Burn Manufacturing has announced the issuance of Sub-Saharan Africa’s first-ever green bond which has been designated to finance clean cooking to the tune of USD10 million, an equivalent of Sh1.506 billion.
Burn says proceeds from the bond will allow the company to expand its current manufacturing capacity in Kenya and also establish a new manufacturing facility in Lagos, Nigeria.
The clean cookstove maker, distributor, and carbon-offset project developer says this will also grow its production of biomass, electric, and LPG stoves from 400,000 units to 600,000 units per month.
Burn stoves have been highly recommended by University of Pennsylvania, University of Chicago and Yunus Social Business to provide huge benefits in the health, financial, and climate action aspects.
“Our decision to issue the first green bond to support clean cooking underscores our strong belief in the power of financial innovation to drive positive environmental and social change,” said Burn CEO and Founder Peter Scott.
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Scott added: “Leveraging benefits such as investment communities’ interest in green financing and potential tax advantages to investors, green bonds have gained considerable traction in recent years.”
DRY Associated Ltd was the bond issuance placement agent, FSD Africa provided the framework technical input and offered technical assistance for the second-party opinion done by Agusto & Co.
“Biomass fuel is the main source of energy for cooking for the majority of households in Africa and the proceeds from this capital raise will support these households to transition to more sustainable alternatives,” stated FSD Africa Capital Markets Director Evans Osano.
Osano added: “These are not only better for the environment but also have health benefits from the reduction of particulate and carbon monoxide emissions which particularly impact women given their greater exposure.”
Agusto & Co Regional Director, East Africa Ikechukwu Iheagwam lauded the green bond issuance as landmark saying it will play a great role in promoting clean cooking across the African continent.
“Burn displayed transparency in its pursuit to reduce greenhouse gas emissions following the very detailed scientific process backed by international standards and robust laboratory testing to ensure that the cookstoves consume less wood and charcoal fuel at ISO/IWA Tier 4 thermal efficiency ratings levels,” said Iheagwam.
He added, “While this project is expected to have a significant positive environmental impact in terms of tons of firewood saved and tons of carbon dioxide emissions mitigated for each stove manufactured, the catalytic social, financial, economic and health benefits are quite compelling.”
“The Green Bond programme underscores the opportunities available for fixed-income investments in Kenya to catalyze capital formation, employment, and economic growth,” noted Dry Associates Investment Bank Head of Research Reuben Mabishi.
The 2022 report by the International Energy Agency on the Africa Energy Outlook suggests that realizing universal access to clean cooking fuels and technologies by 2030 needs shifting 130 million people globally away from dirty cooking fuels each year.
