As of early October, C-Quest Capital (CQC) Cambodia is under contract with SNV Netherlands Development Organisation Cambodia to manage The Stove Auction project. The Stove Auction is an innovative concept developed by SNV that facilitates the sale of advanced biomass stoves between international stove suppliers and local distributors through an auction platform in Cambodia.
As of mid-December 2016, 16 auctions have been conducted with 3,604 advanced biomass stoves sold. The auctions started in late March 2016 under SNV management and transitioned to CQC in October 2016. CQC has implemented the past 5 auctions, selling 2,176 stoves in just the past 2.5 months.
“So far so good” is how CQC’s Chief Operating Officer, Jason Steele, explains the progress of the world’s first wholesale auction for advanced biomass stoves. “We are testing a hypothesis for a new way of developing the market for advanced biomass stoves, which have struggled to gain market share in most other places in the world. And so far, it is going quite well. The market is reacting positively to these stoves. We have 10 registered bidders and half of them are quite active, returning to the auction on multiple occasions for more stoves. We see evidence of their consumer sales records when they claim their results-based-financing payments, so we know people are buying them and paying retail prices that most other development practitioners in- and outside of Cambodia said would be impossible. Consumers in poorer strata do care about their cooking appliances and are willing to pay more for the benefits that these stoves provide,” explains Steele.
“The auction is not without its challenges though. We see auction prices remaining on the lower end and stagnant, requiring more results-based financing funds to fill the gaps. We have plans to address this through a new reserve price policy by setting a specific floor price per stove per auction that gradually increases over time, and of course to increase the number of registered bidders thereby increasing competition and having bid amounts increase naturally. The reserve prices will be published compared to how it is now, which is a hidden reserve price that has been a fixed percentage of the Full Wholesale Value of the stove that increases on a periodic basis,” explains Steele.