Energy which, after obtaining some successes in promoting improved woodstoves in Ghana as well as Togo and Burkina Faso, is now looking to expand production and sales in Nigeria.

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Current programmes are region and segment focused. The national cookstove programme should look at incorporating these programmes and articulate a country-wide intervention that focuses on professionalising the supply chain of stoves, ensuring that clean and high efficient woodfuel stove models are available alongside better kerosene and LPG stoves – and that are sold with a guarantee that the user can rely on certain quantified performance characteristics. The national clean cookstove market development programme will need to look into how to scale up both local production and imports simultaneously: there is room for many entrepreneurs, and given the scale needed, the more producers and importers are involved, the likelier that the programme will become a success. They will all need to comply with the basic rules laid out under the programme: professional supplies, satisfy minimum standards, and give warrantees.

2.1.5 Difficulties encounteredMost of the difficulties faced by local producers in the field of production, staffing and finance have been highlighted earlier; lack of capacity, knowhow, and financing. Imported cookstove suppliers are also facing some challenges. High import duties that increase final prices have been reported. For example, DARE has experienced 35% import duties on the Save 80 clean cookstove. The Ministry of Environment’s renewable energy fund provides import rebates to qualifying technology, but it would be more efficient if the import duty were automatically related to the performance characteristics of each stove. Efficient cookstoves should indeed be eligible for import duty or other tax rebates to foster their market penetration but only after certification by the national certification authority (to be established). This would require a policy change.31

Widespread corruption is also raising the cost and complexity of doing business in Nigeria, and this becomes particularly worrisome if subsidies are involved. Maximising subsidy benefits for personal use will be attempted always and anywhere if opportunities exist – not just in Nigeria. However, it is especially prudent in Nigeria to explicitly incorporate this idea as a reality and integrate mechanisms to circumvent any attempts to make use of such opportunities.Developing the distribution channels to make products available to consumers is another difficulty. For cooking gas, the poor energy infrastructure means that it can hardly be made available to consumers outside the southern regions and when it is, only in limited quantities and at a high costs. Since road transportation is the only option for inland distribution and roads generally are in poor condition, a nationwide distribution system will be complex and is likely to increase the transaction costs. So even while local production opportunities may lower production costs, there is a risk that the prevailing poor infrastructure may offset these benefits. Following some disturbances in the supply in 2007 when the refineries stopped producing LPG, the situation has stabilised and wholesale prices (i.e., ex Lagos) have been reduced from 250k Naira/t to about 100k Naira/t; despite this, however, retail prices remained roughly the same. Lastly, many products claiming better efficiency and cleanliness still have to demonstrate such statements in the absence of national standards on cookstoves. Only stoves that are measured by the national stove laboratory using the agreed stove testing methodology and standards specific for Nigeria would be supported by the programme, The independence of this laboratory is important, as it will decide which stove models and which stove suppliers may get access to subsidies. For that reason, results of stove tests by another laboratory will need to be carefully considered (e.g,. only Tüv or SGS certification can be accepted).

2.1.6 Lack of clean stove certificationAt the moment there is no clear internationally accepted definition of what a clean cookstove is, let alone what the performance criteria are that distinguish improved stoves. The concept depends on a set of criteria related to the performance of a traditional stove model taken as reference, and the relative improvements made by the improved stove and the tests that are carried out to determine product durability. This method is inherently difficult as there is not one traditional stove model but many, and different cooks obtain different performances even

31 GACC Market Assessment Nigeria, 2011

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using the same stove model. Moreover, different “burn cycles” are used when cooking different types of food32. The “Lima consensus”33, signed by a number of organisations active in the field of clean cookstoves around the world within the framework of the 2011 PCIA (Partnership for Clean Indoor Air) Forum, gives draft standards to help classify clean stove according to performance standards in terms of indoor air pollution (CO emissions and particulates), fuel savings and safety, following a defined measurement protocol.The ISO International Workshop Agreement (IWA) from February 2012 established international guidelines for laboratory performance on emissions (total and indoor), efficiency and safety. The IWA also included resolutions that identified remaining areas for the clean cooking sector to address. The partners of the Global Alliance for Clean Cookstoves (GACC) are collaborating to address these resolutions, including research, protocol development, expanding the IWA Framework to address a broad range of stove and fuel types, and linking together with other guidelines being developed, including for health and humanitarian settings. However, some open issues remain with reference to the testing methodology applied in this process, including the water boiling test protocol (WBT 4.2.1) which appears to allow misinterpretation of the testing results. Until all issues are resolved, extreme care is needed when applying the WBT 4.2.1 protocol, particularly in view of comparative differences in cooking practices and equipment (traditional food and pots vary a lot in Nigeria). Alternative protocols for testing exist and could possibly also be applied.To identify a particular stove model as an eligible clean cookstove in Nigeria, qualifying it for financial, logistic and/or technical support under the national clean cookstove market development programme, does thus necessarily imply setting efficiency and emissions standards, ideally coupled with durability and safety standards specifically applicable for Nigeria. The standards as proposed by GACC are a good starting point but may need to be updated to reflect conditions in Nigeria. Once a standard is agreed and in place, it will need to be accompanied by strict verification and quality control by a designated authority, and possible updating over time.Setting clear standards and the use of labels would give eligible stoves visibility, and help build people’s trust in their performance. It would also give eligible suppliers visibility and communicate that these are trustworthy companies where you can obtain an eligible clean stove. Standards should ideally be set by SON (Standards Organisation of Nigeria), based on inputs by the Ministry of Environment in conjunction with relevant bodies like the Energy Commission of Nigeria, Manufacturers Association of Nigeria, Nigeria Society of Engineers etc. However, the risk of over-regulation exists and should be avoided: the SON procedures to get PV systems certified are so cumbersome that some international companies do not want to import these into Nigeria. It is necessary to have an application process that is simple, yet transparent and clear, and respected by all stakeholders. In the absence of international standards – or widely accepted standards for clean stoves, it is not possible to accept certification from other testing organisations, and all stoves for which support is sought under the NCCMDP should be tested by the Nigerian testing organization.

2.1.7 Problems & Attitudes toward changesThere is no literature covering issues of people’s perceptions of potential problems associated with cooking fuels and stoves or willingness to change in Nigeria, except for cooking gas and the more recent 2013 household survey in 3 states. According to a more general ESMAP study, the major barriers for prospective new cooking gas consumers are related to cost, availability, safety and cultural patterns. The importance of the cost hurdle is inversely proportional to the income ladder, even more so when the cooking equipment has to be acquired whereas the availability problem touches mainly rural populations. The study also illustrates a well-known cultural phenomenon linked to cooking habits: the perception that certain dishes taste better when cooked over wood. This means that in some cases, even though people may upgrade to kerosene or cooking gas, they would still be using wood for some of their cooking. This is also

32 E.g., cooking beans, deep frying, water boiling, preparation of sauce, etc.33 The Lima Consensus, PCIA, 2011

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true for large social or family gatherings as woodfuels remain connected to festive cooking, even for high-income urban dwellers.34

A recent advocacy visit to Zamfara state by the “Mobilising Women for Access to Clean Cookstove” NIAF work stream team35 confirmed that: (i) communications to spread the values of clean stoves (income, health and environment saving) are essential for successful dissemination; and (ii) that women can be convinced of the possibility of cooking with other technologies through hands-on demonstration.36

Most households in Nigeria are not likely ready to spontaneously switch fuels or stoves because they lack the information or understanding to make such decision:

Do clean cookstoves actually exist and where they are available in Nigeria?- Do these stoves deliver benefits (money, time, durability, health)?- Generally prices are higher than for traditional stoves, but does this pay back for

itself?- What to look for – how to distinguish clean cookstoves from ordinary stoves?- What are the rights of the consumer when he/she buys a clean stove?

Where to find a reliable retail store close to their homes Confirmation that safety is not an issue for LPG (and methanol)37.

In addition, wood fuel prices are not very high and people often use free own-made stoves, the financial incentive to replace these for fuel saving models is moderate at best. Also, as the financial returns in terms of fuel saved are not very important for users who gather fuel, they may likely be reluctant about taking a loan to pay for a new stove. Financial schemes such as micro-financing could indeed facilitate an upgrade in cooking fuel and stoves for the poor but may not be appropriate especially in the northern parts of the country where households may have religious constraints for interest banking. Note that experience in other development projects involving micro-finance mechanisms has shown that poor households in general are reluctant to get indebted particularly for acquiring a common appliance such as a low-cost stove. This could be another driver against change for a large part of the population that is not able to pay the upfront cost of a clean stove.However, for a relatively large proportion of simple woodfuel and/or kerosene stove users, a moderate willingness to pay for clean cooking technology does exist that likely can be matched with the selling price of the cooking equipment they currently use. It is particularly noted that the $100 Save 80 wood stove sells quite well in Kaduna state, where it is being marketed with a carbon financing subsidy. Many households, however, do not want to be registered when they buy a clean stove. If unregistered, the stoves cannot be tracked easily while this is a requirement for carbon financing. When financial support is provided under the stove programme, registration is needed, to avoid double dipping and fraud.The 2013 survey also showed that households have existing networks they can rely on in terms of financial help, be that through membership in a formal credit institutions (roughly one third of households in each survey domain except Kaduna) or family and friends (more than 30% of all households declared getting financial assistance from family or friends ).It also highlights a real interest for improved stove technologies across the survey sample and that prior efforts are gaining some visibility in some areas (Kano). Communication and advocacy should therefore form a key element of the programme.

34 Nigerian LP Gas Sector Improvement Study, March 2004, World Bank/ESMAP35 Part of the Climate Change Sector, Nigerian Infrastructure Advisory Facility.36 Climate Change Mobilising Women for Access to Clean Cookstove Work stream, Zamfara Lessons, March 2013, NIAF37 In the NIAF survey, roughly 45% of respondents hold that using cooking gas could pose a risk to themselves and a very similar share hold that it could pose a risk to society at large. As with any new technology, there appear to be real barriers to overcome in peoples’ perceptions of the safety of cooking gas before it can penetrate the marketplace as a standard household fuel.

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In the end, the adoption of cleaner fuels and stoves depends largely on customising stoves to local needs and to different segments of the population in terms of fuel types, cooking patterns and cost-effective price. Indeed, a programme can only be effective if there is an acceptable proposed solution for everyone, and one-size-fits-all solutions that have been promoted in the past may no longer be appropriate.The 2013 household survey in Kaduna, Kano, and Rivers identified 3 first priorities for the selection of a new stove: speed of cooking, price of the stove, and ability to cook clean, and the 4 second order of priorities: ease of lighting, appearance of the stove, operational costs (fuel efficiency), and modernity of the stove.

Figure 10: Main reasons for preferring a stove

F4A. Price

F4B. The cost of usage (including maintenance costs and the cost of the fuel which it uses)

F4C. Cooking speed

F4D. The ease of lighting

F4E. Modernity (the newness of the stove design)

F4F. Cleanliness (whether or not it produces soot and blackens pots)

F4H. Appearance (the way the stover or cooker looks)

0 300 600 900 1200 1500 1800

Important aspects when choosing a stoveNOT AT ALL SLIGHTLY FAIRLY QUITE VERY

Source: NIAF, 2013 Household consumption survey When asked what the priority of a national stove programme should be, if one is launched, people indicated that health improvements & safety as well as reducing cooking costs are the main reasons in its favour. Reducing deforestation, protecting the global environment, and modernizing kitchens are the least important reasons indicated.

Figure 11: Indicated reasons for justifying a national stove programme

F5`1. To stop cutting down trees

F5`2. Improve health & safety (indoor air quality)

F5`3. Reduce the cost of fuel use to households

F5`4. Protect the global environment

F5`5. To modernize all kitchens in the country

-800 -600 -400 -200 0 200 400 600 800 1000

Rationales for National Cookstove ProgrammeLeast Important Most Important

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Source: NIAF, 2013 Household consumption survey

3 INSTITUTIONAL CONTEXT AND SECTORAL PUBLIC POLICIES

3.1 Overview of the stakeholders

3.1.1 Ministries and local governmentsThe Energy Commission of Nigeria is responsible for overall energy sector planning and policy implementation in Nigeria, while the Ministry of Environment under its Renewable Energy Unit also has a mandate to reduce carbon emissions and mitigate environmental degradation including emissions from unclean energy sources. The Ministry has launched a couple of activities including the Rural Women Energy Security (RUWES) project and the National Clean Cooking Scheme’ (NCCS) to promote clean cooking energy sources and technologies in Nigeria. Other relevant Ministries are Science and Technology, Health, Women Affairs, Petroleum resources and Education, and Finance. Most national policies and programmes are implemented at state level which implies state governments are also key stakeholders in developing and implementing a national clean Cookstoves programme. Some state governments are more innovative than others and a few have made own funding available for addressing related issues: in Jigawa state, the government set up a stove factory and so far distributed 80,000 stoves for free.

3.1.2 NGOsThere are few NGOs working on promoting clean cookstoves in Nigeria. Some of these organisations include International Centre for Energy, Environment and Development (ICEED), Developmental Association for Renewable Energies (D.A.R.E), Mfamiyen Conservation Society, Friends of the Environment (FOTE), Project Gaia and recently the Nigerian Alliance for Clean Cookstoves. The profile of these organisations is as follows.

International Centre for Energy, Environment and Development (ICEED)38

The International Centre for Energy, Environment & Development (ICEED) is Nigeria’s leading Think Tank on clean energy and climate change. ICEED provides ideas that link energy and climate change policy reforms to prosperity for Nigeria’s poor. ICEED presently hosts the Nigeria Alliance for Clean Cookstoves and acts as its secretariat.

Developmental Association for Renewable Energies (D.A.R.E)39

D.A.R.E is an acronym for “Developmental Association for Renewable Energies.” A Renewable Energy NGO based in Kaduna, Kaduna State, Nigeria. The organisation has executed quite a number of projects around Nigeria, like the UNFCCC registered CDM project 2711: “Efficient Fuel Woodstoves for Nigeria”, among others and aims at making use of Nigeria’s abundant solar energy resources by transforming it into other forms of energy, through the use of latest appropriate technology.

Mfamiyen Conservation Society40

The Mfaminyen Conservation Society (MCS) is a community based organization that seeks to facilitate community development which addresses the physical needs of the Mfaminyen Communities in Akamkpa and Etung LGAs of Cross River State. The organisation was conceived to serve as a vehicle for conservation and preservation of the high tropical rainforest, one of the hot spots of the world. One of the conservation projects of the community is the dissemination of “Ekwuk” stove, a locally constructed efficient wood fuel stove which is made from clay and other materials sourced locally in the communities.38www.iceednigeria.org 39www.dare-world.org/dare.org/ 40http://mfaminyen.org/

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Friends of the Environment (FOTE)41

Friends of the Environment (FOTE) was established to promote environmental sustainability through advocacy, education, awareness creation and initiatives in the areas of renewable energy sources, waste management, economic empowerment and gender issues. FOTE has advocated for cleaner and efficient energy technologies for women since the 1990s with the promotion of locally made clay stoves in a rural community in Lagos, to the construction of pilot biogas plants for cooking for women enterprises in Lagos and Enugu States and recently the popularization of LPG usage in two communities in Lagos under the GEF small grants project.

Project Gaia Nigeria42

Project Gaia is an initiative promoting a clean cookstove, an ethanol stove technology in select developing countries including Nigeria. The stove burns alcohol fuel without smoke, is easy to use, is highly efficient, and affordable to run. Project Gaia is working to introduce the Clean Cook stoves to families in the Niger Delta area of Nigeria and has pilot households in Delta State.

Nigerian Alliance for Clean Cookstoves43

The Nigerian Alliance for Clean Cookstoves is a public-private partnership that seeks to introduce 10 million clean cookstoves to Nigerian homes and institutions by 2020. The Alliance supports policy change, better technical standards and innovative financing in the development of a national clean cookstoves industry. It has four government institutions including ECN as founding partners. The Alliance also has a number of private sector and donor agencies including USAID and Shell Nigeria.

There are linkages in the activities of some of the stakeholders listed above. For example the Renewable Energy unit of the Ministry of Environment, as well as ICEED, are members of the Nigerian Alliance for Clean Cookstoves. On the other hand, ICEED is leading the Development of a National Programme (NCCMDP) on behalf of NIAF for the Ministry of Environment. The Programme will provide a market-based approach to mobilise state and non-state actors in delivering an ambitious cooking energy programme to enhance the achievement of the National Clean Cookstoves Scheme and other initiatives of the Ministry to promote clean cookstoves in Nigeria.

3.1.3 Stove suppliersMost kerosene stoves in the Nigerian market are imported from China by general retailers while LPG cylinders and stoves are mainly imported by LPG marketers and retailers. Apart from traditional cookstoves, efficient wood and charcoal stoves are also mainly imported from the United States, Europe and Asia with the exception of Toyola efficient charcoal stoves which are produced in Nigeria. ENVIROFIT, Stove Tec, and ECOZOOM are some of the major suppliers of efficient wood and charcoal stoves in Nigeria. Envirofit is reviewing options for setting up a local assembly plant, which Quantas has already done for the T-LUD stove.

However, the bulk of the stoves currently used are manufactured locally from clay and/or metal by stove artisans in the neighbourhood of users, or are even self-constructed by the users. These stoves are widely used and accepted as a fact of life without questioning their price, quality, or fuel consumption behaviour.Envirofit as well as C-Quest both managed to register a stove POA under the CDM. They have invited other stove initiatives to join and as part of project preparation the team is now discussing the issues for joining the existing PoAs; new CDM activities cannot be registered any longer as Nigeria officially qualifies as a middle income country. However, Gold Standard projects can still be registered, using the voluntary carbon and CSR market.

41www.fote-ng.org 42http://www.projectgaia.com/page.php?page=nigeria#sthash.EI90USf0.dpuf 43http://www.nigeriacookstoves.org

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LPG burners are often integrated with the cylinder, particularly for the smaller cylinder sizes of 3 and 6 kg. The availability of cylinders if hampering further growth in the number of LPG users. Cylinders used to be manufactured in Nigeria, but the plants have all been closed. Oando, in collaboration with a number of micro financing institutions, has recently set up a scheme whereby new imported cylinders can be purchased and paid over an extended period of time.

3.1.4 Financing institutionsThe following are the most known and active organisations that provide or are interested in injecting financing in one way or another in the supply chain of stoves and fuels. It is likely that other organisations exist that are not mentioned here. In addition there are cooperatives and associations that provide financial services to its members.

