Clean cooking vehicle promises $100m to 'de-risk' investment

A new vehicle including a UN fund has been formed to mobilise $100 million by 2026 towards the use of lower-carbon cookstoves globally to make investments in projects less risky, with a ramp-up in the generation of carbon credits one of the end goals.

Cleaner cookstoves are one of the biggest sectors in terms of credit supply in the voluntary carbon market, but the coverage of equipment that burns firewood more efficiently or uses alternatives such as electric or biofuel-powered stoves is said to be only a fraction of its global potential.

"Despite a recent increase in investment in the clean cooking sector, the rate of financing remains far too slow. This new financing platform can help close the financing gap, mobilizing and de-risking new investments at the scale required to rapidly accelerate access to clean cooking," said Jillene Belopolsky of the Clean Cooking Alliance, one of the organisations behind the new tie-up.

The joint statement didn't specify the reasons why the speed of financing for cookstoves projects is subject to delays and bottlenecks.  

The new Partnership Platform for Clean Cooking Finance said that current levels of investment in clean cooking – estimated at around US $130 million each year – fall far short of the US $10 billion needed to reach universal access.

It added that the platform aims to support investments to expand clean cooking markets and to widen access to modern fuels and technologies in Africa, currently the continent that hosts the vast majority of projects.

Besides the Washington DC-based CCA, the new Partnership Platform for Clean Cooking Finance is backed by the African Guarantee Fund (AGF) and the UN Capital Development Fund (UNCDF).

The initiative has also got support from South Africa's Standard Bank Group, a major finance provider to cookstove programs.

"Bringing together a range of players with different focus areas, such as AGF on guarantees, CCA on coordination, technical assistance and market knowledge, and UNCDF on policy support and concessional capital, is extremely helpful to financiers considering new investments," said Lawrence Cole-Morgan, Executive Lead in the Carbon Credit Trading division of Standard Bank.

The sector has also been roiled by a huge increase in supply in recent years at the same time that demand has stagnated amid claims by US researchers that some projects are being hugely over-credited (x6.3 times on average) because of flawed methodologies and difficulties in verifying projects or programmes that cover tens of millions of people in remote regions.

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