View source for Local Production: Conditions and Success Factors

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= Overview =

In contrast to [[Import of Energy Products|imports]], local manufacturing of energy products can constitute a reasonable cost-efficient alternative that supports local value creation.

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= Key Factors for Successful Local Production / Manufacturing<ref name="Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.">Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.</ref> =

#'''Relevant market:''' The demand of the relevant market should match the minimum size of one production unit. If a specific niche is big enough, the probability of success is higher. In Indonesia the niche was turbines for mini- and micro-hydro power, which has a high national demand and is not the core business of incumbents like Voith Hydro, Ossberger etc.
#'''Time factor:''' Establishing local production of hydro power components takes time (5-10 years). This is the biggest obstacle for projects which are only funded by EnDev and do not have a longer sectoral mandate like a focal area.
#'''Cluster:''' The production site / firm should be located within an industrial cluster, where it is easier to get qualified suppliers, employees etc. Multi-product firms are in a better position because they can compensate low demand with other product lines and transfer relevant knowledge to new technologies.
#'''No grants to the manufacturers.''' Better use (soft) loans or even better create trust for long-term investments like the German Feed-in Law did.<br/>

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= <span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'">Further Information</span> =

*[[Mini / Micro Hydropower Turbine Manufacturing in Indonesia|Example: Mini & micro hydro power turbine manufacturing in Indonesia]]
*[[Local Manufacturing of Solar Systems|Example: Local manufacturing of solar systems]]
*Local Production Systems of Wood Stoves: [[Enhancing Production of Improved Cookstoves (ICS)|Enhancing production of ICS]]

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= References =

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[[Category:Production_/_Manufacturing]]