Energy | Blogs

  • Impactful partnerships for inclusive energy access at scale


    July 1st, 2019

    The renewable energy market has grown rapidly in recent years, with vast and successful national programs and initiatives reaching upper poverty quintiles. However, big areas of energy poverty remain in remote communities and hard-to-reach areas.

    Asia Clean Energy Forum (ACEF)
    Last week, I was at the Asia Clean Energy Forum 2019 (ACEF) in Manila, one of the Asia’s premier networking and knowledge-sharing events dedicated to clean energy and energy access in Asia. The theme for ACEF 2019 was “Partnering for Impact”, with five cross-sectoral thematic tracks: Energy and Livable Cities, Energy and Water Sustainability, Energy and Rural Poverty Alleviation, Energy and Innovative Finance and Clean Energy Trends and Directions.

    Presenting PPEO 2018 at ACEF 2019

    What was different this year?
    The forum provided additional networking opportunities to discuss new and innovative ideas with young entrepreneurs/start-ups. A dedicated networking reception was organised to encourage women participants to meet each other. Thirty-six per cent of participants were women as compared to 18% last year, showing a relevant growth in female participation. A dedicated app was helpful to connect with the most relevant participants from the scattered huge mass. So much liked ACEF bags were missing; instead, we were given the green gift by offsetting our ACEF travel-related carbon footprint! My carbon footprint was neutral while attending this year’s Forum!

    Trending energy topics at the ACEF
    The topics covered a broad range of the achievement and challenges in renewable energy access, energy efficiency, artificial intelligence for energy load management and electric vehicles (EVs). EVs are going to help reducing pollution in the cities and be a huge collective battery by absorbing the surplus power that some countries are going to generate in the coming years. However, there were concerns that some countries would just be shifting emissions rather than omitting emissions in case of carbon intensive grid. I also believe that other important area of focus in the coming years is definitely going to be electricity use for cooling and heating. This will help people to have access to cooling fans, refrigeration and other forms of cooling that can protect food, vaccines and overall public health. And in terms of key actors, evolution of MFIs in energy access space was recognised promising in many of the business cases presented as they have great potential to reach the last mile. They could widen their scope to energy efficiency as well.

    The India case: a successful example?
    Energy sector reform in India was presented as a successful example in reaching every household. However, it was prominent that quality and reliability issues have not allowed consumers to think beyond lighting. Fossil fuel subsidy reform or increased fossil fuel taxation in many states of India has been able to leverage the private sector investment. India and Indonesia each saved $15 bn in 2014-15 through subsidy reform.

    PPEO 18 presentation: Nepal and India
    I presented India and Nepal case from our PPEO 2018. While there were many discussions on how private sector led innovative business models helped reduce dependence on subsidies, there was a realisation for the need of public investment if we want “no one to be left behind”.

    Jennifer Holmgren, CEO at Lanza tech said, “Winning slowly is the same as losing.” Of course, we cannot afford slow progress. Practical Action will definitely continue to build impactful partnerships to accelerate clean energy goals.
    Here is a link of presentations for this year together with 2018.

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  • Technology builds community resilience to climate change


    April 1st, 2019

    Practical Action is working in West Africa to help small-holder farmers and people living in low income households, improve their management of and resilience to climate related risks such as drought and floods, through access to information and adapted knowledge services.

    In 2015 we co-founded the social enterprise Jokalante, whose name means “dialogue” in the Wolof language, to deliver a range of innovative ICT-enabled services to support uptake of emerging agricultural technologies. Four years later, by combining local language radio broadcasts with mobiles phones, Jokalante can reach 600,000 producers across Senegal and offers its business, development and government clients a powerful set of tools to engage in dialogue with men and women living in rural communities, collect feedback and measure levels of satisfaction. One of the first technologies promoted by Jokalante was a range of locally produced, high quality seeds of staple crops such as millet, sorghum, cowpea and groundnuts. Most of these varieties have a short growing cycle, suitable for years with low rainfall. Their use alongside existing long season varieties can help farmers to be more resilient to the increasingly variable and unreliable rains in the Sahel. To further strengthen climate resilience, Jokalante added advice on using organic matter to improve soil fertility, to the promotional campaign for high quality seeds.

