Sistema Biobolsa: Addressing Challenges of Climate Change, Sustainable Agriculture and Waste Management in Mexico

Indu Perepu
Research Faculty, IBS Case Research Center, IBS Hyderabad (Under IFHE ? A Deemed to be University u/s 3 of the UGC Act, 1956), Hyderabad, Telangana, India. E-mail: indup@icmrindia.org

The case chronicles the innovation in bio-digester technology by Alex Eaton and Camilo Pages through a social enterprise in Mexico called ?Sistema Biobolsa?. It describes how the two social entrepreneurs created an innovative new waste and resource management system by reimagining the 150-year-old biogas production system by using a high-quality membrane, durable modular parts, and anaerobic bio-digesters that transformed animal waste into renewable energy (biogas) and organic fertilizer. Sistems Biobolsa addressed several challenges that small and marginal farmers in Mexico and across the world faced?low yielding land due to excessive use of chemical fertilizers, lack of organic fertilizers, unviable waste disposal methods, and limited access to energy. Sistema Biobolsa converted organic waste into organic fer tilizer and renewable energy. Its impact was manifold. With an investment of US$600, a farmer with two cows could save up to US$40 per month in the cost of fuel and fertilizers. The biogas produced was environment-friendly, reduced methane emissions, resulted in better waste management, reduced deforestation, protected the soil, and also improved the quality of life of the farmers. To cater to the needs of different farmers, the bio-digesters were available in several sizes and could be installed within a few hours. After the first month, the farmers could start using the system. The company provided loans to farmers to install the system, and also extended technical support to them in using it. Eaton expanded into Kenya, Colombia, Nicaragua, and India, but there were still many issues that he needed to address. He had to improve distribution to reach more than 4 million small farmers in Mexico. He was looking at making a huge impact to address the issues of global warming and climate change. But, can a small venture in Mexico be scaled up to address these huge global problems?

Sistema Biobolsa is a project with many benefits. Using organic waste that, through the fermentation process, produces biogas, and using this biogas in cooking stoves generates savings for families and helps us all protect the environment. So it is good for health, good for the economy and good to fight against poverty.i

? Felipe Calder?n Hinoj osa,
Former President of Mexico

The bio-digester is not an end in itself, but rather the means to change rural farmers? energy use and their perception of their own conditions.ii

? Alex Eaton,
Co-founder of Sistema Biobolsa

Introduction
Small farmers contributed to 70% of the global food production.¹ The challenges they faced were innumerable?ranging from limited access to energy, increased use of chemical fertilizers, low yielding land, decreased farm output, increased input costs, etc. These were the issues that bothered Alex Eaton (Eaton), who worked with companies involved in providing alternative energy to the poor. In this endeavor, he partnered with Camilo Pages (Pages), who was involved in marketing eco-friendly technologies.

Eaton and Pages, along with a few social entrepreneurs, started Sistema Biobolsa² in Mexico in 2010 as a social enterprise. Sistema Biobolsa manufactured, distributed, sold, and installed anaerobic (oxygen-free environment) bio-digesters³ that transformed animal waste into renewable energy (biogas) and organic fertilizer. This system promised clean energy and sustainable agriculture.

Sistema Biobolsa?s waste and resource management system reimagined the 150- year-old method of biogas production by using high-quality membranes and durable modular parts. The pre-fabricated equipment contained a black bag made from dense, impenetrable material. Farm and animal waste was gathered into the bag and was converted into clean gas and organic fertilizer. The equipment, available in different sizes, was manufactured at the company?s factory and was distributed across the market and could be installed within a few hours.

Through this system, small farmers and rural communities could convert organic waste into renewable energy and organic fertilizer. The gas effectively replaced conventional energy and was used for cooking, heating water, and for heating the greenhouses. A small farmer with two cows could save about US$28-40 every month on energy and fertilizers.

