Business Plan - bettervest · (Hardic Associates Pvt. Ltd Nepal, Adikarya Agribusiness Indonesia,...

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Business Plan Nagaro GmbH

Nagaro GmbH| Business Plan

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Contents 1. Executive Summary ......................................................................................................................... 4

2. Company Introduction .................................................................................................................... 6

3. Products and Services ...................................................................................................................... 6

3.1. Design ...................................................................................................................................... 6

3.2. Intellectual Property Rights ..................................................................................................... 8

4. Human Resources ............................................................................................................................ 8

5. Business Introduction ...................................................................................................................... 8

5.1. Idea Development ................................................................................................................... 9

6. Background Information ................................................................................................................. 9

6.1. What is the Problem? .............................................................................................................. 9

6.2. Biogas Technology ................................................................................................................. 10

6.3. Nagaro’s Smart Biogas Systems ............................................................................................ 10

6.4. Smart Biogas Systems: Useful Products ................................................................................ 11

7. Business Model .............................................................................................................................. 12

7.1. Value Proposition .................................................................................................................. 12

7.1.1. Customer Value ............................................................................................................. 12

7.1.2. Social Value.................................................................................................................... 13

7.1.3. Value Chain .................................................................................................................... 14

8. Key Resources ................................................................................................................................ 15

8.1. Smart biogas System Feed Stock ........................................................................................... 15

8.2. Technical ................................................................................................................................ 15

9. Business Development .................................................................................................................. 16

9.1. Phase I (Completed) .............................................................................................................. 16

9.2. Phase II .................................................................................................................................. 16

10. Key Activities ............................................................................................................................. 16

10.1. Time Line ........................................................................................................................... 17

11. Market Analysis ......................................................................................................................... 18

11.1. Why Domestic Biogas? ...................................................................................................... 18

12. Target Markets .......................................................................................................................... 19

12.1. Why Indonesia & Pakistan? ............................................................................................... 19

12.2. Business Environment in Target Markets .......................................................................... 20

Table of Contents


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12.2.1. Environmental Conditions ............................................................................................. 20

12.2.2. Political Environment .................................................................................................... 20

12.2.3. Economical Conditions .................................................................................................. 20

12.2.4. Social Environment ........................................................................................................ 20

12.2.5. Current Trends ............................................................................................................... 21

12.2.6. Business Environment ................................................................................................... 21

12.2.7. LPG ................................................................................................................................. 21

12.2.8. Kerosene Oil: ................................................................................................................. 21

13. Segmentation and Targeting ..................................................................................................... 22

14. Key Partners .............................................................................................................................. 22

15. Competitors Analysis ................................................................................................................. 23

16. SWOT Analysis ........................................................................................................................... 24

17. Marketing .................................................................................................................................. 25

17.1. Promotional Mix ................................................................................................................ 25

17.2. Marketing Objectives ........................................................................................................ 25

18. Investment Requirements ......................................................................................................... 25

Appendix ................................................................................................................................................ 26


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1. Executive Summary

Nagaro GmbH is a German based renewable energy company dedicated to provide the cost effective

systems for processing of organic waste and converting it into energy (biogas) and bio-fertilizer,

commonly known as digestate or slurry.

Nagaro GmbH is a determinant member of German biogas plants manufacturing market and offering

Pre-fabricated Smart Biogas Plants for decentralized application to process the urban and rural organic

waste from household to commercial level. The multiple years of experience, networking and market

knowledge are the reliable partners for Nagaro’s business development in existing and emerging

markets.

The company’s vision and mission truly reflects the nature of the business, which is to provide the

“decentralized organic waste processing systems integrated with photovoltaic (PV) and other

associated products as a source of economical outcomes”. Through Smart Biogas Systems, the

company has introduced the solutions for reducing dependence on the energy imports and

contributing the economy in a very positive way where the end users can generate new incomes using

the Nagaro’s smart biogas systems. Further our efforts are to provide environment friendly products

to reduce CO2 emissions and having a very beneficial output from the waste processing.

Based on its market and sector experience, Nagaro GmbH, becomes a pioneer in making quality

products following the down-sizing technology principle i.e. by developing Smart Biogas System. Based

on market research, personal experience, strong network and having business partners, Indonesia,

Pakistan and Mexico were identified to be potential biogas market initially. Following are the main

reasons to choose the above given countries;

Very young biogas markets with huge potential.

Low competition, Nagaro as only company from any of technology rich countries.

Nagaro’s established network and trusted business partners.

Promotion and encouragement by the governments of respective countries.

Suitable per capita incomes for decentralized systems purchase.

For business, Nagaro has already signed the MOUs with our business partners in Nepal and Indonesia

(Hardic Associates Pvt. Ltd Nepal, Adikarya Agribusiness Indonesia, PT. Inti Surya Engineering

Indonesia). For research and development, Nagaro is already in technical collaboration with TU

Bergakadmie Freiberg Germany.

In addition, our strong networking in government, non government institutions as well as mobilization

community, we are in process of signing MOUs/NDAs with our further potential business partners in

Mexico. Nagaro GmbH is in process of finalizing its agreements with different organizations for the

business as well as technical cooperation and will be signing the agreements very soon with;

State Polytechnic Institute Malang (POLINEMA) Indonesia,

PT Masagi Energi Solusindo Jakarta, Indonesia, a company with 0.5 million US$ sales in 2015.

Pakistan Council for Renewable Energy technologies (PCRET) Pakistan.

South Asian Association for Regional Cooperation (SAARC) Pakistan.

Taita Taveta University (TTU) Voi, Kenya, a government university of Kenya.

Tonámix renovables Mexico city, Mexico.


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Nagaro believes on innovation in products, standardized quality, dedicated workforce, effective

planning and continued research and development which make it most competitive in any market

with great potential to grow. Starting with an experimental stage smart biogas plant back in March

2015 in city of Mankera (Punjab), Pakistan (at home of Nagaro’s company personnel), the system is

still running very successfully. The second prototype smart biogas was built in March 2016 as

demonstration & scientific testing unit and it is working at Bergland Agrarwirtschaft Clausnitz

(Freiberg) Germany since May 2016. The third demonstration unit is working at Nagaro display

center Harheim, Frankfurt am Main, Germany since November 2017). Nagaro has Installed two

further smart biogas plants in Indonesia (April 2017). Furthermore, four smart biogas plant units were

sold to TTU Voi. In May 2018, 3 more units were sold, one to Indonesia and 2 to Mexico.

Currently, the company is in process of expansion and is planning large scope investments which are

necessary for its growth or expansion phase. With the planned investments, following facilities will be

built;

1. A workshop with necessary equipment, machines and tools to manufacture the smart biogas

plants and added value products as well as the storage place for the raw material used in

manufacturing process.

2. A display center for the Smart Biogas Plant with a working unit of smart biogas plant

equipped with necessary devices for the demonstration purpose.

3. The storage place for the manufactured and ready-to-ship units of smart biogas plants and

added value products.

With the planned investment, company will be able to manufacture most of the material used in

manufacturing and assembling the smart biogas plants and its added value products. The developed

facility will help to reduce the marginal costs of production as well as independency from other

companies which currently are providing assembled parts to manufacture the smart biogas plants.