    © TICmbay/United Purpose

    Practical Action also works to build resilience to climate risks through access to improved weather and climate weather information services (CIS).  Many farmers in sub-Saharan Africa face barriers of illiteracy, language and connectivity which restrict their access to CIS based on text messages or smartphones. In Senegal, Jokalante is working with the national meteorological service to develop a sustainable business model for sending weather advisories to farmers and fishers, as voice messages recorded in the recipients’ preferred local language.

    But improving access is only one part of the solution. CIS need to be delivered to farmers in a way that improves their productivity, reduces risk or enhances resilience to climate shocks and stresses. In the Climate Information Research Initiative (CISRI) we have looked at ways to improve the overall effectiveness of climate information services, using a systems approach. The Participatory Climate Information Service System Development approach is based in the idea that if CIS system actors map the system and analyse together how it works, then they will be able to identify possible changes they can make, individually or collectively, to improve the flux of information and how it is used by farmers. The approach supports system actors to assess all the various factors that may affect the effectiveness of the service including advisory services, social norms and institutional arrangements.  During pilot studies in Niger and Senegal, participants identified intervention points to improve men and women’s access to and use of CIS, forged new stakeholder partnerships to facilitate CIS delivery and identified locally-driven solutions. The approach has also been useful for designing a new CIS. More information and a step by step methodology guide are available on Climatelinks at: www.climatelinks.org/resources/PCISSD-guide.

    © TICmbay/United Purpose

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  • Innovations in Briquette Business for Clean Cooking Energy


    April 1st, 2019

    Access to clean and affordable energy is an important determinant in the livelihoods of all rural and urban people, however, only a few have access to an adequate gas supply for cooking and other productive purposes.

    Those who have not been blessed with the access to this valuable resource depend on the use of a wide range of biomass such as firewood, and agriculture residues such as jute stick, leaves, rice husk, sawdust, cow dung which are not thermally efficient and result in creating smoke in the kitchens. Moreover, the use of firewood is aggravating another major environmental crisis – deforestation. The overexploitation of wood is contributing to deforestation causing an adverse effect on the ecosystem, and the environment and climate at large. This has led to the need for an innovation that can potentially deal with these issues from an eco-friendly lens.

    The Practical Action team in Bangladesh, with support from GIZ and SREDA (Sustainable and Renewable Energy Development Authority), have devised an intuitive innovation – the conversion of biomass into briquette, a block of compressed flammable organic material used as fuel – to address the aforementioned issues. Briquette significantly increases thermal efficiency, reduces smoke and the cost of cooking fuel, in the most reductive terms. Not only does it have a thermal efficiency higher than traditional biomass, and emit less smoke, through this innovation we have essentially transformed “waste” into a useful resource and in that, alleviated its value by manifolds. It has also made way for a solid source of livelihood where women can be involved in its backward (raw material supply) and forward (market development of finished products) production.

    Throughout the duration of this project, the team worked with several medium and large scale briquette producers and increased their technical and business management capacity and created linkage with a wide range of biomass suppliers and distributors to reach a wide range of clients i.e households, institutional and commercial. The comparative pros and cons of the use of briquettes from at least three to four different biomasses were also assessed under this intervention.

    One of the briquette producers under this intervention was Mostak Ahmed from Siddik Sanitation, a veteran in the biofuel stove manufacturing industry who has previously worked with organizations like USAID, GIZ. He wholeheartedly acknowledged Practical Action’s efforts. He said that he did not understand “efficiency” and all those big jargons, but what he understood was the satisfaction of his customers, whether their needs were met, and that was his only prime concern. He expressed that with support from Practical Action and GIZ, he could further his stride on bringing optimum utility to his customers.
    Another one of the briquette producers was Josna Begum from Kheya (Samaj Unnayan Sangstha) who appreciated how this initiative has reduced the work load of the women, by eliminating the need for them to forage for firewood, which is not only cumbersome but also poses risks. She felt that this initiative has empowered women, in that, they not only now have the opportunity to network with each other, but they can also spend a nice time with each other and share their daily woes and joys. They could venture out and develop their marketing skills, which eventually led to a multiplier effect and encouraged more women to do something on their own as well. 