This had a huge impact on small farmers, increasing their productivity while reducing adverse environmental impact. In the process, Sistema Biobolsa addressed the health challenges the farmers faced due to unviable waste disposal methods. According to Eaton, ?I designed bio-digesters because in the countryside, there?s an excess of organic waste that can be converted into a reliable source of energy.?iii The benefits of the system were manifold?elimination of CHG emissions, protection of water sources, and exclusion of wood, chemicals, and fossil fuels. On the economic front, it addressed issues like poverty, food security, and climate change and provided sustainable and productive solutions to small farmers.

By 2017, this social enterprise with a proven environmental and social impact, had installed 3,500 bio-digester systems in Latin America and Africa. The system's ease of use, efficiency, and economic viability made it highly popular. Buoyed by the response, Sistema Biobolsa was looking at installing 10,000 systems per month in Mexico and another 50,000 per month worldwide.

The Beginning
As a child, Eaton had learnt about sustainable agriculture on an organic farm in the US. He studied in Kenya, later graduated from Colorado, and was actively involved in environmental journalism. For some time, he stayed in Alaska, where he worked as a wilderness guide.⁴ Later on, he moved to Nicaragua where he worked with an organization that was involved in installing photovoltaic⁵ and solar cooking systems. At that time, he came across a bio-digester on a farm. He was particularly attracted by the way the system processed animal manure in a safe and hygienic manner, producing biogas that could be used for household purposes instead of fossil fuels and wood. He felt that this would address the need for clean energy in the world (Refer Exhibit I for the need of Clean Energy).

Most of the systems that he came across were too large to or too complex to operate and maintain. He found that though these systems were effective, the technology being used was inefficient and caused a lot of trouble for users, due to which it was not widely embraced.

Eaton then relocated to Mexico attracted by the conducive social entrepreneurial climate in the country. He set out to improve the technology (Refer Exhibit II for Social Entrepreneurship in Mexico). He worked with an organization as a consultant for large scale renewable energy and bio-digester projects. In 2005, he started creating his own design for a smaller bio-digester. He, along with an environmental engineer, Ilan Adler, and a few other engineers registered International Renewable Resources Institute (IRRI) as a non-profit organization to promote sustainability in the rural communities in Mexico, Latin America, and the Caribbean. In IRRI, Eaton built the Mexico Biogas program, while continuing to work on a bio-digester design and fabrication for small bio-digesters (Refer Table 1 for other grants that Eaton Received).

In 2007, IRRI started installing small scale bio-digesters. Eaton went back to the US in 2007 to do his Master's in international development and engineering. During the course of his program, he concentrated on studying the impact small-scale biodigesters could have in rural Mexico. In 2009, Eaton completed his Master's with a thesis on bio-digesters and came up with a business plan, which went on to become the plan for Sistema Biobolsa. Eaton continued to work on finding a durable material for the bio-digester that would address the challenges rural farmers had previously experienced with the biogas systems. Apart from the material, he concentrated on ease of use, manufacture, installation, and transpiration.

In 2009, Eaton met Pages, who had studied industrial engineering and was involved in marketing eco-friendly technologies. Pages became interested in Eaton's vision of bio-digestors and their impact on rural farmers. Eaton and Pages got together to start a company called Buen Manejo del Campo SA de CV in 2010 and patented the technology. While Eaton was the CEO, Page was the COO of the company. They started the process of obtaining the necessary support from the government, municipality, and other public sector organizations. Eaton and Pages met personnel from international non-profit KIVA⁶ during a conference and started a dialog about microlending. Eaton traveled to Europe to attract investment for the venture and received his first support from an individual in Sweden.

In 2011, Eaton was selected as an Ashoka Fellow for "seeking to transform the culture of waste and resource management among small-scale Mexican farmers through the introduction of appropriate bio-digester systems". The same year, a television reality show was conducted in Mexico-'Iniciativa Mexico 2011' for social start-ups. The show was organized by the Government secretariat for social development (SEDESOL) where Sistema Biobolsa won the second prize from among 57,000 applicants. The company was covered extensively in the media, due to which it became popular across the country. This also brought in angel investment of US$1 mn for it. With this capital, Sistema Biobolsa built a manufacturing plant in Toluca, Mexico. In 2011 and 2012, 100 bio-digesters were installed in 10 states across Mexico.

