On a recent visit to the E+Co Tanzania office in Dar-es-Salaam, Monitoring & Evaluation Officer Elizabeth Ngoye and I visited E+Co portfolio company, Afrozone. Afrozone, founded by former BP Director Abraham Mwalwega, is a distributor of Liquified Petroleum Gas (LPG), which is used in place of charcoal for cooking. Since 2009, Afrozone has sold a total of 259.96 tons of LPG. The enterprise has also begun selling gas stoves, which are imported from China under the “Afrogaz” brand name.
Tanzania has one of the lowest electrification rates in Africa, with only 14% of the country electrified, dropping to 2% in rural communities. Since opening an office in Tanzania in 2008, E+Co has been actively engaged in supporting the development of clean energy entrepreneurs, especially solar entrepreneurs in the country. E+Co is also working to ‘transfer’ to Tanzania its knowledge and experience gained from LPG investement in Ghana. While LPG is not a “clean” cooking fuel, it’s “cleaner” than use of charcoal, and a “step up” along the clean energy chain.
LPG has several advantages – it burns more cleanly, it takes up less storage space than a bag of charcoal, and use of LPG reduces deforestation. There are also health and environmental advantages – the “black carbon” emitted by charcoal and biomass stoves is a major contributor to asthma and other respiratory diseases, and has also recently been acknowledged as a significant contributor to global warming and climate change.
It is also less costly. Elizabeth, a Dar resident, has her own personal experiences with charcoal and LPG, having recently switched from charcoal to gas. While LPG filling locations are spread around the city, to which users can bring their canisters for refilling, there remains a suspicion about using LPG – many still fear that it’s an unsafe fuel source. But with a cost factor weighing increasingly on the side of LPG, a shift seems to be underway.
Elizabeth shared that filling a 15Kg cylinder costs 36,000 Tanzania shillings (approximately US $23.75). This canister will last approximately 1.5 to 2 months for a family of five. Charcoal costs about 38,000 Tanzania shillings per bag (approximately US $25), but lasts only about two weeks. Additionally, lighting charcoal takes longer time than gas, extending the time needed for cooking.
While there is an upfront cost for the purchase of the canister (approximately US $100), at current prices the costs for the cylinder can be covered in as little as four months.
In addition to the safety concerns, there continue to be other challenges against the adoption of cleaner LPG gas. BP, one of the gas suppliers in Tanzania, is pulling out of the market, leaving only Oryx as the sole provider. That is impacting the work of Afrozone, which had been sourcing supply from BP, and is now in the process of establishing a partnership with Oryx. As Afrozone is planning to expand its distribution into new, underserved regions of the country, the enterprise will continue to expand their Oryx relationship.
This reduction in suppliers will reduce distribution competition in the country, potentially resulting in future price increases. For the time being, however, the benefits of LPG seem clear.
By Anne Murray, E+Co Senior Development Officer