Pradeep Pursnani

Shell Foundation and the
Breathing Space Programme

Innovations Case Commentary:
Envirofit International

When Shell Foundation was established in 2000, we had the ambitious objective of
catalyzing scalable and sustainable solutions to key global development challenges.
We set about doing this in ways that were new at the time: by pioneering an enter-
prise-based approach, and by focusing on a range of social and environmental
issues in which the energy industry has a particular responsibility. We also sought
to harness links to our corporate parent, Shell, for the purpose of delivering greater
charitable benefit.

INDOOR AIR POLLUTION

In 2002 Shell Foundation established a program to find a solution to achieve a sig-
nificant long-term reduction in the incidence of indoor air pollution (IAP) at the
global level. Tuttavia, it was only toward the end of 2007, after five years of pilots
and partnerships around the world, that we realized this could only be achieved
through the market-based development, production, distribution, and sale of
high-quality, durable, and affordable cookstoves to households affected by IAP. UN
problem as large as IAP can only be solved through market thinking and private-
sector involvement. This represents a radical departure from most traditional
metodi, which have seen NGOs and governments give away or subsidize
improved stoves. Following a number of pilot projects, In 2007 we selected
Envirofit as our global strategic partner, and since then we have supported the
establishment and growth of their cookstove business in India and Africa. In addi-
tion to our direct support to Envirofit, the IAP program encompasses a number of
supporting activities that are considered to be of critical value to the sale of these
cookstoves, such as the capacity-building of large distribution partners, social
marketing efforts, E, more recently, carbon finance. Last year, the Shell
Foundation became a founding partner of the Global Alliance for Clean
Cookstoves (www.cleancookstoves.org), a public-private partnership that aims to
create a thriving global market for clean and efficient household cooking solutions.

Pradeep Pursnani manages Shell Foundation’s Indoor Air Pollution Program.

© 2011 Pradeep Pursnani
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Pradeep Pursnani

Its Room to Breathe campaign (www.roomtobreathecampaigns.org) runs activi-
ties to raise awareness among affected households of the benefits of clean cook-
stoves.

PAST EXPERIENCE

From 2002 A 2007, the Shell Foundation carried out nine pilots in seven countries
to help us understand the issue of IAP—cooking habits, technologies, fuels, E
distribution mechanisms. The lessons learned from these pilots helped us shape
what the Breathing Space Programme is today, and clearly are the reason behind
our partnership with Envirofit.

While a large number of stoves were distributed through our partners in the
pilots, the model that was being explored did not allow for either global scale or
financial sustainability, and therefore required large amounts of funding to sup-
port it or enable it to be a local solution.

Through these pilots we learned five key lessons:
1. Focus on biomass fuel, as this is the fuel used most often in households affected
by IAP, and the most affordable. Some of the pilots did focus on other fuels and how
they could be adopted by the users. While they did reduce IAP, the solutions were
either not preferred by the users, as it required them to change their cooking prac-
tices, or they were solutions that would not allow global scale. Biomass is still the
main fuel used globally in households affected by IAP, and we decided that this
would be the fuel to focus on so as not to disrupt their cooking practices, and it
would not require a parallel fuels supply chain to support any program.

2. Centralized manufacturing will ensure the ability to scale-up, economies of
scala, as well as good quality control and consistent performance. During the pilots,
some local stoves were used and other new stoves produced. Tuttavia, there were
either concerns about the consistency of the quality of these stoves or the ability of
the manufacturers to produce them in the vast numbers that would be required.
We realized that to deliver an IAP solution at scale, centralized manufacturing
would be the way forward in order to meet demand. Once this was put in place,
local assembly operations could take over at a later stage.

3. Focus on having a commercial partner that supports the market-based
approach of the foundation. Some of the pilots were done with NGOs, and while
they are great partners for a stoves program, they cannot focus on manufacturing
a sustainable global solution at scale. NGOs are generally donor-based organiza-
zioni, and if they also have to produce stoves with this limited funding, then they
would have to compromise either on the number or the quality of the stoves to
achieve their targets, unless unlimited funding was available. Having a market-
based approach would ensure a sustainable model.

