Nonprofit Chronicles

Thousands of words, including many on this blog,  have been written about the so-called clean cookstove sector. But the fundamental problem with cookstoves has been captured in a single sentence by Kevin Starr of the Mulago Foundation.

“The cheap stoves aren’t good enough,” Starr says, “and the good stoves are way too expensive.”

Yep. Cheap cookstoves–sometimes described as “clean,” “improved” or “efficient”–can save users money, reduce carbon emissions and slow down deforestation, at least when compared to open fires. But they don’t burn cleanly enough to keep users from breathing unhealthy air into their lungs, with terrible consequences for the health of children and adults. If the primary purpose of a cookstove is to prevent disease, then it’s ethically questionable, in my view, to put philanthropic or taxpayer dollars behind “improved” or “efficient” cookstoves that fall well short of World Health Organization standards.

How, then, can philanthropy deliver truly clean cookstoves to the poor?

Inyenyeri has a bold plan. A small company in Rwanda founded by an expatriate entrepreneur named Eric Reynolds, Inyenyeri leases high-quality stoves to poor people for a nominal fee, then recovers its costs and makes a profit by selling wood fuel pellets to its customers at a cost that is less than what they now pay for charcoal. The business model is ingenious, if not original. After all, you can buy a printer for just $29.99 because the profits are all in the ink.

“It’s the razor blade model, right? You make your money from the blades, not from the handle,” says Louis Boorstin,* managing director of the Osprey Foundation. “Because it’s run that way, Inyenyeri can use the best available cookstove. That gets you a health benefit, an environmental benefit and a social benefit–and a more viable business model.”

Mulago and Osprey both have supported Inyenyeri. They want the company to succeed. So do I, for at least three reasons.

The challenge of “stove stacking”

First, Inyenyeri is using Mimi Moto stoves, which are, by most accounts, the cleanest biomass stoves in the world. Designed by a Dutch company and made in China, Mimi Moto stoves can burn virtually any kind of biomass — wood, crop waste or dung — but the uneven quality of those fuels makes a clean burn just about impossible to achieve. So Inyenyeri manufacturers low-moisture fuel pellets, a standardized fuel that is turned into gas before it is burned, and calibrates the stove to match the fuel. This combination of stove and fuel is key to protecting human health.

Second, to the best of my knowledge, Inyenyeri is the only cookstove company that tackles, head-on, the stubborn problem known as “stove stacking,” which refers to the fact that even after buying an improved cookstove, many users continue to cook over household fires as well. This all but eliminates the health benefits of the new stove. So Inyenyeri typically provides its customers with two Mimi Moto stoves.

“We’re trying to replace, in every house, every stove they’re using with the cleanest (biomass) stove on the planet,” Reynolds says, via Skype, from Rwanda. Biomass, he says, is readily available, cheap and easily turned into pellets.

Third, Inyenyeri has invited independent researchers to do a rigorous study of its impact on health and poverty. A research team from the University of North Carolina, funded with a grant of $2.6m from the National Institute of Environmental Health Sciences, is conducting a randomized controlled trial (RCT) to see how cookstoves work in the field. (This is far superior to the lab tests that most cookstoves undergo.) The researchers will measure personal exposures to air pollutants over a five-year period in homes using the cookstoves, as well as in a control group. They’ll also look at the financial gains, if any. US AID and the Global Alliance for Clean Cookstoves are also funding the study.

Interestingly, Ashu Handa, a development economist at UNC and a lead investigator on the study, told me by phone that he has doubts about the future of biomass stoves. “I think the developing world is going to move to LPG, natural gas,” he said. But Handa says he has been impressed by what he’s seen of Reynolds and Inyenyeri. “Eric is a perfectionist,” he said. “He and his team are so focused on getting this right.” Reynolds doesn’t believe that poor people will be able to afford natural gas stoves anytime soon.

Reynolds, who is 65, came to the cookstove sector late in life. A mountaineer, he founded Marmot, the outdoor clothing and equipment company, in a Grand Junction, Colorado, storefront in 1974. His obsessive commitment to performance made Marmot a favorite of dedicated outdoor enthusiasts. (“Quality was Marmot’s raison d’etre and its greatest liability,” one critic wrote.) Reynolds spent 13 years at Marmot and developed two other outdoor sports businesses, SweetWater and Nau, before moving to Rwanda in 2010 to launch Inyenyeri.

