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Commercial ventures for increasingFood & Energy Security throughsmallholder-based agroforestry,bioprocessing, and retailin...
Charcoal industry across Africa• Over $10 billion annual consumer spend• $25-$35 per month per urban household• Between 10...
Cooking shouldn’t kill“Indoor smoke from cooking =2 packs of cigarettes per day”“2 million early deaths per yearfrom indoo...
Charcoal-based deforestation• Causes erosion, land degradation & flooding• 10kg of wood = only 1kg charcoal• Major source ...
Rural communities have few other sources of cash income than CharcoalSubsistence rainfed farming• Slash – burn – degrade –...
African Urban Food Demand• Fast growing cities need staple foods• Have no linkage to own rural areas & farmers• Increasing...
CleanStar Mozambique is a commercially-profitable andenvironmentally-restorative venture designed to help meetAfrica’s gro...
The venture has three main revenue streams• Fuel made from surplus Cassava ($1.60/L)• Modern, high-performance cookstove (...
The foundation of CleanStar’s business model is low-inputagroforestry and conservation agriculture withsmallholder-farmers...
Over 1000 smallholder farmers have adopted CleanStar’sintegrated food & energy farming system as of early 2013Baseline far...
CleanStar’s “Community Agriculture Centers” provide training,planting material & tree seedlings and procure surpluses12
Long term impact chain:↑ crop diversity ↑ tree cover↑ soil health ↑ crop yields↑ nutrition ↑ incomeFarmers are starting to...
Procured materials are transported to CleanStar’s integratedfood & energy bioprocessing plant, 1 hour awaySales team under...
The cooking fuel is transported and stored in CleanStar’sfacility in MaputoJan 201315
Final bottling, quality control and warehousing is alsodone at this facilityJan 201316
The Ethanol cookstoves and fuel are sold via CleanStar’sown shop network in MaputoSales team undertakes in-homedemonstrati...
CleanStar is on track to achieve its goal of 2000 smallholder farmers supplyingthe company, and 80,000 households using it...
19The venture has raised over $20 million in commercial equity and debtinvestment Impact venture developer, head office i...
CleanStar has developed an “Impact Accounting & Sustainability Assurance” systemto measure impacts of the venture and buil...
DakarFreetownAntananarivoLilongweKigaliKampalaLusakaAccraDar es SalaamCotonouLuandaYaoundeLagosMonroviaKinshasaHarareAddis...
• 5 million women save time & improve quality of lifeby avoiding need to buy, handle & ignite charcoal• 25 million people ...
Brazil•Macauba forestry in Minas Gerais•Silvi-pastoral systems in Para•Biomass pellets in RJ stateMozambique•Clean Cooking...
www.cleanstarmozambique.comContactSagun SaxenaManaging PartnerCleanStar Ventures LLCNew York, USAs.saxena@cleanstarventure...
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CleanStar Mozambique: A commercial case study of sustainable food and biofuel production with smallholder farmers

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Presentation by Sagun Saxena, Managing Partner, CleanStar Ventures, presented at the "IFAD-ICRAF Biofuel Program" side event which took place along the sidelines of the thirty-eighth session of the Subsidiary Body for Scientific and Technological Advice (SBSTA 38) in Bonn, Germany June 5, 2013.

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Transcript of "CleanStar Mozambique: A commercial case study of sustainable food and biofuel production with smallholder farmers"

  1. 1. Commercial ventures for increasingFood & Energy Security throughsmallholder-based agroforestry,bioprocessing, and retailing ofsustainable food & energy productsSagun SaxenaManaging Partner, CleanStar Venturess.saxena@cleanstarventures.com5th June 2013Bonn, Germany
  2. 2. Charcoal industry across Africa• Over $10 billion annual consumer spend• $25-$35 per month per urban household• Between 10-30% of average income• 5 million acres of forest destruction annuallyCharcoal is the primary cooking fuelfor 75% of Maputo residentsCharcoal reaches the capital Maputoon trains from forest areas2
  3. 3. Cooking shouldn’t kill“Indoor smoke from cooking =2 packs of cigarettes per day”“2 million early deaths per yearfrom indoor air pollution”- World Health OrganizationUsing charcoal impacts women’s health and quality of life4
  4. 4. Charcoal-based deforestation• Causes erosion, land degradation & flooding• 10kg of wood = only 1kg charcoal• Major source of Greenhouse Gas emissionsCharcoal production has wiped out neary a third of Africa’snatural forest cover (FAO)5
  5. 5. Rural communities have few other sources of cash income than CharcoalSubsistence rainfed farming• Slash – burn – degrade – move cycle• Lack planting material, inputs, training• Lack local markets to sell surpluses• Extremely vulnerable to climate shocks• Rely on Charcoal for cash income6
  6. 6. African Urban Food Demand• Fast growing cities need staple foods• Have no linkage to own rural areas & farmers• Increasingly dependent on imports & aid• High international prices + logistics penalty• Extremely vulnerable to global price shocksMeanwhile…7
