October 1, 2009 | Read Time: 1 minute
VillageReach, a nonprofit organization in Seattle, has taken a novel approach to improving the health of people in remote areas of Northern Mozambique: It runs a propane-distribution company.
In 2002 the charity started VidaGas with the country’s Ministry of Health as its first and, at the time, only customer. With a reliable source of energy, clinics were better able to keep vaccinations cold, sterilize medical equipment, and offer nighttime birthing services.
After five years, 95 percent of young children in the region were vaccinated for diphtheria, tetanus, and pertussis, compared with the nearly 70 percent vaccinated previously.
The company quickly began to seek as clients hotels, restaurants, hospitals, small businesses, and eventually households. The business has spurred economic development and reduced the use of charcoal and wood for cooking.
Last year VidaGas delivered 240 tons of propane and is now the largest distributor in Northern Mozambique.
New Investment
Impressed both by the company’s business prospects and the social benefits of its work, the Oasis Fund, a commercial investment fund in Luxembourg, has made a $1.4-million equity investment in VidaGas. The money will allow VidaGas to expand its business in Northern Mozambique and potentially start exporting propane to surrounding countries.
The Oasis Fund invests in businesses that provide housing, health care, education, water, or other services to poor people in developing countries. But while the fund focuses on businesses that provide a social benefit, it also is looking for significant financial returns.
“I come from investment banking and then later dealt with private equity and venture capital, and I can tell you that the terms of this deal are as stringent as I’ve ever seen,” says Craig Nakagawa, co-founder of VillageReach.
To learn more, listen to an interview with Mr. Nakagawa at http://philanthropy.com/extras.