Alitheia Capital Alitheia Capital is an impact investment firm focused on enabling access to finance housing and energy for low income households as well as small and growing businesses. It has a particular interest in working with established MFIs. Alitheia Capital in partnership with Oando, a leading energy company in Nigeria, currently provides wholesale funding to select microfinance institutions in Nigeria for distributor financing for the retailing and acquisition of LPG fuels and cookstoves. Consumer finance might be provided as well, but preferably through the intermediary of the retailers. The initiative aims to promote clean energy and reduce dependence on dirty fuels including wood, kerosene, and charcoal, but with a preference for LPG44.

Alitheia’s discussion with Oando is in advanced stages and is expected to lead to the choice of a pilot area where LPG will be newly introduced on a relatively large-scale. Niger State has been identified as one of the likely candidates for this pilot.

Bank of Industry The bank of industry has a mandate to provide financial assistance for the establishment of large, medium and small projects as well as expansion, diversification and modernization of existing enterprises; and rehabilitation of ailing ones in Nigeria. It has a particular interest in working with Micro Entrepreneurs. The Ministry of Environment is collaborating with the bank through the Access to Renewable Energy Project (AtREP) to provide funding to women entrepreneurs interested in setting up energy enterprises in the country. This is to ensure the success of the Ministry’s National Clean Cooking Scheme (NCCS) project and enhance the participation of women in increasing access to clean cooking technologies in Nigeria.

Atmosfair GmbH Atmosfair, a German Carbon offset organisation, provides carbon finance to reduce the cost of Save 80 stoves presently sold in the northern part of Nigeria. The stoves are sold by a local organization, Developmental Association for Renewable Energy (DARE). The Save 80 stoves are high quality German made stoves for use by the high end households and for institutions.

DevA Access and Empowerment Int'l Limited DevA (Development Access) provides micro finance. It is a MFI-NGO established to provide developmental access to economically active people who have difficulty or do not have access to commercial sources of funding, for starting and improving business and improving the quality of life. The organization supports rural communities, self-help and solidarity groups, micro entrepreneurs, promote participation of women in business and offer easy access to financial services and simple and affordable technological tools in rural areas and for the underprivileged. DevA provides loan facilities, one of which is “RENTA” which is designed to help the active poor avail themselves use of modern technology such as solar lamps, solar cookers, biomass stoves, etc. while making payments over a period of 3 to 12 months45.

44 http://www.thealitheia.com/current-initiatives.html#bullet0345 http://devapeople.webs.com/devaempowerment.htm

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Informal faith/Social/market based Groups Informal organisations such as Savings and Credit Co-operative Organisations (see section 7.5) and women social groups also provide members with opportunities to buy efficient energy equipment and pay back over time in an agreed number of instalments. This arrangement is based strictly on trust.

3.1.5 Universities and LaboratoriesThere are six Energy Research Centres under the Energy Commission of Nigeria with specific technical/research roles46. These are:

i. National Centre for Energy Research and Development (NCERD), at the University of Nigeria, Nsukka (responsible for research in solar and renewable energy) 

ii. Sokoto Energy Research Centre (SERC), at Usmanu Danfodiyo University, Sokoto(also responsible for research in solar and renewable energy)

iii. National Centre for Energy Efficiency and Conservation (NCEEC) at the University of Lagos (responsible for research in energy efficiency and conservation).

iv. National Centre for Hydropower Research and Development (NCHRD) at the University of Ilorin (responsible for research in hydropower).

v. National Centre for Energy & Environment (NCEE) at the University of Benin (responsible for research in energy and environment).

vi. National Centre for Petroleum Research and Development (NCPRD) at the Abubakar Tafawa Balewa University, Bauchi (responsible for research in petroleum).

Only two of the above mentioned centres i.e. The National Centre for Energy Research and Development (NCERD) and Sokoto Energy Research Centre (SERC) are involved in research on clean cookstoves and fuels. In addition, a Clean Cookstoves Development and Testing Centre is being established at NCERD, University of Nigeria, Nsukka, South East Nigeria with support from the Global Alliance for clean cookstoves. The centre will combine stove development and testing, research and services and will have an Advisory Board that will include the Standards Organization of Nigeria, Energy Commission of Nigeria, Nigerian Alliance for Clean Cookstoves and ICEED.

3.2 Policy environmentThe market for clean cook stoves in Nigeria is not yet prominently developed although a few isolated attempts have been launched. However, more than several thousands of clean stoves have not been disseminated, a far cry from the actual potential. Indeed, it is a policy failure that access to modern cooking energy receives lower attention than access to electricity. Despite the fact that the combined value of the market for cooking energy47 approaches USD 3 billion per year and receives a subsidy of more than USD 1 billion per year, the Government has not paid serious attention to the policies and regulation needed to properly manage this sector. As a result, a clear programme for addressing this challenge is lacking.There is a growing traction within government, the private sector, civil society and donors to address the challenges of cooking energy. This is not in the least because of international attention generated on this issue. Recently, the Nigerian Alliance for Clean Cookstoves launched a public-private-partnership to introduce 10 million clean cookstoves by 2020 and this programme will join the NCCMDP. It seeks to strengthen policy frameworks, technical standards, create more innovative financing and promotion. In 2009, the government presented its vision 2020, with five main themes, of which two are supported by the proposed project:

46http://www.energy.gov.ng/index.php?option=com_content&view=article&id=85:research-centres&catid=37:about-ecn&Itemid=8547Cooking fuels only

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Achieve energy supply security by utilising the nation’s renewable energy resources (including wind, solar, hydro and biomass) to diversify the energy consumption mix;

Development of efficient and sustainable energy generation and consumption patterns.48

The Federal Government has initiated a set of policies supporting the clean cookstove sector, however implementation capacity is limited. The most important measure is the decision to fund a subsidy to reduce the price of kerosene for household. The National Clean Cooking Scheme (NCCS) and Rural Women and Energy Security project are part of the Renewable Energy Programme carried out by the Ministry of Environment. The Government of Nigeria has an essential role to play in sending the right signals to investors and professionals in the cookstove sector alike by putting in place regulations and policies that back-up and promote the development of the clean cookstove industry. This can take the form of a direct subsidy for households for the purchase of a clean cookstove, VAT exoneration and reduced import tariffs for products that meet the required eligibility criteria. It is proposed to organize an all-inclusive effort to use clean cookstoves, switch cooking fuels in a coordinated effort building on individual programmes and efforts by a large variety of stakeholders, all working towards the same goal.

48 Report of the Vision 2020 National Technical Working Group On Energy Sector

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4 CURRENT CLEAN COOKSTOVE INTERVENTIONS

4.1 Clean Cookstoves Interventions by NGOs and private firms

4.1.1 National Stove testing centre ICEED signed an MOU with the Energy Commission of Nigeria on the July 4, 2013 for the establishment of a national stove testing centre at the Centre for Energy Research and Development (NCERD), University of Nigeria, Nsukka. This initiative is a collaboration between the following: Energy Commission of Nigeria, Standards Organisation of Nigeria, ICEED, Global Alliance for Clean Cookstoves and the National Centre for Energy Research and Development (NCERD), University of Nigeria, Nsukka.

4.1.2 USAID/ICEED’S Energy Efficient Woodstoves Project The International Centre for Energy, Environment and Development (ICEED) with support from United States Agency for International Development (USAID) Nigeria is implementing a project that will install efficient woodstoves in boarding secondary schools in Ebonyi and Niger States in addition to distribution of one hundred (100) household stoves in each state. The project seeks to address the silent health crisis being experienced by cooks as a result of indoor air pollution by removing important barriers to the market expansion of clean cooking stoves in the two project states.

4.1.3 Developmental Association for Renewable Energies (D.A.R.E)49

D.A.R.E is an acronym for “Developmental Association for Renewable Energies.” A Renewable Energy NGO based in Kaduna, Kaduna State, Nigeria. The organisation is one of the sole suppliers of the SAVE80 improved wood stoves and has sold over 16,000 to customers at a reduced price all over Nigeria using CDM pre-financing to subsidise and make the stoves affordable. The organisation presently assembles the Save80 stoves but plans to commence Production in Nigeria, when enabling environment and policy are available to allow setting up of own production facilities.

4.1.4 Mfamiyen Conservation Society50

The Mfaminyen Conservation Society (MCS) is a community based organization that seeks to facilitate community development which addresses the physical needs of the Mfaminyen Communities in Akamkpa and Etung LGAs of Cross River State. The organisation was conceived to serve as a vehicle for conservation and preservation of the high tropical rainforest, one of the hot spots of the world. One of the conservation projects of the community is the dissemination of “Ekwuk” stove, a locally constructed fixed- efficient wood fuel stove which is made from clay and other materials sourced locally in the communities. The organisation has successfully disseminated 10,000 Ekwuk stoves in the pilot phase of Nigerian Clean cook Stove Programme and has scale up to commercial scale since 2011 with a new model of stoves that can be moved around.

4.1.5 SOSAISOSAI is a social enterprise that deals in the dissemination of renewable energy solutions including solar PVs and efficient wood and charcoal stoves. The organisation is based in Kaduna, with an early focus on Kaduna state but the organisation has since started distribution in other parts of the country. The organisation has disseminated about two thousand (2000) clean cookstoves till date but has a target to reach 1.2 million households in Nigeria. SOSAI presently distributes Envirofit and Stovetec stoves.

49www.dare-world.org/dare.org/ 50http://mfaminyen.org/

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4.1.6 SMEFUNDs

SMEFUNDS is a major distributor of biofuel (ethanol) stoves in Nigeria. The organisation has presence in twenty states in Nigeria and is presently investing in market expansion for its biofuel stoves. The stoves use biofuel which can be purchased in twenty (20) designated ‘green centres’, one in each state where the organisation operates. The organisation has disseminated the ethanol stoves to about 150,000 households across the nation. The company plans to establish two bio-refineries with a combined capacity of about one million litres of bioethanol per day in Nasarawa and Lagos States in the near future.

4.1.7 Toyola EnergyToyola Energy is a Social Entrepreneurial business with a mission of providing Clean Cookstoves to low income households in a financially sustainable and scalable way. The organisation was founded in Ghana in 2006 and has since expanded to three other countries in the West African sub-region; Togo, Benin and Nigeria. The organisation is relatively new in the Nigerian market and has presence in just one State (Ogun) in Nigeria. The organisation has sold over twenty thousand (20,000) improved charcoal stoves in Nigeria and is in the process of completing a factory, which is expected to start production in Nigeria by the end of 2013.

4.1.8 Quintas EnergiesQuintas Energies is an organisation that promotes High efficent T-Lud gasifier woodstove for households, institutional and small businesses uses. The organisation is based in Akure but has presence in Lagos and Abuja. The commercialisation of the stoves started at the end of 2012 and the organisation wants to increase production (10 stoves per week) and distribution of the gasifier stoves.

4.1.9 OANDO- Clean Cooking Fuel InitiativeOando Marketing Plc (OMP) in partnership with Alitheia Capital has set up a Clean Cooking Fuel Initiative. The initiative is in line with OMP's plan to switch millions of Nigerians from biomass to clean, efficient, affordable and sustainable LPG using Oando's ‘OGAS’ 3kg cooking stove. Oando introduced this portable 3kg cylinder to suit the purchasing power of low income socio-economic group who have been hindered primarily by affordability and accessibility. The cooking stoves are directly available to end-users through the company’s existing vast network of over 500 retail stations and a growing network of authorised distributors. The initiative has raised $11 million and has disbursed about $1 million. The initiative makes the adoption of clean cookstove affordable and accessible through provision of micro finance loans to both entrepreneurs and end-users.

4.1.10Tower AluminiumTower Aluminium, a foremost company in cooking utensils sector in Nigeria, is in a Joint-venture with Envirofit to help disseminate carbon credit subsidised stoves in Nigeria. Dissemination of the improved wood and charcoal Envirofit stoves started in March, 2013 but the long term plan is to create demand in a way that will encourage the local production of the Envirofit stoves in Nigeria. The company currently distributes the clean stove through cooperatives and other social networks in Lagos state. Appendix 1 gives an overview of these various actors and the scope of their activities.

4.2 Clean Cookstoves Interventions by Government

4.2.1 Nigerian Clean Cookstoves AllianceThe Nigerian Alliance for Clean Cookstoves (NACC) is a public-private partnership that was recently established to to introduce 10 million fuel-efficient stoves to Nigerian homes and institutions by 2020. It works with its partners to scale up access to clean cookstoves by

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developing innovative financing mechanisms, supporting quality assurance and standards, influencing policies and communicating the value of clean cooking.Current partners of the Nigerian Alliance for Clean Cookstoves include:

Federal Ministry of Health Federal Ministry of Environment Federal Ministry of Women Affairs Energy Commission of Nigeria Shell Petroleum Development Company Ltd. Oando Plc USAID-Nigeria GIZ-Nigeria Bank of Industry International Centre for Energy, Environment & Development.

The Secretariat for the Nigerian Alliance for Clean Cookstoves is managed by the International Centre for Energy, Environment & Development (ICEED). NACC is an affiliate of the Global Alliance for Clean Cookstoves.

4.2.2 The Renewable Energy Programme of the Federal Ministry of EnvironmentThe Federal Ministry of Environment under its Renewable Energy Programme has launched the Rural Women Energy Security (RUWES) project targeted towards the underserved rural woman who is usually off grid, energy poor and has the highest incidence of health related issues from harmful energy practices. In order to address cooking energy, the National Clean cooking Scheme (NCCS), a sub project under the RUWES, was launched in 2012 in partnership with the Bank of Industry to also train women as clean cookstove entrepreneurs. The NCCS seeks to address the need for clean cooking technologies to ensure success of the various tree-planting campaigns nationwide as well as curb deforestation. The Scheme with an intervention from the United Nations Development Programme (UNDP) has benefitted ten (10) pilot Secondary Schools in Kaduna State which had their kitchens retrofitted with LPG. The scheme is expected to kick off in Borno and Bauchi States as the two state governments have indicated interest in retrofitting high volume firewood consumers such as schools, hospitals, hotels and prisons considering the rapid desert encroachment in the states. The REP is in various stages of talks with state governments for commencement of the project at the state level.

4.2.3 Jigawa State’s Alternative Energy FundThe Jigawa state government set up the Alternative Energy Fund as a response to solve environmental degradation and reduce the rate of desertification in the state. Since the lunch of the programme, the state has produced and disseminated some 80,000 improved wood stoves free to households in Jigawa State over the period of several years. Presently, the demand for the improved wood stove outweighs the rate of production. A review of the performance and quality of the stoves should be carried out as a priority. In order to meet up demand and ensure the sustainability of the project, the state government plans to commercialise the production of stoves starting from 2014.

4.2.4 Lagos state governmentThe Lagos state government is presently promoting the use of LPG as alternative to fuelwood. The state has set a target to disseminate 100,000 LPG stoves through loans which are administered by the state Micro finance institution at low interest rates. The LPG project is designed to benefit only residents of the state, thus the state works with registered community development associations in the state to ensure the recipients are bona fide residents of the state.

4.2.5 Niger state governmentThe Niger state government on December 17, 2013 launched a safe cooking energy programme. The programme is expected to deliver clean cookstoves to 500,000 households in

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the state starting with 50,000 within twelve months starting from March, 2014. The state intends to achieve this target through public private partnership with technical support from NIAF.

4.3 Current Stove Activities with Carbon FinancingNigeria currently has three existing registered carbon projects (Programmes of Activities) for efficient stoves:

Envirofit – Africa Improved Cooking Stoves Programme of Activities C-Quest – Distribution of fuel efficient improved cooking stoves in Nigeria Atmosfair – Efficient Fuel Wood Stoves for Nigeria

Initial contact with these programs indicates that all of these would be open to licensing their POA in the future. With respect to registration, the Programme may establish a new registration document, or it may license an existing registered project for a fee.The NCCMDP aspires to use multiple brands of stoves and to be national in scope. All of these PoAs would have the flexibility to use multiple brands and models of efficient biomass stoves, although none are applicable to kerosene or LPG-based stoves. Only Envirofit’s POA covers both wood and charcoal stoves. Two are nation-wide and one (C-Quest) is restricted to Kaduna state. All of these have a CDM registration qualifying them for carbon sales either on the European Carbon Markets (EU ETS), other markets that may adopt CDM as a registration standard (like future Australian, Korean or Californian markets) or governments buying the credits to fulfil domestic or international targets. One of the POAs, (Atmosfair) has Gold Standard registration which is additionally suitable for the Voluntary Carbon Markets. The other two POAs may be able to sell credits into the voluntary markets, if they additionally do a Gold Standard labelling process, or if they convert their status to the Gold Standard (a process that may be allowed by the Gold Standard in the future). Envirofit plans to seek Gold Standard accreditation in 2014.

4.3.1 EnvirofitThe Coordinating and Managing Entity for this POA is Envirofit International51. The POAs geographic boundaries are limited to the nation-states of Ghana and Nigeria. The POA was registered with the CDM on November 24, 2011 and will expire after 28 years. The POA is classified under the CDM as a Small Scale programme and as such is limited to energy savings up to 180 GWHth/year per CPA. This translates to allowing each CPA included under the POA to offset a maximum of roughly 47,000 t CO2e per year or 470,000 over the ten-year term of the CPA. To date there have been no CPAs issued under this POA in Nigeria. At the time of POA registration a CPA was submitted for Ghana. Envirofit is currently in the process of registering a POA in Nigeria, and plans to achieve validation by the end of 2013. The CPA will include two Envirofit stove models: the G3300 and the M5000.

