ClimateCare is using an innovative Revolving Fund model to create a new market for clean burning ethanol cookers in Kenya, helping the community to leapfrog traditional development pathways.
In Kenya, 68% of household energy comes from wood and charcoal, burnt on open fires and inefficient stoves. In urban areas kerosene is also used as a cooking fuel. These cause air pollution and contribute to climate change.
Demand for wood fuel also leads to deforestation, devastates biodiversity, reduces habitat for endangered species and reduces carbon uptake by forests. Toxic fumes also have an impact, killing approximately 14,300 people in Kenya every year, and damaging the health of many more.
The UN endorses the provision of modern, efficient stoves (which reduce fumes and particulate matter) to address this issue.
Ethanol fuel (made from molasses, a bi-product of Kenya’s sugar manufacturing industry) is a clean burning, renewable fuel, but ethanol cookers are out of reach financially for many families. As a consequence, there is limited accessibility of cookers and no distribution network for the fuel.
ClimateCare set out to help start the market for ethanol cookers and fuel. This meant selling cookers and ethanol fuel in tandem through our partners, creating distribution channels and marketing and selling the concept on the ground.
What Are We Doing?
ClimateCare selected Safi International as a partner for the initial pilot project and identified Kibera as the ideal location. The ethanol cooker chosen was extensively tested to ensure suitability and desirability for regular, domestic use.
Arranging funding from DFID, ClimateCare developed a financial model to subsidise initial stove costs and provide interest free loans through a Revolving Fund. The project has also created a sustainable distribution channel for ethanol in Kibera.
ClimateCare set up a mechanism to manage loans through local Savings and Credits Co-operatives, who lend to members at zero interest, with a payback facility through the M-Pesa Pay Bill system.
Carbon reductions are measured and the credits are sold. Income is subsequently re-invested in the Revolving Fund, will keep the cost of cookers down and make the project financially sustainable over the longer term.
Going forward, we will measure improvements in indoor air pollution to gauge improvements on women’s health.
The Role of Carbon Finance
ClimateCare’s revolving fund model
Carbon finance provides a partial but vital part of the finance for this project. The Revolving Fund was initiated using donor finance from UK AID.
The fund is used to subsidise the price of ethanol stoves, making them affordable to communities. It also provides loans to assist purchase through local saving co-operatives, with a payback facility through the M-Pesa Pay Bill system.
Sales of carbon credits top up the element of the fund that is reduced by providing the initial stove subsidy, allowing the fund to reach more and more people, and the project to grow. This Revolving Fund model is a blue print that ClimateCare is already rolling out across other projects.
ClimateCare has already had interest from several parties in purchasing the carbon credits from this project. The buyer will be playing an essential role in helping change the way people cook, for good – tackling poverty, improving health and protecting the environment.
In the first five months 1,400 cookers have been sold, and feedback from retailers and consumers is excellent.
Initially, this project will reach 8,000 families, but it has potential to scale across the developing world – improving health, tackling poverty and fighting climate change.
ClimateCare led the development of innovative funding for cookstoves in 2003, writing a methodology allowing carbon finance. Through this mechanism to date, it has improved life for 6.5 million people through cookstove projects and cut 2.6 million tonnes of CO2.
Now, with this project, it is demonstrating new financial interventions that can achieve even greater impact – using a revolving fund to support roll out of ethanol cookers is a first in Kenya.
By creating a brand new market for ethanol stoves, this project has the potential to change the way people cook, for good.
ClimateCare won an Environmental Finance Transaction of the Year award for this project.
If you would like to replicate or expand this award winning project, contact a member of
our team on +44(0)1865 591000.
- Improved Health: The project will improve the health of 8,000 families initially by reducing their exposure to harmful levels of indoor air pollution.
- Tackling Climate Change: One ethanol stove saves 5 tonnes of CO2 per year which helps to tackle climate change.
- Empowering Women: Ethanol cookers cook cleaner and quicker reducing illness and freeing up time for work and study.
- Slowing Deforestation: The cookers use ethanol fuel which helps to reduce the demand for wood and protect local forests.
- Job Creation: The distribution chain for ethanol fuel and cookers creates jobs for residents of Kibera.
- Resource Efficiency: Waste from Kenya’s sugar industry is developed into fuel creating value along the supply chain
- Scale Of Impact: The innovative financing model allows the project to scale quickly, bringing safe, affordable cooking to the people who need it the most.