The project

IMPORTANT NOTE: high risk product - direct loan to biogas company. No local partner in between to cover risks.

Basic info

Issuer: SimGas Kenya Ltd.
Currency: EUR
Amount: EUR 100,000 (senior debt)
Maturity: 36 months, semi-annually and linearly amortizing
Collateral: None
Interest rate: 6.5% p.a.

SimGas has the right to do an early repayment with a penalty fee of 1%. No early repayment is possible during the first 12 months of the loan.

Note: UK Aid (UK Government) supports this campaign via its programme Crowd Power (executed by Energy4Impact). Via this programme, EUR 50 vouchers are made available to new lenders at Lendahand. There is only a limited number of vouchers available (200), which are distributed on first-come-first serve basis. Are you a new lender and are you interested in using a voucher, please send an email to [email protected].

Direct loan

This is a direct loan to a company (rather than lending to a financial institution) and therefore it is recommendable that you are careful with the amount you will invest. 

Available documents:

• InRisc Credit Analysis (download here)
• SimGas Business Presentation (download hier)

Basic compliance checks performed by CreditSafe.

Summary SimGas

SimGas is a triple bottom line company that designs, produces and installs biogas systems for smallholder farmers in East-Africa. SimGas has facilities in Kenya (est. 2013, 60 employees), Tanzania (est. 2011, 20 employees) and The Netherlands (est. 2009, 12 employees). The biogas systems enable rural households with livestock to use the manure from their livestock to generate clean fuel for cooking and organic fertiliser: two valuable assets to increase income whilst saving life, nature, money and time. The high quality, modular, domestic biogas systems can be installed in 2 days. To date, SimGas has provided 1,500 farmers with their biogas systems.

What does SimGas drive to design, produce and install biogas systems? More than 3 billion people worldwide are being exposed to toxic fumes, fuels and dangerous open fires while cooking their meals (FAO, 2008). In East-Africa, 95% of households use wood or charcoal (FAO, 2009). Inhaling acrid smoke and fine particulates causes risks of skin, eye and lung diseases. The direct consequences cause 4 million people worldwide to die each year (WHO, 2011). ). Lower respiratory disease is the number 2 cause of death in Kenya, after HIV/AIDS and Malaria ranking at number 3 (WHO, 2013). Biogas is a clean cooking fuel and thereby eliminates indoor air pollution, putting an end to one of Kenya’s top cause of death and disease.

SimGas desires to enable their customers to become more productive, independent, cost-efficient, and healthier farmers. Next to that they want to make biogas accessible not just for the lucky few, but for the worthy many. That’s precisely what the biogas systems do. By doing so, SimGas helps create healthy and safe environments for rural households while contributing to the reduction of indoor air pollution, deforestation, and carbon emissions.

View http://simgas.org/about-simgas/

The project

With a loan of EUR 100,000, the company is able to provide a loan to 170 farmers in Kenya and enable them to acquire a SimGas biogas system. These systems allow farmers to produce clean gas by using manure of their cows for example. This provides huge benefits as they are no longer required to cook on open fires and breath in toxic fumes. The biogas systems also produce organic fertiliser, which can be used on their land or sold to other farmers. SimGas Kenya, with 60 technicians and sales representatives spread across 11 locations (hubs) will sell and install the systems, provide maintenance and monitor the loans. Clients repay their loans on a monthly basis by using their mobile phone.

The regions where the farmers for this loan are situated belong to the most successful hubs of SimGas, namely Meru, Kiamba, Karatina and Eldoret. At each hub, there is a team of local technicians and sales reps. that provide personal services to the clients. There are currently 11 hubs in Kenya and SimGas plans to increase this to 15 in 2017.

Impact

With this loan 170 families and thus approx. 850 Kenyans are impacted. They will enjoy the benefits of cooking on clean gas and on having access to organic fertiliser. The impact is quite significant and is as follows;

• Health benefits as people do not have to cook on fossil fuels such as charcoal or wood, and thus eliminate the consumption of toxic fumes (the equivalent of 20 cigarettes per day)
• On average, people save 35-45% of their household budget, which they do not have to spend on wood fuel (Kenya Bureau of Statistics, 2015)
• Additional income of EUR 270 on average as a result of using the organic fertiliser on their land (a 200% increase of crops) and/or selling it to other farmers nearby
• Preventing the cut down of approx. 7.42 tons of wood per year (Kenya’s forest declined from 10% to 1.7% of its total territory between 1963 and 2016)(UNESCO, 2006)
• Preventing an average of more than 8 tons tons of CO2-eq emission per year per household
• Saving approx. 2-4 hours per day for a family as it takes much longer to cook on firewood and clean all the pots and the kitchen as compared to using biogas. Furthermore it is no longer required to gather wood or going to the market to buy firewood or charcoal.