4. The solution must meet certain performance benchmarks around fuel efficien-
cy, carbon, and particulate matter (PM); and must be technology driven, well engi-
neered, durable, and affordable. It is clear that artisan-built solutions did not have
the level of R&D funding to ensure consistent performance and high fuel efficien-

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Shell Foundation and the Breathing Space Programme

cies, which is what drives consumer decisions about purchases in most cases, E
solutions were often not durable either. The stove needed significant R&D invest-
ment to address the needs of the consumers, just like any consumer durable.

5. Monitoring and evaluation and social marketing are key to a successful pro-
gram. Finalmente, it was also clear from the pilots that there were lots of cookstove pro-
grams in action around the world; Tuttavia, their performance and deliverables
were not being measured. Monitoring in the field to ensure that the program is
performing is essential to having a positive impact as people adopt the stoves, both
socioeconomically and from an IAP perspective. Awareness of the IAP issue was
low among the families that cooked on open fires, so it became clear that any
future program should contain an education element to address the issue of IAP,
as well as the fact that the globally recognized solution was to use an improved
cookstove.

THE PARTNERSHIP WITH ENVIROFIT

Envirofit was chosen as Shell Foundation’s global partner for the IAP program
because it is an engineering-focused organization with strong R&D and commer-
cial foundations that had experience in emerging markets and a global ambition.
Although Envirofit had limited stove experience, we could see from their previous
achievements how they could apply their skills to this area and find a solution.

Envirofit became a Shell Foundation partner toward the end of 2007 and com-
menced operations in India, where they also inherited some of the work the foun-
dation had done in that country. For the first 18 months, they focused on under-
standing the market and developing a new product. In 2009 they introduced the
G3300, an affordable, high-performance, durable stove that was centrally manu-
factured and looked very different than any other stove on the market. Questo era
clear evidence of what the group was capable of.

Since then, Envirofit has expanded the business into Africa and South America
and developed a range of other products in line with their R&D strengths. While
the company is still funded through a grant, four years later it is growing at an
unprecedented rate and financial sustainability is in sight.

There are three things that will shape Envirofit over the next few years: com-
mercial partnerships, carbon finance, and the start of large-scale local assembly
operations.

Commercial partnerships. Over the last six months, Envirofit has either signed
large commercial supply agreements or become the technology partner to large
stove program developers. They have even developed tailor-made products to suit
those partnerships. This will be a key strength to build on in the coming years.
Whether it is with governments, distribution partners, or carbon developers,
Envirofit’s ability to produce a durable, affordable product that is liked by the user
and performs well in the field will be the only way to distribute stoves at scale. Questo
will allow them to shape their R&D efforts and bring new technologies into the
industry.

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Pradeep Pursnani

Carbon finance. Developments in the last 12 months in the carbon markets
have been a game-changer for the stove industry, particularly in Africa. This trend
is now expanding to other parts of the world. With the innovation demonstrated
by Envirofit and Shell Foundation in creating a carbon fund that enables the price
of the stove to be reduced in exchange for future carbon revenue, Envirofit has seen
higher than expected growth in Africa. The carbon fund is a model that needs to
be proven and then replicated for other markets. This will also allow better tech-
nologies to be made affordable for users, and attract more investment in local sup-
ply chains and communities.

Local assembly operations. In 2011, Envirofit will take the first step on this
journey with the start of local assembly operations in Kenya, which will serve as a
manufacturing hub for its partners in East Africa. While centralized manufactur-
ing made sense for the first few years, regional demand has grown and now justi-
fies the investment required for local assembly operations, including Kenya in
2011, Nigeria and India in 2012. Local assembly will not compromise the quality
and durability of the cookstoves, but will reduce costs significantly and also create
local employment—a clear must for the sector.

We are now at a tipping point for both the stove sector and for Envirofit as an
organization, as it is now scaling-up the work from the first three years of its part-
nership with Shell Foundation and is growing to be a global company with sub-
stantial partnerships. In the next few years, Envirofit will be financially sustainable.

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