Mercy Corps is a leading global organization powered by the belief that a better world is possible. In disaster, in hardship, in more than 40 countries around the world, we partner to put bold solutions into action — helping people triumph over adversity and build stronger communities from within. Now, and for the future.
Over the past 10 years Mercy Corps Uganda (MCU) has been very active in the humanitarian and development sector in Uganda, with a focus on strengthening market systems in support of livelihoods and food security goals. Currently, Mercy Uganda has a total portfolio of US$ 79 million with 16 active programs, providing a strong platform upon which to build.
Within this program portfolio MCU has a long history of engagement in the clean cooking sector. We have seen expanding and strengthening market access to high quality clean cooking technologies as a key element of our efforts to reduce environmental degradation, improve household health outcomes and to create livelihood opportunities. Our programs have always taken a strong market-based approach, testing technologies and business models for more remote or low-income consumer groups and attempting to solve access to finance and access to knowledge gaps. Our recent merger with Energy 4 Impact brings to Mercy Corps deep technical and financial knowledge across clean cooking markets, also through a solid partnership with Modern Energy Cooking Services (MECS), leading program promoting modern cooking technologies associated with business models and smart monitoring.
Uganda Clean Cooking Carbon credit opportunities
Uganda’s energy sector is dominated by biomass. Wood is by far the most common cooking fuel in rural areas and charcoal is the most common in urban areas. According to the National Charcoal Survey (2016), released by the Ministry of Energy and Minerals Development, 9 out of 10 households use either firewood or charcoal for cooking. According to the Uganda Bureau of Statistics (UBOS, 2017), 95 percent of Ugandan households rely on charcoal, wood, or other forms of biomass for their household cooking needs while only 5 percent rely on alternative and modern energy, i.e., electricity, gas or kerosene. The Global Alliance for Clean Cookstoves (GACC) (2017) further reports that the use of clean fuels, such as electricity, liquefied petroleum gas (LPG), biogas, and ethanol also remain under 1 per cent. The roughly 150,000 households that use clean cooking fuels are concentrated in urban areas and rely on electricity and LPG as their primary cooking fuels.
According to the National Charcoal Survey, access to modern and clean fuels are limited due to relatively high prices and low demand. Therefore, while the benefits of modern energy are many overcoming barriers associated with habits, cost, accessibility, and awareness are essential. For the most part, access to modern energy fuels like LPG and electricity is limited due to issues of accessibility, affordability, and last mile distribution costs. While LPG is increasingly available in urban settings, also through PayAsYouCook modalities, generally rural and remote LPG markets are broadly associated with higher risks and lower returns.
Carbon finance has long been seen as part of the solution for providing the long-term subsidies needed to build markets for high quality cooking technologies in Uganda. To date these efforts have been fragmented and small scale, with technology providers trying to capture carbon credits but limited by their small distribution networks. The opportunity exists for a larger scale clean cooking program that works to accelerate market penetration of modern and advanced cooking technologies while aggregating the carbon program activities in a more efficient and transparent way.
As part of its programming in Uganda, Mercy Corps is exploring an opportunity to improve access to clean cooking technologies through a market support scheme that addresses some of the key constraints to access especially finance. The goal is to use carbon credit finance as a conduit to increase access by making such technologies accessible and affordable. Mercy Corps is seeking the services of a consultancy firm to assess the landscape and feasibility of carbon credit finance for the uptake of clean cooking technologies in Uganda. The proposed assessment aims to lay the groundwork for a national-scale cleaning cooking program capable of having sustainable impact while generating a sufficient stream of verified carbon credits.
Goals of the Assessment
- Deepen our understanding of the existing clean cooking market (players, projects, locations, regulations, standards etc) in Uganda.
- Assess the strengths and limitations of existing carbon credit generation models in the clean cooking sector in Uganda.
- Review the regulatory and policy framework around clean cooking and carbon credits generation in Uganda including the needed structures and partnerships for a national-scale program, including different technologies to target different client segments.
- Explore potential models for intervention and recommended options with highest return opportunities in terms of impact and carbon credit generation including options to reach rural and vulnerable communities.
- A capacity building and design workshop based on the assessment output to frame the program and expected outcomes, outputs, key partnerships, operational structure, consolidated work plan and project financials.Detailed Assessment
To achieve the above goals, the consultant is expected to among others focus on the following research component and questions. - Clean cooking market in Uganda
- Map the types, tiers and segmentation of clean cooking technologies and companies are operating in the Uganda market. This should include the various trade organizations supporting the clean cooking sector in Uganda
- Identify the geographical focus of the stove companies in Uganda including their business and distribution models
- Analyze the local production capacity versus the import of existing stoves
- Map out various clean cooking support programs recently or currently supporting the clean cooking market and any synergies a potential carbon credit might have with these programs or eco-system organizations
- Assess the various consumer credit support schemes such as subsidies, RBF, micro-finance schemes being applied in the clean cooking sector
- Assess the key demand and supply constraints inhibiting access to clean cooking technologies and suggest recommendations to feed into the eventual potential carbon credit program
- Current state of carbon market
- Overview of the global carbon off-setting market with a specific focus on Africa providing details on key players on the supply and demand side, applicable, current applicable methodologies, pricing, and trends
- Mapping of the scope of the carbon off-setting market in Uganda with a focus on carbon credit finance initiatives being applied in the clean cooking sector, with detailed analysis on the players, methodologies, geographies of operation, type, and tier of cook stove technologies being applied, duration, off-takers, strengthen and limitation etc
- Analyze the current structure/mechanism for the flow of carbon finance to technology producers, distributors, and users
- Assess gaps in the current market structure and options to make maximum impact
- Assess the inherent risks in both the global and Ugandan market for a potential carbon program
- Policy and regulatory environment
- Assess regulatory environment for clean cooking in Uganda including the government’s vision and current and potential new programs
- Examine the standards and regulatory requirements for stoves in Uganda
- Analyze the various policies and regulations that govern carbon finance in Uganda
- Examine the appetite and support of the government (including the various agencies and their mandates) for clean cooking and carbon credit including potential partnerships and role for a national clean cooking program
- Intervention Options
- Recommend clean cooking technologies, market segment and methodologies with the highest return opportunities in terms of impact, sustainability, and carbon credit generation and potential to scale
- Recommend the key phased intervention points, including a proposed operating structure
- Recommend key partnerships and their roles that needs to be in place for the effective operation of the proposed operating structure/program
- Conduct a cost-benefit analysis of a potential carbon credit program in Uganda under various scenarios, including various carbon methodologies (Gold Standard, VERRA, CDM etc) and propose a phased pathway to scale.
