Publication - Clean Cooking Sector Remains Dramatically Underfunded, Despite Increasing Innovation and Climate Investment

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Clean Cooking Sector Remains Dramatically Underfunded, Despite Increasing Innovation and Climate Investment
Clean Cooking Alliance
Ronan Ferguson, supported by Shrikant Avi, Colm Fay, Jean-Louis Racine, and Lindsay Umalla.
Published in
May 2022
According to the 2022 Snapshot, investment in clean cooking companies remains in the tens of millions of dollars, falling short of the billions needed to achieve universal access to clean cooking. Between 2014 and 2020, investment in clean cooking companies grew at a compound annual growth rate of 20%, with 88% of capital originating from the private sector. Even if this growth rate continues, investment levels in clean cooking companies fall far short of the US $4.5 billion required annually to reach the 2.6 billion people still relying on polluting fuels and technologies.

“As the clock ticks towards 2030, we still have a long way to go in achieving universal access to clean cooking,” said Tariye Gbadegesin, Managing Director and Chief Executive Officer at ARM-Harith Infrastructure Investment LTD. “We need greater amounts of capital coming from a much wider pool of investors. As CCA’s report shows, the opportunities are vast. Enterprises that transition to increasingly customer-centric products and business model innovations are more likely to increase customer loyalty, retention, and growth, enhancing both impact and financial performance.”

Beyond investment, the report tracked US $26 million in revenue based on the sales information from 32 clean cooking companies, denoting a 13% decline from the previous year before the pandemic. However, revenue from carbon credits rose to more than US$ 11 million in 2020, a 21-fold increase over the US$ 500,000 tracked in 2017. The report also found that new capital investment is concentrated in increasingly fewer companies, with just seven companies raising more than 90% of the total. Meanwhile, gender-lens investing accounted for just 12% of company-reported investment in 2020.

Encouragingly, 2022 is showing a return to significant growth in the sector. In the beginning of this year, several clean cooking enterprises and funding mechanisms raised significant levels of capital, including the Spark + Africa Fund – the first impact fund financing clean cooking solutions, which brought in more than US $40 million in its first close in March.

“The amount of capital raised so far in 2022 is already more than double what was reported in the 2020 Clean Cooking Industry Snapshot,” said Dymphna van der Lans, CEO of CCA. “Enterprises are seeing significant customer growth, highlighting the potential to deliver pioneering technologies at a transformational scale.”

“Despite the pandemic, the clean cooking sector has proven to be incredibly resilient,” said van der Lans. “It’s more important than ever that we leverage recent growth and the urgency of addressing climate change, which is why CCA is committed to galvanizing these opportunities at the Clean Cooking Forum 2022 in Ghana in October, as well as at the SEforALL Forum, COP27, and other major convenings.”

The 2022 Snapshot uses self-reported data on investment, financial, and operational performance of approximately 60 clean cooking companies. The Snapshot's revenue analysis was based on 32 companies for which CCA has tracked revenue data over time. As a “snapshot,” this report is meant to provide an abbreviated understanding of the sector.