    The project namely “Innovations in Briquette Business for Clean Cooking Energy” under this intervention, implemented in Rangpur and Satkhira from July 2018 to December 2019, by Practical Action, GIZ and SREDA recently concluded. A learning sharing workshop was organized on 25 March 2019 to disseminate the lessons, successes, and challenges of the project. All the beneficiaries of the project shared their experience on how this project has helped them stride ahead and that they would love to receive more support in the future as well. 

     

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  • What if the ‘last mile’ was our first priority?


    March 13th, 2019

    Empowering women in the energy access sector is a no brainer. Including the perspectives and skillsets of over 50% of the population is not just the right thing to do, it benefits businesses materially and financially – as Value4Women and Shell and BURN Manufacturing demonstrate. Given this win-win situation, why are some people still not convinced?

    Pushing for progress

    63rd Commission on the Status of Women logo

    CSW63 is taking place from 11 to 22 March 2019 at the United Nations in New York.

    At the UN’s Commission on the Status of Women (CSW) this week I heard that just 18% of Asian Development Bank investments/programmes have a gender equality component compared to 79% for the WASH sector, which is ‘better suited’ to gender mainstreaming. Given energy’s role in enabling health, education and productive and social development, surely we should all be doing better than 18% by now…

    SDG7 and SDG5 are mutually reinforcing

    Our work with energy-poor communities shows that gender equality and universal energy access are mutually reinforcing. When women participate meaningfully in energy access markets, they enjoy wider empowerment outcomes (i.e. improved intra-household power dynamics), and energy access is increased – including in ‘last mile’ communities living beyond the reach of the grid and outside the conscience of most decision-makers.

    But we also know it’s tough for women to thrive as energy consumers and entrepreneurs. As our Poor People’s Energy Outlook 2017 explores, women’s lack of access to appropriate finance, particularly when it comes to scaling their energy enterprises, is a huge challenge. In each and every session I have attended this year at CSW, the ‘access to finance issue’ has come up – across sectors and geographies – and I can’t help but feel like gender inequality will remain out of reach if we don’t crack this. Other challenges to women’s participation in energy access markets include reduced mobility due to family responsibilities; little knowledge of core business skills; and low self-belief.

    North Darfur Low Smoke Stoves Project

    In the North Darfur Low Smoke Stoves Project local Women’s Development Associations help provide finance for energy-poor households to cook more cleanly and safely.

    What are we doing to enable women energy entrepreneurs?

    We’ve teamed up with women across different energy access value chains in Kenya and Sudan, to build their capacities in business, computer and financial management skills, while also providing professional and personal mentorship to help build their confidence as valuable stakeholders. Crucially, we’ve done this in partnership with the private and public sectors to develop their understanding and activities around women entrepreneurs’ needs and contributions; and advocated for local and national stakeholders to proactively mainstream gender throughout energy policy, planning and delivery.

    It’s not rocket science!

    This is about creating systems and processes that proactively include people who are traditionally overlooked, at all stages of the project cycle: from design to evaluation. It’s at the heart of the Poor People’s Energy Outlook 2018, which explores how to deliver energy access at scale while also leaving no one behind. In fact, it’s a thread running throughout our work at Practical Action – in our Renewable Energy for Refugees (RE4R) programme and the Global Distributors Collective (GDC), which provides support to last-mile distributors in the energy access (and other) sector. Taking an inclusive lens to energy access is not rocket science – but it IS the difference between catalyzing progress and stifling development.

     

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  • Does access to electricity change poor people’s lives?


    February 15th, 2019

    Globally, just under one billion people have no access to electricity. This means no effective lighting to study at night, no refrigeration to keep medicines, and limited opportunities to run businesses. The United Nations have set a goal to provide affordable, reliable and modern energy for all by 2030. This is a very challenging goal which at Practical Action we try and support through our energy access work.

    However, a recent article in the Economist claimed that providing access to electricity is not as transformational as previously thought. Does this mean we are wasting our time? Definitely not!

    In our Poor People’s Energy Outlook (PPEO) series of publications, we have highlighted the complex and multi-dimensional nature  of energy access. Providing electricity for household uses is of course no panacea for poverty reduction. We need to think about community needs (e.g. health centres, schools, street lighting) and productive uses to boost demand (e.g. agriculture). And while there is a lot of focus on electricity, other energy needs are as, if not more, important. This applies especially to clean cooking, with more than 3 billion people still dependent on dirty fuels for cooking, resulting in huge negative health impacts, especially on women and children.

