Modern Energy Cooking: Review of the Funding Landscape
Clean cooking has long been a woefully underfunded sector in low-income countries and the lack of investment perpetuates a reliance on cooking with biomass that comes with devastating health and environmental impacts. The Modern Energy Cooking: Review of the Funding Landscape report is the culmination of a major research partnership between Energy 4 Impact and MECS that aims to address this challenge by galvanizing greater investment in the clean cooking sector. Taken as a whole, the five reports in the Financing Clean Cooking series comprise a comprehensive and unprecedented analysis of the financing mechanisms currently at play within the sector, whilst offering recommendations to donors on the critical interventions needed to support the growth of this vital industry.
The report shows that higher-tier clean and modern cooking technologies have become more widely accessible and affordable to low-income populations, who until recently were limited to lower-tier improved cookstoves using biomass. The sector has experienced a rapid transition over the last three to five years due to the growing viability of modern energy cooking solutions, such as electricity, biogas, LPG and ethanol. These developments present a new window of opportunity to unlock the financing needed for an inclusive and just transition to modern energy for cooking. The new report by MECS and Energy 4 Impact provide an overview of the funding landscape for modern energy cooking solutions in light of these new developments.
Based on desk research and surveys and interviews with 60 clean cooking companies, funders and organisations, the data in this report identifies three key drivers, which are crucial for scaling and transforming the modern energy cooking sector. This includes the increasing use of “smart data” features and pay-as-you-go technologies by modern energy cooking companies, which enables a more accurate tracking of fuel consumption and energy efficiency as well as unlocking access to carbon credits. The emergence of electric cooking using cost-effective energy-efficient appliances is another driver to further scale access to modern and clean cooking for all. This combined with integrated energy plans which include cooking could open up a completely new dimension for rapidly scaling clean and modern cooking. The report also points towards to the changing financing landscape due to the new and innovative modern energy cooking appliances. With the growing market and diverse players entering the sector, multilateral development banks (MDBs) and other large development finance institutions (DFIs) could bring much needed expertise and resources to support further innovation.
The future for modern energy cooking sector looks bright, however, it is important for companies, financing institutions and international organisations to work together to facilitate sustainable sectoral growth. The report outlines recommendations on how financing institutions could support emerging clean and modern cooking technologies to achieve modern energy access for all.
This report is part of the Financing Clean Cooking series, which aims to generate more investment in clean cooking in sub-Saharan Africa by identifying strategies to expand the adoption of modern energy cooking solutions. The research into key trends, such as the business models of cookstove companies, investor types, pathways to technology scale-up and barriers to capital raising, provides a springboard for recommendations that can inform the actions of 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. The reports call upon donors in particular to make pivotal interventions in order to help scale up investment and thereby stimulate market growth in the clean cooking sector.