4.3.2 C-QuestThe Coordinating and Managing Entity for this POA is C-Quest Capital52. The POA’s geographic boundaries are restricted to the Nigerian state of Kaduna. The POA was registered on August 8th, 2012 and will expire after 28 years. The POA is classified under the CDM as a Small Scale programme and as such is limited to energy savings up to 180 GWHth/year per CPA. This translates to allowing each CPA included under the POA to offset a maximum of roughly 47,000 t CO2e per year or 470,000 over the ten-year term of the CPA.There is one registered CPA under this POA

CPA # Owner Approval Stove Type(s) CPA Stove 51 http://cdm.unfccc.int/ProgrammeOfActivities/poa_db/T0ZKV3S1F2JH8RL75D9GQ6AMO4XNIC/view52 http://cdm.unfccc.int/ProgrammeOfActivities/poa_db/GS2VTKUD3ZW59CAQYJEP740XFN1HIR/view

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Date Limit

1 C-Quest 07 Nov 12 EcoZoom Zoom Dura, Envirofit M5000

13,950

4.3.3 AtmosfairThe Coordinating and Managing Entity for the POA is Atmosfair53. The POA was registered on October 24, 2011 and will expire after 28 years. The POAs geographic boundaries are limited to the nation-state of Nigeria. The POA is classified under the CDM as a Small Scale programme and as such is limited to energy savings up to 180 GWHth/year. This translates to allowing each CPA included under the POA to offset a maximum of roughly 47,000 t CO2e per year or 470,000 over the ten-year term of the CPA.There are five registered CPAs under this POA:

CPA # Owner Approval Date

Stove Type(s) CPA Stove Limit

1 Atmosfair 10 Nov 11 Save 80 3,2002 Atmosfair 11 Jul 12 Save 80 3,2003 Atmosfair 11 Jul 12 Envirofit G3300, M5000 3,7504 Atmosfair 29 May 13 Save 80 9,6005 Atmosfair 29 May 13 Envirofit G3300, M5000 11,250

4.4 Reflection for future intervention

The two main guidelines that can be developed to form the basis for the NCCMDP are: (i) inclusiveness of stakeholders and (ii) geographical targeting. The NCCMDP will never be successful if it excludes possible stakeholders of if it doesn’t build on the experience and efforts already in place. Even though these efforts are small compared to the needs of the national programme, whatever lessons learnt so far must be taken into account. This also means that it would be beneficial if the own programmes as existing now by some of the stakeholders could be moulded into the NCCMDP without major modifications. The implication is that the support offered by NCCMDP could be in addition to what these stakeholders have already arranged for and in place.The country is large and different institutions are active in different parts of the country. Therefore, it is recommended to launch the NCCMDP on a State by State basis. This will facilitate a number of important elements: first of all, it will allow the programme to pilot its activities in a few states before expanding and scaling up; secondly, it will allow States to easily provide different levels of support within the same programme. As an example, a particular State may be willing to provide more support for LPG than other States, or for women empowerment, etc. Finally, this will maximize the flexibility and develop tailor made support within the programme.Although in the long-run carbon financing could make a significant difference, particularly if carbon values increase, so far the ongoing programs have not been very successful. One of the reasons found is that Nigerian households do not like administrative hassles, and tend to refuse registering for the purchase of a subsidized stove. This, plus the fact that the existing PoAs are fairly small could suggest that carbon financing might not be a priority for the moment.

53 http://cdm.unfccc.int/Projects/DB/RWTUV1245685309.5/view

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5 REVIEW OF INTERNATIONAL BEST PRACTICESA list of exhaustive interventions can be drawn from clean stove interventions carried out elsewhere around the world. It can be divided into three main categories of action:

i. Enhance demand: understanding and motivating potential users, developing better and more technology, and providing consumer finance;

ii. Strengthen supply: creating innovative distribution models to reach a wide variety of consumers, attracting more finance and investment, increasing access to carbon finance, enhancing market intelligence and creating inclusive value-chains;

iii. Foster an enabling environment: engaging national and local stakeholders, building the evidence base for the benefits of clean stoves and fuels, promoting international standards and rigorous testing protocols and enhancing monitoring and evaluation.

While action could be desirable on all of these aspects, the most urgent issues and interventions needed to quickly develop large adoption of clean cookstoves in Nigeria are described into the national clean stove programme outlined in section 6. Other key actions could then be implemented with a specific timetable and stakeholder’s engagement.

5.1 Enhance Demand

5.1.1 Understanding and motivating the consumer The following was recommended during the NACC/GACC stakeholder workshop:

(i) Commission a customer segmentation study to identify and better understand the needs and preferences of the consumer segments in different regions in Nigeria. This has mainly been done through an end-user behaviour survey realised by NIAF in three states of Nigeria in 2013, to complement the market assessment carried out by GACC.

(ii) Develop a national multi-media marketing campaign to educate households and make them more aware of the crucial issues that they should look at when replacing their stoves, why it is in their interest to change stoves, and where they can find clean stoves.

5.1.2 Consumer Finance Several options exist that should be explored so that beneficiaries have options to select. Institutions need different solutions than households. As of now, it is not certain which would be the best option as this would need to be field tested.

(i) Develop a subsidy programme to make certified stoves attractive to the end users and convince them to quickly replace their old stove for a clean model.

(ii) Develop financial products (microloans, top-up loans, and fuel saving schemes) targeted to the needs of would-be clean cookstove purchasers. It is observed that households in Nigeria are wary of registering their name and address in order to obtain benefits; stove subsidies requiring tracking for carbon monitoring found this out in practice;

(iii) Promote clean energy-focused savings and loans associations, women’s savings groups, and community networks.

(iv) Pilot new types of cookstove offers, including try-before-you-buy and layaway schemes, to reduce consumer-perceived risk.

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5.1.3 Innovative Manufacturing and Distribution Methods(i) Add clean cookstoves and fuels to large non-cooking product distribution/wholesale

networks such as supermarkets, agricultural outlet stores, and hardware stores where households already tend to come frequently.

(ii) Improve existing cookstove and fuel-specific distribution networks to ensure consumer access and affordability and increased adoption and sustained use.

(iii) Develop enabling policies to encourage private sector actors to build regional/national stove production centers to reduce cost of manufacturing, shipping/freight, and tariffs. This will result in more affordable cookstoves and more profitable business models.

5.1.4 Access to Finance (social investment, working capital, carbon) (i) Design a revolving working capital fund to support operational needs of women

business groups, suppliers, manufacturers and distributors.

(ii) Explore the use of a partial risk guarantee fund

(iii) Work with private sector financiers to provide additional financing options to address gaps identified by the private sector.

(iv)Develop an innovation fund to support improvements in design, production, delivery, and after sales service.

(v) Increase access to carbon finance. Develop a pre-finance carbon facility to support enterprises and consumers in the sale and adoption of cleaner and more efficient cookstoves.

5.1.5 Entrepreneur training and capacity building(i) Train entrepreneurs on how to improve quality of products, better understand consumer

preferences and incorporate feedback, attract investment, market and distribute their products, and keep financial records.

(ii) Specifically target women entrepreneurs and networks to increase their engagement in the cooking value chain.

5.2 Foster an Enabling Environment

5.2.1 Standards and testing(i) Establish a Nigerian Clean Cookstove Testing and Knowledge Centre, which will assess

performance of cookstoves against national standards and possibly future international standards set through ISO processes for emissions and fuel efficiency. The results of this should be disseminated through labelling and/or consumer education activities.

(ii) Develop and enforce a certification system to distinguish stoves that meet national standards (as certified by the Nigerian testing center).

(iii) Provide a market incentive to stove producers/marketers to attain standards by educating consumers about the benefits of certified and labelled cookstoves and fuels (see “Understanding, motivating, and meeting the needs of consumers” above).

5.2.2 Fuels and technology(i) Increase the supply of LPG through a separate LPG Market Transformation Initiative to

adept to accelerated market development through a variety of measures to be

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implemented by the private sector. In addition, the Government has not set a market price for LNG for use within Nigeria but applies a price based on international markets. For liquid petroleum products, an internal price is applied for the supply within Nigeria that is lower than for export. If such price could be established for LNG (and ultimately LPG) the cost of cooking with LPG would be much lower.

(ii) Commission and disseminate research on scaling up of promising technologies that have proven to be viable, fuel efficiency, availability, production, processing, and new technologies, including sustainable woodlots, improved charcoaling technologies, briquettes, waste to energy conversion, and affordable/accessible biofuels such as bio-ethanol, bio-diesel, biogas.

(iii) Establish a comparative value for different fuels showing which are most efficient and when.

5.2.3 Monitoring and evaluation(i) Increase the capacity of NACC to be the central coordinator of M&E for the sector.

(ii) Establish M&E systems throughout the value chain by requiring M&E as part of all funding opportunities and providing training on proper M&E methodology (especially for carbon credit projects that are already operating within Nigeria, but also for the NCCMDP which is expected to use carbon financing for raising much of its financing).

5.2.4 Building the evidence base (research on impacts and benefits)(i) Evaluate existing baseline data on household energy in Nigeria and identify which

regular data collection efforts could potentially contribute in the future to systematically improving and updating the household energy database (i.e. Census, Living Conditions survey, etc.).

(ii) Commission and disseminate research to build evidence base on the relationship between cookstoves and health, livelihoods, environment, and women’s empowerment.

5.2.5 Champion the sector and engage national stakeholders(i) Develop an online Nigeria knowledge portal and promote it through partner networks,

events, and NACC/Alliance email listservs.

(ii) Lobby and sensitize key national and county government institutions on the benefits of clean cooking on health, environment and economy. Work with the Nigerian

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Box 2: Fuel switching experiment

As a thought experiment, assume that the entire commercial cooking fuel market magically and instantaneously switches to LPG. A rough estimate of the annual consumption is about 6.5 million t of LPG (in 2015), with an approximate market value of about 10b USD; the current commercial fuels market value is roughly 4b USD, and LPG consumption is 0.3 million t.The second thought experiment builds further on this; what can the current, inefficient subsidy on kerosene mean if applied to LPG under the above conditions. The approximate budget in 2012 for subsidizing kerosene was 1.5b USD. The average price of LPG as seen in the 3 state NIAF household survey, USD 1550/t, would be lowered by 10% to USD 1400/t, which would further increase adoption rates.

government to create enabling policies that reduce import tariffs for clean cookstoves, especially for organisations assembling or producing within the West Africa region.

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6 MAJOR ISSUES

6.1 SWOT Analysis

Table 17 SWOT Analysis of the Nigerian clean stove Context

Strengths Weaknessesclean stove dissemination contributes directly to MDGs, especially poverty reduction (reducing respiratory diseases, improving living conditions) and environment protection (reducing CO2 emissions and forest degradation), and should therefore be considered as a priority by the government

No successful large scale dissemination of clean stove across the country. Currently, there are no market aggregators

clean stove use is attractive for households because it reduces fuel expenses, time spent for cooking and/or fuel collection time, and results in cleaner kitchen air

Poor rural population is the largest segment of the target and also the most difficult to reach (less than 50% of rural households gather fuel and may not pay for their cooking fuel or stove, and need to be convinced about the benefits)Although households know about improved stoves, they do not know what it could mean for them and where to obtain.

clean stove dissemination could generate added value/additional revenues for players of stove supply chains

Lack of market intelligence

Numerous stove producers and importers are present in Nigeria, working across different fuel types

Absence of efficiency and emissions standards leading to certification of cookstovesAbsence of coordination among the different actors Lack of appropriate technical and financial support to local clean stove supply chains

Some interventions are already benefiting from carbon finance

Lack of efficient independent quality control and monitoring systems, leading to potentially poor thermal and sanitary efficiencies of clean stove disseminated and no warranty of positive impacts

Population is open to modern products as shown by the rapid increase in the use of mobile phones

Not sure that new cookstoves provide enough incremental benefits compared to incremental costs for households that are using smartphones

Sometimes limited but existing willingness and ability to pay if product benefits are demonstrated

Weak political will to address biomass issues head-on, leading to lack of commitment, weak institutional arrangement, regulation, coordination and financing

Some well-established microfinance institutions across the country

Lack of coordination between donors and overly reliance on pre-selected clean stove models supported by each donor

Existing basic market knowledge as to fuel preferences: kerosene as the leading urban fuel while firewood dominates rural markets

Lack of coordination at national level and ethic in carbon finance raising

Some awareness of the negative health impacts of cooking on traditional biomass stoves

Religious beliefs can be an additional hurdle in some parts of the country

Low adoption of clean stove and of LPG and good kerosene stoves No effort to address deforestation even though the deforestation rate is extremely highCarbon market is down, giving low prices for reduced carbon emissions

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Opportunities ThreatsRising energy prices Lack of political promotion of the issue and

solutions (Ministry of Environment/Energy) leads to launching other initiatives with controversial implications (such as LPG bottle give away programmes)

Increasing scarcity of firewood and of subsidised kerosene

Support to market development alone leads to limited market penetration of cookstoves with no durable impact as the population grows

Global and national dynamics on clean stove (GACC and NACC) linked mainly with increasing international awareness on health impacts of biomass fuels combustion

Corruption and political interference (favoring certain technical solutions, or regions)

Health reasons provide enough justification to promote modern fuels and stoves

Failure to integrate larger dynamics and gather donors under a large programme in the field of clean stove (World Bank, EU)

Some among donors and/or practitioners to coordinate and join efforts in the field of clean stove

Many other priorities exist, while stoves are generally not ranked as the most pressing priority (e.g., rural electrification)

WACCA initiative under development Too much attention and no actionCarbon funds and agreed methodologies available Subsidy programme not acceptableInitial subsidy scheme to trigger quick and large adoption of clean stove

Stoves producers not having the capacity to supply at large-scale, particularly when manufactured locally

State-level dynamics in place committed to quickly start implementing pilots

6.2 Discussion of the Main IssuesThe above SWOT analysis presented in Table 17 permits identifying the current major issues regarding clean stove dissemination in Nigeria:

Setting up a framework for large-scale and relatively quick intervention under which donors and practitioners can operate efficiently and relatively independently towards the same goal of providing access to clean cooking solutions in a relatively short period of time. This requires:

- defining the framework conditions under which stoves and stove suppliers can be supported by the programme

- realizing a fail-proof mechanism to verify that stoves and stove suppliers continue to adhere to these conditions without undue pressure on personal information

- providing the means to support the stoves and stove suppliers as long as these operate within the framework conditions.

Giving as much attention as possible to the supply of truly modern stoves; including for rural populations that are open to “modern-ness”, as a push for switching to more modern stoves and fuels that is highly justified for health reasons, but not ignoring lack of funds to invest for a large part of the (rural) population.

- Focusing on the most pressing fuel issues: improved biomass stoves in rural areas and in urban areas improved kerosene stoves and promoting a switch to LPG.

- Trying to down-play the growth of charcoal as much as possible due to the aggravated impact on wood resources.

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Securing a significant initial financial support to quickly harness clean stove technologies within rural and urban populations; this can consist of any of three separate elements: (i) exonerating VAT for the most efficient and/or clean stove models; (ii) (partly) reducing import duties for highly efficient stove models; and (iii) explicit investment subsidies that can be applied in-line with the specific objectives for each State, and should be applied temporarily only to induce quick changes and adoption. At this point, the preference is for investment subsidies, as these are easiest to implement and administer, particularly since this is supposed to be a temporary measure.

Ensuring technological neutrality based on healthy commercial competition and the following basic principle: “Each household should have access to the fuels and stoves they prefer, at their true economic prices integrating health, environmental and economic externalities”. Households thus should be allowed to have a free choice of stove and/or fuel. Embedded in this principle also is the fact that stoves should never be handed out for free.

Setting up an efficient and independent quality control and monitoring system, including a well-equipped independent laboratory for particulate measurements and fuel consumption, in order to easily distinguish between well performing stoves and non-performing ones, and for warranty purposes safeguarding the energy and sanitary efficiencies of clean stove disseminated and avoid counterfeits/imitations. The quality control is realized at two points:

- at entry, when all stove models are verified for eligibility under the programme; they will all be tested in the same laboratory; irrespective of the fuel they use, they will be tested against the same criteria and if eligible, they can be supported to ease dissemination;

- during operation, when it is verified that stoves continue to perform against the original criteria so that households obtained what they paid for.

Providing appropriate technical and financial services to clean stove supply chain stakeholders.

Adopting and enforcing appropriate and regularly updated policies, regulations and tax systems aiming at creating incentives for clean stove supply chain players to up-scale their activity, lower the selling prices and continuously improve their products.

Actively promoting and demonstrating the benefits of clean stoves to foster populations buy-in through an all-inclusive programme encompassing all types of fuels and eligible stoves.

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7 PROGRAMME OBJECTIVES

7.1 Programme development objectiveThe proposed development objective (PDO) is to increase access to modern and clean cooking energy for households, small businesses and institutions in Nigeria, with an emphasis on poor households.

7.2 Specific objectivesThere are five specific objectives, constituting the 5 components of the programme:

Carry out a promotional and awareness campaign to convince households and small businesses to quickly adopt eligible clean cookstoves;

Quality control, which consists of two subcomponents• identify eligible cookstoves, verifying which models can be supported under the

programme as they meet required national quality, performance and safety standards;

• Create an active verification process, monitoring stove quality; Realize an operational financial support mechanism stimulating accelerated stove

replacement and adoption; M&E, to verify performance of the stoves and estimate the impact of the programme Support local stove producers for quality enhancement and scaled-up production

capacity.

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8 PROGRAMME DESCRIPTION

8.1 ConceptLack of access to modern cooking solutions in Nigeria results in high economic costs through environmental degradation, poor health conditions in households from air pollution, and unnecessary cooking fuel expenditures. This is valid for poor households in urban and rural areas alike. The proposed programme is expected to improve these conditions rapidly and sustainably. A public awareness campaign will raise awareness about both the issues and solutions, and will promote households to act now rather than later by quickly replacing their dirty stoves. The stoves that will be promoted include all stoves that meet the performance conditions set by the Nigerian Government, and include all possible fuels. Stove models should be appealing to households and express confidence that they will continue to perform well throughout their useful life. All stoves that will be promoted have in common that they combust cleanly and efficiently, and come with certain performance guarantees. As always, beneficiaries have a choice of which fuel or stove to use, and therefore a range of LPG and kerosene stoves will be promoted under the programme as well as 2 nd

generation wood stoves including owner constructed stoves in poor rural households. In fact, the programme is indifferent as to which stoves to promote, as long as they meet the agreed national criteria. This could therefore also include stoves which require a different fuel supply, such as biogas, bio-oils, and biofuels (ethanol or methanol): although stoves can be promoted under the programme, there is no support for the fuel supply side and if a stove model requires different fuel supply, the promoters of the stove should ensure an adequate supply. Since different households require different solutions, all eligible stove models will be offered simultaneously so that households can make the appropriate choice corresponding to their specific needs. The essential element is that each and every stove model that will be promoted satisfies the agreed performance criteria and comes with a warrantee. Thus, the essence of the programme is that households know (i) what they are buying, (ii) why they are buying this, and (iii) what their rights are. This will be highlighted in the awareness campaign. The programme will essentially be realised by modernising the stove supply chain, providing certified stoves to households at attractive prices, offering a micro financing scheme for households who want to use this, and distributing transparent subsidies. Checks, balances, and transparency through independent M&E agents will help to transform this sector into a more professionally operating one, capable of increasing access to modern cooking solutions for a large part of the Nigerian population in a relatively short time. The large-scale dissemination of clean stoves over a number of years is expected to reduce prices, thereby avoiding the continued need to provide subsidies. Quite a few stove models are currently being promoted by organisations and individuals, some of them with good and some with poor quality stoves, some with 2nd generation stoves, and some are promoted under one of three carbon financing schemes. Potential clients do not know what they get and are confused. Moreover, the scale of any of these efforts is far too small to make an impact. The proposed programme will act as an umbrella programme providing common support for all eligible improved stove models and producers, inviting all stove producers and suppliers to join the programme. The support given under the programme for promoting these stoves will be over and above what each supplier does for himself.Thus, the programme essentially professionalises the supply chain, raises understanding and creates more knowledge among potential customers, and provides incentives for replacing old stoves for clean ones. This requires a well-functioning certification programme to identify which stoves can be supported under the programme, and it requires a well-functioning programme to monitor & evaluate performance of the stoves in real life. If stoves do not perform as originally promised by their suppliers, they should be fixed or replaced; if problems persist, these stoves should ultimately be eliminated from the list of eligible stoves that can be supported. Beneficiaries must be able to count on the promised performance of the stoves.

