Elucidating Finance Gaps through the Clean Cooking Value Chain

Abstract

The current supply of finance to enable universal access to clean fuels and technology for cooking does not match the scale of Sustainable Development Goal 7’s access challenge. To date, little attention has been given to the modalities of funding the clean cooking transition at the macro level. Grounded in a review of academic and recent grey literature, this study’s research objective was to provide a granular understanding of gaps in finance flows and financial instruments, mapped against the innovation cycle of companies that provide clean cooking solutions. In the context of wide-ranging barriers to the clean cooking sector’s development, we found a chronic shortfall of finance for companies at the early stages of their business growth and poorly targeted public finance to support innovation and mitigate risk for later-stage investors. This is exacerbated by limited data sharing and knowledge exchange among a small number of funders. We recommend reforms to public funding for clean cooking enterprises, especially for research, development and demonstration (RD&D) and innovation, to mitigate risk for later-stage investors, as well as more effective data sharing, to help catalyse sufficient, appropriate finance through the value chain for universal access.

Impact Financing for Clean Cooking Energy Transitions: Reviews and Prospects

“…The funding commitments for clean cooking of around US$133 million per year in 2019 compare poorly with the estimated investment needed to achieve universal access to clean cooking by 2030 of US$8 billion per year [11]. The cost for a universal transition to MTF [12] higher tier (4)(5), modern energy cooking solutions that would meet WHO indoor air quality standards could be as high as US$148-156 billion annually [13].…”