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Posts Tagged ‘environment’
GIM delivers a keynote speech at the Sixth World Water Forum: Testing solutions for water products at the BOP must take a multi-product approach, instead of a single product-driven approach

GIM delivers a keynote speech at the Sixth World Water Forum: Testing solutions for water products at the BOP must take a multi-product approach, instead of a single product-driven approach

In a keynote presentation at the Japan Water Forum Side Event at the Sixth World Water Forum, Marseille, 14 March 2012, Sahba Sobhani (Growing Inclusive Markets Initiative, UNDP), reflected on the challenge of growing inclusive markets for water products in low income communities, where the challenge is to find strategies that are replicable and scaleable. The session focused on business-based pro-poor approaches on water and sanitation for better sustainability.

Mr. Sobhani said, “research and pilot testing is essential to take into consideration the cultural characteristics and ease of use in water sector products. Awareness building and community mobilization are also necessary cost factors.  He noted that a sector approach testing multiple products can be more beneficial compared to the standard ‘product’ based approach pursued by most companies when entering the BoP market. Sectoral approaches enable comparative benchmark analysis of pro poor impact, demand for the products and business cases. The presentation included findings from a recent UNDP multi product testing undertaken with two Japanese water purification products as part of a Japanese Ministry of Foreign Affairs funded initiative -perhaps one of the first multi-product feasibility studies of its kind.

The BoP business model can apply not only to point of use systems, but also to support the construction of water supply systems for the unserved, in order to sustainably improve public hygiene with safe water supply. The JICA experience with the BoP business experience has so far demonstrated that these businesses are more difficult than other ordinary private water projects because they are small, target low income groups, and are high risk. Therefore, private finance is very limited. Osamu Murata (JICA), explained that this is why JICA is supporting the costs of feasibility studies by private companies that are willing to invest in the BoP business model. JICA will continue to welcome collaborations with other donors, NGOs and private companies.

The session concluded that the BoP business model can be successful in meeting the needs of poor people for improved water service provision at an affordable cost. It can also open up significant new markets for businesses and enable them to make a profit. And finally, the BoP model provides a long term contribution to sustainable poverty reduction by using more energy and resource-efficient technologies, increasing economic activity and creating opportunities. Unserved communities, private companies, and the international development community can all achieve their objectives by working together using the BoP business approach. Work by the Japan Water Forum, JICA and colleagues on the BoP solutions will build on the suggestions made during the Side Event in preparation for further presentation and discussion on this topic during the 7th World Water Forum in Korea.

Q&A with Charlie Dou, author of Micro-Hydro Power case study in China

Charlie Dou is an adjunct Professor and Research Associate, Alternative Energy Institute, West Texas A&M University, USA; CEO, Beijing Bergey Windpower Co. Ltd., served as International advisor for UNDP/GEF on renewable energy project in China, key Expert for EU, Consultant for the World Bank/GEF, etc. He is directly involved in many research and international projects sponsored by UNDP/GEF, the World Bank, China central government, and has published and/or edited 14 books and more than 40 papers/presentations, including “China Village Power Project development Guidebook” and the series books of “Capacity Building Strategy for the Rapid Commercialization of Renewable Energy in China” for UNDP. He received his Master’s Degree in Engineering Technology in the US, and Master’s Degree in Electric Engineering in China, and once worked on his doctoral degree on Industrial Engineering at Texas Tech University.

To download the Micro-Hydro Power case study from the GIM database, please click here.

What is the project’s basic value proposition and what makes its financial model sustainable?

The economic development is slow for these remote villages located in China’s western mountain regions and the life of these villagers is poor because of their inability to access electricity.  Extension of traditional utility power line is not viable, and not affordable for low-income residents.  Finding a technical and economically feasible solution is key for rural electrification in such areas.  Micro-hydro power is the least costly technology for power generation compared with other renewable energy technologies and traditional power plants. This case provides a successful example of local people relying on their own efforts to develop an electricity service without government and outside financial assistance and improve their life.

In developing countries, what are the main challenges for access to energy for the poor?

The main challenges for access to energy for the poor in developing countries is to develop a solution for a financially and technically sustainable power supply and affordable power service.

What main factors make this model successful that will allow it to be replicated elsewhere?

First, availability of resource and technology. Second, affordability of the solution (again, micro-hydro power generation is one of the least costly power generation technologies). Third, self-motivation (local residents wished to change their status). Fourth, clear ownership (the micro-hydro power system was developed and managed by the villagers themselves).

What would you say was critical about the actor ecosystem that enabled this business to be successful?