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8.2 DescriptionThere are several principles that form the basis behind the programme:

The end-user selects the solution that fits his/her needs, whether an LPG, kerosene, charcoal, or firewood stove

Urban and rural households, small businesses and institutions using commercial wood fuels or gathered wood fuels will be addressed

The delivery of the stove products to end-users is entirely commercial and private The use of market aggregators will be promoted to scale up the supply and distribution

level To accelerate adoption levels, a support mechanism will be developed to give financial

incentives to households and manufacturers or suppliers to quickly change stoves to better performing ones

Financial support is temporary, targeted, and well defined, and absolutely no free hand-outs are allowed

Measures to avoid large-scale fraud should be incorporated, including independent monitoring

(Micro)- finance will be provided as a voluntary option to households, as well as finance to manufacturers or suppliers

Private local manufacturers of efficient stoves and LPG cylinder can be supported as it is expected that the largest quantity of clean stoves will need to be locally assembled or manufactured.

The programme should preferably be implemented by states or geographical zones, using as much as possible capable local organisations for the implementation, incorporating and reinforcing any stove programmes that may already exist. Buy-in from authorities, such as State Government, is required and for practical reasons an approach addressing State by State might be useful, particularly if State Governments contribute to financing of the programme.The proposed stove programme has five interdependent main components, each of which is necessary for the success of the programme:

• Promotion and awareness raising • Quality control and stove certification • Financial Support Mechanism • Monitoring and Evaluation• Support to local stove producers

8.2.1 Component 1: Promotion and awareness raising The awareness campaign will address the lack of knowledge among the target population about the issues regarding safety and air pollution in the kitchen, about fuel consumption and deforestation, and about climate change as result of cooking. Many households will regard a stove as a common or banal commodity and do not see the need to even think about changing it. But, as households have embraced modernization at other levels (i.e., by using smart phones), they may become aware of the opportunities to further improve the wellbeing of their family, by reducing cooking fuel expenditures and hospital bills for respiratory problems, and simultaneously helping protect the local environment and assisting with cleaning up the global environment.The awareness campaign will thus focus on explaining the issues, propose and promote solutions, and make people aware of how they can apply the solutions themselves by providing the information where to buy, what to look for, what the warrantees mean for each of the different stove models, etc. It will also explain the rights and obligations of buyers and suppliers alike. Finally, it will explain the support mechanisms that exist for changing their stoves. No-one is obliged to buy any stove they don’t want, or take a micro credit: the options are there to use for those who appreciate them.The core message on health improvements and health impacts linked to the use of inefficient cookstoves will be instrumental for advocating clean cookstoves. In addition to the household energy survey commissioned by NIAF that has provided insights on perceived health impacts of

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traditional stove use, two surveys should soon be available that will further inform this question. Project Gaia is currently researching the impacts of ethanol stove use on health while Shell is financing a survey comparing traditional and Envirofit stoves.54 The campaign should be multifaceted including mass media and direct reach-out activities, whereby simple demonstrations can be realised close to the households’ homes. This is seen as key by local improved stove producers and distributors to drive sales, who should be actively pursuing this as well. Product centres, where most (or at least many) eligible clean stoves are on display, or retail stores might be good candidates for organising such demonstrations. It has been proposed to learn from the HIV campaign (behaviour change communication) previously led in Nigeria that was successful as advocacy was taken forward by the people affected. Women and other direct targets (as beneficiaries and people mostly affected) need to be put in the centre.The campaign will be implemented over several years, using all possible promising media and channels. It has been suggested to ask a popular singer to become the “face of clean stoves”, which seems a good idea. The possible involvement of the Nigerian national film industries, “Nollywood” (in the south) and “Kannywood” (in the north), to both work with iconic actors and actresses to lead messages and with producers to makes movies focussing on this theme is another interesting option. Television, radio, social media may all be used to advance households’ knowledge and understanding of the issues and solutions. The wife of the former Head of State, Mrs Ajoke Murtala Mohammed has unveiled the Clean Cooking Energy Ambassadors Network, and this needs to be nurtured further. It is also thought that geopolitical champions should lead the clean cookstove initiative. This is true at the state and the community level. Political parties, head chiefs, subordinates, association heads, religious groups, youth, women etc. have all a role to play.A communications consultant specialised in behaviour change communication will be hired to develop this component further. The campaign will be realised by a private media firm. It is proposed to develop a national campaign, which can be used as a model for the various states after fine-tuning to the specific circumstances in that state. The subcomponents are the following:

- Develop the main messages for the awareness campaign (mainly by the Steering Committee and the PMU)

- Design the awareness campaign (by a behavioural change communications specialist)- Implement the campaign (by a private communications firm)- Obtain feedback to refine and fine-tune the messages and the campaign.

8.2.2 Component 2: Quality control and stove certificationThere should be no doubt about the performance of the stoves included in the national programme in terms of safety, fuel efficiency, and emissions. Stoves that meet or outperform the agreed standards will be certified as “eligible for support” under the national clean cookstoves market development programme (NCCMDP). Users should not be deceived and experience problems with underperformance from what was promised by the suppliers. Consumers should be assured of the quality of their stoves, and manufacturers should get incentives for developing even better stoves. Both users and suppliers should benefit from the support (whether financial or technical) offered under the NCCMDP.Different testing services are needed for the NCCMDP, which can be provided by different types of laboratories. R&D testing is needed for stove model development and fine-tuning; this requires access for stove suppliers to a laboratory for fuel consumption and emission testing. The accuracy of the tests and replicability of results are not major concerns as long as relative performance to the traditional stove can be demonstrated convincingly. Eligibility tests are the second type of tests needed, which require a higher level of precision.

54 Note that this data should also be used to lobby federal government (re: import, duties, tax rebates) and state governments for budgetary interventions.

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The reputation of the eligibility testing laboratory must be outstanding, both from a point of view of technical expertise and independence. Stove suppliers may complain if the results are not in-line with their expectations. For the purpose of the stove programme, one must be absolutely certain that the lab has not made mistakes and should be assessed by an international standards and accreditation organization55. There are various steps required to reach stove certification.

Identification of a testing facility (or participating laboratory)The Energy Commission of Nigeria and International Centre for Energy, Environment & Development signed an MOU on the July 4, 2013 for the establishment of the national stove testing centre at the Centre for Energy Research and Development (NCERD), University of Nigeria, Nsukka. Although the GACC has indicated in 2013 its intention to finance the equipment, this has not materialized yet. This laboratory is expected to carry out eligibility testing. The Standards Organization of Nigeria designated this laboratory as its national stove testing laboratory.The International Centre for Energy, Environment & Development in partnership with the Energy Commission of Nigeria and the Global Alliance for Clean Cookstoves have already established a Nigerian Clean Cookstoves Design and Testing Centre in collaboration with the Akanu Ibiam Federal Polytechnic, Unwana, Afikpo, Ebonyi State. Some limited stove testing has been realized here so far. The owner of the national testing laboratory should ideally sign a Cooperation agreement with the PMU, allowing it to receive some assistance. This could include support from the programme to acquire the additional testing equipment and receive initial training and capacity building by a senior Laboratory Testing Advisor56 to be contracted by the PMU. The laboratory will be responsible for providing testing services of stove emissions and efficiency performance following an agreed testing protocol. It does not determine whether a stove is eligible; it simply measures and documents the performance of the tested stoves. The test results are reviewed by a committee, which ideally would be the NCCMDP Steering Committee. The committee decides, based on the test results, which stoves are eligible for support under the NCCMDP. Note that past the initial establishment phase, the laboratory should preferably be able to provide its own financing to remain sustainable57. To be eligible for support, the laboratory should have an operational business plan, including a management structure and proper facilities and equipment to carry out the testing according to the protocol in the Cooperation agreement between the laboratory owner and the Programme Management Unit. An appropriate international testing facility could assist the owner of the Nigerian laboratory to become fully operational. This international testing facility should have scientific experience with stove emission and efficiency testing. As part of a normal due diligence process, the testing centre should be assessed by an independent specialist and accreditation organization with regards to the testing set up of the laboratory and the testing protocol. Tüv and SGS are organisations capable of doing such an assessment. This will be required as the Government will commit large sums of money for subsidies based on the proper functioning of the laboratory.

Setting-up of testing protocols

55 In another country, a stove supplier went to court to obtain what he thought was his right as he trusted his own perception better than the eligibility testing results by the certification laboratory. However, since the eligibility testing laboratory and its testing protocols had been assessed by an international accreditation organization, it could provide adequate proof that its test results were correct. The stove supplier had to accept that his stove could not be included under the programme until it shows improved performance. Thus, he started working with an R&D lab to improve the performance of his model – and that is exactly what is needed: any product that meets the performance criteria will be supported.

56 Note that the cost of setting-up a laboratory should not exceed 100,000 euros for a facility that allows to both test product development and certification.57 This is possible through securing of national dedicated funding (Education, Research etc.), international one (Collaborative Research programmes, Innovation grants etc.) or through the provision of paid services to stoves producers inside and outside of Nigeria.

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Testing criteria and testing protocols will need to be identified for use in Nigeria, taking into account variations in culinary practices and equipment throughout Nigeria. The testing should give reasonable indications for results in the field, i.e., how the stove will perform when used by households for actual cooking. This can be done in collaboration with other recognised independent testing facilities. Ideally a South-South transfer would be favoured, for example, in China, India, Indonesia, or South Africa similar efforts are underway. Protocols and criteria applied by other countries could be used as a starting point, while the GACC could possibly also provide further guidance.

Setting-up of performance standardsThere are various ways of determining adequate performance standards for clean cookstove technologies. One could deduct national standards from a benchmarking of existing national standards elsewhere in the world. Another approach may be to establish acceptable emissions and efficiency levels after having tested and evaluated performances of the whole range of clean stoves offered on the Nigerian market. The Ministry of Environment should lead in designing satisfactory criteria for cleanliness (emissions) and reduced environmental impact (efficiency), probably through the National Environmental Standards and Regulations Enforcement Agency (NESREA), preferably backed by international standards. It is ultimately the Standards Organisation of Nigeria (SON) that will register an agreed stove standard. It might take a few years before SON will be able to realize this, and interim standards specifically for the programme could be used in the interim. This underlines the importance of the Steering Committee that will act as the interim decision maker, as there needs to be broad buy-in for the standards selected.

Selecting eligible stove producers and stove modelsThe programme addresses stoves for households, institutions, and small businesses in Nigeria. Stove suppliers and manufacturers will need to get their stove model(s) tested by the participating laboratory in order to be put on the list of eligible stoves. The verification will be confirmed by the SC when the stove model meets or exceeds the national stove standard as tested by the laboratory. The PMU will ask the national laboratory to carry out the eligibility testing of stoves and stove producers. This will yield two lists: (i) eligible stove models, and (ii) eligible stove producers/suppliers; these lists will be maintained and regularly updated, and is prominently used in the awareness campaign. The actual declaration of eligibility is the responsibility of the Steering Committee.Note that stoves can be locally manufactured, produced or assembled, or imported. Two types of stoves could be submitted for testing: (i) proprietary stoves (such as Stove Tec, Envirofit, etc), and (ii) public domain stoves (such as owner-constructed Rocket Stoves). For the first category, stove manufacturers can submit their stove model(s) for testing; only they will be able to manufacture these stoves in Nigeria or elsewhere unless they allow production under license; imported stoves from a global stove manufacturer also fit in this category. For the second category, some stove producers could ask to be registered as eligible producer; this will be only for the production of eligible public domain stove types. Each stove on the list of eligible models will be accompanied by a unique registration number or certificate so that its origins can be traced. Ideally all certified stove should be stamped with a specific label that will help people recognize the eligible and performing stoves from any other stove sold as “improved”. It would also be easier to communicate and raise awareness around clean stoves thanks to this visual aid.It is understood that some producers may find this cumbersome, as some of their products may already have been vetted by international laboratories, but for reasons of transparency, only stoves that have been shown to comply with the same transparent rules and tested in the same laboratory should be supported. This would increase the transparency as there would be no exceptions and all suppliers in Nigeria would comply with the same rules. If stoves have already been approved by an international laboratory before, chances are good that they will be approved for the Nigerian standard without problems.The participation of eligible stove suppliers in the programme is not a voluntary process: they should sign an agreement with the PMU that outlines their responsibilities and the support they can get in return. As long as they keep their responsibilities, they can be supported by the

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programme. Supplying only eligible stoves, guaranteeing the performance and quality for a defined period of time, submitting new stove models for eligibility testing, and sharing information about numbers of stoves and field performance are among their responsibilities. Support that can be provided in return includes awareness raising, financial support, and technical assistance. The agreement can be either on the national level or the state level. In any case, stoves that have been declared eligible at the national level should be automatically eligible for participating in a state programme, although an agreement with the state-PMU will be required.

Quality control of eligible stove producers and stove modelsUnder the M&E component stoves need re-testing, which will be done by the laboratory. This is for both randomly selected stoves are well as stoves that have been identified as having performance problems. A complaints facility will be set up do deal with customer complaints and get the attention from stove suppliers.

8.2.3 Component 3: Financial Support MechanismSubsidies are a contaminated concept in Nigeria mainly due to large-scale diversion of subsidy funds under several programs in the recent past. However, there are programs in Nigeria that generally do deliver subsidies to the intended target groups, such as the agricultural fertilizer subsidy programme that uses mobile telephone vouchers. Since it is the intention of the national programme to quickly replace traditional stoves with cleaner models, some form of financial support is expected to be needed. This is also in line with expectations from State Governors, who generally want to maximize support for their constituencies. Globally, there is tendency for subsidy support to move towards results based financing, whereby beneficiaries are paid on delivery of clearly identified deliverables. Financial support will be provided to accelerate the broad and expedient adoption of clean cookstoves across various fuel user groups, states and classes around the country as well as the switch to cleaner fuels. Several different levels of support are possible, all leading to a direct or indirect reduction of the retail price of clean stoves:

(i) First of all, direct financial subsidy to the user of the stove is likely to be most direct and effective; it could act as an extra incentive to act now rather than later, and quickly purchase a clean stove. A proven mechanism such as similar to the fertilizer programme or an RBF type programme is preferred;

(ii) A second possibility is to temporarily reduce import duties or support for assembly from components and completely knocked down parts (CKD); a three year window was discussed as potentially beneficial, as it would give incentives to suppliers to quickly increase imports, leading to scale economies. Ideally local production should be supported for longer periods that these can eventually take over imports, in which case after-sales services can also be more easily provided as well.

(iii) The third possibility is temporary VAT exoneration; for which a five to seven year window was discussed as potentially beneficial. This possibility may lead to political difficulties, as many programmes propose to exonerate their products and this is not always appreciated by the Government;

(iv) Similarly, a temporary company tax reduction on the local production and/or assembly from CKD to allow companies to scale up or start production of clean cookstoves in Nigeria;

(v) Finally, a variety of financial support mechanisms can be provided by the banking sector, whereby they make financing for stove supply actors available at subsidized rates. MFI/MFB may already have a mechanism in place that can be used.

There are likely two types of certified stoves that can be supported under the national stove programme: obviously, all stoves must meet the national stove standard, but there are some that just meet this or (far) exceed it. Ideally stoves in the first category stoves should have retail prices equal or somewhat higher in price than traditional stoves for a particular fuel; stoves in the second category are much more efficient and cleaner, and the financial support level could therefore be higher as well. Some preliminary work by GACC on this could possibly

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be used as guidance. Details still need to be worked out. A flat fee representing the financial support could be used for all certified stove models within each category to reduce production prices and promote competition. The financial support component consists of the following activities:•Identify the support levels for new stovesThis is based on actual costs compared to the cost of traditional stoves, on the average emission savings to be obtained by each stove model as well as on people’s willingness to pay58. The precise level of support could in principle change from state to state and should be approved by the Steering Committee.•Develop the mechanism to deliver the financial supportThe mechanism should be simple and easy accessible by households, small businesses, and institutions, and not easily prone to abuse and corruption. Strong MFI institutions might be interested in becoming involved, not only to distribute the financial support, also to offer micro loans to customers for the purchase of stoves, or any other business. Local governments and/or organisations that are well-rooted within the communities could possibly also be part of the system, although in some states they may be rather weak.

• In states with a clear interest in and willingness to support local improved stove deployment, financial support could be channelled through local governments that may add some of their own resources into the stove financing scheme to further reduce user purchase price59. Niger State is a good example which provided most of the financial support for launching a state-wide stove programme as a pilot.• In states with less local political commitment, microfinance institutions with a decent customer base could manage the subsidy system. In any of these two cases MFIs would be available to provide micro-loans to users that require or prefer it on top of the subsidy. In this case, microfinance institutions could be supported in two ways depending on their size: either through wholesale finance, a lump sum is allocated to a large MFI to refinance its current loans so that it can develop its portfolio or if small, by providing financial guarantee to a deposit bank (commercial bank) that then lends to the MFI. In order to select appropriate local MFIs, the programme needs to work closely with the national Association of Microfinance banks, an official regulatory body recognised by the CBN. Also, if LAPO is identified as a potential partner, as it has offices in most states, it would be necessary to look for additional partners. For sustainability reasons it would not be advisable to rely on a single financial partner holding a monopoly.• The precise circumstances will vary from state to state and custom-made solutions may be required.

