Clean cooking solutions provider Burn is issuing $10 million in green bonds. The proceeds will be used to expand its activities in sub-Saharan Africa.
Could the green bond market contribute to access to clean cooking in Africa? We’ll probably find out in a few months’ time, thanks to the issue of the first bonds of this type by clean cooking solutions provider Burn, based in Nairobi, Kenya. This transaction, a first in the clean cooking sector, aims to raise $10 million.
“Our decision to issue the first green bond to support clean cooking underlines our belief that financial innovation has the power to drive positive environmental and social change,” explains Peter Scott, Burn’s founder. This first green bond was supported by DRY Associated, which acted as placement agent, and FSD Africa, a specialist development agency funded by UK International Development, which provided technical assistance.
Access to clean cooking for 2 million households
The proceeds of the bond will enable Burn to increase production capacity at its Ruiru plant, located more than 25 km from the Kenyan capital. At the same time, Scott plans to open a new plant in Lagos, Nigeria’s largest city with an estimated population of more than 20 million. Burn aims to increase its production capacity from 400,000 to 600,000 units per month for the sub-Saharan market.
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The company produces biomass-powered electric stoves, as well as liquefied petroleum gas (LPG) stoves. “These stoves have always been proven to offer significant health, financial and climate action benefits. The funding from the Green Bond is expected to extend these benefits to a further 2 million households by 2024,” says Burn.
In addition to green bonds, the company is also banking on carbon credits to finance access to clean cooking in Africa. The Clean Cooking Alliance (CCA) estimates that $8 billion will need to be invested to achieve universal access to clean cooking worldwide, while the largest companies in the sector have only been able to raise $200 million since 2014. Innovative financing such as green bonds can therefore help reduce this funding gap, especially in Africa where 900 million people still use wood fires for cooking.
Jean Marie Takouleu
