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Finance & scale-up

Energy 4 Impact has collaborated with MECS to produce the Financing Clean Cooking series. The series currently includes five separate reports covering crowdfunding for clean cooking, end-user finance for appliances, clean cooking concessions for displaced people and results-based financing. ‘Modern Energy Cooking: Review of the Funding Landscape’ is the fifth and largest report in the series – this report analyses the financial landscape and potential for scale-up of clean cooking in developing countries and makes recommendations on potential interventions.

Taken as a whole, the five reports in the Financing Clean Cooking series comprise a detailed analysis of the financing mechanisms currently being used within the sector, whilst offering recommendations to donors on the critical financial interventions needed to support the transition to clean and modern energy cooking.

The lack of investment to support the transition to clean cooking has resulted in the continued dependence on cooking with biomass that comes with devastating health, social and environmental impacts. Even though  access to clean and modern energy cooking solutions is a key element of the UN’s Sustainable Development Goals (SDGs), as outlined  in Goal 7 of the SDGs, it  clearly remains a neglected component of the SDG Agenda, as more than 2.8 billion people globally still lack access to clean and modern energy cooking solutions.

The reports take into consideration the growing viability of modern energy cooking solutions, such as electricity, biogas, LPG and ethanol and the new financing opportunities enabled by digital technologies. These developments present new opportunities to unlock the financing needed for an inclusive and just transition to modern energy for cooking which are explored in detail in the different reports.

Access the reports in the Financing Clean Cooking series:

Clean Cooking: Scaling Up with Crowdfunding

This report 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. 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 donors can amplify crowdfunding for clean cooking.

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Clean Cooking: Financing Appliances for End Users

This report provides a snapshot of the current state of end user financing for clean cooking. The crucial problem in the clean cooking market as it stands is unaffordability: the vast majority of modern energy cooking devices are still sold for cash, but many of the poorest households in sub-Saharan Africa cannot afford the typical upfront cost of $30 and $100. The provision of consumer credit is therefore an essential step in promoting the uptake of modern cookstoves amongst lower income customers and this report examines the pros and cons of a range of financing models for both consumers and clean cooking companies.

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Clean Cooking: Structuring Concessions for Displaced People

This report looks at the potential for clean cooking concessions in refugee camps and other displacement settings. Humanitarian efforts have focused on bringing modern energy cooking solutions to refugee camps by means of subsidies and concessions. In order to promote the wider adoption of concessions within humanitarian contexts, this report seeks to update the concession concept. It reviews recent developments in clean cooking in displacement settings and examines the attitudes of different stakeholders towards concessions. It brings a particular focus to the involvement of the private sector and how to incentivise companies to develop clean cooking solutions in displacement settings.

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Clean Cooking: Results-Based Financing as a Potential Scale-up Tool for the Sector

This report evaluates past and ongoing Results-Based Financing (RBF) programmes in order to identify the key success factors for using RBF as a tool for scaling up modern energy cooking solutions. Innovative financing models such as RBF can help to bridge the global deficit in access to modern energy cooking solutions through accelerated investment and market development. Research indicates that designing flexible programmes that match local market conditions and ensuring a level of maturity in the markets selected for the targeted technologies are both critical for the successful rollout of modern energy cooking RBF programmes. The report further explores opportunities to maximise impact through linking energy access and clean cooking RBF programmes more closely and scaling up further investment by tapping into carbon financing.

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Modern Energy Cooking: Review of the Funding Landscape

This report aims to address this challenge of underfunding in the clean cooking sector by galvanizing greater sector investment. 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, the emergence of electric cooking using cost-effective energy-efficient appliances and 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.

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Opportunity: Women in Modern Energy Cooking (WMEC) initiative launched