BURN Manufacturing (BURN), a pioneer in clean cookstove production, distribution, and carbon-offset projects, has just introduced Sub-Saharan Africa to its first-ever green bond, aimed at financing clean cooking initiatives with a substantial USD $10 million. This is a monumental leap in the green financing landscape, and the impact is set to be far-reaching.
A Boost for Clean Cooking
This milestone event in the environmental and social finance arena comes as BURN Manufacturing, a renowned clean cookstove manufacturer, gears up to expand its operations in Kenya and establish a new manufacturing facility in Lagos, Nigeria. The funds generated from the green bond are earmarked to not only enhance the existing production capacity but also to introduce a broader range of life-saving stoves, including biomass, electric, and LPG stoves. As a result, BURN will witness an impressive surge in production, leaping from 400,000 units per month to 600,000 units.
These cookstoves, engineered by BURN, have consistently earned accolades from reputable institutions such as the University of Pennsylvania and the University of Chicago. Their credibility further solidified through a comprehensive impact assessment survey conducted by Yunus Social Business. These stoves have proven to be more than just appliances; they have become vehicles for substantial health, financial, and climate benefits. Now, with the influx of funds from the Green Bond, they are on track to touch the lives of an additional 2 million households in 2024.
The Power of Green Financing
Peter Scott, the CEO and Founder of BURN, eloquently encapsulated the spirit of innovation driving this initiative: “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.” The dynamics of green financing are indeed transformative, harnessing the interest of investment communities and presenting potential tax advantages to investors. This modern financial instrument, the green bond, has gained significant traction in recent years, and BURN intends to harness it as a catalyst for sustainable development.
The bond issuance journey was made possible with support from DRY Associated Limited, acting as the Placement Agent, and the guidance of FSD Africa, a specialist development agency funded by UK International Development. FSD Africa played a pivotal role in shaping the bond framework and contributing essential technical expertise through a second-party opinion conducted by Agusto & Co., a leading Pan-African Credit Rating Agency and Green Bond Verifier.
A Step Towards Sustainability
Evans Osano, Director of Capital Markets at FSD Africa, stressed the importance of this initiative: “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.” The environmental benefits are significant, as cleaner alternatives reduce particulate and carbon monoxide emissions, with particular health advantages, especially for women who are often more exposed.
Ikechukwu Iheagwam, Regional Director (East Africa) at Agusto & Co., highlighted the transparency and meticulous approach taken by BURN in its quest to reduce greenhouse gas emissions. The science-backed procedures and rigorous laboratory testing ensure that the cookstoves are remarkably efficient, consuming less wood and charcoal fuel, and complying with international standards.
Kenya’s Path to Quality and Green Growth
Reuben Mabishi, Head of Research from Dry Associates Investment Bank, lauded the leadership of BURN and their expertise in green finance. He also noted the immense potential for fixed-income investments in Kenya to stimulate capital formation, employment, and economic growth. BURN’s journey is a testament to Kenya’s ability to deliver quality to the world while contributing to a greener future.
Towards Universal Clean Cooking Access
The significance of green bonds cannot be understated in the context of achieving universal access to clean cooking fuels and technologies by 2030. According to a 2022 report by the International Energy Agency, the transition to cleaner cooking solutions is crucial to improving the lives of millions of people worldwide. BURN’s green bond issuance provides a pivotal avenue for advancing this transition, making cleaner and safer cooking accessible to communities across Africa.