    In our latest PPEO, we provide case studies demonstrating how inclusive energy access has been delivered at scale in a number of countries. We recognise that there remain serious challenges but we disagree with the Economist’s suggestion that cash-strapped countries should now effectively de-prioritise energy access. This is totally at odds with a recent call for a huge injection of extra cash for energy access from SE4All which found an annual investment short-fall of USD30 billion for electricity and USD4 billion for cooking.

    Energy access is and remains an enabler of development, especially when combined with other targeted policies and measures. That’s why we will continue to work with communities to achieve access to energy for all through a range of sustainable energy solutions.

    N.B.
    GOGLA, Crossboundary and John Keane of SolarAid have also provided responses to the Economist article, showing the positive effects of energy access.

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  • Taking stock – 10 years of the climate investment funds


    February 1st, 2019

    With 3 billion people still lacking access to clean cooking and almost one billion people without electricity, huge amounts of funding are needed to close the energy access gap. The Climate Investment Funds (CIF) are one of the avenues for funding this big challenge.

    Practical Action has a seat as an observer on the Scaling Up Renewable Energy in Low Income Countries Programme (SREP) Committee of CIF and I just spent a week in Morocco attending a Committee meeting, as well as the CIF@10 anniversary conference. CIF was established in 2008 to help developing countries invest in low-carbon and climate-resilient development. It has had some impressive achievements – $8bn contributions received (with the UK as the largest donor country), US$1.2bn allocated to climate resilience, 11 MtCO2 saved per year and 185,000 people provided with improved access to energy.

    We got the opportunity to see what CIF has done on the ground with a to the visit the impressive Noor solar power complex. Noor (Arabic for light) has a capacity of more than 500 MW of concentrated solar power (CSP), a technology that has only been used in a few other countries. Rather than directly transforming solar rays into electricity as in the more common solar photovoltaic panels, CSP plants heat a heat transfer fluid to then run a turbine to generate electricity. CSP can also be combined with thermal energy storage, using for example molten salt. This allows Noor to produce electricity for up to 7 hours during the night when the sun does not shine. With Noor, Morocco has become one of the leading renewables countries in Africa. Without CIF funding for Noor, this would not have happened.

    Parabolic troughs at Noor solar power station

    Of course, CIF is not without its problems. Specifically, SREP has been slow off the ground, with just 4 out of a targeted 21 projects on energy access operational at present. Its total available funding of US$ 750 million is a drop in the ocean compared to what is needed for energy access. Furthermore, there is some uncertainty about the future of the CIF, with some donor countries insisting that the Green Climate Fund (GCF) should be the only climate financing mechanism. However, as the GCF lacks resources and is still not working effectively, this seems like throwing the baby out with the bathwater. We cannot afford to let politics get in the way of effective climate action.

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  • Sun, Water, Life


    June 15th, 2018

    There was an Afghan, a Pakistani, an Ethiopian, a Somalian and an Englishman…. Sounds like the start of a bad joke but fortunately it is not!

    But it is a reflection of the global interest in addressing the crucial issue of access to affordable water supplies that are so needed to sustain communities, particularly those without access to affordable energy and reliant on agriculture for food security and income generation.

    All of these nationalities were squashed in friendly harmony in the back of taxi making introductions on the way to a two day workshop on the use of solar power for pumping water.

    The workshop was hosted by the solar water pumping company Lorentz at their technology centre in Hamburg. Lorentz are a German company and have been focused on solar water pumping for more than 20 years (Sun, Water, Life is their mantra). They doing nothing else but solar water pumping systems, from development to manufacture to installation and aftercare through a global network of distributors and partners.

    They have a wealth of experience in installing systems in some very challenging locations and conditions and across a range of applications from refugee camps to remote impoverished communities. What perhaps sets them apart from other pump manufacturers is their integration, and application of, software into the pump controller and an app based interface to monitor and control pump performance. They also have an app based system that can enable PAYG services for the provision of water, either for household use or irrigation.

