SEED-to-BRICK

Our project provides a solution to decrease the embodied carbon of buildings and address the growing housing backlog in Africa.

The African population is expected to reach 2.4 billion people in 2050 with 80 percent of this growth in cities. 

An estimated 70 percent of the African building stock predicted for 2040 has yet to be built. Global carbon emissions associated with materials and construction processes throughout the whole life cycle of a building, known as embodied carbon, already contribute to 11% of global emissions. It is impossible to decrease carbon emissions and address the growing housing needs of the continent with traditional building techniques.

Bio-based building materials like wood, hemp, and bamboo have the potential to make a significant contribution to decarbonization efforts and decrease the embodied carbon of the built environment. Fixing the carbon captured by plants in buildings forms a durable storage of carbon.

To accurately quantify the climate benefits of these materials and access “climate action” funding, the homes require detailed Life Cycle Assessment (LCA) data of the products used.

The use of Hemp as a building material is still limited and policies have only recently become favourable to growing Industrial Hemp within South Africa. Locally grown Hemp and data on the environmental impact of the full value chain of creating hempcrete building products do not exist.

To Monitor, Report, and Verify (MRV) the environmental benefits of using Hempcrete products, Afrimat Hemp is developing a digital MRV framework to inform an LCA in terms of the ISO 14040 standard.

In South Africa, we are developing a pipeline of projects to monitor the hemp value chain, from hemp “Seed to Brick”. Currently, in South Africa, there is an estimated housing backlog of 2.6 million homes. The initial projects make use of blended finance to build affordable housing and community buildings such as schools.

Another problem encountered with most new projects and our plan for building low-cost housing is the “green premium” associated with the hemp bricks. Although we believe that “climate action” funding such as carbon removals or other forms of financing can subside this premium, we need local LCA data to back up the claims of carbon removals and carbon avoidance.

Our solution is hemp bricks to build hemp homes, however, the missing component is a comprehensive data tracking and analysis platform that enables a LCA of hemp bricks (cradle-to-gate), essentially from seed to brick. By gathering and analysing data at every stage of the supply chain, including the farm, processing plants, and transportation, we can accurately assess the carbon impact of using hemp bricks as a sustainable building material for non-load bearing walls in housing projects.

The platform works by collecting data which is then used to conduct a LCA study, which quantifies the climate change benefits of using hemp bricks compared to conventional building materials. The LCA results can inform decision-making for builders, architects, and policymakers, encouraging the adoption of hemp bricks in construction projects.

Leveraging results-based funding models, such as carbon financing and other incentives, to promote the use of sustainable building materials in housing projects is contingent upon the availability of an accurate and effective system for data collection and analysis to inform Life Cycle Assessments (LCAs). Without such a system in place, it becomes challenging to harness these funding mechanisms effectively. By demonstrating the climate change benefits of hemp bricks through data-backed analysis, we can attract funding and investment to scale up the production and use of these materials in the construction industry.

The technology behind our solution incorporates advanced data analytics and secure data storage to process and analyse large volumes of information from the farmer, processing plants, and transportation. To ensure transparency and reliability, we will use Hedera Consensus Service to create a topic for each node in the supply chain, generating an immutable audit log of all data submitted for LCA purposes and enabling efficient track-and-trace capabilities.

This approach enables us to generate accurate and reliable insights into the performance of hemp bricks throughout their life cycle, while also providing a secure, transparent, and tamper-proof record of the data collected from various stages of the supply chain. By leveraging cutting-edge technology and data-driven insights, our solution is designed to provide data that supports the adoption of sustainable building materials and contributes to a more environmentally responsible construction industry.

Our solution offers significant benefits to climate change mitigation, which is affecting people worldwide, through reducing the embodied carbon in building materials. Additionally, our solution bridges the gap between traditional construction and green construction, enabling the housing shortage to be solved in a sustainable way.

The primary target population in South Africa is low-income communities that form part of the country’s 2.6 million housing backlog.

Due to significant co-benefits unlocked in the hemp housing value chain, future projects that improve access to housing and durable stored carbon in construction should be able to attract significant impact investments.

These benefits extend beyond the climate impact and financial accessibility, as they also contribute to improved living standards and reduced operational energy requirements.

