Uganda is a landlocked East African country where most people (94%) use firewood or charcoal for cooking. These energy sources have several drawbacks on the environment and users: According to the National Environment Management Authority (NEMA), 2.6% of Uganda’s forests are cleared annually for firewood, charcoal, agriculture, and housing. In addition, burning wood or charcoal produces harmful emissions and smoke, the inhalation of which causes 3.8 million premature deaths each year, according to the World Health Organization. In addition, wood collection is often carried out by women, robbing them of valuable lifetime.

Accordingly, the transformation to modern, clean cooking solutions – particularly electric cooking solutions powered by electricity from renewable energy sources – is essential. However, there are still major hurdles to this, with just 42% of the population in Uganda having access to electricity. In addition, this change requires an adaptation of cooking habits, as other cooking appliances have to be used. As a transitional solution, LPG (Liquified Petroleum Gas) is an option to encourage households to switch to cleaner and modern options, enabling innovative approaches such as biogas for cooking.

This niche is served by Ugandan company Wana Solutions Uganda Limited (Wana Energy), in which it sells fuel-efficient cookstoves powered by LPG to households in Uganda. To increase its environmental impact and pave the way toward clean cooking, Wana Energy also offers solar home systems that provide customers with clean solar power. Therefore, through this crowdfunding campaign, Wana Energy aims to fund new solar home systems, cook stoves, gas cylinders and accessories.

Concept:

What is special about Wana Energy’s concept is that it offers the fuel-efficient cookstoves with the solar home systems as a complete package. The advantage here is that Wana Energy takes advantage of the integrated payment system (“pay as you go”, PAYGO) of the solar home systems: customers load the PAYGO system with money and can then draw as much solar power as they have paid for. The system, which is connected to the solar home system, can also be turned off remotely, which Wana Energy plans to use if the LPG has not been paid for. It thus incentivizes on-time payments and minimizes the risk of non-payment.

Wana Energy’s concept is that customers pay off the solar home system and cook stove through their payments via PAYGO, and then it becomes their property (“rent to own”). This flexible pricing structure allows customers with limited budgets to pay even small amounts. In addition, people save 20-30% of their household income previously spent on charcoal, kerosene, firewood, and cell phone charges, and gain access to clean energy from solar power. This allows clients to power lamps and a small radio, increasing quality of life and productivity.

Wana Energy’s business model actively contributes to 6 of the UN’s sustainable development goals („SDGs“):

The solar home systems that Wana Energy sells to its customers are powered by sustainable solar electricity. Therefore, their distribution and use actively contribute to Goal 7. The fuel-efficient cookstoves running on LPG reduce the consumption of wood, increasing energy efficiency (Goal 7.3) and cutting down fewer trees (Goal 15.2). At the same time, customers save 20-30% on fuel costs (target 8.4).

Using efficient cookstoves and lamps powered by solar electricity also reduces health hazards, such as indoor air pollution, that can cause respiratory illnesses (Goal 3.9). In addition, fewer CO2 emissions are emitted (Goal 13), contributing to climate change mitigation.

Wana Energy currently employs 86 people, of whom approximately 47% are women, and supports women in taking positions that are traditionally “for men only” (Goal 5.1).

By using efficient cookstoves that are running on LPG, fuel is saved, which at the same time creates a large potential for CO2 savings. The switch from traditional wood-based fuels to LPG is usually carried out by households who are using charcoal briquettes because they are already paying for the charcoal hence the switch to LPG is easier for them. One household that uses charcoal briquettes as fuel emits 7,027 kg CO2 per year for cooking. By cooking with LPG, one household emits 2,007 kg CO2 per year. Therefore, one household saves 5,020 kg CO2 emissions per year. As one household in general uses one cook stove, this amount can be attributed to the savings of one cook stove.
Through the crowdfunding project, 1,015 cookstoves will be sold, saving an average of 5,095.30 tons of CO2 per year. The 1,155 solar home systems will produce clean solar electricity and generate a CO2 saving of 1,039 tons of CO2 per year. So, in total, the implementation of the project will save 6,134.30 tons of CO2 per year. Over the lifetime of the project, it is 30,671.50 tons of CO2.

The investment risks associated with the subordinated loan are described in detail in the VIB under item 5 and in the risk notes. To assess and limit the risks for investors, the issuer draws attention to the following special features in the design of the project:

1) Use of a special purpose vehicle:
For the crowdfunding campaign on bettervest, a special purpose vehicle called Afrika Emissions 2 UG (haftungsbeschränkt) based in Germany was established to act as a borrower in this project. It forwards the collected capital as a secured loan to the project owner in Uganda, Wana Solutions Uganda Limited (Wana Energy). Shareholders and directors of Afrika Emissions 2 UG (haftungsbeschränkt) are independent of Wana Energy. In addition, Afrika Emissions 2 UG (haftungsbeschränkt) has a liquidity buffer of 5,000 euros of the money raised in the crowdfunding, which serves as a financial cushion for any necessary measures if Wana Energy fails to meet its payment obligations.

2) Collateralization of the on-lending loan:

The on-lending loan from Afrika Emissions 2 UG (haftungsbeschränkt) to Wana Energy includes the following risk mitigation measures:

(i) Pledge of a piece of land currently valued at just under EUR 74,000 (UGX 300 million, see appraisal report) to Afrika Emissions 2 UG (haftungsbeschränkt). The value corresponds to the current Valuation Report (expert opinion). This will be updated in the near future and will then be higher. We will then provide an updated appraisal report.

(ii) Registration of a debenture for the funding amount in the official register of Uganda in favor of Afrika Emissions 2 UG (haftungsbeschränkt).

Investment requirements

The cost of Wana Energy’s total project is 294,850 euros. This will finance 1,015 new cookstoves, 4,500 gas cylinders, 1,155 solar home systems, accessories, as well as the liquidity buffer and fees.

Via crowdfunding, therefore, 294,850.00 euros (including fees) are to be collected.

The term of the loan is 5 years and has an annual interest rate of 7% p.a. for the crowd-investors. Investors who invest in the project within the first two weeks will additionally receive an early bird bonus of 1% p.a. (i.e. a total of 8% p.a.). The funding threshold for this project is 50,000 euros. If only this amount is reached, the project owner will still use the investor funds for the purchase of material and invest to a lesser extent in the investment objects mentioned above.

Repayment

Repayment of the loan will be made from cash generated by Wana Energy during its operations as income from the sale of the gas cylinders, cook stoves and solar home systems.

LPG burner stoves

Wana Energy offers a complete LPG cooking system along with a solar home system equipped with LED lights and a cell phone charging port.
The cooking stove is sourced from the Chinese company Ferrotech and consists of two burners and is connected to LPG gas cylinders.

Solar-Home-System

An SHS consists of a solar panel, a battery with a battery management system, and a payment system with pay-as-you-go (PAYG) technology. Wana Energy is looking to fund the WOWSOLAR™ 100 model from Amped Innovation.

The WOWSOLAR™ 100 model features 3 or 4 lights ranging from 160 to 400 lumens, a 10-W solar panel for charging cell phones, and a portable flashlight/radio with an extra-large battery for longer run times between charges.

Amped’s products feature integrated PAYGO software that can allow cash or mobile payments. If payment is not made, the solar charge controller can be turned off.

Amped Innovation also provides a 2-year warranty on the solar charge controller, solar panel and lighting, and a 1-year warranty on the flashlight/radio.

Distribution

Wana Energy currently operates in 35 districts in Uganda and serves 72,000 households across the country. Customers are reached through door-to-door deliveries of liquefied petroleum gas, retail outlets and distribution points.