The actual delivery of the financial support to the end-user can be through a variety of means, such as a voucher system, mobile money, etc. An appropriate way to deliver the subsidy may be through the use of cell phone vouchers. Indeed, with 105 million mobile phone users in Nigeria60, such a scheme is already been used in the agriculture sector to subsidize access to fertilizer for farmers in rural Nigeria. Using this database and system is an option to reach rural farmers. The subsidy can also take the form of instant mobile phone credit being transferred to the user account if and when they register their new stoves.Carbon financing could play an important role as the potential reduction in carbon emissions is large indeed. However, trade-offs are the effort and time it takes to develop a facility to sell the credits as compared to some other sources of possible funding. NIAF is collaborating with Central Bank of Nigeria (CBN) to establish a Nigerian Clean Energy Facility (NCEF) as a special purpose vehicle to accommodate intervention in this area and circumvent the often

58 The 2013 NIAF survey could not determine households’ willingness to pay for improved stoves (the question was found difficult to answer by respondents during the pre-test and was removed), but it can assert that if substantial outlay would be required, households do have financial resources.59 This is the case in Zamfara and Jigawa states, where officials are willing to support women entrepreneurs disseminating clean stove.60 If the data from the 3 state survey is valid for the whole of Nigeria, some 83% of households use mobile

phones in 2013, and has on average 2.4 phones: 325 million phones in total.

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unworkable situation in Ministries dealing with these issues. A firm commitment from CBN 61 to develop the facility has been obtained. Although the NCEF was expected to be launched before the end of 2013, this did not happen and instead the CBN encountered some turmoil with high level management that delayed launching of new facilities. Ideally, if CBN standing is back to normal, the financial support for clean stoves – both to end-users and from donors funding the programme - would be channelled through the NCEF62.

8.2.4 Component 4: Monitoring and Evaluation Improved stoves should be of good quality and perform at least according to the national standard. To verify this, a mechanism will be put in place to collect information that can be used to fine-tune the programme as well as for M&E purposes. In addition, many of the stoves are likely to be promoted using carbon financing independent of the national stove programme, and these stoves require a transparent M&E system in itself. It is proposed to develop a simple and smart mechanism to monitor all improved stoves that will be promoted in the country. The mechanism consists of three elements, each with its own characteristics: • Installation checksAfter a producer sold a stove with subsidy, the installation and use of the stove by the beneficiary will be checked. This could be done through arranging visits, inserting confirmation codes that can be sent by text message in stove boxes or else. Once this is properly verified with the beneficiaries, the PMU will obtain the green light to pay the registered producer the counter value of the financial support. The exact mechanism how this will work is still to be developed. This verification mechanism should be set up to maximise inputs by locally-based organisations.• Regular Monitoring & Evaluation Performance of stoves in households will also be monitored through statistical sampling. This is required to determine the impact of the programme in terms of fuel savings, health improvements, and CO2 emissions. This M&E work will be contracted to private organizations.• Random Checks.In addition, from time to time, randomly selected certified producers need to submit a stove for verification (details to be developed) for retesting, and also certified stoves will occasionally be randomly purchased from the market to verify compliance with the quality standards. If a certified producer does not comply with the standards, he will need to make corrections or risks being taken off the list of certified producers; this also holds for producers of (open source) certified stove models: if they experience quality problems, this must be fixed or they will no longer be allowed on the list of certified producers. To ensure that the stove quality does not deteriorate over time, as was observed in other countries in Africa, random quality performance checks will be organised. This work will be contracted to a different independent organisation and is meant to complement & cross-check the regular M&E effort.• Checks based on user feedback - Complaints Facility.Consumers are suggested (through the publicity/promotional campaign) to register complaints if and when their clean stoves are not performing as expected. If a certified producer or a certified stove model receives a significant number of complaints, a verification check should specifically research this question with a view to rapidly find solutions. Depending on the level of feedback obtained, this work will be realized by the PMU or contracted to a private company.A “three-strike you’re out” rule will apply, meaning that suppliers failing to comply receive a first and second warning but get excluded from the programme if they are found at fault a third time.

61 CBN financial commitment expected: 50 billion Nairas62 Climate change sector, Finance workstream

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8.2.5 Component 5: Support to local producersAlthough most rural households use mobile telephones nowadays, they also continue to use the 3 stone open fire stove for their cooking. Simple, mainly Chinese made 2nd generation woodstoves exist that perform quite well and that would modernize the kitchen if used on a daily basis. Certain types of Rocket stoves also exist that can be assembled in the house of the beneficiary with some assistance. However, most modern stoves cannot be obtained for free and must be purchased, sometimes for prices that range from $5 to $25 or more. While there is market for these types of stoves, as demonstrated through actual sales, it is certain that not all households can afford such stoves. Since traditional rural stoves are free (three stones) or often owner-constructed from mud, clay and bricks, the step to purchasing an improved stove is large. The benefits in terms of health and fuel consumption would be large too. However, there is no financial payback time for households that collect their fuel rather than purchase it. In summary, even though rural households are looking for ways to modernize their life, a 2nd generation stove may be a bridge too far. Whether rural households are willing to pay relatively large amounts of money for a stove that reduces fuel consumption and smoke inside the kitchen remains to be seen. They are more likely to be willing to install a user constructed or a simple clay stove as a first step in modernising their kitchens.Therefore, it is likely that a specialised support programme for local stove producers is realised prior to the launch of the publicity and awareness campaign. The support programme assists stove producers to manufacture low-cost, local stoves with good performance, and assist in developing training programmes for teachers who will work with households to install better stoves at their homes. The role of women in this process is likely to be crucial as they have easy access to the target households and may be able to convince them to change or update their stoves. Participation from women empowerment groups should therefore be proactively sought. A number of states intend to, or have already set up a public stove manufacturing plant. Generally this is not in-line with international best practices, which show that a commercial private supply chain is better in innovating and supplying low-cost stoves than a public supply chain. At the same time, it appears that some local companies are becoming active in the field of (assembling) very efficient biomass stoves (e;g; Quintas T-Lud gasifier stove). Although the number of such innovative companies present in Nigeria remains unclear, they have a role to play in the transition to cleaner cooking energy in Nigeria. They are likely to cover upper market segments with larger financial means available such as institutions and small businesses as well as urban woodfuel users. Because their products can or may be able to compete with imported high efficient stoves, the support programme should look at:• Providing financial support as necessaryThe programme should look at helping stove producers cover their investment needs through adequate financing mechanisms. Since microfinance lending cannot exceed 200 million Nairas, larger stove manufacturers will need to deal with deposit banks. But commercial banks generally perceive that clean cookstove entrepreneurs do not have sufficient prospective cash flow and collateral. In this context, assistance for suppliers to scale-up could be provided in the form of a guarantee fund for buying off part of their risk. They would need to qualify and adhere to specific clean energy guidelines for the stoves to be produced. Another mechanism may be to set aside a sum of money (innovation facility-type) to be distributed through grants allocated to selected cookstove interventions via calls for project proposals (selection criteria to be set). Suppliers would be asked to propose ways to increase production or reduce production costs, and those who promise the largest changes would receive funding. The results based financing (RBF) mechanism63, based on the output-based aid principle, could also be useful for disseminating clean stoves, whereby suppliers are rewarded

63 Results Based Financing: Framework for Promoting Clean Stoves, November 2012; EAP CLEAN STOVE INITIATIVE KNOWLEDGE EXCHANGE SERIES, World Bank

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for having disseminated stoves as a way to correct initial market failure. In Indonesia a large-scale clean stove programme is being developed based on this mechanism.• Assisting in building the distribution networkIndependent distributors may also be able to benefit from microfinance loans, tapping into the supply of stoves from known stove producers that may also have their own distribution channels. There should be stringent conditions on who would be eligible, e.g., only procure approved stove models from eligible suppliers, extent the warrantees, and adhere to the three strikes or you’re out principle.• Enabling access to carbon financeThe carbon credit financing process is cumbersome for individuals and requires a minimum amount of emission reductions in order to be effective since the baseline costs are fairly high. Support could be provided to cookstove suppliers in various ways: on the one hand, there is a need for a national baseline study accessible for all to ease access to carbon financing in Nigeria; on the other hand, a number of Programme of Activities for clean cookstoves exist in Nigeria that could potentially register other clean cookstove interventions (Atmosfair, C-Quest Capital, and SME-Fund Clean Carbon Network). At the moment the market for carbon credits is at its lowest value point and it may not be worthwhile to develop new Programme of Activities for a while. • Professional training Local stove manufacturers may need technical support in order to improve their stove models or to scale up production capacity to be eligible for the national programme. They could also benefit from a range of business and management related training such as business administration, accounting etc. This support could be provided on a case by case basis, for community level demand helping produce simple first generation improved stoves, or more generally through a Stove Development Center for more sophisticated requests (see 9.2). A database of business leaders and experts with specific skills who are willing and able to be contracted to teach others their skills would be helpful.

8.2.6 Programme managementThe programme requires a strong and independent programme management unit (PMU) in charge of day to day operations on behalf of the Ministry of Environment. Its task is mainly to liaise with stakeholders, contracting, monitoring and reporting progress, and fund raising. All components will be realized by other stakeholders, mainly private firms. The PMU reports to a high level Steering Committee, which composition is yet to be determined but could comprise the main stakeholders of the programme, and should be chaired by the Federal Ministry of Environment. Members include Ministry of Finance, Central Bank, Ministry of Industries, Ministry of Rural Development, participating donors, SON, Chamber of Commerce or Private Sector Federation, representatives of stove manufacturers and fuel suppliers, NIAF, NACC, and representatives of large-scale financial supporters, etc.The PMU will operate according to an Operational Manual (OM), which describes all types of interventions and arrangements possible under the programme. The OM will be discussed and agreed with all donors and the Steering Committee. The OM will be developed once pilot activities are under way in a number of states. The PMU will directly manage all contracts dealing with the national tasks of the programme, while coordinating and monitoring the tasks at the State level.ICEED is proposed as a good candidate to undertake the PMU responsibilities. ICEED is an independent organization that has realized many if not most of the stove experiences in the country, and presently hosts the National Alliance of Clean Cookstoves. It would need to expand its capacity, and particularly employ certified accountants, procurement specialists, and technicians. It would need to develop a procurement and financial management manual that needs to be approved by the steering committee. More details will be provided in following Chapter 9.

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8.3 Geographical scopeThe programme should cover the whole of the Nigerian territory in the medium to long term (5 to 10 years). Since state buy-in and support is required for the implementation at the state level, specific support from the NCCMDP should be state-dependent. It is proposed that the national programme is implemented on a state by state basis, starting in those states were demonstrated buy-in is considerable (demand driven). To this effect, a call for proposals could be organized among states to identify the candidates with the largest buy-in. This guarantees that there are no undue administrative or organizational barriers during implementation.Proof of concept should take place in a few pilot states and currently confirmed plans exist to develop a programme in 7 LGAs in Katsina State, and in Niger State where the Governor provided substantial co-funding. Although the two state programs are called “pilots”, they should be implemented at a large scale intending to cover most of the state. The World Bank has tentatively pledged support for implementation in two additional states, one in the North and one in the South under its NewMap project, and further financial support is sought from GACC for these pilots as well as operational costs for the NACC. In these pilots, proof of concept will be pursued prior to launching the national programme. In addition, Jigawa State signed an MOU to request assistance for launching a pilot programme without pledging financial support. In Jigawa State the Governor has supported the production and dissemination of 80,000 stoves at a public stove production factory and is interested in advice on scaling up. One of the issues to be addressed is that until now stoves have been given out for free, which is not possible under the NCCMDP.In Katsina a joint ICEED – OXFAM project is in the process to negotiate EU grant funding under the 10th European Development Fund (EDF). This is an agricultural programme addressing sustainable wood supply from farmers mainly on private lands, including a programme to disseminate 50,000 ceramic stoves to reduce the consumption of woodfuel. Under this project, the NCCMDP principles will form the basis for the activities.Further discussions are underway with the Better Life for Rural African Women programme (BLP) and the Rural women security scheme (RUWES) of the Ministry of Environment to identify if and how to organize a pilot programme in several states after realizing a capacity needs assessment.

9 INSTITUTIONAL FRAMEWORK AND IMPLEMENTATION ARRANGEMENTS

9.1 Institutional and legal framework

9.1.1 National levelThe programme is “owned” by the Ministry of Environment and implemented mainly by third parties. Implementation is split between national level activities and state-based activities. An independent PMU will manage the implementation of all activities at the national level on behalf of the ministry. A high level steering committee will be set up to guide the programme and supervise implementation. The Ministry of Environment will chair the Steering Committee, and members will be the main stakeholders and funders of the programme; the PMU will act as the secretariat. The PMU reports to the Steering Committee.The Ministry, partly through the PMU, will be responsible for fund raising from all possible organizations, including Ministry of Finance, bilateral and multilateral organizations, donors, and private organizations (CSR). In addition, the possibility of carbon financing presents itself too, which could be a substantial source of funding as a reduction of 10-13m t CO2 per year could easily be obtained.

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Federal GovtOf Nigeria

Multi/Bi lateralDonor

organizationsCSR

well respected Fund Ministry

of Environment

NCCMDP20 m stoves

ICEED

Management, procurementService contracts (PR, QC, SM, ME)Equipment (lab, testing)Coordination States

MFIs

Subsidy disbursement to suppliers

Steering Committee

PMU

Figure 12: Stakeholder arrangements at national level

Figure 12 above shows the proposed organizational set up of the NCCMDP at the funding level, and Figure 13 below at the implementation level. Programme funding will be deposited into a separate account managed by a Financial Institution (FI). Although this institution is yet to be identified, the Central Bank of Nigeria (CBN) and the Bank of Industry (BOI) have been mentioned as candidates. The Nigerian Clean Energy Facility (NCEF) that is under development could possibly be a good vehicle for this purpose. Whichever mechanism is chosen, it needs to have broad acceptance and confidence from banking stakeholders and donors. The PMU develops the parameters for implementation, such as technical and safety standards to be used for all stoves, procedures for selecting eligible stove models, and determines the subsidy level. The SC approves all these parameters. The PMU further develops the national level awareness campaign and monitors progress made by states. It issues mainly service contracts to private organizations and procures equipment when needed. The PMU is staffed with highly qualified persons and operates relatively autonomously: it submits an annual work plan with budget to the SC which it can implement if approved. All subsidy payments are made by the FI to participating MFI in the different states on request of the PMU. Subsidy payments are verified by an independent auditor. In addition, annual audits will be carried out to identify & correct any misuse of funds by suppliers.There is no preference for any stove model or fuel: all stove models that pass eligibility testing can be supported. The criteria will be announced by the Steering Committee, or the Ministry of Environment, and include PM emissions, fuel efficiency, safety, and durability. Any stove model satisfying the criteria – irrespective of the fuel – can be included in the programme and benefit from the PR activities and a subsidy. It is expected that most of the eligible stoves are firewood and LPG stoves, although kerosene and charcoal stoves are likely to be included as well. Once the national laboratory identifies eligible stove models for inclusion in the programme, participating stove suppliers can submit business plans to the PMU to share their plans for disseminating eligible stoves in the country and request a subsidy. This will result in a time-based subsidy contract between the PMU and the supplier and favouring large suppliers or market aggregators. Suppliers with an intention to work nationally will sign a contract with the PMU; suppliers who intend to work mainly in a particular state will sign a contract with the State PMU.

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NCCMDP subsidy fundsMinistry

of Environment

NCCMDP20 m stoves ICEED

National Level programmePR & awareness (NACC, PR firms)Quality Control (Natl .lab, firms)Subsidy Mechanism (MFIs)M&E (M&E firms)

MFIs

Subsidy disbursement to suppliers

State Programmes (with own budget contribution )PRQCSMME

On demandNCCMDP assistance

Steering Committee

PMU

STATE PMUState

CCMDP

The level of subsidy should be subject to certain criteria: at least relative to the performance of the stove in terms of emissions and possibly fuel consumption. The cleaner the stove, the higher the subsidy. The exact subsidy distribution mechanism is not developed yet and the following ideas will be explored further:

The subsidy is requested by a supplier for a period of 6 months, for a certain number of stoves (i.e. (50,000 or 100,000) and is ideally for dissemination in a particular State; the paid subsidy is based on the actual number of stoves sold (for which proof must be made available by the supplier), and the actual subsidy level depends on the stove model. The PMU will organize a verification of the data provided by the supplier to determine if the results are real. After six months the suppliers can request another subsidy contract that will be awarded if the results for the earlier contract have been positive.

Suppliers request a certain amount of subsidy for a period of 6 months; the supplier who requests the least amount of subsidy per stove (for a specific performance level) obtains a contract for the largest number of stoves that can be supported.

Suppliers must comply with the criteria and if they fail, they will be removed from the programme; an independent quality monitoring system will be set up to verify this over time. Quality is controlled mainly at entry (during the eligibility testing), and then verified over time if performance remains as indicated during the eligibility testing.

9.1.2 State levelState level activities are an extension of those at the national level and follow exactly the same direction.

Figure 13: Stakeholder arrangements at state level

PMUs at the state level will manage clean stove activities in that state. Since state governments provide additional budget, they most likely want to appoint an organization in their state to act as PMU. This should be fine as long as the PMU adheres to the overall guidelines provided under the NCCMDP. Some due diligence on the state PMU will be required, particularly regarding the institutional capacity and the ability to work relatively independently.

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Once the pilot activities have been completed, operational manuals will exist to assist state PMUs develop their programs. In principle, state programmes pursue the same 4 components as the national programme, based on exactly the same criteria. However, to avoid dormant or non-active PMUs, competition will be introduced at the state level in two ways:

There may be large suppliers active at the national level, whether franchised distributors for one (or more) particular stove model(s) or market aggregators regrouping several smaller suppliers distributed throughout the country;

Some social advocacy or otherwise engaged organizations may exist that expressed interest in disseminating stoves and agreed to adopt the NCCMDP guidelines. The Better Life Programme for African Rural Women is such a programme, which is already in the process of organizing a pilot in three states and which hopes to scale up to a nationwide level in the near future. Sure-P also indicated its interest to become involved as PMU. If either of these pilots is successful, one could consider using BLP or Sure-P (or any other qualified organization) as a vehicle for disseminating stoves in more than one state.

9.1.3 Stakeholder mappingA first attempt to map the potential stakeholders for the stove programme is presented in the following matrix below. This will be subject to further discussions over the next few months when the programme components are further developed. As a matter of principle, setting up the distribution chain should be entirely in the hands of the private sector. Implementation of the awareness campaign and the financial support mechanism could be realized by a combination of public and private institutions. The main role for the PMU is to manage contracts for implementation and liaise between stakeholders at state level.