The development will create a fast growth of company and the workforce.


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2. Company Introduction

Nagaro GmbH is determinant member of German biogas industry. Its concrete experience and

knowledge of the emerging biogas and renewable energy markets makes it suitable for diversification.

Nagaro’s mission is providing down-sizing technology based biogas and waste management systems

equally successful for the urban, rural and far remote areas where people can turn waste into taste,

lighten their homes and enlighten the future of their children. For example, Nagaro smart biogas

system is a decentralized solution which will process the organic waste, will generate the gas for

cooking and energy generation which will reduce the indoor air pollution, positive impact on the

health of women and children as well as the stored energy from integrated PV system will be used for

lighting and charging and operation of communication devices e.g. Mobiles, TVs, Laptops etc. The

services are extended to the on-demand waste processing systems.

Nagaro is private company registered in Germany, the ownership and the management is committed

to the cause of sustainable development. Nagaro GmbH, located in Frankfurt, is basically a startup

venture for producing down-sizing technology based portable and/or prefabricated smart biogas

plants integrated with PV systems to provide the decentralized solution for waste processing and

energy generation.

In addition, Nagaro is aiming to provide added value products which can utilize biogas and bio-

fertilizer. For example, machines for milk chilling, cheese making, fruits drying and guidelines for cat

fish farming using digestate or slurry. To convey the message and create awareness among the

people, Nagaro has very good connections or professional networking with different local and

international authorities working for the promotion of green energy technologies.

Presently, the company is capable of producing or manufacturing 15 to 20 units of smart biogas plants

per month (1 cubic meter digester capacity). Presently, company is using its small workshop facilities

and planned investments are to extend the manufacturing and storage of ready units.

3. Products and Services

Presently the company produces 8 different products at its manufacturing facilities;

1. Smart Biogas Plant SBP1-00A (Automatic with manual handle, 0.5M3 digester volume)

2. Smart Biogas Plant SBP1-00M (Manual System, 0.5M3 digester volume)

3. Smart Biogas Plant SBP1-01A (Automatic with manual handle, 1M3 digester volume)

4. Smart Biogas Plant SBP1-01M (Manual System, 1M3 digester volume)


6. Smart Biogas Plant SBP1-02M (Manual System, 2M3 digester volume)


8. Smart Biogas Plant SBP1-03M (Automatic with manual handle, 3M3 digester volume)

Our technology was developed in the way that with the possible shortest changing time we are

capable of manufacturing products with different specifications in large quantities, i.e. demand

driven system design and solutions.

3.1. Design The Nagaro concept represents the core values of the proposed business initiative. Given the nature

of the target market, the ease of use and reliability factors of the product surfaced as priorities and

has been translated into the design as follows:


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Nagaro’s Smart Biogas plant is a prefabricated and portable machine consists of digester tank and a

biogas storage chamber. The digester has unique property, i.e. down-stream technology, integrated

PV system with DC motor for digester agitation/mixing system and manual digester agitation/mixing

system. This system is going to be introduced first time in any portable biogas plant in the world. The

digester working principle is based on continuous stirred tank reactors (CSTR) digesters and it is low-

tech. The complete digester mixing enhances the biogas production up to 40%. It produce up to 2

cubic meter biogas per day which is sufficient to burn a single stove up to 8 hours depending upon the

type of feed stock used. In other way, this gas can be used for cooking or other application e.g.

electricity generation, milk chilling, cheese making and drying the fruits and vegetable. Moreover, the

smart biogas plant reduces the GHG emissions, raises the living standard, process the organic waste

and convert it into biofertilizer and combustible gas. It also minimizes the industrial waste by reusing

the plastic by-product (IBC container) and electrical/electronic waste from automobile industry.

From technical point of view, Nagaro Smart Biogas system is an efficient, robust, with minimal

maintenance and affordable product.

Fig: Product and Service analysis

Dimension Offering Interpretation of the Offering Price Premium/

Competitive To ensure the customers get a decent Return on Investment (ROI) and the capital payback period is maximum 4 years. With the microfinance loan option, the price doesn’t need to be a leader in the market. Also this is a product for the mass and hence premium price won’t sell. The competitive price would result in high volume and aid capture a decent market share. The need is to make the price competitive by lowering the marginal costs of production.

Features Customized Green and renewable energy product with multiple features. The machine can range from complete manual to fully automatic.

Quality Excellent Industry standard is met and the quality of components can be guaranteed. With carefully selected manufacturing partners and sophisticated production processes, each household portable smart biogas unit has 15 – 20 years of average life span.

Support Standard Standard support is provided with standard warranty to 6 months. However, any damaged or nonfunctional unit can only be repaired by an authorized partner or trained technician.

Availability Restricted/ Selective

Products are targeted for both urban and rural areas. Direct sales and business partner’s network will be used to sell products. Mass campaign and exhibitions will be used for advertisement and awareness generation purposes.

Reputation Prestigious/ Respected

Features and benefits are the major concerns of the customers in developing and emerging markets. Good design and durability of the product will generate better perception. With more sales and word of mouth, Nagaro brand will be gradually established and become prestigious.

Price

•Premium

•Premium/ Competitive

•Competitive

•Competitive/Leader

•Leader

Fetures •All inclusive

•All inclusive/ Customized

•Customized

•Customized/ Basic

•Basic

Quality

•Excellent

•Excellent/ Average

•Average

•Average/ Acceptable

•Acceptable

Support

•Comprehensive

•Comprehensive/ Standard

•Standard

•Standard/ Minimal

•Minimal

Availability

•Restricted

•Restricted/ Selective

•Selective

•Selective/ Universal

•Universal

Reputation

•Prestigious

•Prestigious/ Respected

•Respected

•Respected/ Functional

•Functional


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3.2. Intellectual Property Rights In terms of patent protection, it would be rather difficult to achieve protection for the Nagaro based

on its technical design. Although the concept is novel in the existing and emerging biogas market, the

Nagaro is technically innovative and satisfied enough that if not impossible; it is difficult to copy the

design because of process optimization and parts used. Furthermore, enforcing patents within

developing nations is difficult and for the particular case, enforcing is likely to cost more than the

potential recovery. It is important that all IPR related to design and manufacture is retained by the

Nagaro business entity. Trademark registration for Nagaro would also be recommended within all

target market nations. This would deter copiers and can be more easily enforced. The intensive

brand marketing is another way to prosper in the future.

4. Human Resources

Presently our company employs 3 persons. With development, the number of employees will

increase according to work demand. The necessary workforce can be attained by different methods.

The higher level employees can be chosen with the help of recruitment agencies. The skilled and

unskilled workforce can be acquired with the help of the unemployment office. The present

employees will have a role in the new structure, their work experience is absolutely necessary. The

chart shows the new structural design emerging after the investment.

5. Business Introduction

Nagaro GmbH, answering the challenges and changed economical environment is planning large

scope investments. The planned investments, by taking part in the domestic and semi-commercial

biogas market in developing and developed countries, would provide the extended and on-demand

solutions. Nagaro GmbH, based on its market and sector experience created the smart biogas system

with the largest possible added value contents. So far in the developing and emerging markets, only

conventional models are availble without having unique features like what Nagaro is providing in its

smart biogas systems.

