CleanStar Mozambique is a vertically integrated venture that partners with smallholder farmers in Mozambique to produce crops through sustainable agroforestry practices. It processes the crops into affordable cooking fuel, packaged food products, and cooking stoves to provide urban households with alternatives to charcoal. This helps boost food security and rural incomes while reducing deforestation, indoor air pollution, and greenhouse gas emissions compared to charcoal production and use. CleanStar aims to partner with 2000 smallholder farmers by late 2014 to supply its processing plant and fuel 80,000 urban households through its shop network.
Commercial ventures for increasing Food & Energy Security through smallholder-based agroforestry
1. Commercial ventures for increasing
Food & Energy Security through
smallholder-based agroforestry,
bioprocessing, and retailing of
sustainable food & energy products
Sagun Saxena
Managing Partner, CleanStar Ventures
s.saxena@cleanstarventures.com
5th June 2013
Bonn, Germany
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 annually
Charcoal is the primary cooking fuel
for 75% of Maputo residents
Charcoal reaches the capital Maputo
on trains from forest areas
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3. Cooking shouldn’t kill
“Indoor smoke from cooking =
2 packs of cigarettes per day”
“2 million early deaths per year
from indoor air pollution”
- World Health Organization
Using charcoal impacts women’s health and quality of life
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4. Charcoal-based deforestation
• Causes erosion, land degradation & flooding
• 10kg of wood = only 1kg charcoal
• Major source of Greenhouse Gas emissions
Charcoal production has wiped out neary a third of Africa’s
natural forest cover (FAO)
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5. Rural communities have few other sources of cash income than Charcoal
Subsistence 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 income
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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 shocks
Meanwhile…
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7. CleanStar Mozambique is a commercially-profitable and
environmentally-restorative venture designed to help meet
Africa’s growing food, energy and livelihood challenges
• CleanStar partners with
smallholder farmers to
produce a range of crops
• Introduces new planting
material and practices
CleanStar’s business model is vertically-integrated from “soil to stomach”
• CleanStar procures
surpluses directly from
farmers and processes
them into food & cooking
fuel products for urban use
• CleanStar sells the food and
cooking fuel products via its
own distribution centres,
shops and resale points,
under NDZiLO brand
CleanStar harnesses urban demand for cooking fuel to drive rural development & eco-restoration
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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 fuel
spend matching charcoal”
1) Ethanol-based cooking solution -- affordable alternative to Charcoal
2) 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, sorghum
3) 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 traded
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9. The foundation of CleanStar’s business model is low-input
agroforestry and conservation agriculture with
smallholder-farmers
Rotation 1
Rotation 2
Rotation 3
• CleanStar supplies planting
material & guidance
• The 1 ha agroforestry zone
has rows of fast-growing
leguminous trees/shrubs
• These rows are regularly
pruned and leaves mulched
to improve soil fertility
• Alleys are planted with
annual crops rotations
• A 1 ha forestry belt
contains indigenous trees
and Pongamia
• The forestry belt protects
against wind & fire and
enhances biodiversity
• Pongamia produces inedible
oilseeds after 5-6 years
SubsistenceFood
ProcessedintoFoodProd
ProcessedintoEthanol
ProcessedintoDieselAlt
Pruningasfirewood/mulch
Ecosystemservices(z)
Cassava X x X
Cowpeas* X X x x
Soyabean * x X x
Sorghum X x s x
Ground
nuts*
X X x
Native
trees*
x X
Pongamia* y X x x
Lucaena* y x X
Pigeonpea* x x X
Forestry Shelterbelt Zone
X : 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 moisture
Agroforestry Zone
Mix of multi-purpose crops & trees
Farmers must follow CleanStar’s Farming Model to qualify
as “certified suppliers” of raw material to the company
Integrated food & energy farming system boosts local food security & cash income
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10. Over 1000 smallholder farmers have adopted CleanStar’s
integrated food & energy farming system as of early 2013
Baseline farming is subsistence-only
Lack of inputs/storage/markets
CleanStar has identified high-yielding disease-
free cassava, soya, beans, sorghum, pigeon
peas through collaboration with IIAM & IITA
CleanStar provides free planting material and
guidance to farmers that agree to adopt system
Surplus cassava, beans,
and grain are procured
at local collection spots
by CleanStar’s field staff
KEY ELEMENTS OF SYSTEM
• Better planting material
• Crop rotation
• Agroforestry
• No burning
• Integrated pest mgmt 11
12. Long term impact chain:
↑ crop diversity ↑ tree cover
↑ soil health ↑ crop yields
↑ nutrition ↑ income
Farmers are starting to see the benefits of more sustainable