- Develop a “what needs to be true” matrix to guide project developers; including a thorough risk register and mitigation plan
- Recommend the technical capacities required within the Mercy Corp team to enable effective implementation of the program
- Capacity building and Design workshop in Uganda
- Based on the assessment output, lead a 2-day design workshop to frame the potential clean cooking carbon finance program and expected outcomes, outputs, key partnerships, operational structure, consolidated work plan and project financials
- Conduct a 1-day capacity building workshop on carbon finance for participants of the design workshop to set the appropriate toneAnticipated Methodology
Using both qualitative and quantitative research methods, the consultant shall among others follow the following steps to achieving the objectives of the assessment. - Step 1: Detailed work plan for the assessment including methodology
- Step 2: Desk study of existing data, reports, and case studies
- Step 3: Key informant interviews and primary data collection in Uganda
- Step 4: Analysis of findings and reporting
- Step 5: Capacity building and design session in Uganda The Research Team is expected to develop an Inception Report, including a detailed work plan and Evaluation Methodology. This Inception Report should review and confirm proposed methodology, evaluation matrix (including proposed evaluation sub-questions and the ways in which the questions will be addressed), sample frame, data collection strategy, and proposed timeline for delivery of the evaluation outputs. The Consultant will be expected to gather and analyze data and deliver aggregate qualitative (and quantitative, where relevant) conclusions based on diverse materials collected. In collecting and analyzing data and drawing conclusions and recommendations, the Evaluation Methodology should be based on a wide variety of sources of information and utilize methods that will result in a valid, credible and legitimate report. The Research Team is expected to develop an approach that allows for continuous incorporation of feedback in real-time during the evaluation period.
Expected Deliverables
The Evaluation Team is expected to produce the following deliverables: - Prepare a detailed work plan that includes a proposed Evaluation Methodology (including key criteria, indicators, and data collection strategy, for the evaluation questions) and a set of evaluation questions (including draft questionnaires for stakeholder interviews.)
- Data collection: Implement and independently undertake the necessary evaluative work. Evaluate relevant sources of information through desk reviews and literature studies, conduct stakeholder interviews, as laid out in the proposed Evaluation Methodology, and interact with the Mercy Corps team
- Prepare a draft Evaluation Report that includes interim findings and emerging recommendations
- A 3-day capacity building and design workshop in Uganda
- Prepare a final Evaluation Report that reflects feedback received from the Mercy Corps team during the draft process
- A summary report (not more than 5 pages) of key observations, findings and recommendations
- A project design deck outlining best option(s) for a phased program design with high level operational structure, consolidated work plan, projected financial model(s) and project budget
- Workshop to share findings and proposed phased interventions with potential donor The final report, summary report and project design deck are expected to be completed by 15th September 2022.
Tentative Timeframe
It is expected that the completion of the present engagement will take about three months, for a total LoE of 50 days for Assessment Lead and 50 days for Support Staff. A final timeline would be negotiated with the selected Evaluation Team and it will include the following steps:
MONTH
M1
M2
M3
M4
Select Evaluation Team; contract signing
Detailed work plan including Evaluation Methodology review; refining of TOR
Data collection
Prepare draft Evaluation Report
Capacity building and design workshop
Evaluation Report Feedback Process, including Reference Group Review
Delivery of Final Evaluation Report
A summary report
A project design deck
Workshop to share findings and proposed phased interventions with potential donor
Evaluation Governance
During the delivery of services, the Research Team shall be under the direct supervision of the Mercy Corps Chief Climate Officer. The Research Team shall also work closely with other members of the Mercy Corps-E4I Energy and Environment Technical Support Unit, and Mercy Corps Uganda team.
Budget
A budget shall be proposed by the Research Team based on the team’s composition and personnel requirements. The Research Team shall budget for any other costs necessary for the execution of the assignment.
Evaluation Team’s Qualifications
The Research Team is expected to have the following expertise:
- Strong analytical skills, including designing and conducting quantitative and qualitative data collection, analysis and triangulation of qualitative and quantitative data
- Proven track record and experience with complex international development, especially climate finance pilot interventions, preferably with carbon modelling, MRV, methodologies and clean cooking experience preferred
- Strong knowledge of climate change issues and climate-related development programs in developing countries; including excellent knowledge of carbon markets, low carbon technologies
- Proven track record of the climate finance market in Africa, especially in Uganda