|| (Snapshot), a first-of-its-kind publication that highlights investment and business model innovation in the clean cooking sector.
The Snapshot, launched at the Dutch Ministry of Foreign Affairs’ “Accelerating Toward SDG7” event, gauges progress toward a sustainable and inclusive clean-cooking industry, based on investment, operational, and financial performance data provided by more than 40 companies.
“Despite a multi-billion-dollar funding gap that continues to hinder growth, the clean cooking sector has come a long way since the Alliance was founded in 2010,” said Dymphna van der Lans, CEO of the Alliance. “Innovation and private sector investment are driving the industry forward, with a growing number of scalable business models capable of meeting the cooking energy needs of developing markets.”
The Snapshot identifies a number of emerging trends that illuminate progress toward a private sector-led industry that delivers affordable, appropriate, high-quality clean cooking products. Innovative business models, including those that integrate fuel sales and pay-as-you-go solutions, have the potential to meet consumer needs while also producing positive health, climate, environment, and social impacts. Investment in the sector has increased but remains inadequate; this applies both to seed-stage and mature
companies, as well as across the spectrum of investment instruments, including debt, equity, concessional funding for technical assistance, and de-risking tools. In 2017, financing for clean cooking companies totaled about one percent of the USD 4 billion required to achieve universal access by 2030 – just one cent for every dollar needed.
As the Industry Snapshot shows, there is increased momentum toward more coherent and intentional efforts to first prove, then scale, high-impact solutions through high-growth business models. Public-private partnerships that utilize both concessional and commercial capital are critical,” said Peter George, Senior Director for Private Sector & Investment at the Alliance. “As you would expect, we are seeing the majority of impact
investment and development finance flowing to businesses with the most experienced management teams and business models that demonstrate the greatest potential for growth and profitability, in addition to impact.”
One company featured in the Snapshot, Sistema.bio, manufactures prefabricated biogas systems and has been operating in Mexico for eight years. The company raised USD 12 million in 2018 alone, funding its expansion in sub-Saharan Africa and Asia. “We are very encouraged by the additional investments, support, and partnerships that have been attracted to biogas as a promising clean cooking alternative, which can support energy
access as well as nine other Sustainable Development Goals,” said Alex Eaton, CEO and Co-Founder of Sistema.bio.
The Snapshot also notes the importance of government policy in supporting or inhibiting the growth of clean cooking solutions – in particular taxes and tariffs, quality standards and labeling initiatives, and financial incentives including subsidies. Kenya is highlighted as a historical leader in this area, contributing to East Africa’s position as a hub for investment and social enterprise innovation. Thanks in part to earlier enabling policies and conditions, 12 companies headquartered in East Africa attracted more than 50% of the total investment tracked in the Snapshot.
Cookstove manufacturer BURN, which has received Alliance funding and technical assistance, also reported new investments during the reporting period. “BURN is raising upwards of USD 10 million to expand our Kenya factory, launch into new African markets, and expand our product mix across a range of biomass and non-biomass cooking products,” said Peter Scott, CEO of BURN.
The Clean Cooking Alliance works with a global network of partners to build an inclusive industry that makes clean cooking accessible to the three billion people who live each day without it. Established in 2010, the Alliance is driving consumer demand, mobilizing investment to build a pipeline of scalable businesses, and fostering an enabling environment that allows the sector to thrive. Clean cooking transforms lives by improving health, protecting the climate and the environment, empowering women, and
helping consumers save time and money.