The effort to reduce the global carbon footprint has made significant progress, with a $200 million investment in clean cooking in 2022. According to the Clean Cooking Alliance (CCA) 2022 Annual Report, the development is greater than in any previous year since the organization began tracking investment in 2014.
“After weathering years of uncertainty through the pandemic, clean cooking companies are now seeing record levels of investment— some $200 million in 2022,” said Dymphna van der Lans, Chief Executive Officer of CCA.
She said that the CCA-supported Spark+ Africa Fund, the first impact fund to finance clean and modern cooking solutions in developing markets, contributed $6 million to last year’s investments.
According to the CEO, carbon finance is another bright spot with significant potential to transform the sector. “The clean cooking ecosystem can only take advantage of the opportunities provided by carbon finance if fair policies and protocols are in place, and if tools and market insights help markets to operate more efficiently.”
CCA recently launched the Responsible Carbon Financing Initiative, with the goal of improving program quality and broadening carbon financing opportunities and the benefits they can provide to the broadest possible audience.
“More than ever, 2022 highlighted the myriad ways in which clean cooking companies are innovating, making their products more efficient, affordable, and user-friendly.
“CCA’s work with companies has supported projects ranging from improving gender-inclusive practices, to better understanding production costs,” the CEO said.
In terms of investment drivers, CCA supported the creation and launch of the Spark+ Africa Fund, the world’s first impact fund dedicated to financing clean and modern cooking solutions. The fund raised $54 million at its initial close and has already made $4 million in BURN Manufacturing and $2 million in Sumac Microfinance Bank in Kenya.
To promote financial innovation and investment in African and Asian markets, the Alliance has formed new strategic partnerships with the UN Capital Development Fund (UNCDF) and the African Guarantee Fund. The collaborations aim to increase the flow of public finance as well as newer forms of climate and social impact finance to clean cooking companies.
CCA and Modern Energy Cooking Services developed innovative case studies of results-based financing (RBF) initiatives in the clean cooking sector in a report released in the fourth quarter of 2022 that could help program developers design future RBF programs.
“I am honored that the Clean Cooking Alliance (CCA) and our partners helped drive the tremendous growth across the clean cooking ecosystem,” she said.
This year is already off to a promising start, according to the CEO. “I am optimistic about even greater progress in 2023, as CCA’s Systems Strategy initiatives continue to evolve and we strengthen ties with adjacent sectors, including climate action and nature-based solutions.”