The individual characteristic of the Nagaro’s smart biogas plant is its simplicity with down-stream

technolgy based on German high-tech biogas plants. It makes it possible for the operator to make

decisions on different levels of the organic waste processing and to be able to adapt quickly and

wisely to the challenges he/she may face during the operation of smart biogas. Further details are

given in section 5.2.

CEO

Human Resource Manager

Quality & Certification

Manager

Test Lead

Business Development

Manager

Sales & Marketing Assistant

Production Manager

Production Staff

Communication & Networking

Manager

Business & Operations

Administrator

Secretary


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5.1. Idea Development Waste management is one of major problem for the sustainable urban and rural environment in

small and larger cities of developing countries. Due to large population number, tons of municipal

waste is produced everyday which is left on streets or thrown to landfill or slum areas. Imagine

walking along the streets of big and the small cities of developing countries, where waste is thrown

alongside the road. This waste produces bad smell and damage the environment. There are several

slum sights in developing countries, which are not only ironic and heartbreaking, but this is reality.

The company’s focus is developing countries because according to a report of International Energy

Agency (IEA), 2.5 billion people from these countries rely on biomass such as charcoal, fuel wood, and

agricultural waste and animal dung to meet their energy needs (IEA, 2006). The situation is very

alarming, because according to reports, more than 90 % of total households in rural areas of Pakistan,

and Nepal are using fuel wood as main source for cooking. Similarly, around 65 – 75 % of total

households in Indonesia, are still using fuel wood for cooking (Kirk R. Smith et al., 2004; IARC, 2010). It

causes indoor air pollution due to which the health of women and children is at great risk (Kirk R. Smith

et al., 2004; IARC, 2010).

In the absence of new policies, the number of people relying on biomass will cross 100 million by 2015

because of population growth. It means one third of the world’s population will be relying on fuel

wood and other fossil fuels to meet their daily needs of energy including cooking. On the other hand, if

the rate remains same, the Green House Gas (GHG) levels will increase continuously (IEA, 2006).

Methane (CH4) is one of the primary Greenhouse Gases (GHGs) associated with global warming. It is

21 times more potent than CO2. Nitrous Oxide has 310 times heat trapping capacity compared to

carbon dioxide (FAO, 2002). By capturing maximum possible GHG emissions through biogas

technology will bring clean cooking, clean indoor environment, hygiene and sustainable development

in respective countries.

Nagaro’s portable smart biogas plants are the solution that will link these two problems in such a way

that it will be beneficial for both, the energy needs to cook with or generate power and heat; and for

clean urban and rural environment through on site or decentralized processing of urban organic

waste. Nagaro is offering a cost effective and efficient multi feedstock (household kitchen waste,

restaurants waste, coffee waste, vegetable market waste, animal manure etc) based smart biogas

systems for urban as well as rural areas. The digester model is carefully designed to provide the

intelligent solution for processing the organic waste from smaller to larger scale.

“Our smart biogas systems prove the up to date system equally successful for the urban as well as for

far remote areas where people can turn waste into taste, lighting their homes and enlighten the future

of their children”.

6. Background Information

6.1. What is the Problem? The countries like Pakistan, Nepal and Indonesia are among the developing countries facing a huge

demand in the energy sector due to the trends of improving lifestyles and growing population. These

countries have predominantly rural society where fossil fuels and fuel wood are the major source for

cooking. Burning fuel wood and Fossil fuels for cooking are health hazard as they increase indoor air

pollution, causing health damage to children and especially to women who are the managers,

producers and users of energy at the household level.


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On an average, lower to middle class people in developing countries spend around US$ 150-200 per

year for cooking fuel. Majority of households use fuel wood as cooking fuel (US Congress, 1991; Wood

and Baldwin, 1985; Pandey and Bajgain, 2007; IEA, 2010; Knight and Rosa, 2012). In Asia, people

spend more money on buying food. For example, according to a report by the US Department of

Agriculture’s Economic Research Service , an average Pakistani spends 47.7 per cent of their house

hold budget on food consumed at home. As personal experience while living in Pakistan and

Indonesia, the same behavior was observed where people eat warm meal 3 times a day. So it

generates large amount of kitchen waste which is sufficient to produce biogas to meet their cooking

needs and can be used for other energy generation purposes.

Nagaro sees an enormous opportunity within this situation. First of all, kitchen, fruit, vegetables and

coffee waste contains more than double the energy potential per unit weight compared to other

organic material that is used in biogas production, such as animal manure. Secondly, this massive

volume of waste is currently being transported to the landfill where it decomposes, releasing methane

into the atmosphere and polluting it. Methane which is a Green House Gas (GHG) and has Global

Warming Potential (GWP) of 28-36 over 100 years (compared to CO2) and being continuously released

from landfills along with other landfill gases e.g. N2O (GWP 265 – 298 years). This is the same

methane that could greatly benefit the rural and urban people if utilized heat and energy purpose.

6.2. Biogas Technology Nagaro aimed to provide very economic access to the quality product. Nagaro’s Smart biogas systems

provide the quality technology to convert the kitchen and other organic waste (e.g. vegetable market

waste, restaurants waste, animal manure etc.) into biogas and bio-fertilizer. The biogas is produced

with an anaerobic digestion process in bio-digester. This fuel is in the form of methane gas (biogas), a

renewable resource of energy formed during the decomposition of organic waste. In addition, the

byproduct from the biogas production process is known as slurry or organic/bio- fertilizer that can be

sold as bio-fertilizer or used for organic farming. The bio-fertilizer increases the crop yield and ensures

soil productivity for years to come.

6.3. Nagaro’s Smart Biogas Systems Nagaro’s smart Biogas plant is consists of digester tank of one cubic meter capacity and biogas storage

chamber of respective capacity. The digester has unique property, which is only provided by Nagaro’s

smart biogas plant, i.e. solar system based heating and digester mixing system which can increase

biogas production capacity up to 40% compared to conventional biogas plants in developing

countries. This system is going to be introduced first time in any portable biogas plant in the world.

The digester tank is made of High Density Poly ethylene (HDPE) plastic. It takes about 1 – 10 kg of

organic food waste and can produce up to two cubic meter biogas per day on average, which is

sufficient to burn a single stove (home size) up to 8 – 10 hours; hence the gas is enough to cook the

meals for 2 to 5 people each day. Moreover, PV system for digester slurry mixing used for lighting of

home as well.

More importantly, the smart biogas system technology has been tested with different feed stocks

(including the co-digestion of different feedstocks) in collaboration with skilled staff of TU

Bergakademie Freiberg Germany and it is proven to be very efficient system to use at decentralized

level in different geographical and environmental conditions.

http://www.ers.usda.gov/data-products/food-expenditures.aspx#26636



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Flow Charts and Schematics of Smart Biogas Technology

6.4. Smart Biogas Systems: Useful Products Social development is our aim and as a principle, Nagaro believes that not the profit, but social

benefits comes first. Nagaro’s business idea involves the company and customer’s economical

benefits. By increasing the value of product for end users in form of economic out comes will favor

the company repute and branding. By providing a product with certain added values (stoves, lamps,

generator sets, milk processing machines, fruit dryers, technical training etc) will eventually benefit

the company to generate the profits. This is how Nagaro will create an impact to save our green

planet. The Smart Biogas systems mainly produce two products;

1. Biogas (55 – 68% CH4).

2. Bio-Fertilizer


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7. Business Model

7.1. Value Proposition The value of this business plan falls into two segments, customer value and social value. Although in

the beginning, our proposal is just a small step for solving one of the major problems of developing

countries, we believe our plan is replicable and upon proving that our model works, we can begin to

play a greater role by extending our services.