In 2012, Eaton delivered a TedX talk in Mexico. The company was widely covered in local and international media organizations. This helped it develop a relationship with governments and rural cooperatives to install bio-digesters. In 2013, the company received a major public order from the Food Security Program in Tlaxcala, Mexico, to install 100 bio-digesters (Refer Exhibit III for more about bio-digesters).

The venture received support and investment from several investors including individuals and companies in the US and Europe. One such company was ENGIE, a France-based energy company, which invested through its solidarity investment fund that lent support to social enterprises working in the area of energy poverty. The other investors included Factor(e)⁷ ventures, a company that supported early stage entrepreneurs. From 2015, Sistema Biobolsa received a three-year US$100,000 donation from Greater Impact Foundation,⁸ which also provided a working capital loan. The component of sales in the revenue generated by Sistema Biobolsa increased from 16% in 2010 and 2011 to 95% of the total revenue in 2014 (Refer Exhibit IV for Revenues from Sales vs. Grants). The company broke even in 2014 and achieved a net profit of 18% on sales of just over US$1 mn. By then, it had installed 2,000 systems (Refer

The Bio-Digester System
Sistema Biobolsa's bio-digester closely resembled natural ecosystems, which did not generate much waste. Whatever was generated became an input to another system. According to Eaton, "We take that waste and turn it into a clean, renewable energy source"iv (Refer Exhibit VI for the use of Biogas).

The mission of Sistema Biobolsa was to empower farmers to manage their own resources in order to build a better future for themselves and their families. This was to be achieved through a well-designed technology and by raising awareness about the system and its benefits. Eaton said, "a huge disadvantage of being a small farmer today is you live in an environment filled with flies and horrible odor, with animal waste contaminating rivers, lakes and watersheds."

Sistema Biobolsa was a waste-to-nutrient ecosystem comprising several steps including onsite diagnosis, tailored financing, installation, training, and long-term support for biogas and fertilizer use. The bio-digesters, meant for small and mediumsized farms, were available in 15 different sizes. The farmers could choose the biodigester based on the number of animals on the farm. Made of a high quality geomembrane, the bio-digesters were designed to withstand the harsh rural climate and ensure long product life with low maintenance costs. It was manufactured in Toluca, in adherence to the just-in-time schedule and zero waste concept. It was tubular, prefabricated, modular, and flexible and could fit onto a pallet, which made it easier to package and distribute (due to the flat-pack system, 10 packs could fit in one truck).

It could be transported easily into the hinterlands of rural Mexico through any mode of transportation available.

Sistema Biobolsa's biogas system, which lasted for 15-20 years, consisted of two main components-a reactor (that could be compared to a large bag-Bolsa meant bag in Spanish) and tubes. The reactor was made of a linear low-density polyethylene geomembrane and was of 1.5 mm thickness. It was black in color to enable absorption of heat that would break down waste. The geomembrane had an estimated lifetime of more than 50 years. It optimized solar heat and kept the internal bacteria alive. According to Prapas (Prapas), co-founder of Factor[e] Ventures, "A cow can step on this bag and it won't pop. In fact, stepping on-rather, kicking-the geomembrane every few days is how farmers keep the bacteria-rich contents mixed."^v

The tubes and assemblies were made of hydraulic and sanitary PVC. The biogas system had the capacity to operate with 4 m3 to 40 m3 of liquid. Every day, the biodigester received farm waste and manure mixed with water (1 part manure to 3 parts water) (Refer Exhibit VII for the characteristics of Sistema Biobolsa).

