Switzerland-based Basel Agency for Sustainable Energy (BASE) in August named Nigeria-based ColdHubs Ltd. as the winner of the Cooling as a Service (CaaS) Prize, which recognizes outstanding providers of refrigeration and air-conditioning equipment financed by the CaaS business model in developing countries.
CaaS is a pay-for-use arrangement, which helps end users finance cooling projects for which up-front costs would be prohibitive. The equipment provider owns, maintains and operates the cooling infrastructure, and the cooling service is sold per unit of cooling, or with a similar price structure.
BASE, along with the Kigali Cooling Efficiency Program (K-CEP), manages the CaaS Initiative, which has been working on contracts, pricing models, marketing material and events to support the implementation of CaaS projects. (shecco, publisher of this website, is a supporting partner of Cooling as a Service Initiative.)
To qualify for the CaaS prize, which was launched in May, equipment providers had to share information on implemented pay-per-use cooling/outsourced cooling projects from Asia, Africa, or Latin America.
Prize winner ColdHubs rents out propane (R290)-refrigerated cold storage space, powered in part by solar energy, on a per crate daily basis in Nigeria. This helps alleviate the impact of food loss and improves small-scale post-harvest infrastructure, saving 20,400 metric tons of food from spoilage in 2019 alone.
“ColdHubs’ solution is a perfect example of how Cooling as a Service can overcome key barriers to adopt clean cooling technology,” says Thomas Motmans, Sustainable Energy Finance Specialist at BASE. “We want to showcase this success story because here is a large opportunity for its wider application in agricultural supply chains to reduce food waste and increase the quality and value of food for small- and medium-scale producers.”
Extending shelf life
Founded in 2015, ColdHubs has pioneered a bespoke pay-as-you-store servitization model for smallholder farmers, retailers and wholesalers of horticultural produce. The project aims to eliminate food spoilage at key points within the food supply chain by deploying and operating robust off-the-grid cold storage.
To that end, ColdHubs designs, installs, commissions and operates walk-in cold rooms, branded as ColdHubs, in farm clusters, produce aggregation centers, and outdoor markets.
The Hubs are used to store and preserve fresh fruits, vegetables and other perishable foods 24/7, extending their shelf life from two days to more than 21 days. Users rent storage space priced daily per crate, at a price they can afford, and on a scale that makes sense to them.
By improving access to cooling and eliminating associated food waste, ColdHubs has been able to increase the income of farmers and retailers, uplifting and empowering local Nigerian communities – women in particular. “ColdHubs has created enormous social impact,” said Nnaemeka Ikegwuonu, Founder/CEO of ColdHubs.
ColdHubs is currently serving 3,517 farmers, retailers and wholesalers using its 24 installed cold rooms in 18 farms, aggregation centers and markets within the Southern and Northern Regions of Nigeria. Thirty more ColdHubs are under construction across Nigeria, bringing the projected total number of ColdHubs to 54 by the end of 2020.
ColdHubs operates a simple pay-as-you-store model. Farmers and retailers pay 100 Nigerian Naira (equivalent to US$0.50) per day to store 20kg (44lbs)of perishable food in a plastic crate inside the cold room. Hubs are operated by a female Hub Operator, who monitors the loading and unloading of crates, collect the fees, while a Market Attendant builds relationships in farm clusters and markets. The ColdHubs are not responsible for selling stored product.
ColdHubs owns all the equipment, with the assets on its own balance sheet, removing this barrier for small-scale operators who cannot afford the CAPEX investment.
“The ColdHubs have a quick payback on CAPEX and OPEX, so we are more interested in long term loans with very low-interest rates instead of equities,” explained Ikegwuonu. Future installations will be financed with a mixture of grants and debt investment.
A look inside a ColdHub
Each ColdHub is made up of the following:
Cold room: This features 150mm (6in)-thick insulated cold room panels with a floor made of stainless steel. Its dimensions (LxWxH) are 3m x 3m x 2m (10ft x 10ft x 7ft). It contains approximately three metric tons of perishable food, arranged in 150 of the 20kg (44lbs) plastic crates.
Refrigeration unit: This is an energy-efficient R290 mono-block refrigeration unit, with 24/7 autonomous refrigeration, using 658W of energy per hour and specially designed for off-grid use. The temperature is kept at around 5°C (41°F) with a cooling capacity of 3TR (10.6kW).