7.1.1. Customer Value

The population of Pakistan, Nepal and Indonesia have increasing trend (United Nation, 2015). In

Pakistan and Indonesia, around 45 – 55% of the total population live in cities or small towns, the

urban population (% of total) in Nepal is 18% (UN, 2015, WHO, 2015; World Bank, 2015). On an

average, household size in Indonesia and Nepal is 2 – 4 people while in Pakistan; average household

size is 5 to 9 people (Euromonitor International, 2013). Moreover, lower to middle class people (3-5

member family) in these countries spend around 150 - 200 US dollars per year on cooking fuel needs.

This becomes a trade off for them between buying food and buying fuel to cook it with. More

disturbing is that these energy prices are subsidized by the governments and there is a debate for

these subsidies being lifted (e.g. Indonesia has currently lifted subsidy on electricity). This creates the

greater burden on the lower to middle class people. Smart Biogas Systems are the solution for such

customers, communities and institutions.

Nagaro’s plan is to target urban and rural market for providing end users (private households,

commercial buildings, government institutions, village communities etc) the smart biogas systems

and services in cost effective and quality manners. The value for our customers is the quality and

trusted product from technology rich country (i.e. Germany) and that is what our customers are

expecting.

Proposing the value product for our valued customers, the smart biogas systems are portable for

household use, fit in urban housing infrastructure and easily transportable in villages and far remote

areas. At the same time, Nagaro is providing on-demand decentralized waste processing systems and

management services for community and commercial purposes.

Moreover, another most valuable products segment for our customers is that they can now have an

onsite waste processing systems in complex or infrastructures where centralized solutions got failed.

Other value propositions of Nagaro are;

Continuous revenue inflow in form of lighting, heat energy (biogas) and biofertilizer

production without any operating costs – Smart biogas units run on solar power and freely

available kitchen or other organic waste and consequently generate revenue

Alleviating poverty – Considering the economic situation of developing countries, this is a

considerable source of revenue, which will help the owner to financially support his family

better

Encouraging growth and helping the society to prosper – Nagaro will enable owners to

charge their mobile phones locally and keep the phones running always. This will ultimately

help them to operate their trade better by staying connected to the suppliers and customers,

keep in touch with their acquaintances and save unnecessary travel time.


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Promoting renewable energy usage – Nagaro, being an efficient system, promotes the use of

renewable energy.

Sustainable and highly scalable – This is a highly scalable product and business. Many

additional features can be added to the system by making minor modifications

7.1.2. Social Value

Our solution proposes customers benefits in simple but potential way. The waste that is being

generated every day by each household, restaurant or any other sources is currently going to a

landfill where it de-composes and emits methane into the atmosphere. Methane is one of the most

potent greenhouse gases (GHG) and a major contributor to global climate change. Our solution is to

captures this methane produced from the kitchen waste. When methane is then burned as fuel, the

gas released into the atmosphere is in the form of carbon dioxide which is over 20 times less potent

than CH4 (which have GWP 28 – 36 times higher, compared to CO2 ) (EPA, 2010).

The byproduct of anaerobic digestion is a high nutrient biofertilizer. The bio-fertilizer is rich of

nutrients, enhances water holding capacity and soil aeration, accelerates root growth and inhibits

weed seed germination.

Collectively, the proved solution will decrease the rate at which above the landfills sizes are

increasing. The use of bio-fertilizer will promote the horticulture and agriculture on vast scale as well

as gardening at urban level. Moreover, our solution replaces traditional fossil fuel energy sources and

chemical fertilizers demand. The value proposition through smart biogas systems and services

provided by Nagaro are already creating the definite positive impact on the social, economical and

environmental circles of our valuable customers. The result is positive revenues on both ends, i.e. the

more socio-economical benefits, more are the end users happy and increased are the sales.

Figure 1: Cycle of Mutual Benefits


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7.1.3. Value Chain There are different business models that can be deployed by Nagaro in developing and emerging

markets such as:

Partnering with existing network engaged in green energy business and selling through them.

Direct sales to end users/ customers

Leases to customers

Arranging the microfinance facilities for customers through by collaborating microfinance

banks and organizations.

Our research, however, shows that the most effective and profitable business model for Nagaro to

deploy in developing and emerging markets is the “Direct online sales to the individuals given that

they are easily accessible for logistics” and “Partnering with existing network engaged in green

energy business and selling through them.

The benefits of Direct Sales for Nagaro are as follows:

Potential for higher margins compared to other probable business models such as sale to a

distributor network where margin would be low given the huge bargaining power of the

Distributor network/ business partners.

Nagaro will also have the opportunity to have a direct feedback on product enhancement

allowing for business to further strengthen its value proposition.

The main issue with direct sales will be logistics and its documentation which is a time taking process

and based on our customers dealing experience, the customers would prefer to have the product as

soon at their premises as they paid the money. International logistics will take minimum of 4 to 6

weeks time excluding the preparations and providing the stock is ready. Nagaro will be selling the

product online where the business partners or the distribution network is not available and will

redirect the orders to our business partners in respective countries.

The benefits of Sales through our business partners and distribution network are as follows:

Nagaro would have the opportunity to negotiate with business partners already having chain

of display centers with branding potentials such as painting the shops with Nagaro logos &

symbols etc. similar to what some big businesses like Coca Cola / Motorola do in the market.

Dealing directly with partners and distributors will give Nagaro this interesting platform for

advertising

The following diagram shows the Nagaro value chain for the sales through business partners and

direct sales business model. The distribution, sales and end user servicing will vary considerably

depending on different business models.


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Fig: Nagaro value chain

8. Key Resources

8.1. Smart biogas System Feed Stock The organic waste generated in households, restaurants, coffee shops, vegetable markets and from

agricultural and live stock farms will serve as one of continuous source of organic waste to feed in

Nagaro’s smart biogas systems. More specifically, kitchen waste is very important source of feed for

digester. According to a research, 1 kg of kitchen waste can generate on average, up to 0.45m3 of

biogas (Karthik Rajendran et. al., 2012). Smart biogas systems have abundant and sustainable

feedstock resources for our smart biogas systems to be implemented in different countries with

different geographical conditions.

8.2. Technical One of the key elements to the success of Nagaro relies on the hiring of a qualified and

knowledgeable biogas expert with background knowledge in anaerobic process optimization and

experience in biogas implementation. Proper knowledge of biogas production (anaerobic digestion),

process optimization and digester design is required to optimize the system for its efficient use.

Smart biogas system are designed and manufactured in the way that it requires minimum efforts

from the end users and they can easily operate the smart biogas system after reading the product

operation manual.


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9. Business Development

The business plan has/had different implementation phases.