Hemp bricks have excellent thermal insulation properties, which can lead to significant energy savings for households in terms of heating and cooling. By effectively regulating indoor temperatures, homes built with hemp bricks require less energy for maintaining comfortable living conditions. This translates to reduced energy bills or general heating costs, making it more affordable and sustainable for low-income families to maintain a decent standard of living.

Furthermore, hemp bricks provide a healthier and more comfortable living environment for occupants. The natural moisture regulation properties of hemp bricks help maintain optimal indoor humidity levels, reducing the risk of mold and dampness. This contributes to better indoor air quality and can lead to improved respiratory health and overall well-being for the inhabitants.

Additionally, hemp bricks have excellent acoustic insulation properties, providing a quieter and more peaceful living space. This can contribute to an improved quality of life, particularly for those living in densely populated urban areas where noise pollution can be a significant issue.

Our solution also aims to involve small-scale farmers in the hemp brick supply chain, fostering sustainable economic development and empowering local communities. By incorporating these farmers into the process of supplying raw hemp materials for brick production, we help create new income-generating opportunities for individuals and families in rural areas.

Small-scale farmers often face challenges in accessing stable markets for their products, limiting their potential for financial growth and stability. By engaging them in the hemp brick supply chain, we support the diversification of their income streams and promote the growth of the local agricultural sector. This, in turn, contributes to the overall economic development of their communities.

The cultivation of hemp offers numerous environmental benefits, including improved soil health and reduced need for chemical inputs compared to traditional crops. By encouraging small-scale farmers to grow hemp, we foster the adoption of sustainable agricultural practices that can benefit both the farmers and the environment.

The inclusion of small-scale farmers in the hemp brick supply chain strengthens local economies by promoting local sourcing of raw materials. This reduces the carbon footprint associated with transporting materials over long distances, aligning with our overall commitment to sustainability and environmental responsibility.

Our team comprises passionate individuals committed to promoting sustainable and eco-friendly housing solutions in the country.

We have developed a number of successful projects using imported Hemp to establish demand for the product within South Africa and Mozambique. 

Our team's proximity to the target communities allows us to gain valuable insights into their specific needs and preferences. By undertaking various projects, such as constructing a community kitchen using hemp, we have been able to gather first-hand feedback from the kitchen owner in a low-income community. This experience has enabled us to better understand the practical aspects of using hemp as a building material and to identify areas for improvement. We also developed a number of successful commercial projects using imported Hemp to establish demand for the product within South Africa - this was based on a strategy to position hemp as a premium or high-end product and not a “cheap” solution being forced on low-income housing.

Our team is committed to continuously learning from the communities we serve, ensuring that our solution is not only relevant but also culturally appropriate and sensitive to the local context. By involving community members in the design and implementation process, we empower them to take ownership of the solution, thereby increasing the likelihood of its success and long-term sustainability.

As a South African-based team, we understand the diverse challenges that exist to scaling hemp as a building material, particularly in the housing sector. Our extensive experience working with hemp, coupled with our genuine commitment to providing sustainable and eco-friendly solutions to the local population, positions us as the ideal team to design and deliver this innovative hemp-based housing solution.

Our team brings together a diverse group of professionals with expertise directly related to our hemp housing project. With backgrounds in social impact and blended finance, concrete technology, sustainable building design, and research on embodied carbon in buildings, we have the necessary knowledge to develop data-driven models and deliver innovative, environmentally friendly housing solutions. Supported by talented software developers, engineers, and data scientists, our team possesses the ideal combination of skills to successfully introduce our sustainable housing project to the South African and African market.

We list some of our finished projects below using imported hemp.

Past Projects:

• 84 Harrington street (Commercial Building)
• Zonnestraal House Constantia 
• Magaliesberg house (hempcrete)
• Beira - Mozambique (Low-Cost house)
• Houtbay house
• Morija – Lesotho House
• Tulbagh House
• Gordons Bay House
• Woolworths cellar shops (hemp plaster)
• Bootleggers headquarters (bricks, hemp plaster)

As local Hemp grown in terms of current permits will only start becoming part of the supply chain at the end 2023 and 2024, the number of people served is still in an early stage. Based on our current data the following potential could be reached in the short term:

2022 data on Hemp Permits:
Total 50-hectare permit applications: 590
Approved permits : 190
Potential hectares: 9000 hectares
Stalk supply potential: 90 000 tonnes
Potential bricks: 50 million bricks (from 90,000 tonnes stalk supply)
Potential homes & home owners: 47,500 homes
Potential family members housed:  190,000 people living in hemp homes

The use of bio-based building products in South Africa is still novel and requires the development of effective strategies to scale its adoption. While there is significant interest in green building technology, the industry struggles with a “green premium” or funding gap referring to the additional cost of choosing a low-carbon material over alternatives that emit a greater amount of greenhouse gases. 

