“Community Produces Pellets From Forest and Agricultural by Products” Project

The Energy and Environment Partnership (EEP) with the Mekong region is grant program funded by Ministry of Foreign Affairs of Finland.

EEP Mekong promotes renewable energy, energy efficiency and clean technology investments in the four Mekong countries – Cambodia, Lao PDR, Thailand and Vietnam. The objective is to combat climate change while providing sustainable energy services to those who lack them. The programme is designed to facilitate the development of innovative ideas, approaches and concepts into sustainable and bankable investment projects that will bring substantial benefits to the partner countries.

The second stage of the Energy and Environmental Partnership Program with the Mekong Region (EEP) was established as a part of the development policy of Finland Government with the goals of reducing property ad adapting to climate change through a sustainable approach.

“Community produces pellets from forest and agricultural by products” Project was implemented by Microfinance and Community Development Institute (MACDI) with the EEP Mekong grant is 180,000 EUR and 120,000EUR from MACDI reciprocal capital, under the second stage of the Energy and Environmental Partnership Program of Finland Government, was launched by the goal of enhancing reliable energy approach and sustainable as well adapting climate change and livelihood development, property reduction.


Encourage and mobilize community to produce pellets from forest and agricultural by products.

Specific objectives:

  • Produce pellets from forest and agricultural by-products;
  • Generate additional incomes for low skill, middle age and poor women through;
  • collecting saw dust and sell to our factory;
  • Protect environment through collecting and processing saw dust and improving;
  • Acknowledgement of farmers on environmental protection.


  • Women groups collecting saw dust;
  • Local Government;
  • Electricity supplier;
  • Machinery and technology supplier,

Expected results:

  • 150 poor women collect saw dust for the factory;
  • 1000 tons saw dust are collected every year;
  • 1000 tons pellets are produced every year,


Direct beneficiaries

Main beneficiaries of this project are poor women. This project creates job and increases income for poor women to escape from poverty: they collect saw dust from carpenters
to sell to the factory to produce pellets. The project creates job and increase income for 150 poor women.

Indirect beneficiaries

2000 people living in surrounding areas can have better environment when saw dust is gathered and processed.


6 components are completed.

Set up office, factory, human resources and women groups

Upgrade factory

Facilitate machinery and electricity

Purchase materials: (sawdust)

  • Collected approximately 200 tons of sawdust per month;
  • Created jobs for 150 poor and middle-aged women and generated additional incomes of 1,200,000 VND per person per month on average,
Sawdust was collected from many traditional wood villages in Hanoi

Organize production:

  • On average, we produced over 200 tons of pellet per month which lead to the production capacity of approximately 2000 tons per year;
  • Accordingly, we met the target of 200 tons in milestone 2 and 500 tons in milestone 3 as indicated in the revised work plan.
Over 200 tons of pellet was produced per month by MACDI

Marketing and sale:

Provided for domestic market with 100 tons per month
  • Set up long-term partnership with some companies as strategic partners to export pellets;
  • Seek and approached several potential partners to ensure the competitive price as well as to serve our long-term strategy of promoting sale,

Impacts of the project

Environment Impact:

  • Make approximately 30 traditional wood villages’ environment clean through collecting sawdust and other wood/forest by-products;
  • Collect and process approximately 400 tons of sawdust and forest & agricultural by-products per month;
  • Provide pellet products as a kind of alternative products for charcoal and coal using in paper factories, textile factories, traditional villages (rattan products), etc;
  • Ash from burning pellet is very low – usually lower than 1% and can be used as a source of clean fertilizer;
  • Reduce greenhouse gas emission from burning sawdust/forest by-products as a popular way of waste treatment;
  • Reduce greenhouse gas emission as well as pollution from using coal and charcoal in processing input materials of paper factories, textile factories, traditional villages (rattan products);
  • Raise awareness among communities and local authorities particularly in traditional wood villages on environment protection, waste treatment and keep surrounding environment clean.
Make approximately 30 traditional wood villages’ environment clean through collecting sawdust and other wood/forest by-products.

Social Impact:

  • Create additional jobs for 150 low skills, middle-aged, poor women;
  • Create jobs for at least 04 workers, 01 technician, 01 safeguard who directly work in the factory;
  • Create opportunities for those workers and collectors to participate to insurance system regulated by the government including social insurance and health insurance;
  • Support those women collectors, workers, and their children to have access to available health and education services;
  • Support in poverty reduction for 150 low skills, middle-aged, poor women in a sustainable way through providing them advantages to become shareholders of the factory;
  • Contribute to minimize the migration to urban areas;
  • Raise awareness among communities and paper factories, textile factories, traditional villages on using clean energy in their production activities.

Economic impact:

  • Generate additional incomes for those vulnerable women group – 1,200,000 per person per month on average;
  • Generate stable incomes for 08 local people living surrounding factory (01 Factory Manager, 01 Accountant, 01 Technician, 04 workers, and 01 safeguard);
  • Generate additional incomes for carpenters through selling sawdust and other forest by-products. Approximately 1,100,000 VND per ton on average;
  • Low price (2,200 VND per kg) whereas can produce high energy (range from 4200 ~ 4600 kcal/kg);
  • Revenue from sale of approximately 4000 tons per year accounts for around 8,000,000,000 VND.

With the outstanding impact of project, “Community produce pellets from forest and agricultural product” Project has contributed to improve abilities approach to clean energy source, sustainable development and help more people have a better life.

Mai Linh

Micro-finance & Community Development Institute (MACDI)
Address: 324/22/15 Thuy Khue - Tay Ho - Ha Noi
Tel: + 84-24 3759 0344 | Fax: + 84-4 3759 0344
Email: macdi@macdivn.org | Website: www.macdivn.org