- Under the partnership between the African Guarantee Fund (AGF) and the Clean Cooking Alliance (CCA), several financial institutions will expand their clean energy portfolios.
- This support will strengthen the financing of small and medium-sized enterprises (SMEs) specialising in the provision of clean cooking solutions in Africa, as well as carbon project developers.
Financial institutions in East, Southern and West Africa will benefit from new funding to support clean cooking in these different sub-regions. The funds were pledged by the African Guarantee Fund (AGF) as part of a recently signed partnership with the Clean Cooking Alliance (CCA), an initiative that aims to build a vibrant, inclusive and financially sustainable industry for universal access to clean cooking by 2030.
The financial institutions, beneficiaries of this guarantee facility, will use it to “address the capacity building gaps and risks associated with lending to green small and medium-sized enterprises (SMEs) in Africa, while preparing these SMEs to become credit and investment ready, enabling them to play their full role in promoting sustainability and growth of the green economy on the continent,” says AGF.
The AGF will also support the creation of a pipeline of carbon project developers ready to obtain credits. The CCA’s knowledge of the clean cooking and carbon markets will be essential for the selection of financial institutions in East, Southern and West Africa.
For banks to understand the value of investing in the clean energy markets, partners also promise to: provide targeted technical assistance prior to board decisions and subsequently support activities like staff training and business process preparation; engage potential donors and investors; and work with associations, alliances, and other partners to promote the clean cook movement.
Through more than 150 financial institutions, AGF has already accessed close to $3 billion in financing for SMEs in 40 African nations. AGF and CCA want to lessen greenhouse gas (GHG) emissions by promoting clean cooking innovation on the continent.