Clean Cooking Energy Business Opportunities in East Africa
Access to clean cooking solutions is essential for improving health and driving economic growth in Africa. However, there’s a big gap in clean cooking availability between North Africa and Sub-Saharan Africa. While North Africa boasts over 90% access to clean cooking, only about 7% of people in East Africa had this access at the end of 2019, according to the International Renewable Energy Agency (IRENA).
In East Africa, many households still rely on biofuels and waste—such as fuel wood and charcoal—for cooking. This reliance on traditional fuels is due to low access rates to clean cooking solutions. As a result, finding effective and scalable clean cooking alternatives presents a significant business opportunity.
Growth of LPG in East Africa.
One of the most promising solutions is Liquid Petroleum Gas (LPG). Over the past few years, LPG consumption in East Africa has been rising rapidly, especially in countries like Kenya, Tanzania, and Rwanda. In these regions, LPG use has grown by at least 15% annually.
Despite this growth, per capita LPG consumption in East Africa remains relatively low compared to North Africa. For example, North Africans consume more than 20 kg of LPG per person each year. In contrast, Kenyans use about 6 kg per person per year, while Tanzanians and Rwandans consume around 2.5 kg per person per year. In Uganda and Burundi, the consumption is even lower, at less than 2 kg per person per year.
This lower consumption rate can be attributed to several factors. One major issue is the limited infrastructure for LPG distribution. The region lacks adequate investment in the supply chain, including port facilities for handling large LPG shipments, storage terminals, road networks, and remote cylinder filling plants. These infrastructure gaps make it challenging to distribute LPG widely and affordably.
Opportunities with CNG for Cooking.
Another exciting opportunity is the use of Compressed Natural Gas (CNG) for cooking. East Africa is rich in natural gas, with over 57 trillion cubic feet available. CNG could offer a cleaner and potentially cheaper alternative to traditional cooking fuels. However, the development of CNG infrastructure—such as pipelines for distribution—presents a significant challenge. Despite these hurdles, the immense natural gas resources in the region highlight the potential for CNG to become a major player in the clean cooking market.
Business Opportunities in Clean Cooking.
For entrepreneurs and businesses looking to invest in East Africa, the clean cooking sector offers multiple opportunities:
- LPG Distribution Networks: Investing in LPG infrastructure, such as storage facilities, distribution networks, and filling stations, could address the current supply gaps. With growing demand, businesses that build and manage these infrastructures stand to benefit significantly.
- Affordable LPG Solutions: Developing and offering affordable LPG solutions, including subsidized cylinder exchanges or low-cost cooking stoves, can make LPG more accessible to a broader segment of the population.
- CNG Infrastructure Development: Investing in CNG infrastructure, such as pipelines and distribution networks, could position businesses to take advantage of the growing interest in this cleaner fuel. As infrastructure challenges are addressed, CNG could become a viable alternative to traditional fuels.
- Clean Cooking Technology: Businesses that innovate new clean cooking technologies, including more efficient stoves or alternative fuel sources, can tap into the rising demand for cleaner and safer cooking solutions.
- Educational Campaigns: Providing education and training on the benefits of clean cooking and how to use new technologies can help drive adoption and create new markets.
In conclusion, East Africa’s clean cooking market presents substantial opportunities for businesses willing to invest in infrastructure and technology. By addressing current challenges and leveraging the region’s natural resources, entrepreneurs can contribute to the energy transition while capitalizing on a growing market.