The reactor was placed in a trench on the farm, and was connected to a source of human or animal waste and water. The reactor was closed to allow the anaerobic process, which broke down the organic material using microorganisms in the absence of oxygen. This process produced biogas-a mixture of methane, carbon dioxide, and other gases-along with digestate (a nutrient source that could be used as fertilizer). A tube connected the reactor to another bag that collected the biogas. This was connected to a pipe leading to the home/farm where the biogas was used. Another tube funnelled biol or liquid organic fertilizer from the reactor to an external tank (Refer Exhibit VIII for different parts of the Biobolsa system). Sistema Biobolsa developed a water treatment system using aquatic plants to further treat any waste water.

It took about 30 days for the system to reach its full productive capacity, after which gas and biol were obtained every day. Experts compared bio-digesters to rainwater harvesters and solar panels as they also generated power by reinvesting natural resources into the ecosystem.

Just after the launch, the team found that there was a huge gap as far as the bioenergy ecosystem was concerned in Mexico. Previously, low-income families had not come under the purview of bioenergy initiatives. "There is a whole chain of innovation that has to happen when you launch a new product. There are so many supporting elements that have to become a reality"vi said Eaton.

Outreach Programs
The main challenge lay in making people who had scarce resources spend a substantial amount on a product, whose benefits they were yet to witness. To enable this, the company carried out ground level, rural outreach programs.

To make the local people understand the importance of bio-digesters, the founders took the help of a local legend about a red dragon. According to the legend, the dragon ate trees and breathed fire. Eaton said, "I came up with my own legend about a blue dragon that eats waste and breathes blue fire to speak to the origin of energy." This story helped spark an interest in biogas among rural and poor communities. Eaton said, "People started calling [biogas] 'the new flame.' It was a significant starting point."

There was not much knowledge about the opportunities available in waste-toresource systems and given the fact that the technology was not popular, the company devised a strategy to approach the customers. The technicians at Sistema Biobolsa were from the local communities and many of them were users of the system. Initially, they spread word about the system and the benefits they had reaped from it, which included reduced energy costs and re-cycling of waste into a source of energy and organic fertilizer.

Once a farm decided to own a system and install it, the company conducted a baseline assessment. The technicians used their smartphones to input data about the farm pertaining to the number of animals and people on it; the expenditure incurred on fertilizers, LPG, and other fuel; time spent on collecting firewood, etc.

The technicians trained the families intending to use the bio-digester. Once the system was ready on a farm in a particular community, it became a prototype and was shown to others in nearby communities. According to Eaton, "The best tools to build community awareness are farmers demonstrating the benefits of the technology within a local framework of value. With this peer-to-peer validation, we can make concrete economic, social, and environmental arguments for the technology, showing payback times, improved efficiencies and reduced health impacts."^vii

Financing
The equipment was sold as an integrated package consisting of the necessary connections, appliances, and a biogas cookstove. The system installed for a small farm produced 1 m3 (volume of one cubic meter equal to 1000 liters) of biogas every day, and gave biogas for 2 to 4 hours. The smallest and most popular bio-digester was called BB4 and contained 4 m3 of waste storage. It cost US$600 and included the tubing, installation, a cookstove, a boiler burner, and gas filters. At the other end was BB240 with 240 m3 of waste storage. It could be used in farms with upto 110 cattle and produce heat for a 60,000 sq. ft greenhouse. It cost around US$12,000. (Refer Table 2 for the details of Sistema Biobolsa).

Though the system was highly useful, its cost was prohibitive for small farmers. Hence, Sistema Biobolsa started a loan program way back in 2011, and ensured that the savings reaped from using the biogas, were used to pay back the loans. In 2012, Sistema Biobolsa partnered with global microfinance organization KIVA to offer loans. According to Eaton, "KIVA loans us the money, and we pay KIVA back as our customers pay us."^viii The amount loaned by KIVA accounted for 40% of the total cost. The loans were secured through international lenders and transferred to Sistema Biobolsa (Refer Exhibit IX for loan eligibility criteria).

