First results-based financing incentive awarded to stove producer in Laos


News

Vientiane, 23 June 2017 - With support from the EnDev-funded project ‘Market Acceleration for Advanced Clean Cookstoves in the Greater Mekong Sub-Region’, SNV kick-starts the market for locally-produced advanced biomass cookstoves in Laos.

A Results-based Financing (RBF) scheme incentives local market actors – such as stove producers and retailers - to become involved in the supply chain of advanced cookstoves that are significantly cleaner, safer, and more fuel-efficient than traditional alternatives.

Producers and retailers can earn a results-based cash incentive for stoves produced and sold to end-users that can be independently verified. The incentive encourages actors to take a risk when moving into this new market, and supplements their initial investment cost for setting up new production and distribution structures. This approach adds to EnDev’s and SNV’s growing expertise base for the use of the RBF tool to facilitate low carbon energy access.

Being among the first stove producers to bring advanced biomass stoves into local retail outlets, Vientiane-based stove producer Mr. Lort has now been awarded an incentive payment for the first 150 stoves produced. Mr. Lort is planning to re-invest the funds in the growth of his business, and is well on track with the production of the next batch of stoves that will earn him additional incentive income.

Additional stove producers are also in the process of launching their products into the market and to gain access to the RBF fund.

Later in the year, EnDev and SNV intend to introduce an auction system that would let stove producers compete for the amount of incentives they require to be involved in the advanced clean cookstove supply chain, gradually driving incentive requirements down over time until the market functions on its own.

Mr. Lort’s stove production centre in Vientiane, Laos