SimGas’s business model is as follows; to the clients, an interest rate is charged for the loans which enable them to buy a SimGas system. The company also takes a small margin on the biogas systems itself.

Next to that, SimGas has a deal with the World Bank (Ci-Dev) that buys carbon credits, which allows SimGas to provide a discount on the systems of EUR 200 each. Thanks to selling these credits, SimGas can provide a guarantee and full service for 5 years. On average, the systems will remain functional for approx. 20 years.

More information on SimGas:

Vision & Mission

SimGas believes in empowering people by offering them graceful, reliable and sustainable tools that help to improve their lives and income positions.

SimGas takes social and environmental impact just as seriously as economic impact. We are creating impact through mass production, modularity and standardisation, combined with highly scalable business models. Our secret is the combination of local presence, great partnerships and smart investments in research and development. We measure what we do, learn from the results, and adjust our strategy accordingly. This is what makes SimGas a true trailblazer and helps us create immediate impact that lasts.

SimGas aims to be a game changer and is already the largest supplier of biogas systems in Africa. We have the ambition to lead the market for decentralised utilities in Africa and Asia by 2030. In order to accomplish this goal, we plan to test and introduce new SimGas products in our home-markets Kenya and Tanzania. In close collaboration with local partners we will ramp up sales in neighbouring countries Rwanda, Ethiopia, and Uganda.

Management team

Mirik Castro – CEO SimGas East Africa

Mirik (MSc., TU Delft) is a systems engineer in Policy Analysis and Management. He is a serial entrepreneur, having established Holland Turnaround, John’s Phone and other companies in the Netherlands, and has previously worked at Boston Consulting Group and Stork NV. As CEO of SimGas East Africa, he manages a growing team of 80 employees, including admin, sales, production, and installation crew in Tanzania and Kenya. Mirik lives with his family in Tanzania since 2011.

Oliver Kynaston – COO SimGas East Africa

Oliver (MSc., Bristol University, UK) is a physicist, researcher, patent holder, brewer, and hang glider pilot. With the belief that developing products for the off-grid market in East Africa can teach the world how to live sustainably, Oliver moved to Tanzania in 2010 to start a business in renewable energy products for households. SimGas persuaded him in 2015 to lead our operations in Tanzania and Kenya. Under his wings, a team of more than 80 is making households in East Africa (including his own) happy with biogas.

Joshua Wasua – Financial Manager SimGas Kenia

Joshua is a certified accountant with over 9 years of experience as a finance manager, senior consultant and accountant with companies such as PwC, Oriflame and Safaricom. As of 2015, Joshua is part of SimGas Kenya and a true linking pin between business and finance.

Christina Mng'ong'o - Factory & Supply Chain Manager

Christina (Msc, Dar es Salaam Institute of Technology) joined SimGas in October 2013 as Quality officer, Hub Manager of the Tanga branch, Deputy factory Supervisor for Gesishamba Production Ltd factory. She worked her way up to become Factory- and Supply Chain manager. Christina is the youngest SimGas employee and is an expert in injection moulding- and biogas technology.

Moses Gekara – Country Manager SimGas Kenya

Moses Ogeto is a trained engineer in Computer Science and HSSE planner. He has worked for 3N International as Database/Data Entry before Joining National Bank of Kenya in the same capacity. He has worked for 14 years as Operations manager for Pressure Vessels Ltd. He joined SimGas Kenya as Country Manager in October 2013 and has since then been of tremendous value in operations and sales. Moses knows all our customers in Kenya!

Track record: http://simgas.org/trackrecord/

2016 highlights:

• World Bank’s Ci-Dev buys 500,000 carbon credits generated by our biogas systems
• Winner IDEO.org Amplify Challenge with our Biogas Milk Chiller
• USAID’s Powering Agriculture grantee

2015 highlights:

• Biogas Milk Chiller prototypes in Tanzania
• Pilot for bio-sanitationsystems at schools in Kenya and Tanzania
• Winner Lettinga Award

2014 highlights:

• Dutch Minister for Foreign Trade & Development Cooperation Ms. Lilianne Ploumen opens our new production line in Tanzania
• Inclusion in the Africa Biogas Partnership Programme
• Global Alliance for Clean Cookstoves Spark fund grantee
• Ashden Awards Finalist

2013 highlights:

• Founded SimGas Kenya Ltd., sales start in Kenya
• Start product development of Biogas Milk Chiller and Biogas Stove 
• Siemens Empowering People Award Finalist

2012 highlights:

• Mirik Castro moves to Tanzania to start local production and sales
• Founded SimGas Tanzania Ltd.
• UNFCCC registered Biogas Program of Activities (PoA) for the trade of carbon credits

(Picture of Moses with one of the assembly teams in Kenya)

Previously realized

http://simgas.org/projects/