The remaining was covered through subsidies provided by the government of Mexico. A part of the cost was borne by the customer. This arrangement benefitted the company as the risk was limited. The company planned to phase out government support. According to Esther Altorfer, Sistema Biobolsa's Finance Director, "The subsidies are a good way to support new technology, but our strategy is to offer credits ourselves and keep this market-based."^ix

The loans were tailored based on the circumstances of the farmers and on the calculation of the farmers' existing energy and fertilizer expenditure. This information was taken into consideration to design a payback scheme, where monthly payments were just equal to monthly savings generated by a bio-digester. Often the savings exceeded installments making the payback easy for customers. This motivated them to install the system. The loan instalment was collected during the regular follow up and monitoring visits.

Once the customer showed an interest in the system, evaluation of the credit application began. Information about the financial position of the applicant was taken along with details of two guarantors. The guarantors needed to be local residents, and should not have been employed with companies going in for liquidation.

Many farmers did not have any bank account or credit history. To address this issue, Biobolsa developed a series of credit survey questions about the number of animals, types of crops, seasonality of farm income, animal health, cleanliness, annual payment details, size of family, food cost, education costs, etc.

This data was then posted on the CRM system using a data collection application called Taroworks, a company that belonged to Grameen Foundation.¹⁰ Through this app, the salespeople or technicians entered the data into smartphones and uploaded it into the database whenever the internet was available. Once all the credit survey questions had been uploaded, the credit coordinator reviewed the information. They reviewed each answer carefully to determine loan eligibility.

Installation
The head office of the company was located in Mexico City, and there were three regional offices and operations spread across 25 states in the country. A team of two technicians installed the product and the customers were trained on using the system. There was a one-year guarantee on the product and a 20-year guarantee on the geomembrane. The installation was completed in 2-5 hours.

After the installation, monitoring was done. After 30, 90, and 180 days, feedback was taken from the customers and their queries were resolved. The initial monitoring was done to ensure that the system was working as intended and any problems were diagnosed. During the second check up, the production of fertilizer was checked (Refer Table 3 for the details of technical support provided).

In the 180-day follow-up, it was ensured that all the outputs were stable and customer feedback was gathered. During these checkups, information about the impact that the system had had on the productivity a nd the farmers' liv es was collected. The monitoring data allowed Sistema Biobolsa to measure impact and gain feedback from the customer about functionality.

The data collected prior to installation was compared with the data collected after six months. This data became a part of the CRM system of the company. This was used to bring in changes to the system, and also in education programs. After 180 days, the technicians certified the family using it as 'local experts' after which they could participate in peer-to-peer validation and future events and also demonstrate their product.

Though such engagement was highly expensive, and these processes were usually automated, the company wanted to continue its engagement with customers in order to maximize the benefits from the product. Sistema Biobolsa sold carbon credits, and the proceeds were used to finance the follow-up activities.

The Impact
Sistema Biobolsa believed that small, sustainable farms played a major role in bringing in economic prosperity. It involved low-income groups as consumers, distributors, and employees. It aimed to create a culture of sustainable resource management by increasing the number of systems installed. On the impact he desired to create, Eaton said, "We try to create change with small farmers by reconstructing their perceptions around waste as a resource. Apart from the impact of our technology on the livelihoods of small farmers, we hope it also acts as a catalyst for further positive change as they increase their awareness of other sustainable resource management opportunities."^x The Sistema Biobolsa digester converted 75% to 85% of volatile solids in organic waste to biogas. According to Eaton, "If we had tried to stretch that extra 10%, we would have had to compromise a lot on affordability and usability. To serve the customers we want, we had to strike a balance between function and technical efficiency."^xi The standard design, size, and installation procedure reduced the cost of the project. The technology could be scaled to millions of small farmers. As the systems were modular they could be used in small or large farms without any problem. The customers were able to realize cost savings immediately after installing the system. One month after installation, the system started producing fertilizer and biogas. The farmers could save on buying fertilizers and also on petroleum and gas. The savings were estimated to be US$20 per month in energy costs. In the first year, the farmers witnessed a 20% to 40% rise in crop yields. Prapas, who visited a few customers said, "I was expecting to see people using the gas for cooking only. Instead, I saw that the family had so much gas, they had bought a boiler so they could have hot showers. It represents such a dramatic change in quality of life."^xii Another customer, a farmer with 100 cows, said he used to find managing animal waste a huge task, but after the installation of the system, he got not only fertilizer but also energy to heat the greenhouses. Many families reported that they were generating more biogas than they needed. Many farmers said that they were growing better crops as they were using organic fertilizers. A few of the customers said that they could heat the barn that kept piglets warm in the night, leading to healthier animals. A farmer said, "Take a look around now; there are no f lies. It's cleaner now."