  7. 7. CleanStar Mozambique is a commercially-profitable andenvironmentally-restorative venture designed to help meetAfrica’s growing food, energy and livelihood challenges• CleanStar partners withsmallholder farmers toproduce a range of crops• Introduces new plantingmaterial and practicesCleanStar’s business model is vertically-integrated from “soil to stomach”• CleanStar procuressurpluses directly fromfarmers and processesthem into food & cookingfuel products for urban use• CleanStar sells the food andcooking fuel products via itsown distribution centres,shops and resale points,under NDZiLO brandCleanStar harnesses urban demand for cooking fuel to drive rural development & eco-restoration8
  8. 8. The venture has three main revenue streams• Fuel made from surplus Cassava ($1.60/L)• Modern, high-performance cookstove ($35/stove)• “Clean, safe and fast cooking solution with fuelspend matching charcoal”1) Ethanol-based cooking solution -- affordable alternative to Charcoal2) Packaged food products – affordable alternatives to imports• Fortified Cassava Flour to replace imported wheat• Soya cooking oil to replace Palm Oil• Various poultry feed products to replace imported soya meal• Year-round supply of dried, cleaned, and packaged beans, groundnuts, sorghum3) Certified Carbon Emissions Reductions (CERs)• Generated from fuel-switching of charcoal with ethanol-based fuel for cooking• Certified under Kyoto Protocol Clean Development Mechanism and traded9
  9. 9. The foundation of CleanStar’s business model is low-inputagroforestry and conservation agriculture withsmallholder-farmersRotation 1Rotation 2Rotation 3• CleanStar supplies plantingmaterial & guidance• The 1 ha agroforestry zonehas rows of fast-growingleguminous trees/shrubs• These rows are regularlypruned and leaves mulchedto improve soil fertility• Alleys are planted withannual crops rotations• A 1 ha forestry beltcontains indigenous treesand Pongamia• The forestry belt protectsagainst wind & fire andenhances biodiversity• Pongamia produces inedibleoilseeds after 5-6 yearsSubsistenceFoodProcessedintoFoodProdProcessedintoEthanolProcessedintoDieselAltPruningasfirewood/mulchEcosystemservices(z)Cassava X x XCowpeas* X X x xSoyabean * x X xSorghum X x s xGroundnuts*X X xNativetrees*x XPongamia* y X x xLucaena* y x XPigeonpea* x x XForestry Shelterbelt ZoneX : main uses; x : secondary uses; y : leaves can be used as fodder; s: if sweet variety of sorghum; * : leguminous /nitrogen-fixing ; ** : cycle nutrients, promote biodiversity, sequester CO2, provide shade, retain moistureAgroforestry ZoneMix of multi-purpose crops & treesFarmers must follow CleanStar’s Farming Model to qualifyas “certified suppliers” of raw material to the companyIntegrated food & energy farming system boosts local food security & cash income10
  10. 10. Over 1000 smallholder farmers have adopted CleanStar’sintegrated food & energy farming system as of early 2013Baseline farming is subsistence-onlyLack of inputs/storage/marketsCleanStar has identified high-yielding disease-free cassava, soya, beans, sorghum, pigeonpeas through collaboration with IIAM & IITACleanStar provides free planting material andguidance to farmers that agree to adopt systemSurplus cassava, beans,and grain are procuredat local collection spotsby CleanStar’s field staffKEY ELEMENTS OF SYSTEM• Better planting material• Crop rotation• Agroforestry• No burning• Integrated pest mgmt 11
  11. 11. CleanStar’s “Community Agriculture Centers” provide training,planting material & tree seedlings and procure surpluses12
  12. 12. Long term impact chain:↑ crop diversity ↑ tree cover↑ soil health ↑ crop yields↑ nutrition ↑ incomeFarmers are starting to see the benefits of more sustainableand resilient farming practices13
  13. 13. Procured materials are transported to CleanStar’s integratedfood & energy bioprocessing plant, 1 hour awaySales team undertakes in-homedemonstrations and take ordersInitial capacityof 2 million L/yrof cooking fuel+ flour mill+ soy oil mill+ food packingThe plant has been custom-designed by ICM Inc (USA ) to produce cooking fuel from cassava14
  14. 14. The cooking fuel is transported and stored in CleanStar’sfacility in MaputoJan 201315
  15. 15. Final bottling, quality control and warehousing is alsodone at this facilityJan 201316
  16. 16. The Ethanol cookstoves and fuel are sold via CleanStar’sown shop network in MaputoSales team undertakes in-homedemonstrations and take ordersCustomersvisit shopsto fulfilordersand collectstoves &fuelCustomersreturnevery day /week to buymore fuelNDZiLO shop network being rolled outin low-income neighbourhoods17
  17. 17. CleanStar is on track to achieve its goal of 2000 smallholder farmers supplyingthe company, and 80,000 households using its stoves by late 2014• 2000 smallholderfarmers in centralMozambique (2 ha ofcultivation each)• 1000 ha of company-leased farms forR&D, multiplication,training• Multiple smallcommunityprocessing centresclose to farmers• Supply inputs &technical support• Equipment forprocurement &light processingFarming Processing Distribution• Main bio-processing plantoff Beira Corridor in Dondo• Parallel Ethanol CookingFuel, Diesel Fuel and Foodprocessing lines• Major bottlingplant & warehouse• 80,000 cookstovescustomers buyingfuel from our 30shops and 250resellers in Maputo• Wholesale anddirect packagedfood and feed salesOperational Targets for Achieving Profitability in late 201418
