How a green bond financed millions of cleaner cookstoves for families

The problem

Across Sub-Saharan Africa, nearly one billion people rely on polluting fuels like wood and charcoal cooking. The effects are devastating.

Every year, indoor air pollution from cooking causes over 815,000 deaths across Africa. Up to 1.3 million hectares of forest are lost to create fuel. And use of these methods causes up to 25% of energy-related carbon emissions.

Women and girls are disproportionately affected. Collecting fuel and doing the cooking takes four or more hours each day, limiting opportunities for education and paid work.

There’s an urgent need for cleaner alternatives. But financing has been slow to reach the sector. Companies that make cleaner cookstoves do exist, but they’ve struggled to expand.

The solution

BURN Manufacturing is Africa’s leading clean cookstove producer. It needed to access large-scale finance to reach more people with its products.

In 2023, FSD Africa stepped in to help BURN launch a $5-million green bond. This was the first finance mechanism of its kind for clean cooking in Sub-Saharan Africa.

FSD Africa supported the green bond in three ways:

• Providing technical guidance to ensure it met international Green Bond Principles.
• Funding an independent environmental certification to give investors confidence.
• Helping regulators recognise clean cooking as a qualifying green investment – a new concept in the region.

The bond was a success. It raised $10 million, double its target. It also opened doors to new investors, helping BURN raise over $100 million in additional financing – including from the European Investment Bank and the African Trade and Development Bank.

The impact

The green bond has already enabled BURN to grow rapidly:

• Expanding from 8 to 14 countries and scaling production to 500,000 units per month.
• Creating 1,000 new jobs.
• Reaching 2 million families with safer, cleaner cookstoves.

Each stove cuts greenhouse gas emissions by up to 80% compared with traditional methods, and will save a household around $1,000 in lifetime fuel costs. In the long run, the new stoves are expected to prevent the use of 15 million tons of firewood.

The bond also enabled a landmark innovation: Africa’s first electric induction cooker designed for low-income households, sold through flexible pay-as-you-go and instalment plans.

These achievements contribute to eight Sustainable Development Goals, from poverty reduction and gender equality to clean energy and climate action.

And by proving this model works, BURN has created a replicable playbook for other African clean energy companies.

“Two million new families can now breathe cleaner air every day.” – Ted Miller, Head of Corporate Finance at BURN