As the sector and associated business models are nascent, commercial funding opportunities are hindered by a lack of data to inform models on potential achievable commercial returns and environmental benefits (for eg. carbon captured/avoided through the use of hemp products).  

Developing projects that combine the climate change mitigation benefits of hemp building materials with other sustainable development goals, such as the development of affordable housing or educational facilities present an opportunity to utilise blended finance models to develop and de-risk initial bankable projects and build the market and LCA of hemp-based building materials. Grants or other concessional finance can further help support the preparatory measures and upfront costs required to access Results Based Climate Finance such as carbon credits. 

We are applying to Solve for several key reasons, as we believe that the support and resources provided can address current market barriers. Our main priorities for support include:

1. Financial Barrier: Develop bankable projects that address the green premium on housing. 

2. Developing blended finance models: We aim to leverage Solve's expertise in connecting Solver teams with potential partners and investors, which can help us create robust blended finance models that combine philanthropic grants, impact investments, and commercial capital to scale our solution and make it more accessible to our target communities.

3. Policies for entities in the supply chain: We hope to benefit from Solve's experience and guidance in developing and implementing effective policies for all entities involved in our supply chain, ensuring that they adhere to the highest environmental, social, and governance (ESG) standards, which can ultimately contribute to the success and sustainability of our project.

4. Networking and connecting to partners: We recognize the importance of building a strong network of partners who can help fund the green premium in various ways. Solve's extensive network of supporters and partners can provide invaluable connections to organisations and individuals that share our commitment to environmental sustainability and can contribute to the financial viability of our project.

5. Guidance on internationally accepted practices for re-using LCA data or making conservative assumptions for data that is difficult to measure in the supply chain: As we strive to make our solution as eco-friendly and sustainable as possible, we need expert guidance on how to effectively use LCA data, adopt best practices (ISO standards and other bio-based building methodologies), and make data-driven decisions that take into account the unique challenges of our supply chain. Solve's expertise in these areas can help us ensure that our solution is not only effective but also aligned with global sustainability standards.

The benefits of Hempcrete include improved thermal performance and reduction in operational carbon emissions throughout the lifetime of the building, both of which are well documented. 

In terms of addressing embodied carbon, using hemp in buildings has the potential to remove MORE carbon from the atmosphere and store it in the material than is emitted during the lifecycle. To accurately determine the benefit of using Afrimat Hemp’s products and to access green funding and certifications, a LCA according to the global ISO 14040 will need to be completed. Due to the early stage of the market and lack of local Hemp supply, no current verified data on achieved environmental benefits or Life Cycle Emissions of the product have been available to inform a funding model that incorporates Results-Based Finance such as carbon credits.

Additional risk factors associated with developing early-stage projects with hemp-based building products make the development of reliable financial models and the financing of initial projects on strictly commercial terms challenging. Current challenges include:

• Premium price for Hemp products (Green Premium)

• Potential fluctuations in the price of Industrial Hemp

• A lack of consistent supply of Industrial Hemp from farmers

• Competition with other commodities that farmers can plant with a more certain or established ROI 

• A lack of verified local data on achieved environmental benefits or Lifecycle Emissions of the product that can determine the potential of Results-Based Finance such as carbon credits

• Fluctuation in the price of carbon credits

Blended finance, where finance from different sources and with different purposes is combined, can provide a bridge to bankability for innovative projects to achieve sustainable development and climate change mitigation. Grants and technical assistance funding can provide a runway for a project to demonstrate measurable social and environmental impact while testing and refining new business models. Once data on the environmental benefits and benefits of the use of hemp have been enabled through concessional finance, future projects will be able to approach commercial funders as the potential risks and returns can be presented. The blending of funds on commercial and concessional terms ensures that transformative projects that integrate environmental and social impact that have the potential to become commercially viable over time are implemented.