9.1. Phase I (Completed) Phase I of the business model included the idea/concept, inception, development and testing of

experimental to the first prototype. The first prototype was developed in Pakistan which is running

since March 2015 in district Bhakkar of Punjab Pakistan. The 2nd prototype, equipped with modern

instrument, was developed with help of EES Nord GmbH Lüchow and brought to TU Bergakademie

Freiberg and was tested at “Agrargeossenschaft Bergland e.G. At the end of Phase I, Nagaro has

made a display center in Harheim, Frankfurt am Main where 3rd Smart biogas system unit is working

continuously since December 2016.

Based on the proven results, Nagaro has developed its first two units of smart biogas for sale to our

business partners in Indonesia where it was installed in April 2017 and demonstrated successfully.

The both units are working flawlessly till date. Further 4 units have been sold to Taita Taveta

University (TTU) Voi, Kenya and currently being installed.

9.2. Phase II In phase II Nagaro will follow its expansion through replication. Keeping in view the current orders

and demand from Indonesia, Mexico and Pakistan, we are in process of replication to start the

production at medium level where company has planned to build the smart biogas system and

shipping to respective countries. Later stages of Phase II will include the assembly lines in respective

countries of business with the help of our business partners. This will bring down the marginal costs

of production and meet the demand more quickly.

Hence to start with stage II, the company is urgently looking for the financial/development funds to

build the production facility plus the investment for pre-orders manufacturing of at least 20 units to

ship to Indonesia initially.

Moreover, it has been also planned that in the first three years of operation, company will be able to

afford the production of several hundred more digesters as we believe that “the idea of

decentralized smart biogas plants for urban & rural organic waste management is the most feasible

solution, that is viable and replica for many other markets in developing countries.

10. Key Activities

The business plan entered in its implementation stage from November 2014. As company has

successfully completed the product development, its validation and demonstration in real

commercial market, company is entering Phase II of the business plan. In addition to secure capital

and full scale production line, an effective administration/management will be required to enter in

market and for sustainable growth. It means that implementing the plan will require distinct steps.

The order by which theses steps has been/planned to carried out will be critical to the overall growth

and success of the model.

The most important step in Phase II, after getting the funds is procurement, production/assembling

facility and manufacturing process to make the stock ready for sales. According to personal market

analysis in Indonesia, it was concluded that the customers are ready to buy the smart biogas plants

once the commodity is available at local warehouses or business centers at different points within


17

country. The local assembly line in respective country would be an asset to expand the business after

the collection of sufficient revenues. Currently Nagaro will focus on B2B and B2C sales through our

trusted business partners.

10.1. Time Line

November 2014 May 2018

Ideating/ concepting

Idea Development

Committing

Skills Analysis

Capacity

Market Study

Networking/ Agreement

Work Planning

Inception

Experimental Stage Product

Idea Testing

Consulting Technical

Evaluation Fact Finding Team Building Agreement to

Proceed. Proposal

Constructing/ Validating

Prototype Development

Testing & Process Optimization

Results & Validation

Final Decisions

Networking

Demonstration/ Market Entry/ Scaling

Product Demonstration

Proven Commercial Viability

Customers Response

NDAs, MOUs, Distributors

Business Model

Growth/ Establishing/ Scale Up

Establishing Funds/ Investment Funds

Procurement

Production

Revenues

Duplication & Expansion

November 2014 - January 2015

February 2015 -

August 2015

September 2015 –

December 2016

January 2017 –

September 2017

October 2017 –

Phase I Phase II


18

11. Market Analysis

11.1. Why Domestic Biogas? The absence of access to modern energy sources aggravates poverty, especially in rural areas where

opportunities are scarce. The biogas technology is an established, proven technology and is capable

of solving parts of the environmental and energy problems of both poor rural communities, as well as

the industrial urban populations. Currently, biogas programmes have been launched in more than 50

different countries. These programmes have been developed as a way of advancing agricultural

productivity, renewable energy use and waste management.

China’s Biogas Program plays the leading role in the worldwide dissemination of household-based

biogas technology. A decade of heavy investments by the government of the People’s Republic of

China resulted in around 41.68 million households using the biogas technology by the end of 2011. It

is very impressive that starting with first household biogas digester in 1970, more than 30.5 million

household biogas digesters were constructed by the end of 2009, generating 12.4 billion m3 biogas

totally in 2009. (B. Chen et al., 2017).

Source: Adapted from X. Zuzhang (2014) Domestic biogas in a changing China: Can biogas still meet the energy needs of China’s rural

households? http://pubs.iied.org/pdfs/16553IIED.pdf

By the end of 2015, household biogas production has reached 419.3 million m3 in China, benefiting

population of 200 million. China has aim to reach the milestone of 50 million household plants, 7000

large scale plants and 22 billion m3 of biogas production per annum. In a similar study by SNV, It was

also reported that biogas units in China produce 410 million tonnes of organic fertilizer annually and

moderate CO2 emissions by 61 million tonnes. (Juliette van Hessen, 2014)

Source: Adapted from E. Billig et al., 2015. Biogas and Biomethane in China, Kraftstoffe der Zukunft 2015, Berlin.


19

India is another example with implementation household and semi commercial biogas plants. About

4.75 million biogas plants have already been installed in the country up to 31st March, 2014. During

the year 2014-15, a target of setting up 1 million biogas plants has been set.

12. Target Markets

After the careful analysis for emerging biogas markets, Nagaro has evaluated that in addition to

other countries, Indonesia, Nepal and Pakistan has a huge potential for the biogas. Indoensia is an

emerging economy with a very young biogas program. Pakistan has also established an encouraging

program for biogas and renewable energy. Many people in Indonesia and Pakistan, like in many

developing countries, have lack of access to economical and convenient energy sources.

12.1. Why Indonesia & Pakistan? Indonesia is world’s 4th highest populated country and has a population around 250 million and

Pakistan has current population of 180 million while Nepal has around 27 million. It is very

interesting and common thing among these countries is a) more than 60% of total population of each

country lives in rural areas and, b) average household size is 3-5 people. People’s average income per

year in Pakistan & Nepal is 700 – 1450 US$ but in Indonesia it is 1800 – 3500 US$ (ILO, 2013;

UNSTATS, 2014, World Bank 2015).

Indonesia and Pakistan are emerging markets for biogas and the biogas programs are very young in

these countries. The Biogas Rumah or ‘household biogas (BIRU) program was started in May 2009.

The Humanist Institute for Development Cooperation (HIVOS) was appointed by the Dutch

government as program manager, with technical assistance from the Netherlands Development

Organization (SNV). HIVOS’s latest data (mid-2013) shows that approximately 11,000 bio-digesters

have been installed with further expansion of the number of participating households anticipated.

The Government of Pakistan started a comprehensive biogas scheme in 1974 and commissioned

4,137 biogas units by 1987 throughout the country. These were large floating drum biogas plants

with capacity varying from 5-15 cubic meters gas production per day. The Pakistan Centre for

Renewable Energy Technologies (PCRET) is the leader in the country to disseminate biogas

technology and has supported installation of around 1600 biogas plants till the end of 2006. The

livestock sector of Pakistan is growing annually at the rate of 4% and approximately 35.625 million

KWh electrical powers can be generated from its dung per day. A considerable biogas can be

produced from 785 million available poultry birds in Pakistan and this gas can be used to generate

electricity and heat. Both countries have good GDP as mentioned in earlier chapter as well as the bio-

energy market.