and resilient farming practices
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13. Procured materials are transported to CleanStar’s integrated
food & energy bioprocessing plant, 1 hour away
Sales team undertakes in-home
demonstrations and take orders
Initial capacity
of 2 million L/yr
of cooking fuel
+ flour mill
+ soy oil mill
+ food packing
The plant has been custom-designed by ICM Inc (USA ) to produce cooking fuel from cassava
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14. The cooking fuel is transported and stored in CleanStar’s
facility in Maputo
Jan 2013
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16. The Ethanol cookstoves and fuel are sold via CleanStar’s
own shop network in Maputo
Sales team undertakes in-home
demonstrations and take orders
Customers
visit shops
to fulfil
orders
and collect
stoves &
fuel
Customers
return
every day /
week to buy
more fuel
NDZiLO shop network being rolled out
in low-income neighbourhoods
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17. CleanStar is on track to achieve its goal of 2000 smallholder farmers supplying
the company, and 80,000 households using its stoves by late 2014
• 2000 smallholder
farmers in central
Mozambique (2 ha of
cultivation each)
• 1000 ha of company-
leased farms for
R&D, multiplication,
training
• Multiple small
community
processing centres
close to farmers
• Supply inputs &
technical support
• Equipment for
procurement &
light processing
Farming Processing Distribution
• Main bio-processing plant
off Beira Corridor in Dondo
• Parallel Ethanol Cooking
Fuel, Diesel Fuel and Food
processing lines
• Major bottling
plant & warehouse
• 80,000 cookstoves
customers buying
fuel from our 30
shops and 250
resellers in Maputo
• Wholesale and
direct packaged
food and feed sales
Operational Targets for Achieving Profitability in late 2014
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18. 19
The venture has raised over $20 million in commercial equity and debt
investment
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 countries
Soros Economic
Development Fund
19. CleanStar has developed an “Impact Accounting & Sustainability Assurance” system
to measure impacts of the venture and build case for replication
Protecting
Forests & Soil
Enriching
Lives
Boosting Food
Security
Delivering Sustainable
Energy
Ending the “slash-burn-
degrade-move” baseline
farming system:
By switching subsistence
farmers to permanent
agroforestry cultivation
Reducing charcoal-driven
deforestation:
By offering a clean, non-forest-
based alternative to charcoal
Planting & maintaining
indigenous trees:
By encouraging our farmers to
include forestry shelterbelts
around farms
Improving urban families
health & quality of life:
By reducing respiratory disease
& drudgery for women & girls
Increasing rural
households income:
By providing a reliable & fair
local market for surpluses
produced by ex-subsistence
farmers
Creating jobs:
By investing in launching large-
scale farmer outreach, logistics,
processing, distribution and
retail operations
Improving quantity &
quality of food grown in
rural areas:
By increasing productivity and
diversifying production
Increasingly supply of
locally-grown food in
urban markets:
By replacing imports with
local products
Increasing access to
renewable cooking fuel
solution that is:
AFFORDABLE – priced like
charcoal to meet needs of low-
income households
SAFE – reduces respiratory
disease, explosions, burns
CLEAN – Reduces annual
greenhouse gas emissions by
~12 tons CO2e per household
LOCALLY PRODUCED –
Independent of foreign supply
chains and shocks; redirects
cash flow from fuel that drives
deforestation to fuel that
supports rural development.
Key Pillars for CleanStar Mozambique’s Impact Accounting & Sustainability Assurance System
CleanStar has defined IRIS-compliant indicators to track impact in each area
and embedded targets into the quarterly performance goals for each Manager
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21. • 5 million women save time & improve quality of life
by avoiding need to buy, handle & ignite charcoal
• 25 million people saved from indoor air pollution, charcoal
burns, 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 diverse
food production & cash income every year
• 500,000 new jobs created in urban and rural areas
The social, environmental & developmental impact of promoting Ethanol cooking
across Africa would be much greater than that of promoting LPG & Improved
Charcoal Stoves alone due to inclusion of smallholder-farmers in this value chain
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22. Brazil
•Macauba forestry in Minas Gerais
•Silvi-pastoral systems in Para
•Biomass pellets in RJ state
Mozambique
•Clean Cooking from
Agroforestry
India
• Diesel displacement from
Agroforestry
• Rural electrification
Australia
•Pongamia agroforestry in
Northern Territory
USA
•Head office in NY
Haiti/SIDS
• Clean cooking from
Agroforestry
CleanStar Ventures (founder of CleanStar Mozambique) has been developing
commercial agroforestry & “impact-oriented” ventures worldwide since 2005
Our Mission
“To harness business and technology innovation to create and scale sustainable businesses
that 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 expansion
History
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