The objective of the household energy component (budget allocation USD2.5 million) is to improve the efficiency of energy production (charcoal from biomass) by supporting an improvement in the technical output of carbonization, decrease in charcoal consumption through scaling-up the use of efficient stoves that are eco-labeled and, producing and promoting substitution fuels. This component also targeted at helping 5000 households adopting alternative energy.

According to the project completion report, this activity never started, and so monitoring was stopped in 2009.  The Implementation Completion Report (ICR) Review stated that "the efforts made to promote sound forest management, reforestation, and combatting forest fires were ineffective in reducing or stabilizing the deforestation rate, or in discouraging the use of wood for fuel or charcoal production".