The African Guarantee Fund and the Clean Cooking Alliance (CCA) have formed an alliance to foster financial innovation, access to responsible carbon finance, and investments in clean cooking firms and programs.
In accordance with our mission, AGF will carry out the partnership’s objectives through selected financial institutions. Both groups will concentrate their efforts on markets in East, Southern, and West Africa, where there is a great demand and opportunity to increase investments in green projects such as clean cooking.
Cooking with polluting open flames and inefficient stoves is used by an estimated 2.4 billion people globally, contributing to 3.2 million early deaths and hurting livelihoods, the climate, and the environment. However, current investments in clean cooking are expected to be roughly US $130 million per year, far short of the US $10 billion required to achieve universal access.
AGF and CCA hope to raise financial investments in clean cooking sectors and promote access to modern fuels and technologies in Africa through their collaboration.
Mr. Jules Ngankam, CEO of AGF Group, stated, “Our partnership with the Clean Cooking Alliance aims to help financial institutions grow their clean energy portfolios by developing innovative financial solutions that promote clean cooking and the use of clean fuels.” Financial institutions will be able to address capacity-building gaps and risks associated with lending to green SMEs across Africa through AGF’s Green Guarantee Facility and Technical Assistance, while also preparing these SMEs to become credit and investment-ready, allowing them to fully play their role in promoting sustainability and growing Africa’s green economy.”
“This partnership brings together two organizations with distinct and complementary areas of expertise,” said Feisal Hussain, Senior Director of Innovative Finance at CCA.
“The combination of AGF’s deep knowledge of African financial institutions and small and medium-sized businesses, as well as CCA’s unique understanding and connections in the clean cooking and carbon markets, presents exciting opportunities.” The collaboration will allow carbon project developers to access pre-financing, so accelerating both customer access to clean cooking and the flow of carbon revenue to clean cooking value chains, generating the volumes of carbon credits required by buyers. Furthermore, for commercial banks, this represents a low-risk option for entering the carbon market prior to capitalizing on market expansion. Importantly, we intend to lower the entrance hurdle for smaller clean cooking enterprises, so assisting in the development of carbon markets that are accessible to a wide range of people,” he added.
AGF and CCA will collaborate in the following ways as part of their new partnership:
-Generating bank interest and demand -Providing banks with market guidance for clean fuels and cooking equipment, allowing them to grasp the benefits of investing in clean energy markets.
- Increasing the capacity of private finance initiatives by providing targeted technical help prior to board decisions and then supporting activities such as employee training and business process preparation.
-Generating a pipeline of credit-ready sustainable energy, SME, and carbon project developers. – Providing technical help to SMEs in the clean fuel and appliance markets in order to prepare them for finance.
-Guarantee, re-guarantee, and co-guarantee partnerships – Investigating options to improve finance for renewable energy projects.
-Partnerships and advocacy entail engaging potential funders and investors as well as collaborating with associations, alliances, and other partners to promote clean cooking and energy industries in general.