In this manner, blended finance fulfills an essential role in creating new markets and de-risking the early stages of the commercialisation of business models that mitigate climate change. It can also address challenges of risk and early-stage funding posed by Results-Based Funding, such as Carbon Credits, for new projects. 

Our solution is unique in the way that we are solving the lack of data to inform future models through developing impact-driven projects with companies like Empowa that solve access to finance challenges along with building climate-smart buildings. In this way, our initial projects form a bridge to bankability through blended finance to commercialise hemp as a building material.

Next Year:

• Build 10 high-impact houses: Our primary goal for the next year is to construct 10 housing projects that showcase the transformative potential of our sustainable solution. These houses will serve as tangible examples of the positive impact we aim to create.

• Test and establish a model for scaling the hemp supply chain: We recognize the importance of a robust and sustainable supply chain to support our housing projects. In the next year, we will focus on testing and refining our model for scaling hemp production, ensuring a consistent and reliable supply of materials.

• Identify hotspots in the supply chain to reduce carbon footprint: As part of our commitment to environmental sustainability, we will conduct a thorough assessment of our supply chain to identify areas with the highest carbon emissions. By pinpointing these hotspots, we can implement targeted strategies to minimize our carbon footprint and enhance the overall sustainability of our operations.

• Produce affordably: Affordability is a key factor in driving widespread adoption of our housing solutions. In the next year, we will optimize our production processes to ensure cost-effective construction without compromising on quality or sustainability. This will enable us to offer our homes at competitive prices and make them accessible to a larger segment of the population.

• Stimulate industry growth: Each project we undertake has the potential to stimulate further industry growth. By showcasing the viability and benefits of sustainable housing materials, we aim to inspire other developers and stakeholders to embrace similar approaches. Our goal is to foster a positive ripple effect where every project leads to another, driving the widespread adoption of sustainable building practices.

Next 5 Years:

• Expand the number of homes/projects to achieve gigaton-scale impact: Looking ahead to the next five years, our overarching goal is to scale up our impact significantly. We aim to expand the number of homes and projects we undertake to contribute to gigaton-scale reductions in carbon emissions. By increasing our production capacity and market reach, we can drive transformative change on a larger scale.

• Generate sustainable employment in the supply chain: We recognize the potential of our projects to create employment opportunities within the sustainable housing supply chain. Over the next five years, we will focus on developing and supporting a robust workforce, promoting fair labor practices, and fostering sustainable job creation. Our aim is to contribute to the growth of a thriving and equitable industry that benefits communities and individuals.

• Regional impact and community development: Our vision extends beyond individual projects. We aspire to have a regional impact by collaborating with local communities, governments, and stakeholders. By actively engaging and involving these entities, we can contribute to community development, enhance infrastructure, and create sustainable living environments that uplift and empower the regions we operate in.

• Decarbonize the supply chain through renewable energy adoption: We are committed to reducing the carbon footprint of our supply chain. In the next five years, we will prioritize the adoption of renewable energy sources in our farms, processing plants, and manufacturing sites. 

In measuring our progress toward our impact goals, we utilize a combination of indicators that align with the UN Sustainable Development Goals (SDGs) we have chosen. Here are a few specific indicators we use to measure our progress:

1. Decent Work and Economic Growth (SDG 8):

   1. Number of sustainable jobs created in the hemp supply chain.

   2. Percentage increase in income levels of workers involved in our housing projects.

2. Industry, Innovation, and Infrastructure (SDG 9):

   1. Number of innovative technologies and processes developed to enhance hemp construction.

   2. Number of projects using choosing hemp due to “green premium” being funded through “climate  action funding”

   3. Number of potential projects defaulting to concrete bricks due to cost of bricks and lack of climate action funding

   4. Investment and funding secured for infrastructure development related to sustainable housing projects.

   5. Number of people attending hemp building courses

3. Reduced Inequalities (SDG 10):

   1. Number of housing projects implemented in underserved communities.

   2. Increase in access to affordable and sustainable housing for low income communities.

4. Sustainable Cities and Communities (SDG 11):

   1. Number of sustainable housing projects implemented in urban areas.

   2. Reduction in the carbon footprint of buildings through the adoption of sustainable materials and construction practices.