    Setting aside any particular manufacturer what became absolutely clear for the assorted participants is that it makes little sense to look at energy, water and food in isolation of each other. For those struggling to meet their daily needs in rural communities these three resources are increasingly under pressure from population growth and the impacts of climate change. The ability to pump water using free clean energy to irrigate land and provide improved sanitation gets to the heart of this challenge.

    Of course what is not free is the technology to make this happen. The upfront investment cost of a good quality system is still higher than that of a diesel or petrol pump. However, this is soon recovered (can be as little as 2 years) when the cost of fuel and maintenance is taken into account.

    And the cost of solar pumping has decreased significantly over the last 5 years as the panels required to capture this free energy have tumbled in price as they have become a commodity item.

    So how can this cost be met?

    Two approaches, using widely available technology in the areas we work in, were shared during the workshop:

    • Pay at point of extraction (Pay at pump) – A pump is loaded with credits. This allows for pre-payment of water either locally or centrally.
    • Pay at point of delivery (Pay at tap) Consumers pre-load secure tokens with credits (litres). Smart Taps dispense water and reduce credits on the token.

    As Practical Action we already have a number of projects on the go making use of solar power for irrigation and the provision of drinking water. This includes working with small holder farmers in Zimbabwe to help them to increase their income through the use of solar powered irrigation to improve crop production, and getting better prices for their produce in the local market.

    With the costs decreasing and the technology forever improving the opportunities to harness this free energy source in emerging economies are increasingly being recognised by both the private and public sector. We seek to encourage this and find innovative ways to scale up affordable use of this technology.

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  • ‘Technology’ Enabling Adaptation to Climate Change


    June 11th, 2018

    At CBA12, Practical Action is working with IIED and its conference partners to lead an ‘adaptation technologies’ workstream, exploring how technologies can be used to enable communities to adapt to climate change; increasing their resilience to climate stresses and shocks, and how ‘technology’ can be used to lever support and investment in adaptation.

    In a world where we see new technology changing the way we live our lives, and constantly surprising us about what is possible, it is no wonder that ‘new technology’ is often looked at to provide a solution to the issues that face the world.

    The daunting task of delivering effective action on climate change – the mitigation and adaptation objectives of the Paris Agreement – is no exception to the idea that ‘technology’ will help us achieve the sustainable change we need.

    New technology has been an enabler of climate change mitigation. Commercial research and renewable energy technologies have created tremendous opportunity for nations to reduce their greenhouse gas emissions and, therefore, implement their mitigation commitments. Through market competition or regulation by governments, the private sector has been instrumental in improving the energy efficiency of engines, cars, planes, factories and homes.

    The story is not the same for adaptation, for which there is still woefully inadequate finance, limited innovation and little success! To address this there are growing calls for the scientific community to deliver market oriented and transferable adaptation technologies – technology ‘fixes’ – silver bullets!

    However, what is really needed are affordable, co-created and long-term solutions. As with mitigation, the ideal is to mobilise the private sector to deliver the additional innovation and resources needed to achieve change at scale. However, the innovation and technology needs to be appropriate – accessible and affordable – to small scale poor or risk adverse farming families in developing countries.

    To do this, technologies need to use or build on the assets smallholders already have, have low cost, be reliable (have little risk), and work in the long-term. These are the technologies that are likely to be adopted and lead to adaptation at scale, i.e. adaptation technologies.

    Adaptation technologies in developing countries might be about using the natural capital rural communities already have – their plants, animals, soils, water, forests, land – in a more resilient and productive way. For example, water and land use management that integrates the needs and voices of all vested interest groups – including groups within households, farmers, livestock owners and other.

    Alternatively, they might be about how recent advances in renewable energy have created opportunities for farmers to cope with the increasingly unpredictable weather and seasons, or households to process or storage produce, and thereby develop added value to enterprises. A good example of this is solar powered irrigation for crop production. Solar powered irrigation can range from portable units, to small standalone systems, to multiple sites within mini-grids, or to large systems that replace diesel pumps in extensive irrigation schemes.

    Or ‘adaptation technologies’ might be about how digital or communication technologies improve the access to and use of knowledge. For example, short and medium term weather forecasts that give farmers and traders a better understanding and confidence about supply and demand and therefore prices. Or using new digital devices and information so that farmers know what is happening in the market and strike better deals with traders for their produce.

