Developing new markets for LPG for clean cooking requires relatively high capital expenditure on LPG infrastructure, despite the small volumes that are typically traded through new assets.
Paybacks can be long and establishing new projects often faces challenging economics, requiring the need for development and blended finance.
Many countries simply do not have the critical mass in terms of LPG market size to encourage private sector investment and therefore markets do not grow.
There is demand for development of the LPG market in many African countries including in Angola, the Democratic Republic of the Congo, the Republic of Congo, Ethiopia, Gabon, Gambia, Guinea, Liberia, Sierra Leone, Rwanda, Zambia and Zimbabwe, with expansion required in countries such as Cameroon and the Ivory Coast. The situation is similar in many countries in Asia and Latin America.
Once storage and distribution logistics are established, local supply chains spring up, which enables LPG-to-power solutions to be set up in coastal locations. This also encourages inland captive power solutions, including solar-hybrid, where baseload is still crucial, leading to “greening” for miners and industrial demand. This also then stimulates downstream/household demand for cooking gas.