We chose Indonesia and Pakistan for various reasons. The most important is to always find a local

partner. This makes compliance with law and regulation easier. It will also save you costs

on purchasing etc. Both countries, everyone wants to profit from you. By having a local partner, it

will cost less.

Nagaro’s Product and Business Development Team Lead had been working at PCRET Islamabad

Pakistan as Assistant Director Technical from 2007 – 2010, and about 1100 domestic biogas plants

were installed during this period under his technical supervision.

https://www.hivos.org/

http://www.snvworld.org/


20

12.2. Business Environment in Target Markets

12.2.1. Environmental Conditions

Indonesia and Pakistan have the stable climate, which is almost every day sunny. In Indonesia, it is

always 30 - 35 ºC while in Pakistan it is even hotter, where temperature reaches up to 48 in plain

areas. This is very suitable for biogas production as no additional heat is needed for the anaerobic

digestion process. Indonesia and Pakistan have the sunniest hours. Both countries have a lot of

water which is necessary for the mixing of feedstock.

12.2.2. Political Environment

Presently, the political scenario of proposed countries is quite favorable for using renewable energy

resource in order to eliminate the severe energy crisis . Energy and environment are the

intense, costly and multidimensional problems currently faced by the governments in these

countries. The infuriating electricity, gas disruptions and soaring fuel prices, in turn, pushing the

costs of living and have made life difficult for the people of these countries. In this crucial

situation, the governments now understands that, in order to tackle the existing energy crisis

and ensure a prosperous energy future, the backbone of the future energy policies would have

to be reliance on domestic resources (Biogas, Hydropower, Solar and Wind energy) as well as the

energy conservation. For example, Indonesian and Pakistani governments are promoting renewable

energy for domestic and semi commercial as decentralized solution to overcome the energy needs of

the local people. Indonesian government has recently taken a concrete step by banning unprocessed

waste to the landfill by city governments, i.e. it must be processed and recycled.

12.2.3. Economical Conditions

Energy sector is one of the most important sectors driving the economy in developing countries.

Some of the latest fluctuations due to the energy crisis in these countries are having an adverse

impact on the economy coupled with the widening gap between demand and supply in this

particular sector.

Moreover, developing countries have a deficit of fossils or hydrocarbon sources of energy. To cover

up the deficit; it depends upon importing crude oil at an enormous cost from its meager forex

reserves. The need of crude oil is on an increase because of an improved lifestyle. In view of

developing countries, the dependence on imported petroleum is expected to increase, therefore

putting the economy under great strain. In this way, an alternate source like solar, wind and biomass

energy would have to be explored.

12.2.4. Social Environment

As mentioned previously, Pakistan and Indonesia have predominantly rural society where biomass or

fuel wood is the major source for cooking. In Villages and remote areas, women are primarily

involved in biomass collection and use. In Urban areas, women are under more threat because of

indoor air pollution due to city transportation. Urban households usually use LPG, Kerosene Oil as

well as fuel wood for cooking which cause the indoor pollution levels much higher compared to rural

household. The reason is adjucent homes with narrow streets. Nagaro decided to take initiative in

this sector by providing portable smart biogas plants which will reduce the indoor pollution as well as

household garbage. It save the metabolic energy and the time of women, which could be used for

other productive activities that enable women to be socially, psychologically and politically


21

empowered. Their livelihoods are threatened due to their heavy workloads and deteriorating health

conditions in the absence of good nutrition and health services.

12.2.5. Current Trends

The following factors are contributing to the sharply rising demand for the conventional energy

supplies in Pakistan and Indonesia;

Industrialization.

Urbanization.

Population growth.

Shift in consumer demands towards energy intensive products.

12.2.6. Business Environment

The governments of both countries are attempting to raise the living standards of its citizens and

have meant that the economical development has largely taken precedence over environmental

issues. Unchecked use of hazardous chemicals, vehicle emissions, use of fossil fuels and firewood for

energy generation and industrial activity has contributed to a number of environmental and a health

hazard; most prominent among them are air and water pollution.

The overall impact of the biogas technology in terms of environmental conservation is considerably

beneficial as the process provides an environmentally sound means of managing urban and rural

organic wastes. An important advantage of the biogas programme is that it results in considerable

reduction of fuel wood consumption. Biogas leads to three main benefits:

Firstly, it slows down the deforestation trend, thus achieving numerous environmental benefits.

Secondly, it generates less air pollution by the combustion of biogas.

Finally, we get natural fertilizer from biogas sludge.

12.2.7. LPG

Currently, housholds in proposed countries use LPG as cooking fuel. But the own production in

proposed countries is not enough to meet local demands. To meet the demand, rest of total

demended LPG is being imported from other countries e.g. Qatar, Saudi Arabia etc. Moreover, LPG

was subsidized for domestic use but currently governments are lifting subsidies on LPG. There is

same situation of demand and prices of LPG and other fuel wood in Pakistan and Indonesia.

12.2.8. Kerosene Oil:

Kerosene Oil is also subsidizes in most of the countries to help rural poor people. The majority of

rural population rely on kerosene for cooking, heating, and lighting. Though LPG is in high demand in

urban & rural areas, kerosene has been the best option for cooking fuel because of its availability and

accessibility. Currently, there is decline in usage of kerosene as LPG is available even in rural areas. If

not available, people prefer to use fuel wood for cooking because of bad smell from kerosene oil.

We believe, with such high demand for fuel in Indonesia, Pakistan and other developing countries

and also in light of the social, environmental and economical benefits to our targeted customers,

Nagaro’s Smart biogas is a plausible, marketable, and sustainable product for creating the positive

impact in the society and on environment.


22

13. Segmentation and Targeting

GEOGRAPHIC

World region South and South East Asia

Country Pakistan, Nepal, Indonesia,

Cities All major cities

Climate Humid climate

Density Urban and rural

DEMOGRAPHIC

Age Applicable in every age group

Gender Male, female

Family size 1-2,3-4,5 plus

Family life cycle Married, Unmarried

Income US$ 150 – 400 plus per month

Occupation Any

Race Asian, African, Latin American

PSYCHOGRAPHIC

Social class Lower class to upper class.

Lifestyle Actualizes,fulfilled,believers,achievers,strivers,

Experience’s makers and strugglers

BEHAVIOURAL

Benefits Cheap, 24/7 availability,

User status Preferred Target: First time user

Loyalty status Optimistic

14. Key Partners

For business, Nagaro has already signed the MOUs with our business partners in Nepal and Indonesia

(Hardic Associates Pvt. Ltd Nepal, Adikarya Agribusiness Indonesia, PT. Inti Surya Engineering

Indonesia). For research and development, Nagaro is already in technical collaboration with TU

Bergakadmie Freiberg Germany.

In addition, our strong networking in government, non government institutions as well as mobilization

community, we are in process of signing MOUs/NDAs with our further potential business partners in

Mexico. Nagaro GmbH is in process of finalizing its agreements with different organizations for the

business as well as technical cooperation and will be signing the agreements very soon with;

State Polytechnic Institute Malang (POLINEMA) Indonesia,

PT Masagi Energi Solusindo Jakarta, Indonesia, a company.

