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Stove maker floats Sh1.5bn bond for Kenya, Nigeria upgrade

Cooking stove manufacturer Burn has issued a $10 million (Sh1.5 billion) green bond whose proceeds will support clean energy projects in Kenya and Nigeria.

The company said the proceeds from the bond will allow it to increase its existing manufacturing capacity in Kenya as well as launch a new manufacturing facility in Lagos, Nigeria.

“Production will increase from the current 400,000 units per month to 600,000 units and will produce a range of life-saving biomass, electric, and LPG (liquefied petroleum gas) stoves,” it said in a statement.

The funds from the green bond are poised to extend these benefits to an extra two million households in the year 2024.

“Our decision to issue the first green bond to support clean cooking underscores our strong belief in the power of financial innovation to drive positive environmental and social change. Leveraging benefits such as investment communities’ interest in green financing and potential tax advantages to investors, green bonds have gained considerable traction in recent years. Burn is excited to deploy this innovative instrument to catalyse sustainable development” said Peter Scott, CEO and founder of Burn.

The US firm launched its first full manufacturing facility in Kenya in 2014. A brief on its website said that the solar-powered facility has a capacity of 250,000 stoves per month.

The bond issuance was supported by Dry Associated Limited, acting as the placement agent with FSD Africa, a specialist development agency funded by UK International Development, providing technical input on the bond framework and contributing technical assistance for the second-party opinion which was conducted by Agusto & Co., the leading Pan-African Credit rating agency and green bond verifier.

“We’re proud to have supported this landmark issuance, the first-ever green bond to finance clean cooking activities in sub-Saharan Africa. Biomass fuel is the main source of energy for cooking for the majority of households in Africa and the proceeds from this capital raise will support these households to transition to more sustainable alternatives” Evans Osano, director of Capital Markets, FSD Africa, said.

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