The villagers there have lacked power supply for generations. They wished to change this situation.  But the local utility company is not interested in expanding the service to such areas due to high investment and poor return (or even no return, since the losses from the power transmission may be even more than the power to be applied).  Micro-hydro power generation provides an affordable and environmentally friendly solution, since usually, for such a micro-hydro power generation, no civic construction is needed.  The water flow will not change significantly, which means little negative impact on local ecosystems compared with large hydro dams.

Q&A with Tram Nguyen-Stevenin, author of MDI Betterday Fairtrade Products case study in Vietnam

Tram Nguyen-Stevenin was born and raised in Vietnam. She graduated from ESSEC MBA with a focus in Marketing & Sales, and has 13 years of international management experience acquired in both the association sector and private sector. She effectively managed Sales & Marketing for the largest European and American multinationals operating in Telecommunications and e-commerce & Online Financial Services. For over 2 years, she has been the Executive Director of a Business Organization (European Chamber of Commerce) in the developing and exciting country of Vietnam. She accepted this appointment which is somehow different in her corporate career path as a key opportunity to promote and facilitate trade and investment activities between the EU, her welcome mainland, and Vietnam, her born country. After her term at EuroCham, she is now back to the business world as the Marketing & PR Director at K+, the first media joint-venture ever in Vietnam between the Canal Plus group (Vivendi) and the national broadcaster Vietnamese Television VTV.

MDI is a SME specialized in equitable trade of agricultural products, including coffee, green tea, jasmine tea, snow mountain tea and cashews grown in eight provinces across Vietnam. MDI works in partnership with groups of smallholder farmers, mostly from ethnic minority groups in poorer and remote areas of Vietnam.

To download the MDI Betterday case study from the GIM database, please click here.

What is MDI’s basic value proposition and what makes its financial model sustainable?

MDI works in partnership with groups of smallholder farmers, mostly from ethnic minority groups in poorer and remote areas of Vietnam. The company is committed to the development of the rural sector in Vietnam and believes that the best way to accomplish sustainable development is by doing business in a fair and ethical way with people in the sector: by engaging producers as trading partners, MDI can improve their livelihoods, increase their incomes and assist them in linking with markets on terms that are beneficial for them.

With their motto “Development through pro-poor business” MDI has a “double bottom line” meaning that in addition to being a “for-profit” their success is also measured by the social impact that they can achieve.

What are the main challenges for scaling up the business?

- Physical Infrastructure: in order to grow and reach to new farmer groups, MDI needs to invest and recruit local staff in the mountains to collect and check the quality of the crops.

Besides, in terms of organization, as a small structure with limited human resources, the company has to undertake many tasks, from providing support to farmer groups right through to marketing their products internationally. Furthermore, MDI does not have a big budget for marketing and advertising their brand.

What has the involvement of MDI done for ethnic minorities in the country?

MDI works with farmer groups to help improve quality of production, achieve Fairtrade certification and organic certification. MDI is currently working with around 1000 farmers, representing total household size about 4500-5500 people. All of the farmers they work with live below the international poverty line of US$1 day; most are ethnic minority people; and many live in remote mountainous regions.

Because MDI only started recently, the impact on income is still quite modest. However, the tea farmers were able to double their income from tea this year – tea is about 1/3 of their overall “income” but represents almost all of their cash income.

It can also be noted that the farmers feel more pride in their products and are excited to see that their tea and cashew is being sold in the international market but still retaining the identity of the producer groups.

“We are proud to know that our products are sold in many foreign countries and…I cannot believe that my picture is in fact appearing on tea boxes to many people!” explains a young Mong lady.

For MDI, what were the main benefits of the fair trade certification?

The FAIRTRADE Certification Mark is a registered trademark of Fairtrade Labelling Organizations International (FLO). It certifies that products meet the social, economic and environmental standards set by Fairtrade. The Mark certifies products not companies. It does not cover the companies or organizations selling the products.

For producers Fairtrade uniquely offers four major benefits

  1. Stable Prices
  2. A Fairtrade Premium
  3. Partnership
  4. Empowerment of farmers and workers

What would you say was critical about the actor ecosystem that enabled this business to be successful?

Oxfam Hong Kong has played a critical role in providing contacts, linkages and assistance on international markets to MDI.

Oxfam International is a confederation of 14 like-minded organizations working together and with partners and allies around the world to bring about lasting change. Oxfam International works directly with communities and seeks to influence the powerful to ensure that poor people can improve their lives and livelihoods and have a say in decisions that affect them.

Oxfam Hong Kong helped MDI with the launch of Betterday Fairtrade products into Vietnamese supermarkets in December 2007 and also introduced their products in Hong Kong. In 2008, Oxfam subsidized MDI paying 50% of their trip to exhibit their Fairtrade products at the Hong Kong Food Expo. Oxfam also supported a trip to meet tea farmers in Nghe An, Central Vietnam, where Oxfam has been working for over a decade.