53
In 2023, a UNDP project introduced home bio- gas technology to 500 Rwandan farmers as part of a wider project on climate-smart agriculture. Over its 10-year lifespan the project is introducing home-based equipment to convert animal manure into cooking gas and biofertilizer. This is projected to save over 14,000 tonnes of firewood, produce 194,000 cubic meters of digestate, which can be used for fertilizer and to save 1.7 million working hours for women. BOX 13: CLEAN COOKING AS CATALYST FOR SUSTAINABLE FOOD SYSTEMS Development partners can help bridge the gap with research and challenge funds, using grants to accelerate innovation, including through technology development, business model development, piloting and proof of concept. Supporting NGOs and Community-based Initiatives: NGOs also play a critical role in facilitating the transition to clean cooking. Their knowledge of, and connections with, local communities can help build a better understanding of social and cultural norms and other contextual factors that influ- ence the uptake of clean cooking. NGOs can also serve as lo- cal champions and channels for awareness raising and public education campaigns as well as distributors of products and services.
markets such as Kenya. For low-income or fragile settings the design needs to be adjusted to enable smaller companies to participate and to give them space to grow their businesses. This might include providing them with a portion of the re- sources in advance to support bulk purchasing of equipment and providing them with the resources and time to develop their products or set up distribution networks. The inclusion of an upfront grant component to support pre-financing and cash flow can help diversify the spectrum of participants. 119 • Managing Currency Risk: Program participants often pay for imported equipment with hard currency, but receive their revenues in local currency, leaving them exposed to exchange rate changes. Financiers may wish to build mitigation against currency risks into their RBF programs. 120 However, trying to hedge against potential exchange rate losses comes with a cost and is typically only a short-term solution. Concessional Capital: Development partners can also sup- port clean cooking enterprises and crowd in private finance through “concessional capital”. This refers to financing on more favorable terms than commercial capital such as debt at below-market rates or equity with asymmetrical returns. This type of financing helps cover risks that return-seeking investors are not willing to bear, giving companies more time and space for testing new technologies and business mod- els. One example is the Spark+ Africa Fund, a US$64 million fund supported by both public (including bilateral DFIs) and private partners, which invests in early-stage companies. An- other is Acumen, an impact investor that has invested over US$6 million in “patient capital” since 2015 in five clean cook- ing companies. Through its philanthropic approach to invest- ment it is able to take on more risk and come in at an earlier stage of its investee companies’ development, when equity is hard to find. 121 Challenge Funds and Innovation: There is a major shortfall in funding for clean cooking companies at the initial stages of the business innovation cycle, when risks are at their high- est and most return-seeking investors are unlikely to invest.
118 Ibid.
121 MECS and ENERGY 4 IMPACT (2022) Modern Energy Cooking: Review of The Funding Landscape, Report 5 of the Financing Clean Cooking Series, https:// mecs.org.uk/wp-content/uploads/2022/02/Modern-Energy-Cooking-Review-of- the-Funding-Landscape.pdf
119 Ibid.
120 MECS (2021) ‘Clean cooking: results-based financing as a potential scale-up tool for the sector’, https://mecs.org.uk/wp-content/uploads/2021/10/Clean- cooking-results-based-financing-as-a-potential-scale-up-tool-for-the-sector.pdf
4. OPTIONS FOR SCALING UP CLEAN COOKING
Powered by FlippingBook