    Practical Action is an active and committed participant in the CBA community. Given the lack of implementation of the ‘adaptation’ component of internationally agreed actions on climate change, Practical Action is working with the CBA community to develop evidence and the narrative needed to inspire greater and more effective investment in adaptation – especially in developing countries.

    Practical Action’s key messages are:

    1. New technology has been an enabler of climate change mitigation, however, this is yet to happen for adaptation. To achieve this requires more committed support and investment – to get the finance and innovation that is needed for success;
    2. There is a need for affordable, co-created and long-term adaptation solutions that involve and engage the private sector. System change requires all actors to be involved;
    3. Finally, technologies that enable climate change adaptation must be accessible and affordable to small-scale, poor and risk-averse farming families in developing countries, to be adopted and so enable adaptation at scale.

    More information about Practical Action’s role at the CBA12: https://policy.practicalaction.org/policy-themes/food-and-agriculture/cba12-2018

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  • The Gravity of GRAVITY


    June 8th, 2018

    Life in high hills and mountains is not very simple. Access to resources, market, education to even health and other basic services are bleak due to treacherous geography; not to mention, how hard even commuting for the locals can become through the steep hills and cliffs. In absence of much prospect, many are compelled to live at edge of poverty. We have come across many people who have outlived great challenges with so much persistence and struggle. Their life stories inspire us every day to work harder and motivate us to do more to make life better for them.

    The Hardships of Hill, Belkosha’s Story

    In many stories, one of Belkosha Bohora from Tilagufa Village in Kalikot might captivate your sentiments too. She seems happy and content at first glance, but listening to how she went through the thick and thin of her life, anyone can feel dejected. Growing up in the parched hills of Kalikot, all she saw in life was the hardships the hills had to offer; in form of loss of childhood, no education and no alternative but to marry early and of course make a bunch of babies. With no option other than to work at the fields carrying fertilisers heavier than her, half her life went by foraging, farming and taking care of the cattle. In patriarchal society that is so deep rooted, men were not expected to take care of the babies she gave birth to almost every year after her marriage. That’s why she was not just a full time mom for year after another but also full time labour until the last day of her delivery and as early as 5 days after the delivery. Overworked and ‘un’cared, Belkosha lost 8 of her 12 babies to the hardships of the hill until eventually her uterus prolapsed.

    Belkosha Bohora (40) from Kalikot who lost 8 out of 12 children due to drudgery, Photo: G Archana

     

     

     

     

     

     

     

     

     

     

     

     

     

    Gravity Goods Ropeway

    But in the forty years of her life, she is finally going to feel rested. We are making it easy for women like Belkosha by bringing a pulley technology at the village that lie at the top of vertical peak. In Nepal, roads alone cannot guarantee access to services for the most marginalised and isolated communities like Belkosha’s. Gravity Goods Ropeways (GGR) is simplest form of rope based transportation system that works on the proven principle of a controlled freefall mechanism, GRAVITY. It is operated by potential energy of mass at upper station, generating kinetic energy by the action of pulley systems. Through GGR, people can easily transport goods from uphill to downhill and the other way round. Similar technology has been installed in Tipada of Bajura District where people are making most out of the system. We have witnessed people’s life changed since the technology directly affects farmer’s livelihood by bringing the market closer. Many farmers who were subsistence based have started commercial vegetable farming since they can easily transport the goods downhill in less than two minutes instead of hours and hours in the steep hills which have claimed lives of many. This simple to operate, low cost solution requires minimum maintenance and is indeed changing lives of many.

    Gravity Goods Ropeway being operated in Bajura, Photo: S Kishore

     

    The pulley system is being installed with financial support of project named BICAS, implemented by Practical Action with funding support of the European Union and Jersey Overseas Aid (JOA)

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  • Innovation in last mile distribution


    May 22nd, 2018

    The Global Distributors Collective (GDC) facilitated an ecosystem event at the Skoll World Forum on 12 April dedicated to ‘innovations in last mile distribution’.