Biogas offered many more benefits. In the agriculture sector, it helped in reducing methane emissions, which had a huge global warming potential-23 times higher than carbon dioxide. The agriculture sector also polluted water sources with animal waste, fertilizers, chemicals, pesticides, etc. By transforming methane and carbon dioxide into renewable energy, Sistema Biobolsa was able to reduce the greenhouse gases from farming-related activities.

The use of bio-digesters led to improved waste management, resulting in reduced water pollution and sanitary risks. Due to the use of renewable energy, the dependence on fossil fuels and wood went down considerably, leading to reforestation. The reduced use of firewood led to lower deforestation and better health due to less indoor pollution.

The use of organic manure led to the protection of soil and farmers could save on expensive chemicals and fertilizers (Refer Table 4 for The Impact of Sistema Biobolsa).

The impact reports showed that the full cost of the system could be repaid in 8 to 18 months. Once the money was paid, the farmers experienced an increase in disposable income and savings. It showed that on an average, a farmer with 3 hectares (around 7.5 acres) of land saved US$260 on fertilizers in one year by replacing chemical fertilizers with biofertilizers. Besides, the use of biofertilizers resulted in a large and more powerful crop yield.

Each farmer saved about US$28 to US$40 per month on fossil fuels like LP gas, which was the main source of cooking and heating. The farmers were also able to use the biogas to power their homes and farms.

In a span of about six years, 2.4 million tons of animal waste was treated by Biobolsa. Over the years, the number of systems installed was showing an increase. Over 75% of the systems sold were very small; 15% were medium, and 10% were of large scale (Refer Table 5 for the details of the number of systems instaled).

Sistema Biobolsa addressed critical challenges like waste management, soil degradation, adverse affects of chemical fertilizers, growing energy costs, deforestation, etc. The final impact of all this was on climate change. Observers also said that due to better yield from the farms, the migration to overpopulated cities could also come

down. Prapas said, Sistema Biobolsa has been "potentially the most impactful way to empower farmers to take an active role in escaping the cycle of rural poverty and improving the quality of their own lives."^xiii

Going Global
To support the farmers, the company decided to not only sell the equipment but also train rural families on using the bio-digesters to process waste into energy. The founders planned to reach millions of small farmers across the world through this system.

To replicate the model in other international markets, Sistema Biobolsa worked with solar energy system distributor Tecnosol in Nicaragua. Several bio-digesters were sold in this manner. The main problem with the model was the lack of a followup and maintenance mechanism.

Another strategy adopted to replicate the model was to set up a network of organizations to support the growth of the bio-digester sector and promote the biogas projects and innovations. This method was followed in Latin America and the Caribbean countries. Sistema Biobolsa worked with 10 organizations to organize events and share good practices and work on common goals. More than 500 organizations were participants in this network. The objective of this network was sharing information and experiences, identifying technical, environmental, social, and economic barriers, suggesting ways to spread the bio-digester technology in different countries, systematizing research and dissemination among partners, and encouraging actions that influenced policies related to bio-digesters. This was supported by IDB and other organizations.