Pakistan Council for Renewable Energy technologies (PCRET) Pakistan.

South Asian Association for Regional Cooperation (SAARC) Pakistan.

Taita Taveta University (TTU) Voi, Kenya, a government university of Kenya.

Tonámix renovables Mexico city, Mexico.


23

15. Competitors Analysis

The main competitor in the fuel market in Pakistan and Indonesia, are the governments. Currently

the governments in most of developing countries puts a cap on the price of LPG and kerosene to

lower inflation in the economy. In recent years however, this cap has been increasing, as the prices

of subsidized and unsubsidized government provided fuel are increasing. This increase in prices has

led government to look towards alternative energy sources that could eliminate these prices, and

alleviate the cost burden on the government. The new policies aim to promote modernization and

commercialization of renewable energies especially biogas and solar technology.

On the commercial level biogas production, there are no direct competition at all in the market.

There are few local NGO’s which are currently installing the conventional fix dome and floating drum

household biogas plants based on animal manure. So, Nagaro would not face direct competition

from household medium size and commercial level for our down-stream technology smart biogas

systems. The indirect competition in the energy sector is being fostered by the other alternative

energy resources including natural gas, firewood, wind energy, solar energy, and coal and petroleum

products. But due to its cost-effective and environment friendly nature, biogas is going to have a firm

standing in the presence of this indirect competition.

The local competitors indentified in Indonesia are Biogas Rumah or BIRU, Asia Biogas Ltd, KIS Group

while in Pakistan main competitors are Pakistan council for renewable Energy Technologies (PCRET),

Bioenergy Technology Pakistan, and Rev Green. BIRU from Indonesia and PCRET from Pakistan are

government institutions and they showed their support for Nagaro’s smart Biogas systems during our

company officials meetings with concerned authorities of both organizations.


24

16. SWOT Analysis

Helpful to achieving the objective

Harmful to achieving the objective

Inte

rnal

ori

gin

(a

ttri

bu

tes

of

the

syst

em)

Strengths

Technology know-how Knowledge on the down-streaming

technology area. High quality, Portable, Safe to Use and Environment Friendly Initiative step for alternative energy

and organic waste management also in urban households.

Qualified management, Strong Networking with local and international authorities.

No complexities in biogas production,

No harmful waste, No pollution Ozone Friendly – Climate Change

Mitigation Use of kitchen waste and animal

manure Audit and quality control Project Management knowledge

Weaknesses

First stage production in Germany. Currently, No outlets Management staff Financial constraints Logistics German based Assembly Line Higher marginal cost of production

Exte

rnal

ori

gin

(a

ttri

bu

tes

of

the

en

viro

nm

en

t)

Opportunities

Being “Happy Mode with Food” nature of people, abundant ingredients for biogas.

Being Agrarian countries, enough animal manure for the biogas plant for rural people.

No labor Cost for installation. Economically feasible and socially

acceptable concept. Huge potential in Indonesia and

Pakistan. Government and Public Support Favourable changes in the law of

developing for the management and processing of urban and rural organic waste management through biogas and other renewable energy technologies for example Indonesia.

Great Support promised by PCRET, SAARC Energy Center and Ministry of Environment for the planned initiative to be taken by GAZU.

Threats

Fierce competition with gas grid extensions.

Antibiotics used in the feed of animals can cause difficulties.

Spreading of the technology


25

17. Marketing

Nagaro is in a unique and innovative marketing position. Since business is bringing very new and

attractive product in addition to social and economical benefits, it will produce motive for customers

to know about product plus its added values where they can multiply their financial incomes. Our

product speaks itself. You won’t go elsewhere until you reveal the product. Furthermore, we have

identified that Asian and African customers have other sense of buying, i.e. compete for the cheapest

products but at the same time they will definitely go for branded products even with high price like

Made in Germany etc. Customers will check out that how fine the product is assembled; it means

they are looking for both outlook and quality. We believe that our product purely satisfy the

customer’s demands. In addition, Nagaro is engaging in social media promotions, educational

campaigns and civil society seminars for the know-how and publicity of smart biogas systems and

their importance and necessity for the urban and rural areas.

17.1. Promotional Mix Nagaro decided to use following tools of promotional mix. It is our goal to spread information

“Biogas for better world” in depth of customer’s mind. And we will use different methods:

Personal Selling – Direct Marketing

Public Relations and Networking (Words of Mouth)

Internet Marketing/ Mobile Marketing/ Social Media

17.2. Marketing Objectives

Customer value and satisfaction

Creating strong position

Creating strong distribution channel

To achieve better market share

Try to increase growth rate

18. Investment Requirements

From the business plan, it’s evident that this business has tremendous potential. Although the

immediate target market is Indonesia and Mexico, the potential market includes the urban and rural

areas in different developing and emerging markets where waste management is one of the main

issues because of population and economic growth. Nagaro seeks Euro 100,000.00 investment to

cover the next year operational expenditure including the fixed and the variable costs. With the

planned investment, company will be able to develop assembly line and manufacture 50 units of

smart biogas plants. The developed facility will help to reduce the marginal costs of production as

well as independency from other companies which currently are providing assembled parts that are

required to manufacture the smart biogas plants. The development will create a fast growth of

company and the workforce.


26

Appendix

Type Biogas Output/day

(on average)

Energy equivalent /day* Energy equivalent/year*

SBP1-01A

1.5 m3

33 MJ 12 GJ

3.20 kWh 1170 kWh

SBP1-01M

1.1 m3

24.2 MJ 8.8 MJ

2.35 kWh 860 kWh

(More details: ANNEX II)

Smart Biogas : Energy Equivalents

1. Cost of Smart Biogas Plant

I Fixed Cost SBP1-01A (Auto)

SBP1-01M (Manual)

Investment Cost US$ 1400 US$ 1000

II

Variable Cost

Operation and Maintenance Cost (per year) US$ 20 US$ 10

2. Smart Biogas Plant Output

Output SBP1-01A

SBP1-01M

i. Gas Output

(m3/day) 1.5 m3 1.1 m3

(m3/month) 45 m3 33 m3

(m3/year) 550 m3 400 m3

ii. Solar Energy

Total output (kWh/day) 1.5 -

SBP self usage (kWh/day) 0.4 – 0.5 -

Available for lighting etc (kWh/day) 0.9 – 1.0 -

Average extra available energy for lighting (kWh/year) 350 -

iii. Slurry /Bio-fertilizer)

(liter/day) Approx. 10 Approx. 8

(liter/year) Approx. 3500

Approx. 3000


27

3. Smart Biogas Plant: Value Income

Value Income Category SBP1-01A

(US$)

SBP1-01M

(US$)

i. Gas Saving

Per month Income (LPG, Fuel wood savings) 28 21

Annual Income (LPG, Fuel wood saving) 336 240

Per month Income (equivalent to electricity/lighting from Solar Energy)*

10

Annual Income (equivalent to electricity/lighting from Solar Energy) (Kenya price @ US$ 0.30 per kWh)

105 -

Total Income (@ LPG gas savings + solar energy )

US$ 441 US$ 240

ii. Slurry /Bio-fertilizer)

