Sowing the seed of private sector in Ethiopian biogas industry

Sowing the seed of private sector in Ethiopian biogas industry

Tamirat Zerifu is playing a key role in transforming the bio-digester technology into an attractive business.

“Tamirat Zerifu is the backbone of bio-digester dissemination in Boset woreda [district]. He has good skill in constructing quality bio-digesters and providing after-sales service” says Getu Birhanu, Boset Woreda, Energy Technician and Bio-digester Focal Person.

In 2013, the National Biogas Programme of Ethiopia (NBPE) had trained masons such as Tamirat Zerifu and Addisu Wedajo on bio-digester construction. Following the training, the programme provided entrepreneurship courses. On top of this, SNV has been offering business coaching and assisted him in preparing a business plan. Based on this exercise, he understood the dynamics of the bio-digester market and the importance of collaboration.

In 2015, some masons started to establish bio-digester construction companies. Tamirat's and Addis' Bio-digester Construction Work and Bio-digester Materials Supplying PLC was one of the formally established bio-digester construction enterprises in the Oromia region. However, an analysis shows, out of the 1,539 trained masons, only 10% are still in the business. Among reasons of poor retention and lack of motivation in setting up enterprises, are a misconception about the commercial viability of the bio-digester business in rural areas and the limited business capacity among youth.

Sowing the seed of private sector in Ethiopian biogas industry

Currently, Tamirat, a father of five, owns the business by himself as his friend left him. To date, the company has successfully constructed more than 200 bio-digesters for individual households, cafés and restaurants. The company is also supplying appliances, accessories and construction materials for bio-digester users. In May 2016, for instance, the company has sold more than 120 quintals of cement; supplied a good number of biogas lamp glasses and mantles. In addition to this, it has created job opportunity for three permanent and additional five temporary employees.

To reduce the dropout rate, experts like Getu Birhanu, Energy Technician and Bio-digester Focal Person from Boset Woreda, work with determined and business-oriented masons, such as Tamirat. These masons, once they fall in love with the business, they look for ways of making their business successful and overcoming the challenges.

“The bio-digester business is full of challenges. Users may not provide construction materials in time; there is slow payment of investment contribution by government (subsidy) and access to credit is also limited. Although all these things discourage me, I don’t give up. Biogas has already become my second name”, said Tamirat Zerfu.

Customers nick-named him “Tamirat Biogas”. He is positive about the nickname. What is painful for people like Tamirat is the limited number of supporting actors with understanding of the business, particularly at the local level. He currently does not have a proper office , but he is about to complete the construction in his compound and inaugurate it soon. He has already figured out better ways of promoting the business in a more professional manner. He has invested in promotional materials like T-shirts for the purpose, to be distributed during the inauguration of his new office.

“In addition to the after-sales service I provide to users, I have understood that properly establishing my company will help me promote my bio-digester construction business as well as the supply of appliances and accessories for new and old bio-digesters”, added Tamirat.

The business is generating a decent amount of income for him as well as for his employees. He makes a monthly income of Birr 4,000 (roughly USD 200) for him and Birr 3,000 (roughly USD 150) for each of the three assistants. Besides, he has created additional job opportunities for five temporary workers. The increased income helped him to diversify his source of income. He has also started livestock fattening. He owns a motorcycle, which he uses for multi-purposes, including for transporting employees and for demand collection. To further improve his business, he also has bought a pick-up vehicle, which he uses especially for transporting cement and other materials.

Furthermore, Tamirat said, “the national framework for private sector development serves as a basis for establishing clarity among the private sector and the supporting partners and therefore the framework should be operationalized, immediately”

NBPE is co-funded by the Government of Ethiopia and the Dutch Ministry of Foreign Affairs, Directorate General for International Cooperation (DGIS). It receives fund management and technical assistance from Hivos and SNV, respectively. The programme creates market-based solutions to energy poverty through promotion of biogas, as clean energy and bio-slurry, as organic fertiliser.

This article was initially published by Hivos.