5. Responsible Consumption and Production (SDG 12):

   1. Amount of carbon emissions reduced through the use of sustainable building materials.

   2. Reduction in waste generation and landfill contributions during the construction process.

6. Climate Action (SDG 13):

   1. Reduction in carbon emissions associated with our housing projects compared to traditional construction methods.

7. Life on Land (SDG 15):

   1. Amount of land preserved and protected through sustainable farming practices for hemp cultivation.

   2. Decrease in synthetic fertilisers and agro chemicals per hectare

Goal:

To reduce the embodied carbon of buildings and increase access funding for climate smart buildings containing Hemp

Activities:

• Partnering with hemp farmers to ensure a reliable supply of hempcrete
• Developing a digital MRV policy and tool to conduct a LCA from Seed to Brick 
• Collaborating with financial institutions to develop blended financing options for hempcrete construction projects
• Funding transformative and Impact driven projects 

Outputs:

• A LCA on Hempcrete projects
• Increased awareness and understanding of the benefits of hempcrete and the importance of reducing embodied carbon in buildings
• Increased availability of hempcrete as a building material
• Financing options for hempcrete construction projects
• Climate smart buildings and homes containing hempcrete

Outcomes:

• Increased demand for hempcrete, leading to economic opportunities for farmers and increased availability of the material
• Increased adoption of hempcrete in construction projects, reducing the embodied carbon of buildings
• Increased access to housing finance for hempcrete construction projects, making it easier for people to finance sustainable, low-carbon homes

Impact:

• Reduced embodied carbon in buildings, mitigating climate change
• Increased access to sustainable housing for individuals and communities
• Economic benefits for hemp farmers and the local economy.
• Policy changes that incentivize the use of low-carbon building materials like hempcrete, contributing to the reduction of embodied carbon in the construction sector and mitigating climate change.

Our solution is powered by a combination of advanced data analytics, Distributed-Ledger-Technology (DLT), and the development of local processing equipment. These core technologies work together to create a sustainable, efficient, and transparent system for the cultivation of hemp, and the production and use of hemp bricks as an alternative building material in low-income housing projects.

1. Advanced Data Analytics: By collecting and analysing data from the entire supply chain, from seed to brick, we can accurately assess the climate performance of hemp bricks throughout their life cycle. This information is crucial for attracting funding and encouraging the adoption of environmentally-friendly building materials in the construction industry. Additionally, Afrimat Hemp aims to provide hemp growers with data on seed genetics that work best in certain areas, expected yields, and a list of agricultural products with a carbon footprint that makes the LCA process more efficient and streamlined.

2. Hedera Consensus Service: We will use the Hedera Consensus Service to create a topic for each node in the supply chain, which enables us to generate an immutable audit log of all data submitted for LCA purposes and track-and-trace. This DLT-based technology ensures data reliability and transparency, which is essential for maintaining trust among stakeholders and providing accurate insights into the environmental performance of hemp bricks.

3. Local Decortication Equipment: Afrimat Hemp is developing decortication equipment to process locally grown hemp into hurd and fibre components and has already started with their second generation decortication machine. This technology allows for the efficient separation of hemp stalks into the raw materials required for producing hemp bricks, fostering self-sufficiency in the local supply chain and reducing the dependence on equipment imports.

4. Life Cycle Assessment (LCA) Integration: Our solution incorporates LCA data to quantify and communicate the environmental benefits of building with hemp bricks. By leveraging this evidence-based approach, we can showcase the product's sustainability credentials and attract potential investors and funding partners.

5. Traditional and Natural Technologies: We combine modern data-driven construction techniques with traditional building materials, like the use of hemp in a building block paired with a structural frame to support non-load bearing hemp bricks.

6. Offtake Agreement Models and Data Policies: We explore offtake agreement models with farmers to pay a premium to farms that provide good data and have a lower carbon footprint. We also develop policies for farmers to ensure they are aware of the data that needs to be submitted, promoting transparency and accurate reporting.

Our solution not only harnesses advanced data analytics, DLT, local processing equipment, but also tailors the hemp data and LCA protocol specifically to the African context. This ensures that the unique challenges and opportunities faced by African communities, supply chains and building contractors are taken into account when assessing the environmental performance of hemp bricks throughout their life cycle.

To make the data collection and management process as seamless as possible for farmers and other stakeholders, we are developing a user-friendly web and mobile app. This platform will enable easy submission, access, and monitoring of all the data required for the LCA process. By simplifying data management, we aim to encourage participation from farmers and other contributors, ensuring the accuracy and comprehensiveness of the information used in our analysis.

