Delivering propane as a social business

Vidagas is currently the leading distributor of propane in northern Mozambique … the least developed and primarily rural portion of the country. It has recently become profitable and is raising additional capital to expand into additional provinces of Mozambique and beyond.

What's most interesting about Vidagas is that it's a social business. It was started in 2002 by two NGOs VillageReach and Foundation for Community Development. They raised the initial capital and started this business not because they were looking for a great new investment opportunity, but because VillageReach had a contract to improve delivery of medical supplies to the rural clinics. The rural clinics needed a reliable supply of propane to power their refrigerators (to keep their vaccines effective) and for lights so that they could operate the facilities for operations and at night time. And there was no propane supplier.

Rather than simply funding the delivery of propane with government subsidies (if these could even have been obtained), they saw an opportunity to bootstrap a sustainable commercial business with a strong multi-year client … the Mozambique government clinics. So, they created a separate commercial business and then went about operating it like a commercial business selling propane delivery to other local businesses and residential customers. Today, less than 20% of their revenue comes from the government clinics and their customer base continues to grow as they deliver a valued service. …