NDF - Financing for climate change and development projects

NCF 6: Improving rural livelihoods in the North Central region in Vietnam through innovative development of supply chains for energy-efficient cook stoves and wood from sustainable sources

Photo: NEPCon
Photo: NEPCon
14.05.2018
The project strives to support sustainable livelihoods of 6,000 poor and low income rural farmers in the Quang Tri province of Vietnam, and to improve access to affordable and clean energy efficiency solutions for 2,000 households as well as supporting a sustainable forest resource base and mitigating carbon emissions.

Vietnam
Improving rural livelihoods in the North Central region in Vietnam through innovative development of supply chains for energy-efficient cook stoves and wood from sustainable sources
Ref: NDF C83

Nordic Partner: NEPCon
Local Partner: Spark Center for Social Entrepreneurship Development
Other Local Partner: Cam Lo Wood Pellet Factory and SEPON
Total Project Cost: EUR 920,209
NCF Financing: EUR 399,914
Agreement Signed: 29 May 2017
Project type: Mitigation
Duration: 30 months

Project objective

The project objectives are to improve the livelihoods of poor communities and reduce negative environmental impacts of Quang Tri province in Vietnam through:

  • increased economic opportunities for local farmers through sustainable forest management
  • improved forest management techniques that improve local environmental conditions through increased biodiversity, forest cover etc.
  • increased use of energy efficient cook stoves that contribute to stabilising GHG levels.

Main results/outputs

A sustainable supply of chain of wood has been expanded e.g.:

  • Study on improved forest management
  • Replantation areas identified
  • 6,000 ha has been prepared for assessment by FSC certification body
  • In total 2-3 nurseries established and 5-7 female farmers are employed at each nursery
  • 500 leaders of farmer groups (20% female) are trained on sustainable forest management techniques and 6,000 households are guided on FSC forest management techniques
  • 6,000 ha of forest area has been targeted for sustainable forest management certification including valuable species and 20% permanent forest, equal to 1,200 ha replanted
  • Capacity for sale of certified products is increased
 

The supply chain of sustainable wood pellets and improved cook stoves for households and industry in Quang Tri province has been developed e.g.:

  • Baseline study about cook stoves conducted
  • Study about cook stoves
  • Business plans for 2 cook stove producers and 3 wood pellet producers elaborated. 3-5 models of affordable cook stoves identified and available for households and industrial users. 2,000 households have been informed about affordable cook stoves and certified wood pellets.
  • A total of 5 workshops conducted (500 people trained)
  • At least 4-10 local Industry users applied improved ovens used certified wood pallets
 

Capacity of local wood processing companies improved e.g.:

  • Wood processing assessment completed
  • Wood processing practises are improved in the private sector (training of 5 companies). They will have knowledge about certified production, 4% reduction in by-product, 6,700 t of residues available for pellet production)
  • Farmers are supported in mechanized wood cutting (40% of area is harvested this way, 15% higher value from certified wood products, and 10% increase in income at household level)

Awareness has been raised on sustainable forest management and project outcomes e.g.:

  • At least 30 participants representing local authorities have visited sustainable forest management initiatives in the province
  • Adoption of improved forest management practices has reached another 6,000 ha at project end in addition to the 6,000 ha reached within the first 2-2.5 years (possibly FSC certified area). In total, 12,000 ha expected in 2020.

Description

The current forest management practice and wood supply chain in the province of Quang Tri offers opportunities for increased sustainable livelihoods as well as releasing bottlenecks that affects the incomes of farmers as well private sector industries and their employees involved in wood processing industry. Despite tangible economic and environmental benefits of implementing sustainable forest management certification such as FSC, a lack of technical knowledge, business network and financing services are main barriers that are preventing the majority of farmers from switching to sustainable forest management practices.

This project aims to develop the supply chain of certified wood and wood pellets from sustainable forests, and scale up certified sustainable forest management areas thereby enhancing the sustainable livelihoods for forest growers as well as improving rural households access to affordable clean energy efficiency solutions for cooking. By doing so, it will help the local companies to get sufficient supply of certified wood for processing for higher added value lumbers and wooden products for export, as well as sufficient supply of by-products and residues – the inputs needed for wood pellet production.

This project will collaborate with private companies such as Cam Lo Wood Pellet Company, who will support and encourage 6,000 farming households to apply sustainable forest certification practices, and train local farmers in sustainable forest management practices and forest replantation techniques, which will create a sustainable base for a certified wood pellet production in the province.  Furthermore, it will enable industrial users to apply cleaner energy solutions to reduce a significant amount of fossil fuel such as coal leading to CO2 emission. The development of certified wood and wood pellets will turn waste from wood processing to renewable and energy efficiency fuel for local households and industry users.

Hence, the project will through multiple channels stimulate green growth within the region while, at the same time, supporting the sustainable livelihoods of rural farmers. 
 

Relevance for climate change

The project helps mitigate climate change through:
 
  • Market development for promoting use of improved cook stoves and wood pellets to avoid the combustion of unsustainably-harvested biomass. This will reduce pressure on woodlands and wildlife and reduce users' indoor pollutants. Nearly 3 billion people in the developing world cook food and heat their homes with traditional cook stoves or open fires using coal or solid biomass. In addition to the health problems created, this burning releases emissions of some of the most important contributors to global climate change: carbon dioxide, methane and other ozone producing gases as well as black carbon and brown carbon.
  • Since forests are important carbon sinks, absorbing carbon dioxide from the atmosphere and storing it as carbon, an improved permanent forest cover, more trees and better forest management will be the second main climate change mitigation activity in this project. Once the trees are harvested, new trees can grow in their place and continue to sequester carbon. Good forest management both maximize forests’ contribution to climate change mitigation and help forests and forest-dependent people adapt to new conditions caused by climate change.

Innovation aspects

The project offers an innovative market-based approach to develop the comprehensive supply chain for new energy efficiency products (wood pellets and improved cook stoves) targeting households and industrial users. Bringing existing players such as Cam Lo who produce and distribute different types of cook stoves and wood pellets into the province will create a competitive market of affordable and clean energy efficiency solutions.  Moreover, innovative social marketing activities, that will share information on improved cook stove models and pellets to reach the desired target of the users, will be used to create the demand for these new products.

The project will also facilitate innovative partnerships between stakeholders to ensure sustainable project results. Business knowledge, experience and resources from committed private firms who take a lead in the development of supply chains will ensure continuous innovation in the production, distribution of wooden products prepared for certification, cook stoves and wood pellets during and beyond the project period.

Lastly, innovative financing mechanisms, where the private sector will provide financing for farmers who need bank loans for alternative livelihoods, will be a powerful instrument to motivate large number of farmers in applying this sustainable practice.

More information
NEPCon
Spark Center for Social Entrepreneurship Development