    Event hosts Practical Action, BoP Innovation Center and Miller Center for Social Entrepreneurship ran a panel with practitioners from the Shell Foundation, EYElliance and Danone Communities. The audience, which included a wide array of participants from the private sector, social enterprises, multinational institutions and NGOs, had a lively Q&A session followed by a world café.

    The event highlighted a range of key challenges and innovations in the last mile distribution (LMD) sector:

    The panel – Liz Smith (EYElliance), Meera Shah (Shell Foundation) and Valerie Mazon (Danone Communities), moderated by Emma Colenbrander (Practical Action)

    1. Working capital for inventory and consumer financing

    LMDs struggle to access working capital for inventory because they are not selling at sufficient volumes to attract the interest of mainstream debt providers, and are seen as too high-risk to lend to. They manage this challenge using different approaches, such as providing sales agents with stock on consignment, but innovation is desperately needed to facilitate better access to capital.

    The burden of providing consumer finance tends to fall to LMDs, but there is potential for manufacturers and intermediaries to play this role. There is significant opportunity to tap into MFIs, especially in countries like India where the pay-as-you-go (PAYG) sector is not as strong, but questions remain about how to de-risk this investment for MFIs. One innovation in consumer financing that Shell Foundation is exploring is digital lay-away schemes for customers to save towards down payments on products.

    2. Demand creation and behaviour change

    For complex products like eyeglasses and improved cookstoves, consumer education is needed to raise awareness and ensure adoption, but this is often expensive and inefficient. Broad campaigns can be a more cost-effective way of building demand and educating consumers than targeting individuals. Campaigns can be done nationally (such as those planned by EYElliance alongside governments) or on a local level (such as those done by Danone Communities using community ambassadors). Consumer campaigns must integrate LMDs on the ground in order to be effective and to ensure supply can adequately meet demand.

    Meera describes how LMDs are typically underinvested in compared with product companies

    3. Salesforce training

    All participants agreed that salesforce training continues to be an enormous challenge in the sector, especially given high churn rates in sales teams and the need to adapt training to different markets. Classroom training is of limited value, so ongoing mentoring and support (and a small sales manager/sales agent ratio) is essential. Innovative training providers are emerging in the sector to support LMDs and some companies (eg. M-KOPA) have set up their own training universities. However, these services are either exclusive or very expensive, and tend to focus more on technical skills rather than sales and marketing. There is huge demand for more innovation in this space.

    4. Opportunities to leverage economies of scale

    EYElliance represents an excellent example of how collective approaches can work in distribution. EYElliance is a coalition of multi-sector actors working at system level to create change in the vision sector. They have had success in distribution of eyeglasses by tapping into the expertise of many members and learning from distribution methods in other product categories such as antimalarials, solar lighting and Fast Moving Consumer Goods (FMCGs).

    The following key opportunities were identified to leverage the power of the collective across the LMD sector:

    • sharing best practices and lessons learned through online platforms, in-person networking and exchange visits between LMDs
    • improving access to information, including by building a directory of certified peer-reviewed products
    • developing standardised metrics and measurement tools for M&E
    • bulk buying products to streamline procurement processes

    5. Potential of emerging technologies to transform the sector

    Liz Smith describes EYElliance’s collaborative model to achieve systems-wide impact in eyeglass distribution

    Technologies that help gather data for operational intelligence are increasingly being utilised, for example software that can digitally track consumer behaviour. The next disruptive technologies are 3D printing which will transform manufacturing, and blockchain which will enable LMDs to track inventory through the supply chain and more effectively assess impact.

    6. Product specialisation vs diversification

    LMDs that use sales agent networks to sell complex consumer products generally need to specialise. Specialisation tends to be the most cost-effective approach because different skills and knowledge are required for different product categories, and also because LMDs have so many other functions to manage – logistics, procurement, finance, etc – that end sales need to be simplified to the greatest extent possible. However, LMDs can still achieve diversification across their portfolio by specialising at the sales agent level (ie, each sales agent only sells one product category) or by focusing on promoting different products during different time periods, rather than offering a basket of goods all year round. It has proven difficult to combine distribution channels for consumer durables like solar lights with FMCG products, although retail channels have more success than sales agent networks.

    The hosts closed the session by showing great willingness to work on the discussion points raised through the Global Distribution Collective.

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