Energy efficient ovens in Ecuador
The role of SME finance in energy efficiency
A loan from a responsibility-managed climate fund has enabled a bakery in Ecuador to buy an energy efficient oven that uses 40% less fuel. The owner is now using the increased profitability to open a second bakery.
Energy efficiency is an important tool for managing increasing energy demand without constricting economic development. To reach small-scale projects across the world, an energy fund managed by responsibility partners with local financial institutions to develop green lending products.
Ecuador has a high dependence on oil and a growing population so one partner institution in Ecuador offers loans to SMEs (“Small and Medium Enterprises") to improve the efficiency of industrial equipment such as sewing machines, peanut processing machines and bakery ovens.
Jorge Luis Yaguache Sislema has been in the bakery business for over 20 years. He runs a small bakery in Caupicho and had been using an inefficient diesel-fueled oven. A USD 11,500 loan from the bank enabled him to replace the old oven with a new energy efficient version.
Previously, energy had accounted for 60% of the bakery’s operating costs. Now, with the new oven, the bakery is using 40% less fuel, which translates into significant cost savings and CO2 savings of 11 tones per year.
As well as saving fuel, the new oven bakes more evenly, resulting in better quality of baked goods and reduced waste. With such improved profitability, Jorge Sislema is now planning to open a second branch.
Jorge Sislema said: “Buying an energy efficient oven has transformed my business. We knew it would be worthwhile but we could not afford the upfront investment. Spreading the cost over three years makes it affordable.”