Indonesia Clean Cooking: ESMAP Supports Innovative Approaches to Build the Local Cookstoves Market, Helps Increase Access

Story Highlights

Despite significant strides in clean cooking solutions, about 40% of households in Indonesia still rely on traditional biomass fuels as one of their cooking options. Indoor air pollution from solid fuels is linked to 165,000 premature deaths each year in Indonesia.
As a key partner of Indonesia’s Clean Stove Initiative, the World Bank is helping the government design a strategy to achieve universal access to clean cooking by 2030.
ESMAP support is helping to design and pilot an innovative approach to develop a robust cookstoves market and increase household access to a range of clean stoves.

September 02 2016

Indonesia has made great strides in getting its citizens to adopt clean cooking solutions. Thanks to the government’s highly successful Kerosene-to-Liquefied Petroleum Gas (LPG) Conversion Program (2007–12), over 50 million LPG stoves were distributed to households and small businesses across the country. Despite these efforts, more than 40% or about 25 million households primarily living in rural areas still rely heavily on traditional biomass fuels, such as firewood, to meet most of their cooking needs.

According to the 2010 Global Burden of Disease Study, each year about 165,000 premature deaths in Indonesia are attributed to household air pollution linked to traditional biomass cooking, with women and children particularly at risk. Scaling up the use of clean biomass stoves could help mitigate health risks associated with the use of traditional biomass stoves and help the country achieve universal access to clean cooking.

Working with the Government of Indonesia, the World Bank launched the Indonesia Clean Stove Initiative (Indonesia CSI) in early 2012, which focused on the 25 million households that had not converted to LPG. One of the program’s goals was to create a thriving market for clean cookstoves, something that previous programs implemented by NGOs and donors had failed to do because they lacked scale and did little to involve the private sector. While the CSI took into account known barriers, such as lack of consumer awareness of available products, affordability of stoves, and weak retail and institutional capacity, it also found that other sociocultural factors, such as gender dimensions, cooking skills, type of foods cooked and others, added more complexity to the decision to adopt clean cookstoves. The key was to understand consumer preferences and adoption patterns and to convince suppliers of the need to design clean stoves that met these preferences rather than focusing on supply-side approaches to develop the market.

With support from the Energy Sector Management Assistance Program (ESMAP) and the Asia Sustainable and Alternative Energy Program (ASTAE) contributing with $0.4 million and $1 million grants respectively, the Bank helped find a solution with an innovative Results-Based Financing (RBF) approach. The RBF, which disburses public resources against demonstrated results, focused on mobilizing private sector involvement in distributing and promoting the adoption of clean cookstoves.

Two pilots were carried out in the provinces of Central Java and East Nusa Tenggara—the former being a more affluent area with widespread access to LPG stoves and the latter a poorer region with a more dispersed population that had not benefited from the LPG program. Early results confirm that listening to buyer needs and customizing cookstoves accordingly is effective in creating demand. They also show that providing incentives for the private sector to invest in building a sustainable value chain is a promising way to develop a strong cookstoves market. Research conducted on the sociocultural factors driving the market has produced useful social and gender knowledge, which has been shared with key stakeholders.

Efforts in these two provinces focused on three key components:

An innovative stove subsidy approach. In order for the government to provide market subsidies, cookstoves must meet pre-defined quality criteria. Incentives for suppliers are intended to motivate them to produce appropriately designed stoves, build enough stock to satisfy demand, and promote continued adoption and distribution of stoves.
Innovative stove testing. Information from social and gender research was combined with technical data on stoves to develop stove testing methodology. The combination of sociocultural and technical dimensions of clean cooking in the testing provides more representative results and leads to better decisions.
A market-based approach. While subsidies are provided to support the market, incentives (e.g., making funding available based on stove performance) are used to push the private sector to invest along the entire value chain and carry some of the risks related to the adoption of products.

Of the 50 different stove models tested since the beginning of the pilots, about a third met quality standards. In addition, 10 so-called “market aggregators”—legal entities such as stove producers, wholesalers, and retailers willing to take investment risks—have selected some of those models and are currently aiming to sell about 5,500 stoves in the pilot areas, representing about 80% of the 7,000 cookstove target for the entire pilot.

Learn more about Programs Results-Based Funding for Energy Sector Development.

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