It’s been a struggle, he admits, to find that elusive biomass stove that will protect the health of users. He tried a Philips-made stove that didn’t work well. He likes the Mimi Moto stove, but has worked with the company to improve it over the last two years. In the long run, he thinks, a two-burner stove might be a better solution. Along the way, he’s encountered skeptics.

“I was in the wilderness for a long time,” he says. “People thought I was Kramer on the Seinfeld show.”

New commitments of capital

To their credit, Mulago and Osprey helped keep Inyeneri afloat. Mulago provided an $800,000 loan and Osprey provided about $600,000, mostly loans. Inyenyeri remains small, with about 2,000 customers, but it is poised for growth, thanks to major new commitments of capital, grants and revenues from carbon finance.

In June, the company got a vote of confidence from the World Bank. The bank, through its carbon finance unit, signed an agreement to buy at least 600,000 and as many as 1 million carbon credits from Inyenyeri between now and 2023. What this means is that the bank will pay Inyenyeri for each ton of carbon pollution that it prevents by replacing open fire cooking with its stoves. The price of the credits wasn’t disclosed but they are expected to be between $5 and $10 each. The carbon-finance commitment has allowed Inyenyeri to borrow money that it needs to buy stoves and expand its production of wood pellets. Lenders include the Luxembourg-based Althelia Climate Fund.

“Our model is very capital intensive,” Reynolds says. “We have to buy two stoves per household, in advance. We have to build pellet factories. We have to hire staff.” The stoves cost about $80 each, he says, and he estimates that the company spends about $250 per household before it can generate revenues.

In August, the IKEA Foundation made a 3m euro grant to Inyenyeri, as part of its global commitment to protect the health of children. That support is critical as Inyenyeri moves towards its goal of providing cookstoves to 150,000 homes in Rwanda by 2020.

That’s an audacious goal, but Reynolds expects growth to come quickly as word spreads that customers can save money by signing on with Inyenyeri. Rwandan families today mostly cook over charcoal, and pay about 18,500 Rwanda francs, or $22, per month for fuel. Inyenyeri customers pay about 12,500 francs, or $15, per month, a substantial savings, in part because Mimi Moto stoves are so much more efficient than open fires.

“It’s a big savings, and they don’t have to buy the stoves,” Reynolds says.

Remarkably, Inyenyeri has come up with the way to serve even the poorest of the rural poor, who have no money and gather their own wood. “We’ve all seen the pictures of kids and women carrying bundles of sticks and branches, wasting too many hours each week gathering cooking fuel for a three-stone fire,” he says.

Not wanting to leave them out, Inyenyeri came up with a barter system under which rural household provide the company with wood, the raw material for its pellets. In return, they get stoves and pellets. These cashless customers only have to collect about half as much wood as they used to because the stove-pellet combination is so much more efficient than open fires, according to Reynolds.

If all this sounds complicated, it is. The business has lots of moving parts, and outstanding challenges, including distribution. Charcoal can be purchased in very small quantities, while Inyenyeri customers currently buy a month’s worth of fuel at once. The company would eventually like to make its pellets available at kiosks or vending machines throughout cities.

“We’re still scrambling,” Reynolds tells me. “There’s still a lot of uncertainty involved.”

But the potential is enormous. Maybe I should have started this post by reminding readers that about 3 billion — yes, 3 billion! — people cook and heat their homes using open fires or crude biomass stoves. The WHO estimates that more than 4 million people die prematurely from illnesses attributed to household air pollution caused by cooking.

Because Reynolds, from the start, has been dedicated to preventing death and disease, he has come up with a model that is designed, not merely to sell or give away stoves, but to get rid of the smoky, open fires that kill millions of poor people every year. This approach, if it works, will also save his customers money and deliver climate benefits on a meaningful scale.

To achieve its potential, Inyenyeri needs to raise still more capital. Reynolds hopes to have more to say about that at the annual meeting of the Global Alliance for Clean Cookstoves later this month in India.  You can listen to a talk by Eric Reynolds here.

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*Louis is a friend, but I found Inyenyeri on my own.