Clean cooking fund, Spark+ Africa has raised over $40 million in a first close achieved in March. The fund is the world’s first impact investment fund focused on financing the value chains of clean and modern cooking appliances and fuels, to make them available to more people across Sub-Saharan Africa.
Spark+ Africa’s first close was anchored by the African Development Bank’s Sustainable Energy Fund for Africa (SEFA), with additional investments from the Investment Fund for Developing Countries (IFU) (Denmark), and the Belgian Investment Company for Developing Countries (BIO) (Belgium).
“We are grateful for the catalytic role that the African Development Bank and SEFA have played in launching Spark+. Access to clean and modern cooking solutions is an underappreciated component of infrastructure, with a major impact on the health and well-being of hundreds of millions of people, and in particular women, on the continent,” said Peter George, Co-Investment Director of Spark+.
Many clean cooking businesses in Africa face many challenges, including limited access to investment capital to increase their production and distribution capacity, high-risk perception, and an insufficient return profile to attract commercial investment. Spark+ aims to respond to challenges faced by clean cooking businesses in Africa and help them achieve commercial viability.
Commenting on the financial close, the African Development Bank’s Acting Director for Renewable Energy & Energy Efficiency, Dr. Daniel Schroth said: “SEFA’s anchor investment in the Fund’s first-loss tranche contributed to catalysing the participation of additional financiers in Spark+.”
“We are pleased that the Fund has been established as its investments are expected to support the delivery of clean cooking solutions to well over 10 million people across Sub-Saharan Africa, with significant benefits for public health, gender equality, the environment, and climate,” Schroth added.
Spark+ Africa Fund will make debt, mezzanine, and equity investments in companies that manufacture and distribute clean cooking solutions, such as biomass stoves, advanced biomass fuels, liquefied petroleum gas, ethanol and biogas systems. Spark+ will also invest in distributors and consumer finance providers, such as off-grid solar companies and microfinance institutions that extend their services to clean cooking products.
Access to reliable and affordable energy remains an aspiration for many Africans. While Africa has made strides towards increasing electricity access over the last decade, there has been less progress on access to clean cooking solutions. Close to 900 million people in Sub-Saharan Africa still lack access to modern energy services for cooking, with negative impacts on health, especially for women and children, and the environment.
