- The Improved Cook Stoves Carbon Fund will be managed by Singapore’s Impact Capital Asset Management (Icam), which has partnered with EKI Energy Services.
- We forecast carbon offset supply from clean cookstoves could reach 542 million tonnes of carbon dioxide equivalent in 2050.
A Singapore-based money manager plans to raise as much as US$125 million (S$168 million) to supply energy-efficient stoves to families in India and Africa and will generate returns for investors by selling carbon credits. The Improved Cook Stoves Carbon Fund will be managed by Singapore’s Impact Capital Asset Management (Icam), which has partnered with EKI Energy Services. The Indore, India-based EKI will invest US$25 million in the fund and make the stoves, according to Icam chief investment officer Deepak Mawandia. He said, “There is a huge opportunity for a meaningful impact in India because, if you look at the numbers, it’s mind-boggling. In Africa, the impact on society is much larger because, in some of the areas that we are going and some of the things that we are doing, you see a lot more difference.”
Mr Mawandia added that the fund is betting that the demand for carbon credits, which McKinsey & Co forecasts may reach US$50 billion by 2030, will help it generate returns for investors as polluting companies seek to balance their emissions with offsets generated by CO2-mitigating strategies. The proceeds will benefit the fund supply of three million cookers in India, Kenya, and Ghana within about two years.
Each stove will help reduce greenhouse gas emissions by as much as five tonnes a year. The fund controllers said the project would generate as much as three million carbon credits annually over five years for each US$25 million disbursement. Mr Kyle Harrison, an analyst with Bloomberg New Energy Finance, said, “In the case of cookstoves, most clean alternatives are more expensive than traditional cookstoves. But offsets can bridge the gap in costs to allow rapid deployment. We forecast carbon offset supply from clean cookstoves could reach 542 million tonnes of carbon dioxide equivalent in 2050.”