Factor(e) was also working closely with Sistema Biobolsa and was looking at reaching 10 million users in 18 months. It was looking for a scalable and replicable bio-digester model. Inspired by the smallest and largest bio-digester units, it decided to invest in Sistema Biobolsa. Factor(e) entered into an agreement with Sistema Biobolsa for equity and technical support in 2016. Together, they planned to identify the areas where Sistema Biobolsa could enter, and attract further investment. In the first phase, it planned to grow in Latin America and in the second phase to expand across the world. Factor(e) launched a regional office in India to help Sistema Biobolsa evaluate the impact it could have in India.

Several African and Asian countries were also interested in this biogas system and the company shipped bio-digesters to Ghana, Nigeria, Madagascar, Haiti, and also to South American countries Cuba and Peru. The founders were also looking at venturing into countries where the waste management practices were unsustainable. In 2016, the company trained 12 people to start the operations in Nicaragua. In July 2016, the first international office was started with a manager and two local employees.

Looking Ahead
There was a huge potential for bio-digesters across the world. As per the Food and Agriculture Organization of the United Nations, there were more than 500 million small farms in the world,^xiv while the number of digesters was only around 10 million, showing a huge gap between supply and potential demand. There were more than 2 billion farmers in the world, and most of them were among the poorest in the world. According to Eaton, "I want to create a base of users that leads to a tipping point ... a collective aha moment in farming."^xv

The company had over 35,000 people using the biogas technology in six countries. But there were an estimated 4 million small farmers in Mexico alone, whom the company had to reach in order to make a full scale impact.

The company's business model was profitable and it was looking at expanding into new markets and extending its social, economic, and environmental impact. The pilot projects were running in several Central American countries, Haiti, East Africa, and India. It planned to enter these countries by 2018.

Though the use of the biogas in Mexico was growing, its usage in the agricultural sector was still limited due to a lack of suitable motors to convert biogas into electrical or mechanical energy. Sistema Biobolsa hosted workshops with local mechanics to convert products designed for other power sources to biogas. These included small equipment like stoves to large motors. It then bought those machines from the mechanics to sell them along with bio-digesters. Eaton said, "Three to five years down the line, we hope [the market will have grown so much] that we'll just be able to direct people to a local store if they want to buy a biogas-powered motor."^xvi

It also developed generators that used biogas to pump water, heat water, or generate electricity. It started using these on an experimental basis with funds obtained from Wisions and KIVA.

Though the company had become financially successful, it had several lofty goals ahead- reducing pollution in rural areas, addressing the issue of global warming, and reaching small and medium farmers across the world to create a more sustainable economy (Refer Exhibit X for Global Goals of the company).

At the micro level, there were some issues that the company needed to address. One was the commercialization of biol. Though it was claimed that excess biol could be sold as fertilizer, many of the farmers were not sure of its chemical composition and whether to sell or use it in their farms. Biol was not a commercially viable commodity, as it had only 1% nitrogen, which meant that huge quantities were required if it was to be used as a fertilizer.

The main challenge with Sistema Biobolsa, according to the investors, was that the model could become unviable as the company grew, as engaging with the customers so closely was an expensive affair. But the company was of the view that such a high level of engagement was needed to ensure the long-term use of the product.

Another challenge it could face was to replicate the conditions that it had created in different countries. It required experienced people with well-established contacts, capacity, and resources. In Mexico, the expansion was smooth as there had been several years of lobbying by various authorities to subsidize energy and use alternative energy. But the regulatory mechanisms and budgets in other countries could be different. Thus, the company might have to spend considerable time and effort to lobby with various authorities to obtain subsidies and loan funding.

Sistema Biobolsa attracted some high profile partners like the Clinton Global Initiative and Nature Conservancy, through whom it planned to expand its activities to other parts in the Latin American Region, the Caribbean, and Africa.

