The Board of Directors of the African Development Bank has approved a $ 5 million investment in the SPARK + Africa Fund to provide clean cooking solutions to more than two million households across Africa.
The European Commission will contribute an extra € 10 million. The investment of the Bank, which comes from its Sustainable Energy Fund for Africa (SEFA), is expected to enable the participation of other interested investors. As an anchor investor, the bank will channel the first-loss equity of SEFA and the European Commission’s thematic blending facility.
In addition to cleaning techniques for the culinary industry, the investment is expected to reduce carbon emissions by 15.9 Mt CO2 equivalent, by reducing the use of inefficient stoves and open fires and deteriorating wood for wood fuel.
The switch to cleaner hobs reduces exposure to harmful cooking smoke and the time spent collecting firewood, a burden that falls disproportionately on women.
“By investing in the development of clean cooking solutions for millions of households, the Bank also contributes to women’s empowerment, job creation and reduced deforestation associated with charcoal production,” said Dr. Kevin Kariuki, Deputy President for Power, Energy of African Development Bank, said. , Climate and Green Growth.
The investment complements the bank’s wider efforts to address the aftermath of the COVID-19 pandemic. He said: ‘Positive health effects of reducing domestic air pollution also contribute to the resilience to diseases that attack respiratory systems such as COVID-19. “
Dymphna van der Lans, CEO of the Clean Cooking Alliance, said: “The Clean Cooking Alliance is very pleased to have partnered with Qapital, the African Development Bank and the European Commission to develop this groundbreaking investment facility. We believe the SPARK + Africa Fund has a tremendous impact on the market and will accelerate the growth of clean cuisine to positively impact the lives of millions of people in the coming years. ‘
Xavier Pierluca, managing partner for the activation of Qapital, said: “We designed the SPARK + Africa Fund to follow an ecosystem approach to promote quality solutions to low-income communities through tailor-made value-added investment instruments from design and manufacturing companies to last mile distributors. “
SPARK + Africa is a groundbreaking impact investment fund enabled by Qapital and the Clean Cooking Alliance to channel debt and equity financing to enterprises that manufacture, distribute and finance clean cooking solutions in sub-Saharan Africa. The fund is aimed at a capitalization of $ 50-70 million.
The scale of the challenge of broadening access to clean cuisine in Africa remains daunting, in part because much-needed investments are hampered by high perceived risks, and in many cases a return profile that is insufficient to attract commercial investment. The SPARK + Africa Fund is a direct response to this challenge and is an important component of the AfDB’s response to the clean cooking challenge. The investment in the fund’s first loss tranche will directly address a critical financing gap and enable the participation of other interested financiers.
The Clean Cooking Alliance works with a worldwide network of partners to make clean cooking accessible to the three billion people who live without it every day. Enabling Qapital Ltd. is an impact investment advisory firm with a track record in promoting financial inclusion and access to energy.
SEFA is a special donation fund administered by the African Development Bank and anchored by the governments of Denmark, the United States, the United Kingdom, Italy, Norway, Sweden and Spain ─ in support of renewable energy (RE) and energy efficiency (EE) projects in Africa.
The approval was done on 24 November 2020.
Contact:
Media Contact: Olufemi Terry | Department of Communications and External Relations |
African Development Bank | Email: o.terry@afdb.org
Technical contact: Namho Oh, Senior Investment Officer, Renewable Energy and Energy Efficiency Division, n.oh@afdb.org