Incorporating the African context and providing an intuitive platform for data management are essential components of our solution. These elements help to foster local engagement, create a more accurate assessment of the environmental performance of hemp bricks in the region, and ultimately drive the adoption of sustainable building materials in low-income housing projects across the continent.

In order to develop initial projects using blended finance we will be addressing South African socio-economic challenges. 

The business-as-usual emissions and cost of the buildings will be compared with the higher cost of choosing hemp-based building materials. This green premium will inform the calculated additional contribution required to implement the projects. Our goal is to fund this premium through innovative finance mechanisms.

By combining contributions from different funders with different purposes and risk expectations the projects will be catalytic in addressing the early-stage funding gap for carbon projects while addressing additional Sustainable Development Goals. 

The Broad-Based Black Economic Empowerment Act 53 of 2003 (B-BBEE Act) and its accompanying Codes contain concessional finance mechanisms for Corporate Social Investment in South Africa. The following elements of the scorecard encompass a significant amount of Environmental, Social and Governance (ESG) spend for large South African Companies and Renewable Energy Producers. 

• New Enterprise and Supplier Development (ESD)

• Socio-Economic Development (SED)

Concessional finance (ESD) or corporate philanthropy spending (SED) can be strategically combined with other sources of capital such as philanthropic grants and carbon credits to fund projects. 

A broad range of Contributions to ESD is recognised in the Act. Costs directly incurred for the development of an entity, or concessional trading terms such as extended payment terms, preferential loans, equity funding to black-owned businesses, and grant funding will qualify. SED Contributions are philanthropic and measured in terms of grant funding or costs directly incurred to contribute to Socio-Economic Development. These forms of funding specifically target improving access to value chains for previously disadvantaged people within South Africa and will be utilised to diversify the Hemp Value Chain. 

The B-BBEE framework also applies to the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), initiated by the Department of Energy in 2011. The REIPPPP aims to expand the energy mix to include renewable forms of energy, reduce dependence on coal, and improve the national energy supply. Independent power producers are required to spend 1% of NPAT on SED initiatives - this funding could be channeled to fund the “green premium” and community assets.

More than 100 approved producers have, by Government’s estimation, spent more than R1bn on community development initiatives. As with BEE trusts outside the energy sector, the bulk of this spending was directed at education – for example, the building of school infrastructure (classrooms and libraries) and scholarship programmes for tertiary study.

By strategically combining these forms of private sector funding with Government Grants for housing we believe the Hemp Value chain can be a powerful resource to address historical inequality in South Africa.

Our business model revolves around providing value to our target populations through environmental benefits, cost-effective construction, and revenue generation from hemp products and services. The primary components of our business model include:

1. Profit on hemp bricks: We produce and sell environmentally friendly, non-load bearing hemp bricks that cater to the low-cost housing market. These bricks provide an affordable and sustainable alternative to conventional building materials, leading to reduced operational energy requirements and improved living standards.

2. Decortication equipment sales: Afrimat Hemp is developing decortication equipment to process local hemp into hurd and fibre components. By selling this equipment to other hemp projects, we can enable the growth of the hemp industry and contribute to the local economy.

Where the following components are required to scale the primary business model components:

1. Life Cycle Assessment (LCA) protocol: Developing a comprehensive LCA protocol tailored to the African context will allow us to quantify the environmental benefits of hemp bricks and attract funding through carbon and alternative results-based funding models. This will help subsidise the green premium associated with building low-cost housing using hemp bricks.

2. Data services for hemp growers: Afrimat Hemp aims to provide hemp growers with valuable data on seed genetics, expected yields, and carbon-efficient agricultural products. By streamlining the LCA process, we can facilitate off-take agreement models that pay a premium to farms with accurate and reliable data. This will incentivize farmers to participate in our ecosystem and contribute to the growth of sustainable hemp production.

3. Web and mobile app for data management: Our solution includes a web and mobile app that makes data collection and management as easy as possible for farmers and other stakeholders. By simplifying the data submission process, we can encourage more farmers to participate and ensure a consistent supply of hemp raw material for our bricks.

4. Collaboration with local governments and organisations: We will seek partnerships with local governments and organisations to secure grants such as the Finance Linked Individual Subsidy Program (FLISP) and also work with the Department of Human Settlements (DoHS) that is looking for sustainable materials, corporate social investment (CSI) budgets, and other funding sources for our projects. These partnerships can help support the growth of our business and expand our impact on low-income communities.