Natural refrigerant: According to ColdHubs, it hasn’t had any issues with flammability using R290. The company’s employees take extra care in handling it, and ensure that the ColdHubs are not installed in areas where there is any type of fire or open flame nearby.
Remote monitoring: Breakdowns and down-time are managed through the ColdHubs Advanced Remote Monitoring System (CARMS). On each ColdHub, there is daily monitoring of the number of door openings, battery state-of- charge, ambient temperature, cold-room temperature, and solar irradiation. CARMS is being upgraded to have a video camera with capabilities of taking and storing pictures in the cloud, so the ColdHubs team can see the loading and offloading of food remotely. With CARMS, the team manages and pre-empts the performance of each ColdHub.
Solar power: Half of the energy used by its storage locations is generated by solar, the other half by the grid, with a diesel generator as a back-up. The solar energy is provided by rooftop panels generating approximately 5.5kW, connected to a set of deep-cycle, long-lasting batteries, with off-grid and on-grid inverters. The power generated can be used to run the ColdHubs in all weather conditions.
100% jump in income
In 2019 alone, the 24 operational ColdHubs had the following impact:Increased the household income of 3,517 small farmers, retailers and wholesalers by 100%, boosting monthly income from US$60 (€50) to US$120 (€100), simply by eliminating 50% food loss.Created 48 new jobs for women, by recruiting and training them to work as Hub Operators and Market Managers in markets and farm clusters.Increased the quality of 20,400 metric tons of fresh fruits and vegetables, ensuring food safety by reducing exposure to harsh direct sunlight, chemical, bacterial and mycotoxin contamination, and eliminating rapid rotting. Thus it made 20,400 metric tons of nutritious food available for local consumption.Saved an estimated 462,528kg (1,019,700lbs),of CO2 emissions with an annual energy consumption reduction of 547kWh.
How does it work?
The cold storage process commences once the non-refrigerated trucks filled with fruits, vegetables and other perishable food arrive from the farms at the farm cluster’s aggregation centers or outdoor food market with the intention of storing the goods. The ColdHub Operator transfers the food from raffia baskets or bags into the clean returnable plastic crates.
For a first-time customer, the ColdHub Operator completes the customer’s Storage Card, which details their name, phone number, address and type of business. The Operator also details the commodity brought for storage, the number of crates for each commodity, the total number of crates and the total amount for storage. Each line of information must have the signatures of the Operator and the customer.
Then the Hub Operator issues a receipt for the cold storage cash payment to the customer. The Operator and the customer sign the receipts and the customer pays the Operator upfront. This amount is calculated based on the number of crates, the amount of storage per crate, and the number of days for cold storage.
After the first payment, a customer can come to pick up the stored empty crate and return it with produce, paying once again to be granted cold storage entrance. Long-term, regular customers enjoy the privilege of paying only when they are coming to pick up their crates.
“The model works because it is very affordable and reduces the risk of spoilage on farmers, retailers, and wholesalers,” explains Ikegwuonu. “It enables them to focus on their core competence (which is to sell fresh fruits, vegetables, and other perishable food), while leaving the technical element of making sure the food doesn’t spoil within the duration of sales, to ColdHubs, which has the technical competence.”
ColdHubs 2.0 coming soon
The company has just concluded the design of its second-generation ColdHubs named ColdHubs 2.0, which additionally features thermal storage to minimize their impact on the grid even further. The prototype will be ready by the end of 2020.
These new ColdHubs will take in an 8,000kg (17,637lbs) daily load of fresh goods, loading in the afternoon (from 12pm to 5pm) with a product starting temperature of 30°C (86°F).
The cold room size will be 10m x 6m x 2.8m (32.8ft x 19.7ft x 9.2ft) and it can be kept on temperature for three days during power outages without starting the backup generator (if no warm goods are loaded during this time).
The refrigeration system will operate an average seven hours a day and offers a cooling capacity of 40-45kW (11.4-12.9TR) to keep the cold room temperature at 5°C (41°F). Energy will be supplied exclusively by solar PV for 50% of the days in long-term average, with a solar fraction of power supply greater than 80%.