Project Management

Stakeholders National Level State Level Local levelMinistry of Environment

Hosts the project, chairs the Steering Committee

Steering committee (various public, donor & private members)

Coordinate between high level organizations, raise funding, monitor implementation, provide institutional support

Individual SC members could be involved in certain states with the same issues as on the national level

MoEnv PMU

Manage day to day tasks, monitor & guide project implementing partners, reporting progress in Nigeria as well as to the outside world

Anchor or focal point in key organizations, both high level support and practical implementation

Liaise with State PMUs

State PMUs Will carry out the same tasks as the MoEnv PMU but then at the state level and report back to MoEnv PMU

Anchor or focal point in key local organizations, both high level local support and practical implementation

Awareness raising

MoEnv Issue regular messages using all types of media explaining why stoves need to be updated, how, what, etc

Issue specific messages referring to the programme in the state, where to get info, where to get stoves, what support is available, etc

MWA NACC

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Stove suppliers & distributors

Advertisement campaign to buy specific stoves

Advertisements where to get stoves

Quality control

MoEnv set specifications for stove performance standards

SON

Develop standards, testing protocol, certification testingSet up & operate laboratory to test for eligibility (i.e., stove models that can be supported under the national stove programme)Request international independent certification agency to verify the laboratory and testing protocolsGACC can assist with these activities

Verify/Enforce that suppliers adhere to standards

Universities R&D testing for suppliers Stove suppliers & distributors Stove importers

Agree with standards and warrantee periodCorrect quality problems when/if arising

MoEnv PMU

Communicate standards, quality control, warrantees

Sign subsidy contract with national suppliers

Set up feedback mechanism using local companies

Set up feedback mechanism to deal with complaints

State PMUs Communicate standards, quality control, warrantees

Sign subsidy contract with state-wide or local suppliers

Set up feedback mechanism using local companies

SupportMoF

Fiscal incentives, budget for programme

State government Commitment for programme, fiscal incentives, budget for programme

Bilateral or multilateral organizations and donor organizations, and private sponsors

Budget for programme

Budget for programme

Carbon finance suppliers (CDM, voluntary market)

Agree on general rules for participation and supply of budget for programme

CBN

NCEF used as a vehicle for collecting & moving funds for project expenses to various financial intermediaries

Financial institutions Could be involved in Could be involved in the distribution of a

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(MFI/MFB) the distribution of a subsidy for stoves

subsidy (and loans) for stoves; could also be a distribution agent for certain stove suppliers

Market Aggregators, which are large companies with a nation-wide or state-wide distribution chain (groceries, hardware, petroleum companies)

Could also be a distribution agent for certain stove suppliers (wood, kerosene, LPG) , in addition to their core business. They sign a subsidy contract with the MoEnv PMU.

International stove suppliers

Import of stoves (wood, kerosene, LPG), set up national and/or state distribution chain, possibly assembly plant. They sign a subsidy contract with the MoEnv PMU.

Nigerian stove suppliers

Large-scale manufacturing of stoves (wood, kerosene, LPG), national + state + local distribution chain; They sign a subsidy contract with the MoEnv PMU if disseminating nationally or with the state PMU if disseminating state-wide only.

LPG suppliers

Set up enhanced LPG supply in a number of key non-served urban areas, and possibly LPG stove supply chain too. In principle there is no support from the NCCMDP for this; it is likely that NCEF would be interested to provide support for this (on own merits).

Kerosene suppliers Set up kerosene stove supply chain MoEnv PMU, NACC

Set up information exchange on improved stove manufacturing, supply and use, organize contacts with global manufacturers and

projects

M&E

National Bureau of Statistics

Independent monitoring of several indicators in ongoing and planned major statistical work (LSMS, Census, poverty surveys etc); focus on fuel use and improved stove use

MoEnv PMUSet up M&E mechanism, at national level and coordinate with State level, and contract organizations to realize this

State PMU Set up M&E mechanism at state level and coordinate with national

level, and contract organizations to realize thisCarbon Finance Suppliers Monitor performance of carbon credit supported stovesFinancial institutions Monitor subsidy payments for supported stovesLarge stove suppliers Monitor stove sales

9.2 Stakeholders

9.2.1 BeneficiariesHouseholds – buy a new stove model at a subsidised price; only eligible stoves (as determined by the national laboratory) are supported. Its decision includes the selection of model, decision to buy, sign a short User Agreement with the supplier, payment of the related price or optionally sign up with a microfinance bank for specific payment arrangements. Different sales models may also be used. In principle, households should benefit only once from the subsidy, although this may be difficult to verify in practice as there is no habitant registration obligation, no functioning cadastre, and no functional SIM registration system; however, the introduction of a national ID card is being piloted and could possibly be used at a later stage.

Small businesses – similarly to households, buy a new stove model at a subsidised price. Its decision includes the selection of model, decision to buy, sign a User Agreement with the

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supplier, payment of the related price or sign up with a microfinance bank for specific payment arrangements. Food stalls, restaurants, canteens, etc. are examples of small businesses that could be interested in replacing their stoves.

In addition, the stoves need to be produced and supplied, transported to product centers and suppliers, and sold to end-users. The target of more than 15 million stoves over the next 7 years will lead to quite a bit of business for the actors in the supply chain, not for the initial purchase, also for the replacement after a few years. Similarly, households are expected to switch fuel, particularly towards LPG and possibly kerosene, away from firewood and charcoal. This quantity of fuel needs to be produced and supplied, which will generate employment for quite a few people. However, the reduced use of wood fuels in the future will lead to an employment reduction.

Institutions – such as hospitals, boarding schools, get a new stove model that could be financed by state government financing; however, since the stoves have clear benefits, including a payback time, a financial contribution from the institution itself should be pursued.

9.2.2 Possible collaborating entitiesEligible stove supplier - signs a Participation Agreement with the state PMU (or MoEnv PMU if operating nationally). It is the entity responsible for supplying eligible stoves in time and of good quality, providing warranty, a 1 year minimum after-sales service and meeting other requirements in the Participation Agreement with the PMU. A supplier can be selected as being eligible by the Steering Committee, on nomination of the PMU after verification of compliance by the testing laboratory. The supplier in principle hooks up with the DSA for reaching out to beneficiaries and distributing supported stoves.Distribution and Sales Agents – Could operate within one or more participating states, and are identified as main intermediaries and/or market aggregators to disseminate eligible clean cookstoves covered by the NCCMDP in a particular state or nation-wide. They provide a link between an MFI and suppliers in a way to inspire confidence among potential users. A DSA is an organization where beneficiaries can visit and be confident that the stoves offered comply with the NCCMDP criteria. A DSA should have wide coverage in the area where they are active. Specifically included are women entrepreneurs in the more rural parts of the country, where simple owner constructed clean cookstoves are promoted. It is hoped and expected that some national retailer chains (i.e., hardware, supermarkets) show interest in this as well. They could sell eligible stoves from different suppliers including LPG and kerosene stoves. The DSA signs a participation agreement with the MoEnv PMU or State PMU for the subsidy distribution. The DSA will be asked to operate one or more Product Centers, where eligible stoves are on display.

MFI (or MFB) Partners – could be in charge of managing the subsidy system in relation with both sales and distribution agents and customers (households and small businesses); this area needs more research and discussions before a more precise mechanism can be developed.

Mobile money – popular way of making payments and receiving money through mobile phones, and could be used to distribute the subsidy.

Mobile phone company – in charge of distributing subsidies to users’ mobile phones on behalf of the programme. They could also be used for M&E purposes. These companies do not set any of the rules, they simply implement what is prescribed and make use of the publicity and increased business they get in return for this.

MWA – Ministry of Women Affairs is involved with mobilizing women groups to act as intermediaries for obtaining scale in the supply of eligible stoves.

National Environmental Standards and Regulations Enforcement Agency- in relation with the national testing laboratory could be involved in the quality assurance aspects of the M&E programme to verify that safety, efficiency and emissions standards for eligible cookstoves remain applied.

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Nigerian Alliance for Clean Cookstoves – works closely with the MoEnv PMU to take part in the implementation of some components of the national programme and coherently organises all stakeholders and provides guidance so that the national clean stove programme indeed is a programme of collaborating actors. NACC is particularly involved in the PR and awareness raising at national level.

Nigerian Clean Cookstoves Design and Testing Centre- is being established by the University of Nigeria, Nsukka National Centre for Energy Research and Development as Nigeria's clean cookstoves testing lab to conduct stove eligibility tests. If this testing centre passes the required independent assessment, it should sign a Cooperation agreement with the MoEnv PMU. It is responsible for providing testing services of stove emissions performance following an agreed testing protocol. It does not determine whether a stove is eligible but could give test results to the PMU which submits it to the committee that can decide on eligibility. If it does not pass the test, then either another centre should be set up or this one upgraded. Ideally a separate certification laboratory will be used for the eligibility testing.

Nigerian Clean Energy Facility (NCEF) – could serve as the primary financing window of the programme, regrouping all financial resources provided by the various development agencies and stakeholders supporting the programme in a flexible and scalable way. The facility is expected to be launched this year when initial financial commitment from the Central Bank of Nigeria is secured (CBN).The NCEF is currently being negotiated and set up.

Product Centres – could be established by a financing agency as a tool to facilitate the distribution of eligible stoves; at a product centre most stoves are on display and users can purchase a stove and get their subsidy contribution towards the purchase. Product Centers and DSA could be one and the same in certain states.

Public Relations/Communications Consultant - is contracted by the MoEnv PMU for developing a communications strategy plus implementation plan for advertising and promoting new stove models, and public awareness of health and environment related issues. It may well be that one PR company is needed for national work, and several companies for state-wide work.

Quality Assurance Agent - is contractually responsible to the MoEnv PMU for verifying that the quality of eligible stoves provided by Stove Suppliers is in compliance with the Participating Agreement executed between Supplier and the PMU and assisting the PMU with checking supporting documentation for subsidy payments. The QAA performs its inspections at random and at unannounced times as part of the M&E effort throughout the entire duration of the Subsidy Programme, and reports its findings to the PMU. Quality Assurance Agents are likely to be “state-specific” and working closely with the monitoring agency/consultant and the standards organization.

Standards Organisation of Nigeria – in relation with NESREA, issues a certification label – a range or various labels could be issued each corresponding to a level of performance (as for energy efficient electric appliances in Europe and the USA, using a range A to E to express the performance). This process should not add too much complexity, as performance criteria include fuel efficiency, emissions, and safety. SON will also carry out eligibility testing for stoves at the NCERD, Nsukka.

Stove Development Centres – such Stove Development Centres could be used to channel training and capacity building for stove designers and producers in particular areas where there is a large potential for this. Assistance with the design of clean stoves as well as production issues can be obtained there. These centres should not design stoves for support under the consumer subsidy mechanism, but merely support stove producers to develop and improve their own stove models. One of such centers is located at Akanu Ibiam Federal Polytechnic, Unwana, Afikpo, Ebonyi State.

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Women entrepreneurs –, promote and sell eligible stoves among local women groups, friends and family, that correspond to the need, aspirations, cooking habits and financial capabilities of local populations, mostly in rural communities.

9.2.3 Contracting authority and implementation agency

Contracting authorityThe Ministry of Environment (MoEnv) is the owner of the National clean stove programme and chairs the high level Steering Committee. It liaises with other Ministries to align policies in favour of the rapid adoption of clean cookstoves, including the provision of subsidy and possible (temporary) exoneration of VAT and reduction of import duties. It promotes the programme both internally within the Government and externally towards stakeholders and among the population, and will organise a large-scale awareness campaign. The Steering Committee will assist with these activities.

Implementation agencyAn autonomous Programme Management Unit (PMU) is proposed to manage the NCCMDP at the national level. It should have its own budget approved and supervised by the Steering Committee. The committee should include representatives from participating donors (WB, DFID), private companies (GACC, SHELL, Chamber of Commerce, etc), selected central government agencies (MoF, MWA, CBN, SON, etc). The NACC will be involved as the secretariat for the Steering Committee. The PMU will be responsible to manage all project activities at the national level, including all five NCCMDP components. Its responsibilities include developing all selection criteria (stoves, suppliers, state PMU, MFIs), dealing with national level eligible stove suppliers and producers, managing the financial support system, the selection and verification of eligible stoves, the national publicity and awareness campaign, and the M&E system. Important decisions, programme parameters, work plan and budget shall be submitted to the SC for approval. It mainly issues service contracts and/or participation agreements with the associated organizations and firms, which will be responsible for implementation and/or delivering the results. An audit will be carried out every year to review accomplishments as compared to the proposed work plan and to verify disbursements and costs. The PMU could be hosted by the Ministry of Environment, but the institutional capacity and justification might be lacking. Instead, the PMU could be hosted by ICEED, which has the largest experience with stove issues in Nigeria and hosts the NACC, and which may not have such capacity problems. The PMU should liaise closely with state-PMUs to monitor state-level activities and intervene in case of need. State-PMUs will be appointed by the state SCs and can consist of a variety of organizations mainly depending on the specific situation in-state. The Nigerian Alliance for Clean Cookstoves is likely to be involved as well, particularly in the communications/awareness campaign and with support to local producers.

9.2.4 SupervisionA high level Steering Committee will be established by the MoEnv to provide guidance and oversight to the PMU in realising project activities. The SC approves and maintains a list of eligible stove models and eligible suppliers at the national level, based on information from the national stove testing centre, and based on criteria established for the minimum performance of eligible stoves.The possibility of an Advisory Committee should be investigated, particularly for establishing the minimum performance criteria for eligible stoves as well as desired subsidy levels for each of the stove models. Possible members would be universities, research institutions, as well as financing institutions and NGOs.

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10 DURATION, COSTS AND FINANCING PLAN

10.1 Project implementation planningThe programme is expected to start towards the end of 2014 when some tangible results are in hand; it is expected to last until 2020. Major milestones still need to be worked out as are some of the tools. The approach taken is to develop all these elements on the go through the realization of state pilots. Nevertheless, there are political choices to be made in establishing the ultimate goals of the program. Even though the objectives are the same, a different approach may reach quite different results. As it is quite clear that LPG will be the ultimate solution for access to modern cooking energy in Nigeria, this may be difficult to adopt for many poor households. Nigeria has large LPG resources and this fuel is accepted by households as a good but expensive solution that may be adopted later in time. So, some households may have difficulty buying into cooking with LPG in the near future. On the other hand, the Government can also decide that households should continue to use wood, but more efficiently than before. In summary, the Government should set the target in terms of expected penetration rates of clean stoves for the different fuels, particularly LPG.Two scenarios are presented in this document: (i) focus on clean wood stoves, trying to develop sustainable markets for such stoves while simultaneously also promoting LPG and improved kerosene stoves for households that can afford it; and (ii) strong focus on LPG stoves, trying to promote as much as possible the use of LPG stoves and immediate adoption while using clean wood stoves only for those who cannot afford LPG at this time.

10.2 Indicative costs Until 2020, about 420 million US$ is needed to finance the main elements of the national clean stove market development programme focussing on wood stove market development, giving access to clean cooking solutions to an additional 15 million households reaching about 52% of all households in Nigeria. The costs for the program pursuing a more aggressive approach to adopting LPG as a clean cooking solution is about 740 million US$, leading to 29 million additional clean stoves and 75% clean energy access rate. The preliminary cost breakdown for the woodstove scenario is as follows in Table 18:

Table 18: Tentative Budget for NCCMDPComponent 2014 2015 2016 2017 2018 2019 2020 TotalPMU 4.0 4.0 4.0 2.0 1.5 1.0 0.5 28.8Awareness/Comm 10.0 10.0 5.0 2.5 1.3 60.0Supplier support 20.0 20.0 20.0 -Guarantee FacilityM&E 5 5 5 5 5 5 5 35.0Fin – Duty waiver 18 31 24 20 20 20 22 155.1Fin – VAT exempt 10 18 14 12 12 12 12 89.7Fin - Subsidy 4 7 5 5 5 5 5 34.7Total Cost (million USD) 71 95 77 46 44 43 44 420.2

Source: project team

This does not include support from state governments for the operation of state PMUs and possible state awareness campaigns.

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10.3 Financing planThe programme could be self-financing after a few years, if reasonably priced carbon credits can be obtained for the financing of parts of the programme64. Seed money is needed for the first years of the programme. Table 18 below shows a tentative, not confirmed, and indicative potential financing plan. Stoves are expected to be sold at about 60% of their normal retail prices, which is obtained through defiscalization and possibly a direct subsidy. At the moment the Government allocates more than 1 billion US$ per year on subsidies for Dual Purpose Kerosene. According to the NIAF survey in 3 States, it seems that only a small quantity of this actually ends up with poor households. Rather than continuing the subsidy, the NCCSMDP could be entirely financed if the DPK subsidy allocation for one year only can be used if spread out over the duration of the project. Thus rather than subsidizing the fuel, it is proposed to reduce the end-user cost of equipment that allows households to reduce their fuel consumption and enjoy cleaner indoor air.

Table 19: NCCMDP Financing Plan

Financing options(million USD) 2014 2015 2016 2017 2018 2019 2020 Total

GoN fiscal incentives

28.0 49.2 37.9 32.3 31.5 31.9 34.0 244.8

GON subsidy 4.0 6.6 5.3 4.5 4.6 4.8 4.9 34.7GACC 30.0 20.0 10.0 60.0Carbon financing 1.5 3.9 5.8 7.3 9.0 10.4 11.6 49.4World Bank 5.0 5.0 10.0Shell 2.0 2.0 2.0 2.0 2.0 10.0Other 5.5 8.1 11.2 0.2 25.0TOTAL 71.0 94.8 77.1 46.3 43.9 42.7 44.4 420.2

Source: project team

Note: this Table shows tentative financing sources and does not imply that funding from these sources is confirmed.

10.4 Carbon financing possibilitiesThere are a few scenarios to use carbon financing as part of the funding for the NCCSMDP given that potentially a large reduction in CO2 emissions is possible, approaching 10 million t of CO2 per year. This could become one of the larger carbon reduction programs in the World if all stoves under the programme can be included in the scheme. Table 20 below shows an analysis of the options for using the Programme of Activities that are already in place.

Table 20: Carbon registration scenarios

Cost Risk Timing Viability OverallPurchase the whole POA from one player. Make NIAF the CME

Purchase price must be negotiated with POA owner.

Ownership of POA negates the risk that CME will neglect their POA duties

Time will be spent in negotiation and in transferring CME ownership.

It is unclear whether the POA owners are willing to sell.

Reduces risk for NIAF by giving more control over the carbon process

Use two POAs and play them off of each other

Overall costs could be negotiated down in the presence of competition.

Could create un-needed confusion and complexity for NIAF. Reduces risk of relying on one POA CME.

Could double negotiating time

All three POAs are structurally capable of inclusion in The Program

Potential to lower costs and reduce risk.Could increase complexity of The Programme.

64 The budget table assumes current carbon value at USD 0.75/ton; the programme could be autofinancing by 2020 if USD 2/t were obtained

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Develop a GS CDM POA

Between 120,000 USD and 150,000 USD

Gives design and implementation control to NIAF.

12 – 18 months to register.

Pending approval from CDM and GS authorities.

Gives long-term flexibility and control, but could take longer to set up.