  18. 18. 19The venture has raised over $20 million in commercial equity and debtinvestment Impact venture developer, head office in New York Ventures under development in Africa, Latin America and Australia Global leader in enzymes for bioenergy and agriculture $2 billion revenue & 6,000 people US ethanol process technology contractor Built 6.7 billion gallons of ethanol capacity globally over last 30 yrs Leading global bank, $50 billion environmental commitment Innovative financier in carbon and climate solution markets Impact investor in post-conflict societies, part of Soros group Invests in sustainable businesses that alleviate poverty Danish government-owned Development Finance Institution Invests in sustainable businesses in least developed countriesSoros EconomicDevelopment Fund
  19. 19. CleanStar has developed an “Impact Accounting & Sustainability Assurance” systemto measure impacts of the venture and build case for replicationProtectingForests & SoilEnrichingLivesBoosting FoodSecurityDelivering SustainableEnergyEnding the “slash-burn-degrade-move” baselinefarming system:By switching subsistencefarmers to permanentagroforestry cultivationReducing charcoal-drivendeforestation:By offering a clean, non-forest-based alternative to charcoalPlanting & maintainingindigenous trees:By encouraging our farmers toinclude forestry shelterbeltsaround farmsImproving urban familieshealth & quality of life:By reducing respiratory disease& drudgery for women & girlsIncreasing ruralhouseholds income:By providing a reliable & fairlocal market for surplusesproduced by ex-subsistencefarmersCreating jobs:By investing in launching large-scale farmer outreach, logistics,processing, distribution andretail operationsImproving quantity &quality of food grown inrural areas:By increasing productivity anddiversifying productionIncreasingly supply oflocally-grown food inurban markets:By replacing imports withlocal productsIncreasing access torenewable cooking fuelsolution that is:AFFORDABLE – priced likecharcoal to meet needs of low-income householdsSAFE – reduces respiratorydisease, explosions, burnsCLEAN – Reduces annualgreenhouse gas emissions by~12 tons CO2e per householdLOCALLY PRODUCED –Independent of foreign supplychains and shocks; redirectscash flow from fuel that drivesdeforestation to fuel thatsupports rural development.Key Pillars for CleanStar Mozambique’s Impact Accounting & Sustainability Assurance SystemCleanStar has defined IRIS-compliant indicators to track impact in each areaand embedded targets into the quarterly performance goals for each Manager20
  20. 20. DakarFreetownAntananarivoLilongweKigaliKampalaLusakaAccraDar es SalaamCotonouLuandaYaoundeLagosMonroviaKinshasaHarareAddisMombasaNairobiMekeleBamakoThe opportunity to replace charcoal with a similar business model involvingfarmers exists today in at least 40 other African citiesMarket Size:61 million urban households across SSAx 60% using charcoalx $25 per month spent on charcoalx 15% penetration for Ethanol-based cooking= $1.7 billion/yr market forCleanStar cooking fuel21
  21. 21. • 5 million women save time & improve quality of lifeby avoiding need to buy, handle & ignite charcoal• 25 million people saved from indoor air pollution, charcoalburns, or unsafe LPG equipment• 50 million trees saved every year• 90 million tons CO2e emissions reduction every year• 1.5 million farmers benefit from greater and more diversefood production & cash income every year• 500,000 new jobs created in urban and rural areasThe social, environmental & developmental impact of promoting Ethanol cookingacross Africa would be much greater than that of promoting LPG & ImprovedCharcoal Stoves alone due to inclusion of smallholder-farmers in this value chain22
  22. 22. Brazil•Macauba forestry in Minas Gerais•Silvi-pastoral systems in Para•Biomass pellets in RJ stateMozambique•Clean Cooking fromAgroforestryIndia• Diesel displacement fromAgroforestry• Rural electrificationAustralia•Pongamia agroforestry inNorthern TerritoryUSA•Head office in NYHaiti/SIDS• Clean cooking fromAgroforestryCleanStar Ventures (founder of CleanStar Mozambique) has been developingcommercial agroforestry & “impact-oriented” ventures worldwide since 2005Our Mission“To harness business and technology innovation to create and scale sustainable businessesthat help solve some of humanity’s most pressing challenges”• 2005: Research started in India with help from USAID, WRI & local universities• 2006: Project opportunities & partners reviewed in 14+ countries• 2007: CleanStar Ventures Limited formed as international parent company• 2008: Venture development commenced in Brazil, Mozambique, Australia• 2012: New head office launched in NY to coordinate and support global expansionHistory23
  23. 23. www.cleanstarmozambique.comContactSagun SaxenaManaging PartnerCleanStar Ventures LLCNew York, USAs.saxena@cleanstarventures.com24

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