February 27, 2012 -- IFC client Premier Gas has launched a mini gas cylinder in Kenya, making clean energy accessible to low income households. The new technology allows partial refills of as little as 60 cents, for those unable to afford a full LPG cylinder.
As a bachelor, Michael Momanyi, general manager of Premier Gas, would make a cooking gas cylinder last for nine months, living on a diet of fried eggs. “I couldn’t afford the LPG refill," he explains. “It made me think – why should we fill the entire cylinder? Why not pay only for what we use?”
A few years later, Momanyi’s company may have found the solution. In February, Premier Gas, supported by an IFC equity investment of $2 million launched ‘Pima,"a one-kilogram LPG cylinder, which allows partial refills starting at 60 cents. Pima Gas will be dispensed from a mobile LPG pump; with an automatic switch-off mechanism.
“Partial refills will make it easy for consumers to purchase LPG. We aim to pull biomass and kerosene users to start using LPG,” said Momanyi.
Premier Gas estimates that over 3 million households in Nairobi use kerosene as their choice cooking fuel, despite health hazards. Kerosene stoves produce carbon dioxide and aerosols, which cause acute respiratory diseases. LPG stoves have cleaner combustion gases, reducing health risks and contribution to global warming. LPG also cuts cooking time by half, leading to household savings.
Yet, kerosene use continues due to the high costs of switching to LPG. The hassle of refilling a standard 6–13 kilogram LPG cylinder is another deterrent – an issue that the Pima mini cylinder is taking head-on.
“Private sector investment is critical for energy security in developing countries," said Jean Philippe Prosper, IFC Director for East and Southern Africa. “As Premier Gas has shown, the private sector is filling the gap in Africa with innovative products that expand access to clean energy and offset greenhouse gases.”
The Pima cylinder retails on the market at $24. Premier Gas is exploring cross subsidization options to reduce consumer costs, targeting 1.4 million consumers in Kenya over the next five years.
IFC’s Lighting Africa program, which converts users from kerosene to solar lighting, will advise Premier Gas on roll out of the Pima cylinder. If successful, Premier Gas plans to replicate Pima in other East African countries, with an eye towards Asian markets.