Use one POA (likely Envirofit)

Purchase price must be negotiated with POA owner.

POA owner neglects CME responsibilities and creates a bottleneck for the carbon revenue

Possibly quickest option

It is highly likely that any of the POAs will participate in The Program

Easiest option but poses risks for long-term implementation

Table 21 shows the carbon credit purchaser options for the programme. Because of the large potential benefits, this will need to be reviewed closely as it may actually be difficult to find a purchaser for this amount of credits.

Table 21: Carbon off-take scenarios

Cost Risk Timing Viability OverallGovernment Purchaser

Low cost due to size of potential purchases

Low Risk once government purchaser is found.

At high volumes a government purchaser will be the best option for stable pricing.

This option is the best option for the intended volumes of The Program

Voluntary leading to Government

Could lead to higher carbon purchase prices in the short term, but will increase negotiation prices.

Unable to find voluntary market offtakers

The transition to a government purchaser might create delays

Voluntary markets will cover small volumes at higher prices. Transition to government purchaser might delay

Could lead to high carbon prices in the short term if suitable contacts are lined up.

POA owner existing ERPA

Depends on negotiations with POA Owner

ERPA unlikely to be large enough to cover programme scale up.

Pending negotiations with POA owner

It is unlikely that any existing ERPA will be flexible to accommodate the scope of The Programme.

Unlikely to offer enough scope to meet the projected need of the programme.

Voluntary Markets

Costs are associated with finding buyers willing to offtake large volumes.

At high volumes the voluntary markets might become over supplied and lead to glut.

Time and energy will be needed to sell off tranche’s of credits

The voluntary market is viable only at small volumes.

Not suitable for a project this size, but could provide short term.

Compliance Markets

Low transaction cost Depressed prices persist

Credits are quickly sold

Compliance market prices likely to remain depressed for several years

Carbon price on compliance market too low to make an impact

The following table shows the options for operating the carbon financing scheme, with their associated costs, risks, delays, and expected viability.

Table 22: Operating Scenarios

Cost Risk Timing Viability OverallDevelop new operations based on a single coordinating financial institution, expanding to

Cost savings will occur from following proven processes and building out

Financial institutional risk. The coordinating entity could create a bottleneck for implementation.

Will allow for quick start pending the willingness of the selected coordinating

High viability This option will allow NIAF to focus efforts on a programme design built to meet the objectives of the programme.

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multiple entities (XacBank model)

from a singular institution

body

Develop new operations using another model

Planning and design costs will be higher upfront

This option might take too long to implement

Will take the most time of all operational options

This option is possible but will take longer

This option is not necessary given the availability of proven models for scalable improved stove subsidy programs.

Accelerate POA owner operations

Low Long term costs might be high

Unlikely to have the structural foundation to scale fast enough

Slow No POA owner currently has operations that can reach The Programs goal of 15 million stoves in seven years

Will likely require major adjustments to accommodate scale.

Given the complications in developing a scheme that allows all clean stove transactions to benefit from carbon financing and the low value of carbon for the foreseeable future, it may be wise to not pursue this at the moment. This is particularly true if the availability of grant or concessional funding from other sources is demonstrated to be available.

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11 BENEFITS OF THE PROGRAMME

11.1 Contribution to the economic and social development of beneficiary populationsThe national clean cookstove market development programme will contribute in many ways to improving economic and social conditions of the Nigerian population, please refer to Appendix 3 for more detailed information. Direct and indirect benefits are reviewed in the economic analysis based on projected market development for the different stove models. This type of analysis has a relatively high degree of uncertainty, but unfortunately there are no other ways to estimate the benefits better. Therefore, a sensitivity analysis is carried out as well, to determine the influence of the different parameters on the obtained benefits. The programme is expected to lead to households changing stoves, fuels, and/or behaviour. Any of these changes will introduce uncertainties that may or may not be easy to predict. The programme will particularly lead to direct economic benefits for clean stove users, from fuel savings as a result of the capacity of clean cookstoves to reduce fuel consumption. Stoves using the same fuel are expected to reduce the fuel consumption by 20% or more, which would result in appreciable savings for benefitting households. Although households switching to more efficient fuels are expected to reduce their energy consumption, they may not always reduce their fuel bill. A reduction of only 10% of the cooking fuel expenditures in the country is estimated to yield roughly 400 million USD per year, which would largely be absorbed by poor households. In fact, the poorest households most likely use the most inefficient stoves, and the impact on them may be the largest if they adopt a truly efficient stove. Households adopting LPG as a fuel may experience higher fuel bills though. This will depend on the price setting policy of the government: at the moment, the price is set in relation to export markets; on the contrary, for gasoline the price is set at two separate levels: one for internal use, one for exports. It is hoped that the Government realizes that there could be a huge internal market if the price were set to promote this.Indirect economic benefits for users include health, environmental benefits and improved well-being, which could also be considerable. It is certain that lives will be saved from a cleaner indoor air environment while less doctors’ visits will be needed, freeing time and reducing healthcare costs for families and subsequent burden on the national healthcare system. However, a reduction of the number of deaths as result of the programme has not been estimated for lack of data, although the reduced number of doctor’s visits has been estimated and taken into account.Environmental impacts also provide key economic benefits for the federal and state governments, reduction of deforestation as a local effect and reduced greenhouse gas emissions as a global effect. The local effect is extremely difficult to estimate, not only because of the quasi-absence of any baseline data, also because the causality between reduced wood fuel consumption and deforestation is difficult to establish without a substantial monitoring effort and in the absence of baseline data. It will require a considerable effort to determine the real impact of reduced wood offtake on the tree resources base in Nigeria, and this is beyond the scope of the activity as it will need to start with a full resource assessment and complemented by monitoring of wood fuel flows. Greenhouse gas emission reductions can be measured in the laboratory for the different stove models and projected over the entire stove market. In the absence of reliable baseline data, it was assumed that 10% of the wood savings from the programme actually contribute to avoided deforestation. The economic benefit is then calculated using average reforestation costs of the resulting saved forest cover 65.Cognitive well-being is developed through assessing one’s interactions with their environment and other people. Richer households generally tend to use more LPG, electricity than poor households which tend to use more woodfuels. When households start using more kerosene or LPG as result of the program and refrain from using woodfuels, they will perceive higher

65 See footnote 17 WHICH IS THAT NOW

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cognitive well-being. However, this has not been estimated and taken into account in the economic analysis.Employment generation is another benefits category. New stoves need to be manufactured or assembled, transported, and distributed. Incremental fuel consumption needs to be produced, transported, and distributed. As a result of the programme, substantial fuel switching is also likely to take place, resulting in jobs being created and lost as well, particularly in the woodfuel and LPG supply areas. Finally, households that stop gathering woodfuel but start buying a cooking fuel reduce their time required to procure the fuel. This remains valid throughout the fuel ladder – if one can speak about that – as electricity does not need any time to procure, LPG is procured only once a month and sometimes even delivered at home. Charcoal is easier to purchase and transport than firewood, and kerosene is even easier to obtain. When households modernize the fuels they use, they will obtain time savings for procuring these fuels. Table 23 below summarizes the economic value of the main benefits expected from the NCCMDP, woodfuel scenario and the two figures below show the distribution of benefits for the two different scenarios.

Table 23: Expected economic benefits of NCCMDP to 2020, woodfuel scenario

Benefits (million USD) 2014 2015 2016 2017 2018 2019 2020

Reduced fuel expenditures 96 126 153 177 214 245 271Reduced carbon emissions 2 4 6 7 9 10 12Reduced deforestation 6 16 24 30 37 42 47Employment generation 31 41 36 32 33 39 35Improved health 355 361 368 376 385 395 404Reduced time to procure fuel 29 80 117 146 173 193 210Total 518 628 704 769 850 923 979

Source: project team

Figure 14: Distribution of benefits for the two scenarios (NPV, million USD)

LPG Woodfuel

-2000

-1000

0

1000

2000

3000

4000

5000

reduced fuel procurement time

decreased health costs

increased employment generation

reduced deforestation

carbon reductions

fuel bill savings

Source: project team

Support to actors in the supply chain involves creating employment opportunities; the entire clean cookstove market represents a minimum of USD 80 million of equipment per year during

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the implementation of the programme (around 2 million stoves per year, focus on woodstoves), with a maximum of 140 million in year 2. In the case of the LPG scenario, the market value ranges between 160 million and 300 million US$ per year. The programme aims to ensure that a substantial part of this market is covered by national suppliers and manufacturers. There is nothing wrong with quickly importing low-cost stoves to cover immediate and initial demand, but the medium-term goal should be to manufacture these stoves locally. It is therefore recommended to make fiscal support for importe d solutions time-bound. The value added from incremental employment far exceeds the benefits of importing lower-costs stoves through imports. This will help to transform the entire market and make it sustainable, allowing households to benefit in the long-term.

11.2 Cost Benefit RatioTable 24 shows the costs and benefits stream per year as well as the Net Present Value of the sum over the programme period for the wood scenario. The NPV of the costs are 307 million USD while the benefits amount to 3595 million USD, giving a benefit-cost ratio of 11.7. The NPV of the LPG scenario are 529 million US$ giving a total benefits of 2972 million US$ (NPV). The reason that the LPG scenario has higher economic costs and lower benefits can be explained by the fact that cooking with LPG is more expensive than with wood, kerosene, and charcoal, and there are thus incremental costs; the financial support for LPG stoves is higher than for firewood stoves. However, the number of households benefitting from access to clean cooking energy under the LPG scenario is higher: 75% of all households will have a clean stove under the LPG scenario versus 52% for the wood stove scenario.

Table 24: Annual Cost Benefit Flows, woodfuel scenario

million USD 2014 2015 2016 2017 2018 2019 2020 NPV total

Costsprogramme 39 39 34 10 8 6 6 39

financial support 32 56 43 37 36 37 39 32subtotal 71 95 77 46 44 43 44 71Benefits 518 628 704 769 850 923 979 518

Net benefits 447 533 627 722 806 881 935 447

Source: project team

The programme has higher benefits than costs, and the sensitivity of the benefit-cost ratio researched as result of variations in the different parameters to determine the most important threats. The benefits of the program are most sensitive to variations in the LPG price, and the cost of a doctor’s visit. It is assumed that a substantial increase in the use of LPG, i.e., more than tripling of the current consumption, leads to a 25% price reduction at the pump. The LPG scenario is very sensitive to the projected price changes: if the price reduction is 10% only, the benefits are reduced by 60%. If the price reduction is 15%, the benefits are reduced by 40%. However, if the price reduction is 30%, then benefits increase by 20%. Without LPG price reduction, the LPG scenario is not viable. The project performance is indeed very sensitive to the price of LPG. The reason is that households are likely to increase their fuel bills in they switch to LPG, and the accounted benefits are not able to fully cover these incremental costs. However, some benefits are not incorporated, such as the ease of cooking, the increased safety in terms of burning, not blackening the pots. If the stove program does include a large push for LPG stoves, the Government should make sure that from the regulatory environment’s point of view nothing prevents an end-user LPG price decrease.The second variable with considerable impact on the economic performance of the project is the price of a doctor’s visit, and the relative improvement between the different fuels. A 20% increase or decrease in the price of the doctor’s visit (base cost is US$ 31 or 5000 Naira, although only 50% of this is taken into account to reflect the fact that many poor households will avoid going to the doctor unless absolutely necessary) will lead to a 16% increase or decrease of the economic performance of the project for both scenarios. More analysis is

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needed to better quantify this risk. The current analysis assumes that one doctor’s visit is avoided per year if households gathering firewood adopt a clean stove; for household purchasing firewood this is 1.25 visits per year, for charcoal using household 1.5 visits, for kerosene households 2.0 visits, and for LPG using households this is 2.5 visits66. See Annex X for a few graphs with project performance data, including the growth in access to clean stoves, urban and rural penetration of clean stoves, the total reduction in wood use, and the number of users of different fuels.

11.3 Significant impact on the global environmentFirst estimates show that over the 2014-2020 period, 65-68 million t CO2eq could be saved by the programme. Depending on the precise selection of stoves by beneficiaries, the annual emission reduction could be as much as 16m t per year. Although the use of LPG is considerable in the LPG scenario, in energy terms wood fuels still contribute much to the total quantity of energy used for cooking in Nigeria. Therefore, the use of clean stoves would result in a considerable reduction of black carbon emissions. It has not been possible to estimate this in more details in the absence of more precise deforestation data as well as updated consumption pattern data beyond the three states where the cooking energy survey was carried out. Depending on the evolution of the market for emission reductions, the possibility exists that carbon financing can contribute to the overall financing of the programme. At the moment, with prices of carbon at the compliance market less than 1 USD per ton, the contribution to the overall financing could still be meaningful. For the voluntary market, which shows much higher prices for carbon savings, the results of the programme could be too high to absorb. This issue is to be monitored and discussed further to see how the considerable benefits can be captured by the programme that initiated them.

11.4 Innovation and exemplary natureThe approach chosen by the national clean stove programme is quite innovative in the way that its focus is on setting the programme variables as a way of defining who and what can obtain support under the programme. This implies, among others, to develop quality standards and determine which stoves are eligible for support rather than the usual approach pre-determining one or more designated stove types for support. The entire programme is based on the fact that it sets the variables, and support is available to those who comply and are able to contribute. A second innovation is that the programme works across all fuel and stove types as an umbrella programme. It is agnostic about the choice of stoves or fuels, as long as the end results comply with the programme variables. This is fully justified and in fact reflects real life conditions, as every household will have his or her own preferences when it comes to deciding which stove and which fuel to use. Most households already use more than one fuel or one stove, and as a result of the programme, everyone who is interested to improve the situation in her/his own kitchen will be able to do so.

11.5 Collaboration and inclusivenessThe programme is ambitious and will have little chance of obtaining success if it excludes parties that are willing to participate. Therefore, all who want to participate and adhere to the common conditions set forth by the programme are welcome to join forces. Support by the programme will indeed be extended to all who are willing to participate, who fully apply the transparent rules, and who are able to deliver results. The opportunities are large indeed, and there is no use for separate programmes or efforts. This is not about politics, it is about generating economic benefits for the poorest in society.

66 This corresponds to 100% health benefits for LPG, 80% benefits for kerosene, 60% for improved stoves and charcoal, 40% for improved stoves and firewood, and 30% for improved stoves and gathered firewood

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Programme management units (PMU) can be set up in different parts of the country, with the intention to reach as many beneficiaries as possible. The selection of the national PMU will be agreed with the steering committee members, but the selection of state-based PMU will be demand driven. Their selection will depend on the potential reach and the capacity to deliver of the potential PMU, and its capacity to intervene without too much supervision and support. It might therefore be possible that more than one PMU is active in the same geographical area, and within reason that should not lead to conflicts.PMUs can be government organizations, non-government organizations, and private companies. The main criteria for selection are its ability to deliver results (i.e., clean stoves sold & delivered to households, small businesses, and institutions), on a large scale, independently, and with qualitatively good results.

11.6 Demonstrable and replicable effectsThe programme intends to start as a pilot in a few states to eventually grow nationwide. In this way, lessons learned from the first states of interventions will be exploited to trigger quicker results in other parts of the country. However, the pilots are not designed as small-scale activities and are designed to quickly grow large market shares for clean cookstoves across all types. The pilots that are pursued are: (i) in Katsina, a joint Euro 5.7 million proposal of ICEED-Oxfam has been approved by the EU Delegation; this is an agroforestry proposal for 7 LGAs with a stoves component for which 80% EU funding has been allocated; (ii) in Jigawa and Niger state, MoUs have been signed with NIAF, and implementation details are being sorted out; (iii) the Better Life Programme for Rural African Women has proposed to start a pilot in 3 states, with a view to see if this can be scaled up more considerably. In Kaduna, Kano and Ebonyi states possibilities for pilots are being discussed as well. Finally, the Ministry of Environment’s RUWES programme could be supported also.

Figure 15: Programme benefits by category (NPV 2014-2020, Woodfuel scenario)

fuel bill savings23% carbon reductions

1%reduced deforestation

4%

increased employment generation

5%

decreased health costs51%

reduced fuel procurement time17%

Distribution of economic benefits

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11.7 Economic and financial sustainability after the projectThe first budget calculations indicate that the programme could become self-financing after a few years (when based on carbon pricing of 2 USD/t, which is currently not possible at the compliance market but may be possible at the voluntary market). However, the volumes are large, and it will be difficult to find a corporate buyer for this. Even if such buyer is found to ensure the programme long term financial sustainability, some seed funding will be required during the initial years.The vision for the programme is that, although it is assisted in the beginning, it puts in place a sustainable supply chain for clean stoves. Given the large volume of stoves to be sold, it is expected that scale economies occur, allowing for the large-scale manufacturing of clean stoves in Nigeria. When reduced retail prices occur in the future, many households will opt to buy a clean stove again when they need a new stove. The net present value of the net project benefits amounts to about USD 421 million over the 7 years of the project. This is thanks to large benefits in terms of fuel savings, employment generation, environment and health. Some 42% of the benefits are from fuel savings, and 33% from health improvements (See Figure 12 above).

11.8 Ecologic and environmental sustainabilityClean cookstoves have a lower environmental impact both locally by reducing pressure on woody biomass resources and globally by reducing GHG emissions from cooking. The switch to LPG and kerosene that will eventually occur will further enhance ecological sustainability but still contribute to GHG emissions. The use of clean firewood cookstoves will reduce wood offtake and deforestation, but may not reduce black carbon emissions. Moreover, the expected scale-up of local clean cookstove production will further ensure long-term environmental sustainability. At the moment clean stoves are not available except on a small scale, and at high prices. The expected result of the programme is that clean cookstoves are available everywhere and at lower prices. One cannot and should not force households to stop using wood fuels, but ensure that they have access to clean burning stoves that minimize the consumption of wood. Eventually households might switch away from woodfuels, when their economic development includes this possibility.

11.9 Social and cultural sociabilityAwareness raising and communication is one of the five components of the project as it is recognised that clean cookstoves cannot be imposed but must rather be desired. This requires households to understand why it is important to change their stove and/or fuel now instead of waiting some time longer. It should also be understood what the consequences of adopting a clean stove are, in terms of expectations, both duties and benefits. Messages and products must be tailored to be fully acceptable by Nigerians. By encompassing all stove and fuel types, the programme wants to ensure that each household can upgrade its cooking practices within its cultural comfort zone.

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12 MONITORING AND EX POST EVALUATION

12.1 Evaluation criteria and indicators (as mentioned in the logical framework)This is developed along with the logical framework, see Appendix 2.