Afrimat Hemp aims to achieve financial sustainability through a multi-pronged approach that encompasses the development of the local hemp market, support of the local hemp supply chain, and by partnering with various stakeholders in the housing industry.

As a complete Hemp value chain is still developing in South Africa, data is lacking to develop a funding model based on carbon avoided or removed through hemp-based building products. 

Blended finance will de-risk initial projects and create a basis to develop  sustainable business models and grow the market acceptance and demand for hemp-based products. Implementing early-stage projects with blended finance provides a basis to accurately quantify the carbon removed and avoided throughout the value chain and verify the environmental benefits of using hemp-based building products.

Core revenue streams for becoming financially sustainable include the following: 

1. Climate Action Funding: Using carbon or alternative sources of funding to subsidise the green premium on hemp homes

2. Developing and supporting the local hemp supply chain: By investing in local hemp cultivation, processing, and equipment, we aim to reduce the cost of production, making our hemp bricks more competitive in the market. This will not only increase revenue from brick sales but also create opportunities for selling decortication equipment to other hemp projects.

3. Partnering with South Africa's Department of Human Settlements (DoHS): We will collaborate with the DoHS to ensure that our hemp bricks are cost-competitive and meet the standard housing budget, allowing us to tap into the 2.5 million housing backlog and secure government contracts.

4. Engaging with the Finance Linked Individual Subsidy Program (FLISP): We will work with FLISP to build hemp homes for qualifying individuals, providing them with eco-friendly and sustainable housing solutions while generating revenue for our business.

5. Targeting diverse housing markets: We will cater to various segments, including first-time buyers, young professionals, and high-end construction markets, thereby increasing the demand for our hemp bricks and ensuring a steady stream of revenue.

6. Collaborating with companies for Corporate Social Investment (CSI) funding: We will partner with companies such as wind farms in South Africa, which typically fund community assets like schools or libraries. By offering our eco-friendly hemp bricks, we can attract CSI funding, further strengthening our financial sustainability.

7. Selling bricks with verified LCA data: Providing the necessary Life Cycle Assessment (LCA) data to back up our green and eco-friendly claims will make our hemp bricks more appealing to environmentally conscious buyers, thus increasing sales and driving revenue growth.

Our business model revolves around providing value to our target populations through environmental benefits, cost-effective construction, and revenue generation from hemp products and services. The primary components of our business model include:

1. Profit on hemp bricks: We produce and sell environmentally friendly, non-load bearing hemp bricks that cater to the low-cost housing market. These bricks provide an affordable and sustainable alternative to conventional building materials, leading to reduced operational energy requirements and improved living standards.

2. Decortication equipment sales: Afrimat Hemp is developing decortication equipment to process local hemp into hurd and fiber components. By selling this equipment to other hemp projects, we can enable the growth of the hemp industry and contribute to the local economy.

Where the following components are required to scale the primary business model components:

1. Life Cycle Assessment (LCA) protocol: Developing a comprehensive LCA protocol tailored to the African context will allow us to quantify the environmental benefits of hemp bricks and attract funding through carbon and alternative results-based funding models. This will help subsidize the green premium associated with building low-cost housing using hemp bricks.

2. Data services for hemp growers: Afrimat Hemp aims to provide hemp growers with valuable data on seed genetics, expected yields, and carbon-efficient agricultural products. By streamlining the LCA process, we can facilitate off-take agreement models that pay a premium to farms with accurate and reliable data. This will incentivize farmers to participate in our ecosystem and contribute to the growth of sustainable hemp production.

3. Web and mobile app for data management: Our solution includes a web and mobile app that makes data collection and management as easy as possible for farmers and other stakeholders. By simplifying the data submission process, we can encourage more farmers to participate and ensure a consistent supply of hemp raw material for our bricks.

4. Collaboration with local governments and organizations: We will seek partnerships with local governments and organizations to secure grants such as the Financed Linked Individual Subsidy Program (FLISP) and also work with the Department of Human Settlements (DoHS) that is looking for sustainable materials, corporate social investment (CSI) budgets, and other funding sources for our projects. These partnerships can help support the growth of our business and expand our impact on low-income communities.