Per month savings (Bio-fertilizer/Slurry @ US$ 0.05/ liter )

15

13

Total per year savings (Bio-fertilizer/Slurry @ US$ 0.05/ liter ) 180 150

Cost of maintenance per year -21 -10

Total Income/year ( on LPG gas + Bio-fertilizer/slurry saving)

US$ 610

US$ 380

** (Average price of electricity in Nepal, Pakistan, Indonesia and Kenya @ US$ 0.30 per kWh)

4. Smart Biogas Plant: Returns on Investment

Economic Value Category SBP1-01A SBP1-01M

i. Gas Savings

Pay Back Period (years) 4* 4

ii. Gas Savings, electricity/lighting/mobile charging & Bio-fertilizer Value

Pay Back Period (years) 2.25 – 2.5 2.5 – 3

Net Present Value (NPV) (based on 15 years of SBP life) US$ 3240 US$ 1890

* The payback period is same for both systems because without integrated solar based digester

mixing system, the efficiency of both systems will be same. The payback period is less with calculating

bio-fertilizer value and solar energy values provided in SBP1-01 system.


28

5. Smart Biogas Energy Equivalents

Type Biogas Output/day (on average)

Energy equivalent /day* Energy equivalent/year*

SBP1-01 1.5 m3

33 MJ 12 GJ

3.20 kWh 1170 kWh

SBP1-02 1.1 m3

24.2 MJ 8.8 MJ

2.35 kWh

860 kWh

* Calculation (1m3 Methane - CH4 = 36 MJ) based on 60% methane content (22MJ/m3 biogas) and 35% energy conversion

effeciency(1m3 biogas= 2.14 kWh electricity)

6. Smart Biogas: Conventional Fuel Replacement Capacity

Table: Replacement Values of Different Fuels by Nagaro’s SBP1-01

No. Fuel Type Replacement per month Replacement per year

1 LPG 20 kg 243 kg

2 Cattle Dung 60 kg 720 kg

3 Charcoal 46.2 kg 756 kg

4 Firewood 60 kg 720 kg

5 Diesel 23.4 liter 280 liter

6 Kerosene 28 liter 334 liter

7 Gasoline 36 liter 432 liter

Table: Replacement Values of Different Fuels by Nagaro’s SBP1-02 No. Fuel Type Replacement per month Replacement per year

1 LPG 14.85 kg 178 kg

2 Cattle Dung 42 kg 500 kg

3 Charcoal 63 kg 554 kg

4 Firewood 42 kg 500 kg

5 Diesel 17.16 liter 206 liter

6 Kerosene 20.5 liter 245 liter

7 Gasoline 26.4 liter 317 liter


29

7. Smart Biogas: GHG emissions Reduction

Technical Specification

1. Biogas Digester: Portable, Made of High Density Poly-Ethylene (HDPE) 1.1 Properties

1.1.1 Substrate: Vegetable, Fruit Waste, Kitchen Waste, Animal Manure

1.1.2 Digester Load: 2 – 10 Kg/day, Household Kitchen Waste

1.1.3 Favorable Temperature, PH Value and C/N:

Temperature: Mesophilic; 20°C to 38°C

PH Value: Neutral PH and ranges 6.8 to 7.2

C/N Ratio: Ranges from 20:1 to 30:1

1.1.4 Hydraulic Retention Time (HRT): 10-30 days (at optimum temperature)

1.2 Volume of Biodigester: up to 2 M3 per day

1.3 Geometrical dimensions:

Length, L: 1.20 m Width, W: 1.0 m Height, H: 1.2 m

2. Gas Collection Bag

Made of polyester fiber with PVC coating on both sides, 0.5 – 1.0 cubic meter gas storage capacity for household

use.

Figure: Smart Biogas Plant

Total GHG Savings (CO2-eq. tCO2e/year) with Smart Biogas SBP1-01A: Capacity 1.5 M3 Biogas Per day

1 tCO2e Savings through Fossil Fuel Replacement 1.5

2 tCO2e Savings through Methane Capture 0.9

3 Total tCO2e Emissions Reduced/Avoided 2.4


30

Risk and Mitigations

Safety is another extremely important element to Nagaro’s success. We plan to implement many

layers of safety precautions for this reason.

Risk Why it’s a Problem? Mittigation

Gas releases

Hydrogen Sulfide gas, Carbon Monoxide gas, Biogas are flammable, explosive or immediately toxic

Regularly check the whole system for leaks, Use Air Tight Sealant

Confined spaces

When cleaning the biogas digester, safety procedures are necessary

Safe Slurry Exit Valve at Bottom of Digester

Failure of Biodigester

Could lead to failure of entire system

Easy to Drain and Re-start Feeding

Improper preparation of influent solids

leading to blockage and scum formation

Proper Guide in form of Booklet for including Feedstock Preparations

Temperature fluctuations

Could slow down system

Warm Climate of Pakistan, Insulating materials Provided on Demand, Optional DC Heating System for Cold climates

pH Fluctuations (need 6.8-8.5)

Bacteria Sensitive to pH, and re-action could stop working

Continuous monitoring of pH within the Feed and the Digester, pH Easy to adjust through Excessive Water, Avoided Alkali usage

H2S leading to corrosion

Could lead to leakage

regular cleaning and use of proper sealant, Acid resistant HDPE Plastic Digester

Pressure Increases

Could lead to explosion

Removal of Water Condensate from Piping System, use of Pressure Gauges


31

Refrences

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Bhattacharya, S. and Abdul Slam P. (2002). Low Greenhouse Gas Biomass Options for Cooking in

Developing Countries. Biomass and Bioenergy, Vol. 22, pp. 305-317

EnergyPedia. Carbon Markets for Biogas Digesters. Retrievd from;

https://energypedia.info/wiki/Carbon_Markets_for_Biogas_Digesters on June8, 2015.

EPA (2010). Overview of Greenhouse Gases: Methane Retrieved from

http://epa.gov/climatechange/ghgemissions/gases/ch4.html on April 28, 2015.

Euromonitor International (2013). World Economic Factbook (21st Edition). Retrieved from;

http://www.euromonitor.com/medialibrary/PDF/Book_WEF_2014.pdf

FAO (2002). Good Agricultural Practices Database: A Workbook on Greenhouse Gas

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http://www.fao.org/prods/gap/database/gap/files/1397_GHG_MITIGATION_CANADA.PDF

IARC (International Agency for Research on Cancer), 2010. Household use of Solid Fuels

and High Temperature Frying. IARC Monographs on the Evaluation of Carcinogenic Risks to

Humans, IARC Monographs Volume 95, WHO Press, Lyon France. Pp. 45-143. Retrieved

from; http://monographs.iarc.fr/ENG/Monographs/vol95/mono95.pdf

IEA (2006). World Energy Outlook: Energy for Cooking in Developing Countries. Head of

Publication Services, Paris France. Retrieved from;

http://www.worldenergyoutlook.org/media/weowebsite/2008-1994/WEO2006.pdf

IEA, (2010). World Energy Outlook 2010, Paris, France. Retrieved from;

http://www.worldenergyoutlook.org/media/weo2010.pdf

International Labour Organization (ILO), 2013. Global Wage Report. Retrieved from;

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