IMPORTANT NOTE: high
risk product - direct loan to biogas company. No local partner in between to
Issuer: SimGas Kenya Ltd.
Amount: EUR 125,000 (senior debt)
Maturity: 36 months, semi-annually and linearly amortizing
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.
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.
Basic compliance checks performed by CreditSafe.
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.
With a loan of EUR 125,000, the company is able to provide a loan to 185 farmers in Meru, Kenya and enable them to each acquire a SimGas biogas system. These systems allow farmers to produce clean gas by digesting the manure of their cows. 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.
The 185 biogas digesters will be sold, installed and serviced by the SimGas Meru hub team, consisting of 1 hub manager, 6 technicians, 1 quality controller, and 5 sales reps. The loans will be monitored by SimGas Kenya head office. Clients repay their loans on a monthly basis by using their mobile phone. Depending on the loan offer chosen by clients, they pay off their biogas digester in 5, 12 or 24 months, after which they do not have any fuel costs anymore.
With this loan 185 families and thus approx. 925 Kenyans living in Meru 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)
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 25-200% 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
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.
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.
Wasua – Financial Manager SimGas Kenia
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
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
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
Track record: http://simgas.org/trackrecord/
- World Bank’s Ci-Dev buys 500,000 carbon credits generated by our biogas
- Winner IDEO.org Amplify Challenge with our Biogas Milk Chiller
- USAID’s Powering Agriculture grantee
- Biogas Milk Chiller prototypes in Tanzania
- Pilot for bio-sanitationsystems at schools in Kenya and
- Winner Lettinga Award
- 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
- Founded SimGas Kenya Ltd., sales start in Kenya
- Start product development of Biogas Milk Chiller and Biogas Stove
- Siemens Empowering People Award Finalist
- 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
(Picture of Moses with one of the assembly teams in Kenya)