Energy 4 Impact has joined forces with the Modern Energy Cooking Services Programme (MECS) to launch Clean Cooking: Scaling Up with Crowdfunding, the first report in a series that examines financing trends in the sector with the aim of unlocking more investment and so accelerate the transition to clean cooking.
Clean Cooking: Scaling Up with Crowdfunding offers a snapshot of the current state of crowdfunding for clean cooking. Crowdfunding is often overlooked as a source of financing for clean cooking and the volumes are currently small: in 2019, $70 million was raised by 25 clean cooking companies tracked by the Clean Cooking Alliance. However, crowdfunding has the potential to become an important source of future funding, particularly for clean cooking companies that might struggle to raise funds elsewhere. This report outlines the different crowdfunding models currently deployed in the energy access sector, evaluates the relevance of crowdfunding in clean cooking and provides recommendations on how doners can amplify crowdfunding for clean cooking. The key takeaway for all stakeholders is that future growth in crowdfunding will depend on providing support to build the pipeline of investible clean cooking companies.
As 87% of the population of sub-Saharan Africa currently lack access to clean cooking technologies, increasing investment in the sector addresses an urgent need. Not only does burning charcoal or wood in rudimentary stoves harm the environment and exacerbate climate change, it has grave health repercussions too: according to the Institute for Health Metrics and Evaluation, the share of preventable deaths caused by indoor air pollution ranges from 3% to 8% across the continent.
It is therefore imperative that we hasten the transition from biomass to genuinely ‘clean’ cooking fuels, such as renewable electricity, ethanol or LPG, but private companies first need support and incentivization to become capable of delivering affordable, reliable and sustainable modern energy cooking solutions at scale to larger numbers of African consumers.
To this end, Energy 4 Impact has collaborated with UK aid-funded MECS to author the Financing Clean Cooking series which showcases research into the critical elements of the clean cooking landscape, such as the business models of cookstove companies, investor types, pathways to technology scale-up and barriers to capital-raising, in order to identify strategies to expand the adoption of clean cooking in sub-Saharan Africa. The series will be a helpful resource for a diverse range of public and private stakeholders, particularly NGOs in sustainable development, clean energy donors and investors, and suppliers operating in the improved cookstove sector.
Subsequent reports in the series, set to be published in the second half of 2021, will address other aspects of clean cooking such as appliance financing and concessions for displaced people in humanitarian settings.