12.2 Evaluation ex-post planA mid-term and final evaluation should intervene as part of the M&E system. The mid-term evaluation should be led in 2017 and the final evaluation from 2020.

12.3 Communication planThe communication strategy will be detailed as one of the main components of the programme. Additionally, the PMU will communicate on implementation status and achievements all along the duration of the programme.

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13 RISKS ASSESSMENT

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Risk Category Risk Rating Risk Rating Explanation Risk Description Proposed Mitigation Measures

Timing for Mitigation: Prep/Impl.

1. Project Stakeholder Risks

1.1 Ministry of environment M

Not being committed, launching other initiatives with controversial implications (such as LPG bottle give away programmes)Subsidy programme not accepted

Early discussions and propose a detailed justification for the proposed programme including subsidy

prep

1.2 Laboratory M Not being objective and independentNot performing up to the standards

Strict supervision in the early times Independent verification impl

1.3 Local financial institutions MNot having the capacity to implement, or the willingness to be involved

Early discussions, identify their needs, and see how part of the funds can be routed through them

prep

1.4 Stove suppliers MNot having the capacity to supply at large-scale, particularly when manufactured locally

Specific training programme and credit through financial institutions prep

2. Operating Environment Risks

2.1 Country MCorruption and political interference (favoring certain technical solutions, or regions)

Build in transparent checks and balances prep

2.2 Institutional (sector & multi-sector Level) M

3. Implementing Agency Risks (including FM & PR Risks)

3.1 Capacity L NIAF/ICEED is well placed to manage implementation of the programme

3.2 Governance L Procedures in place with NIAF are solid

3.3 Fraud & Corruption L idem4. Project Risks

4.1 Design MThe design is solid but the ambitions are high; the ambitions should be high to get an impact

4.2 Social & Environmental L

There hasn’t been much attention to the issues until now, and there is no environmental monitoring in place; however, the measures are intended to improve this situation

4.2 Programme & Donor L

Until now, GACC has announced a 10m stove programme but not put in place any tailored approach to realize this. The proposed programme is being developed in conjunction with

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GACC.

4.3 Delivery Quality M

The verification system still needs to be developed but is intended to address this. The main issue is the geographic coverage, if stoves are produced throughout the country, how to maintain the quality.

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APPENDIX

Appendix 1 – Cookstove Interventions in NigeriaAppendix 2 – Logical frameworkAppendix 3 – Economic Analysis

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Appendix 1 –Cookstove Interventions in NigeriaOrganisation Partners Products How/where (target) Financing Status/PerspectivesDARE Lernen - Helfen - Leben

e. V. (German NGO), atmosfair gGmbH (GermanCarbon offset organization – upfront financier).

Save80 very efficient wood stoves, produced in Germany, assembled locally

Had target of 12.500 households in northern Nigeria (Pilot Phase) but has upscalled to a target of 100,000 households per annum country wide

CDM, Instalmental payments (without interest) after endorsement by Group Head:- District Head (Hakimi).- Village Chief.- Imam- Pastor

Production in Nigeria, when enabling environment andpolicy available to allow setting up of own productionfacilities.Scaling up dissemination to other parts of Nigeria since 2012: Has sold over 16,000 SAVE80 to customers ata reduced price all over Nigeria -thanks to CDMpre-financing.

SOSAI C-Quest Capital (CDM), Solar Sisters

Very efficient woodstoves (Envirofit, Stovetec, Ecozoom)

Based in Kaduna, early focus on Kaduna state to then go national. Designed to target over 1.2 million households, with the potential to be expanded

CDM and consumer, carbon money managed by C Quest who provide the stoves at already reduced prices

Currently Assembling in Kaduna Nigeria, have a Manufacturers licence and MAN membership to Produce in Nigeria sometime in future. Currently doing a 2nd pilot have so far distributed a total of 1500 stoves in Nigeria.

DEVA StoveTec Efficient woodstoves Targets rural Agricultural communities in some States in Southern Nigeria.

Consumers About 2000 stoves have been distributed.

C-QUEST Envirofit, Shell Foundation

Envirofit stoves (wood and charcoal)

The work will begin in villages in Kano State in the north of the country in March 2011 and is then planned to extend to other parts of the country based on demand.

CDM and consumer ?

SME FUND Set up the Carbon Credit Network

Biofuel gel produced from sawdust, grass and waste paper ($1 per liter) and

Stoves are imported from Singapore, ethanol partly produced locally (one plant in Abuja and

Energy in Common, United States, soon Carbon finance

Want to scale-up production to meet the demand.

DRAFT National clean stove programme

Organisation Partners Products How/where (target) Financing Status/Perspectivesassociated stoves two under construction

in Lagos). Products sold in 20 states through social groups and in green shops with local green ambassadors.

Mfaminyen Conservation Society

Wild Gift Leadership Network, Cross River state government

Ekwuk efficient woodstoves

Rainforest communities in Cross River State

Own-building of efficient stoves

Completed the pilot phase of Nigerian Clean cook Stove Programme (10,000 Ekwuk stoves built) and has scale up to commercial scale since 2011

OANDO Lift Above Poverty Organization Microfinance Bank (LAPO) and Alitheia Capital to provide soft loans for low-income households in Nigeria to purchase Liquefied Petroleum Gas (LPG) or cooking gas

OGAS 3kg cooking stove, an integrated offering that comes with a cylinder, burner, and gas.

Low-income households. Available to end-users via the company’s existing network of over 500 retail stations and a growing network of authorised distributors. 5 Urban Centers to start: Lagos, Port Harcourt, Kaduna, Abuja and Warri

Soft loans via LAPO Microfinance Bank, financed by Alithea, funded by Oando

Quest to provide innovative and affordable LPG cooking stoves to an estimated 5 million low income households over the next five years

TECHNO OIL Agreement with an Asian company for the manufacture of the gas stoves

3kg gas stove&cylinder

The new TechnoGas stoves are targeted at the low income group that relies on kerosene.

Consumer Align with the policy drive of the Lagos State Government to increase the use of cooking gas among a significant proportion of the populace within the next four years

SHELL ? ? ? ? ?GIZ Shea butter production

communityInstitutional stoves Installed prototype of

efficient mud wood stove in shea butter production community

GIZ Still active ?

USAID International Centre for Energy, Environment and Development (ICEED)

Institutional and household stoves

Efficient Institutional and household fuelwood stoves targeted at 100

USAID and consumers

The project has started in Ebonyi State with 60 litre institutional stoves to be installed in 30 schools beginning May, 2013 and 100

93

DRAFT National clean stove programme

Organisation Partners Products How/where (target) Financing Status/PerspectivesSecondary Schools with boarding facilities and 200 pilot households in 2 states .

households and is expected to be extended to schools in Niger State.

Project Gaia HydroChem of Linde AG, NEPAD Pan-Africa Cassava Initiative, Delta state Government

Methanol made from flaired gases and associated stoves

Delta state Funded by United States Environmental Protection Agency (USEPA), Pilot stoves provided to the families

Pilot phase completed, now the Delta State government is working closely with HydroChem of Linde AG, a technical partner on the Project Gaia team, to develop a natural gas-to-methanol plant to capture this untapped energy. Project Gaia is working with the NEPAD Pan-Africa Cassava Initiative to convert flared gas to methanol by building a methanol plant to provide alcohol fuel for alcohol stove users.

Toyola Energy

Improved Kenyan Giko-type charcoal stoves

Ogun State with plans to reach other parts of the country.

Carbon finance (VER Gold Standard), Consumers

Newcomer to the Nigerian market but has sold up to 20,000 units till date. Also has a factory which is expected to start production by end of 2013.

Quintas Energies

High efficent T-Lud gasifier woodstove. For households, institutional and small businesses uses

Akure (Ondo state), Lagos and Abuja (FCT)

Consumers Started commercialisation end 2012. Wants to increase production (10 stoves per week) and distribution.

Tower Aluminium

Envirofit High efficiency woodfuel and charcoal stoves

In Lagos at the moment through social groups

Consumers Products already available in Lagos with intended expansion to other parts of the country. There is a plan to start a manufacturing plant in Nigeria by the end of 2013.

Alternative Energy Fund

Jigawa State Government

Improved wood stoves

Jigawa State Jigawa State Government

Has produced and disseminated 70,000 improved wood stoves free to households in Jigawa as a means of protecting the environment. There is however plan to commercialise the stoves starting

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DRAFT National clean stove programme

Organisation Partners Products How/where (target) Financing Status/Perspectivesfrom 2014.

Lagos state government

CDAs, Community development associations

LPG small stove & cylinder

Lagos state State governement has its own microfinance bank providing loans.

MoEnv, RUWES project (Rural Women Energy Security)

A variety of improved stoves across all fuels (Envirofit, Save 80, Bananagas, Wonderbag…)

Getting rural women organised to acquire small renewable energy products (solar lamps and appliances) across the country. 1 million women registered

Micro-loans provided: 6-month stove repay for users (+buy-back scheme), 2 years for women entrepreneur. IFC/USAID and BOI involved to mitigate the risk

To be launched in May 2013

MoEnv, NCCS(National Clean Cooking Scheme)

A sub project under the RUWES, was launched in 2012 in partnership with the Bank of Industry

The Scheme has benefitted ten (10) pilot Secondary Schools in Kaduna State which had their kitchens retrofitted with LPG.

Contribution of the BOI, with an intervention from the United Nations Development Programme (UNDP)

The scheme is expected to kick off in Borno and Bauchi States as the two state governments have indicated interest in retrofitting high volume firewood consumers such as schools, hospitals, hotels and prisons considering the rapid desert encroachment in the states.

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Appendix 2 –Logical frameworkGoal Specific Objectives Expected outputs Indicators

To increase access to modern and clean cooking energy for households, small businesses and institutions in Nigeria, with an emphasis on the poor

Carry out a promotional and awareness campaign to convince households and small businesses to quickly adopt eligible clean cookstoves

Tailored messages and communication materials are developed for each relevant media & target audience

Number of media covered

Messages developed

Number of communication materials produced and distributed

Number of demonstration/awareness raising sessions organized

Percentage of households/institutions/small businesses knowing about improved stoves and related issues

Households, institutions and small businesses are informed of the benefits of improved stoves and risks associated with the use of traditional fuels and stoves

Households, institutions and small businesses are informed of where to buy, what to look for and what the warrantees mean for the stove models

Ensure quality control through the identification of eligible cookstoves and the creation of an active verification process

A stove testing facility is set-up Testing laboratory operational and number of tests carried out/stoves tested

Written testing protocols

Written performance standards / SON registered stove performance standards

List of eligible stove producers and stove models available

Monitoring system in place for ongoing quality control

Testing protocols are set-up

Performance standards are agreed

Eligible stove producers and products are selected

Ongoing monitoring of quality control of eligible stove models and producers is carried out

Realize an operational subsidy-system stimulating accelerated stove replacement and adoption

Appropriate financial support level for improved stoves is identified

MoU(s) signed with institution(s) involved in delivery of the subsidy

Number and level of subsidies and stoves distributed

The delivery mechanism to deliver the financial support is developed

Households make use of the subsidy mechanism in place to acquire new stoves

Ensure proper Monitoring & Evaluation, to verify performance of the stoves and estimate the impact of the

Installation checks are carried out Number of installation & random checks carried out

DRAFT National clean stove programme

programme Publications on the impacts of the programme (health, fuel savings, CO2 emissions etc.)

Updated M&E database

Volume and financial value of carbon credits generated

Performance of the stoves in operation is regularly monitored by statistical sampling

Random checks are carried out

User feedback is integrated via a complaints filing system

CO2 emissions are monitored so as to obtain carbon finance

Support local stove producers for quality enhancement and scaled-up production capacity

A mechanism is set-up to provide financial assistance to local stove producers

Number of stove producers supported

Number of distribution networks/outlets developed

Number of producers with access to carbon finance

Number of training courses organised

Assistance is provided for building the distribution network

Access to carbon financed is facilitated for individual producers

Professional training is provided

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Appendix 3 –Economic Analysis T O B E U P D A T E D

Basic assumptions from the most recent 2013 NIAF survey were used so as to build economic projections of the proposed programme. Energy prices and breakdown of fuel users in each zone were weighed using state population while quantities used were calculated based on the number of respondents to derive average fuel expenses.

Energy prices (N/kg or l) Energy quantities/month (kg or l)

Fuel expenses/month (N)

Fuel expenses /month ($)

Main fuel used

Urban Rural Urban Rural Urban Rural Urban Rural Urban RuralFW collected 0.0 0.0 108.7 129.7 0.0 0.0 0.0 0.0 6% 40%FW purchased 19.4 13.7 147.2 154.0 2,104.5 1 782.7 13.4 11.4 30% 38%Charcoal 60.6 44.9 61.3 48.0 6,592.3 5 822.3 42.0 37.1 6% 6%Kerosene 147.1 143.4 11.8 8.7 15,999.7 18 600.5 101.9 118.5 42% 14%LPG 240.3 263.8 14.5 9.6 26,127.4 34 217.3 166.4 217.9 11% 1%

Targets for adoption of clean cookstoves and f uel switches during the lifetime of the programme

Targets: energy efficiency (% of all HH using that fuel by the end of year 7) Urban Rural

Use of improved kerosene stoves 30% 15%Use of improved charcoal stoves 75% 50%Use of improved FW stoves 75% 50%Use of improved FW gathered stoves 50% 25%

Targets: fuel switching (% of all HH using that fuel by the end of year 7) Urban Rural

Annual growth LPG (of old time users) 15.0% 10%Nr of rural users in y1 ('000 hh) na 50Switch from kerosene to LPG 25% 10%Switch from charcoal to kerosene 35% 25%Switch from FW purchased to charcoal 15% 10%Switch from FW purchased to kerosene 10% 5%

DRAFT National clean stove programme

Switch from FW gathered to FW purchased 0% 0%

Summary results: differences between the baseline scenario (no changes in fuel or stove uses) and intervention scenario

Incremental fuel users (million HH) in 2020 over period

LPG users 2.7 13.3Kerosene -1.1 -5.0Charcoal 0.8 3.5Fw purchased -2.0 -9.1Fw gathered -0.5 -4.1

Incremental fuel consumption ('000 t) in 2020 over period

LPG 457 2247Kerosene -219 -1039Charcoal 309 1335Fw purchased -6059 -27128Fw gathered -303 1790

HH with access to modern cooking energy (million) in 2020 % of HH

- baseline 12.9 37% - scenario of Programme (NCCMDP) 25.2 72% - total nr HH in 2020 34.7Additional HH with access (2020) 12.3

CO2 emissions (million t) in 2020 over period

- baseline 66.5 501 - scenario 57.4 466 - total savings 9.1 35.1 - as % 14% 7%

Total Wood off take (million t) in 2020 over period

- baseline 41 310

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DRAFT National clean stove programme

- scenario 37 294 - total savings 4 16 - as % 10% 5%Distribution of savings - wood for charcoal making -54% - FW purchased 165% - FW gathered -11%

Markets for clean cookstoves

Urban stove markets (millions) 2014 2015 2016 2017 2018 2019 2020

LPG 0.62 0.66 0.47 0.38 0.48 0.17 0.18Kerosene 0.33 0.65 0.43 0.33 0.22 0.11 0.11Charcoal 0.19 0.37 0.25 0.19 0.12 0.06 0.06FW purchased 0.65 1.30 0.87 0.65 0.43 0.22 0.22FW gathered 0.09 0.19 0.13 0.09 0.06 0.03 0.03Total Urban 1.88 3.17 2.15 1.63 1.32 0.59 0.60

Rural stove markets (millions) 2014 2015 2016 2017 2018 2019 2020

LPG 0.09 0.02 0.03 0.04 0.05 0.05 0.04Kerosene 0.05 0.02 0.03 0.05 0.06 0.06 0.05Charcoal 0.05 0.02 0.03 0.05 0.06 0.06 0.05FW purchased 0.39 0.13 0.26 0.39 0.52 0.52 0.39

FW gathered 0.23 0.08 0.15 0.23 0.30 0.30 0.23

Total Rural 0.80 0.25 0.50 0.75 1.00 1.00 0.75

Total markets for stoves (millions) 2014 2015 2016 2017 2018 2019 2020

LPG 0.71 0.68 0.50 0.42 0.53 0.22 0.22Kerosene 0.37 0.67 0.47 0.37 0.28 0.17 0.16Charcoal 0.23 0.39 0.28 0.23 0.19 0.12 0.11FW purchased 1.04 1.43 1.13 1.04 0.95 0.74 0.61FW collected 0.32 0.26 0.28 0.32 0.36 0.33 0.26

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DRAFT National clean stove programme

Subtotal 2.68 3.43 2.65 2.38 2.31 1.59 1.35Accumulated 2.68 6.11 8.76 11.14 13.46 15.05 16.40

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DRAFT National clean stove programme

Appendix 4 –Project Performance

Woodfuel Scenario

1 2 3 4 5 6 7 80%

10%

20%

30%

40%

50%

60%

Access to modern stove

all modern stoves combined

1 2 3 4 5 6 70%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

penetration rate modern woodfuel stoves

urbanrural

1 2 3 4 5 6 7 80%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Reduction in fuel use

FW purchase urbanFW gathered urbanFW purchase ruralFW gathered rural

1 2 3 4 5 6 7 8 -

5

10

15

20

25

30

35

40

45

total wood offtake (m.t/yr)

with NCCSMDPbusiness as usual

102

DRAFT National clean stove programme

1 2 3 4 5 6 7 8 -

1.0

2.0

3.0

4.0

5.0

6.0

7.0

urban users

LPGkeroseneFW-pcharcoalFW-g

1 2 3 4 5 6 7 8 -

1.0

2.0

3.0

4.0

5.0

6.0

7.0

rural users

FW-gFW-pkerosenecharcoalLPG

LPG Scenario

1 2 3 4 5 6 7 80%

10%

20%

30%

40%

50%

60%

70%

80%

Access to modern stove

all modern stoves combined

1 2 3 4 5 6 70%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

penetration rate modern woodfuel stoves

urbanrural

103

DRAFT National clean stove programme

1 2 3 4 5 6 7 80%

10%

20%

30%

40%

50%

60%

70%

Reduction in fuel use

FW purchase urbFW gathered urbFW purchase rurFW gathered rur

1 2 3 4 5 6 7 80%

10%

20%

30%

40%

50%

60%

70%

80%

Access to modern stove

all modern stoves combined

1 2 3 4 5 6 7 8 -

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

urban users

LPGFW-pkerosenecharcoalFW-g

1 2 3 4 5 6 7 8 -

1.0

2.0

3.0

4.0

5.0

6.0

7.0

rural users

FW-pFW-gkeroseneLPGcharcoal

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