Cleanstar Mozambique Lda. - Clean Cooking Solution. Climate Finance in Mozambique Maputo, 18 February 2014

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1 Cleanstar Mozambique Lda. - Clean Cooking Solution Climate Finance in Mozambique Maputo, 18 February 2014

2 CleanStar Mozambique Lda (CSM) is a clean energy venture that whose business model offers a commercial solution to the interconnected social and environmental problems that result from the use of charcoal as a cooking fuel in urban households in Maputo, Mozambique. The solution is bio-ethanol fuel based cookstove sold under the NDZiLO brand (meaning flame), which in turn displaces the use of charcoal. By displacing charcoal consumption, deforestation caused by its production is mitigated in addition to offsetting GHGs. The stove and fuel are meeting an ever growing demand in the market for an alternative to increasingly expensive charcoal which has tripled in price over the last five years (as in many other countries in Sub Saharan Africa).

3 The charcoal industry in Africa >$10B annual consumer spend $25-$35 / month per household in large cities 10-30% of average incomes 5M acres annual forest destruction Indoor smoke kills women & kids

4 Charcoal-based deforestation Causes land degradation and flooding Soil erosion leads to food insecurity 10kg of wood = 1kg charcoal Major source of GHG emissions

5 Environmental impact Charcoal is predominantly produced in an unsustainable (non-renewable) manner within natural forests of up to 400 km radius from Maputo. This has had serious consequences for deforestation and carbon stock depletion in rural areas It is estimated that charcoal consumption in Maputo leads to the annual depletion of ha of forest per year. Charcoal production is also rudimentary and extremely wasteful, at times requiring up to 10kg of wood to produce 1 kg of charcoal Traditional kilns are also responsible for the emission of GHG through the carbonization process In some homes, cooking for three hours per day exposes women to similar risks as smoking two packets of cigarettes daily (WHO, 2002). The burning of charcoal is the second greatest contributor to green house gases in the cities after the automobiles 5

6 Mozambique faces the same social & environmental challenges as much of sub-saharan Africa 75% of urban households cook with Charcoal Charcoal price has doubled in 3 years as forests recede Adverse indoor air pollution & climate change impacts Forests cleared for Charcoal production Current energy production systems are inherently unsustainable 6

7 Cooking in Mozambique Major contributor to carbon emissions 90% of households in Maputo report using charcoal at least once a week 75% exclusively rely on charcoal for all cooking 98% use inefficient/unimproved metal charcoal stoves (10-15% efficiency) The use of charcoal for cooking is a large emitter of Green House Gases 7

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9 Our product is targeted towards the lower income segment of cooking fuel market Cooking Fuel Business Strategy PRODUCT : Ethanol-based Cookstove & Cooking Fuel Household Cooking TARGET : 20% of urban market = 80, ,000 households POSITIONING : Affordable modern cooking solution that is easier, cleaner and safer to use than charcoal PRICING : Fuel priced competitively with charcoal ($25/month) Stove priced comparably with LPG stove, mobile phones ($45/stove) 9

10 NDZiLO cookstove Using the NDZiLO stove reduces dirty emissions from burning charcoal NDZiLO is a sustainably produce carbon neutral fuel NDZiLO cooking system reduces GHG emissions by at least 3 tons CO2/hh-yr vs. Charcoal If 20% of households in Maputo shift to using NDZiLO, a total of at least tonnes of CO2 can be reduced per year. 10

11 THE NDZILO COOKING SOLUTON IS DESIGNED TO MEET TARGET CUSTOMER NEEDS Sturdy pot holder Large space between burners to allow for use of large pots High quality metal finish Lever to precisely control flame (only moving part) Key selling points: Affordable: Fuel can be purchased in small / daily volume Fast: Instant ignition & extinguish; double efficiency of Improved charcoal stoves Clean: Zero smoke or odor; no soot on walls; no soot on hands; quality assured. Safe: Fuel not pressurized; parents comfortable with children using it,

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13 Ndzilo Store Hulene Expresso

14 NDZiLO Customers & Retail Outlets 14

15 Food Vendors Using NDZiLO - Mercado Museu

16 Sales to Date 16

17 Carbon Emission Reduction To date Ha Annualized Offsets Stoves 31,260 Charcoal Displacement (kg) 22,819, ,198,00 Wood Discplacement (kg) 0 CER (tonnes of carbon per year) 211,005 Wood avoided (Mᶟ) 304,264 Forest not cut (ha) 17, ,005 CERs Kg/day 17

18 CDM Process Clean Cookstoves The End User Project Owner: CleanStar Mozambique THE PROJECT Project Developer: Impact Carbon 3 rd Party Auditor, UN/CDM Emissions Reductions Carbon Offset brokers (BAML) $ 18

19 Direct Benefits of Carbon credits to the Project Benefits from Carbon Finance Provided financing to subsidize cookstove and entry into market Created a business revenue stream Underwrote cost of market development Improves bankability of project Sustainability Allow for long term operation of project, as economic incentive behind generating more carbon credits; Regular monitoring by carbon crediting institutions allow sustained quality of the project and ensures high standards are met and upheld 19

20 Questions? Perguntas? Clarifications? Clarificações? Comments? Comentários? Suggestions? Sugestões? For more information please contact Emmett Costel: