GVEP has completed a study which investigates the potential for briquette businesses in Uganda to address the sustainability concerns of the country’s bioenergy / biomass fuel market. The study investigates the conditions in which micro- and small-scale briquette producers are operating in Uganda and examines their potential for growth.

Some of the key findings presented in the report include:fire.gif

  •     Demand for wood-fuel for energy in Uganda exceeds biomass supply, resulting in a deficit that is causing rapid deforestation.
  •     Recent increases in charcoal prices have created an economic case for briquette businesses to serve domestic and institutional markets.
  •     A large proportion of briquette businesses serving domestic markets utilise recycled charcoal dust as a feedstock representing an unsustainable dependence on the charcoal trade. Dried organic municipal solid waste and agricultural residues offer a more sustainable supply for raw materials.
  •     Briquettes from waste could only contribute a maximum of 6% of Uganda’s total wood consumption (or 50% of charcoal consumption) – limited by the national levels of waste produced – and therefore will not be a single solution to addressing the sustainability concerns of the country’s biomass resource.
  •     There are opportunities of growth at multiple scales of operation. Micro-entrepreneurs can be grown into small to medium scale producers (20 – 200 tonnes per year) using locally available machinery. By attracting suitable investment, opportunities also exist for new entrants to open medium to large scale production facilities (200 – 2,000 + tonnes per year), using imported equipment.
  •     Restaurants and institutions such as schools, prisons and hospitals offer the greatest potential to stimulate demand for briquettes. Domestic markets remain difficult and less economical to penetrate due to a lack of awareness and acceptance among household consumers and the cost of distribution.
  •     Key challenges found to limit the growth of small briquette producers include, the ability to maintain product quality; having access to the appropriate technology; limitations in feedstock supply; overcoming consumer awareness; and accessing the necessary finance.
  •     Evidence from GVEP International’s Loan Guarantee Fund demonstrates that investment from commercial institutions can lead to financially sustainable briquette enterprises. However commercial investors are generally still risk adverse towards the briquette industry and it is likely that seed grants are still required to fuel growth.
  • Facts to take into account regarding True entrepreneurs.
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