Eaton saw a future in Sistema Biobolsa's increased use among farmers as their productivity also grew. The market for small-scale bio-digesters in Mexico was estimated at one million units, equal to 25% of smallholder farms in Mexico. The future of Sistema Biobolsa depended on expanding into new markets rapidly, and also in finding new applications for the equipment like farming equipment powered with biogas. In Eaton's words, "For us, success is when we make farming more viable and more dignified. Rather than your farmyard being filled with manure and flies, if you have this high-tech piece of equipment, and you're no longer cooking over this smoky wood stove, you can create a quality of life that's significantly better."

End Notes

1. "Sistema Biobolsa: Taking Circular Economy to the Countryside," www.elcuartosector.net, 2018.
2. "Study of Social Entrepreneurship and Innovation Ecosystems in the Latin American Pacific Alliance Countries", Inter-American Development Bank, July 2016.
3. Elizabeth Meza Rodriguez, "Sistema Biobolsa," www.solutionsandco.org
4. Vanessa Ho, "Alex Eaton: Helping Small Farmers Turn Animal Waste into Clean Energy," https://news.microsoft.com, June 17, 2016.
5. "Gut Instinct: Introducing Bioenergy in Rural Mexico," https://demandasme.org, Fall Winter 2016.
6. "Gut Instinct: Introducing Bioenergy in Rural Mexico," https://demandasme.org, Fall Winter 2016.
7. John Converse Townsend , "Agricultural Innovation, In Reverse - Waste as a Resource: Q&A with Ashoka Fellow Alex Eaton," www.forbes.com, August 15, 2013.
8. "Gut Instinct: Introducing Bioenergy in Rural Mexico," https://demandasme.org, Fall Winter 2016.
9. "Gut Instinct: Introducing Bioenergy in Rural Mexico," https://demandasme.org, Fall Winter 2016.
10. John Converse Townsend , "Agricultural Innovation, In Reverse - Waste as a Resource: Q&A with Ashoka Fellow Alex Eaton," www.forbes.com, August 15, 2013.
11. "Gut Instinct: Introducing Bioenergy in Rural Mexico," https://demandasme.org, Fall Winter 2016.
12. "Gut Instinct: Introducing Bioenergy in Rural Mexico," https://demandasme.org, Fall Winter 2016.
13. "Study of Social Entrepreneurship and Innovation Ecosystems in the Latin American Pacific Alliance Countries," https://publications.iadb.org, July 2016.
14. www.fao.org
15. Carly Schwartz, "'Smells like Opportunity: Mexican Farmers are turning Cow Pies into Proverbial Gold," https://qz.com, December 11, 2015.
16. "Gut Instinct: Introducing Bioenergy in Rural Mexico," https://demandasme.org, Fall Winter 2016.

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1. As of 2012 according to www.fao.org
2. Sistema Biobolsa legal name: Buen Manejo del Campo. It was registered in 2010.
3. A bio-digester is a tank which digests organic material biologically and degrades and converts the human, animal, and farm waste into usable water and gases in an eco-friendly manner. The generated gas can be utilized for energy/cooking and the water for irrigation purposes.
4. A tourist guide who takes tourists through nature and wilderness expeditions.
5. Photovoltaics are used for generating electric power by using solar cells to convert energy from the sun into a flow of electrons.
6. Anybody from across the world can become a part of KIVA and lend their money to entrepreneurs working in the areas of education, clean energy, and other social causes.
7. Factor(e) is a venture development firm with a mission to improve lives in the developing world through increased access to sustainable energy and related services.
8. The Greater Impact Foundation funds stage two for-profit social enterprises that focus acutely on poverty eradication.
9. B Corporations refer to companies that balance purpose with profit. Such companies consider the impa ct of their decisions on workers, customers, suppliers, the community, and the environment.
10. Grameen Foundation is a global non-profit organization that works to replicate Grameen Bank microfinance model around the world.