Nestlé Indonesia and Hivos: Turn Waste into Benefit: Credit Access to Dairy Farmers in East Java, Indonesia for Biogas Units: Bringing Healthier Indonesian Children into Reality
Nestlé Indonesia and the Humanist Institute for Development Cooperation (Hivos), a Dutch non-governmental organization (NGO), have partnered since May 2010 to implement the domestic biogas program known as “BIRU” that distributes biogas units to households as a sustainable energy source through the use of micro financing. The program aims to improve living conditions of households by using biogas.i
The two partners agreed to collaborate based on the following objectives: (1) increase access to affordable energy by using biogas, and; (2) reduce negative environmental and health impacts of dairy farming activities.
The partnership operates in East Java and is mutually beneficial. Each biogas unit costs the equivalent of USD 765. Hivos with funds from its donor provides cash subsidies of USD 235 for each biogas unit successfully completed, trains dairy cooperatives on how to build biogas units, and conducts quality control and monitoring. Nestlé provides on average USD 530 as a zero-interest loan for every biogas unit. By providing zero-interest loans, farmers will have a greater sense of ownership and responsibility in maintaining the biogas units. Nestlé also identifies cooperatives and encourages board members of the cooperatives to build pilot units in their areas. The three-year partnership will end in December 2012 with a possibility of extending the collaboration.
As of October 2011, 11 cooperatives had been trained on how to build biogas units and provide maintenance. They have built 3,121 units. The program has created 250 new jobs. More than 50% of households that have built biogas units are now using biogas waste as organic fertilizer to replace chemical fertilizer. Nestlé Indonesia and Hivos hope to increase their target of 4,000 to 8,000 units (including the 3,121 units) before the program ends in December 2012. The partners also hope to continue to reach as many dairy farmers as possible in East Java and to overcome challenges that emerged during the partnership. These include strengthening cooperatives’ ability to manage the building and maintenance of biogas units.
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