New EUR 16 million funding round for clean cooking companies

The second funding round of the Modern Cooking Facility for Africa (MCFA) will open at the end of November, supporting access to and scale-up of high-technology clean cooking solutions in seven Sub-Saharan African countries.

MCFA will launch a new funding round in response to significant demand for financial support from private sector companies working within the clean cooking and renewable energy sector in Sub-Saharan Africa. The funding round is expected to open at the end of November 2023 and will support companies to further expand and scale up their activities in the Democratic Republic of the Congo (DRC), Kenya, Malawi, Mozambique, Tanzania, Zambia and Zimbabwe.

“Our new funding round will further support the introduction and scaling of modern cooking solutions to create long-term sustainable markets for these technologies in Sub-Saharan Africa. Building on an external evaluation of the first MCFA funding round, we are seeking to offer more opportunities for clean cooking companies by making a number of changes to the eligibility criteria and streamlining the application process. This will make MCFA funding more accessible to earlier stage companies,” comments Ash Sharma, Vice President at Nefco and Head of MCFA.

The new MCFA funding round will be divided into two funding windows combining results-based financing and catalytic grant financing. The total available funding for both windows will be up to EUR 16 million and the individual ticket sizes will vary from EUR 500,000 to 2.5 million.

The catalytic window will be targeted at earlier stage companies with the potential to scale; 50% of the requested MCFA financing within this window will be provided in the form of non-reimbursable catalytic grants and available to companies in the DRC, Malawi, Mozambique, Zambia and Zimbabwe. The scale-up window will be open to more mature companies in all project countries under terms similar to those of the first MCFA funding round, but with Malawi introduced as a new target country. This window will provide up to 30% of available funding in the form of non-reimbursable catalytic grants and the rest as result-based financing.

The new funding round will continue to support only higher-tier cooking solutions, including electric cookstoves and cookstoves that use sustainably produced solid and liquid biofuels or biogas solutions. In addition, the new funding round will also be available to clean cooking companies using liquid petroleum gas (LPG) in DRC, Malawi, Mozambique, Tanzania and Zambia.

“We see significant demand for financial support from companies active in the clean cooking sector to further expand their businesses and produce and sell affordable modern cookstoves for their customers. Therefore, we are very excited to announce that we will soon be opening a new funding round and tailoring the MCFA to better meet the needs of companies operating in the sector,” says Heli Sinkko, Programme Manager at Nefco.

Lack of clean cooking solutions is a global challenge and one of the key sectors in Africa for accelerating the green energy transition. Globally, some 2.3 billion people lack access to clean cooking, of which some 900 million live in Sub-Saharan Africa. In most of the MCFA target countries, the current access rate to clean cooking is less than 20%.

The Modern Cooking Facility for Africa (MCFA) announced its first funding round in spring 2022 and has so far signed six agreements in the Democratic Republic of the Congo, Kenya, Mozambique, Tanzania, Zambia and Zimbabwe. The new funding round will be divided into two stages, with a simplified pre-qualification stage to verify basic project and applicant eligibility criteria followed by the submission of a full proposal and business plan. Further information, selection criteria and guidelines will be made available on the MCFA website when the new funding round opens.

Read more at www.moderncooking.africa and sign up to the MCFA newsletter to receive information about the upcoming funding round.

Read the early stage evaluation summary report of the first Call for Proposals (MCFA1).

For further information, please contact:

Ash Sharma, Head of Modern Cooking Facility for Africa, Nefco
Ash.sharma@nefco.int, Phone: +358 10 618 06 53

Heli Sinkko, Programme Manager of Modern Cooking Facility for Africa, Nefco
Heli.Sinkko@nefco.int, Phone: +358 10 6180 659

About MCFA

The Modern Cooking Facility for Africa is a multi-donor facility established and managed by Nefco – the Nordic Green Bank – with the aim to support the development of new markets for the clean cooking sector and accelerate access to high technology, modern and affordable cooking equipment for consumers in Sub-Saharan Africa. It combines results-based financing with catalytic grant financing to companies active in the clean cooking market to grow and scale up their businesses in the programme countries.

The facility currently finances projects in six countries: the Democratic Republic of the Congo, Kenya, Mozambique, Tanzania, Zambia and Zimbabwe. The overall aim of the MCFA programme is to provide access to clean cooking solutions for approximately 3 million Africans. The current EUR 45 million MCFA programme was announced in November 2021 and is funded by Sweden and the European Union, and form part of the Global Gateway initiative, a new European strategy to boost smart and clean projects that combine public and private financing. Read more at www.moderncooking.africa

About Nefco

Nefco – the Nordic Green Bank – is an international financial institution based in Helsinki, Finland, owned by the five Nordic countries, focusing on environmental and climate investments and working with concrete actions to accelerate the green transition. Nefco also manages external funds in the climate and energy space and is accredited by the European Union and the Green Climate Fund, and it is the Facility Manager for the Beyond the Grid Fund for Africa, a EUR 126-million multi-donor results-based financing facility funded by Denmark, Germany, Norway, Sweden and USAID. Read more on www.nefco.int

Photo: Representatives from the MCFA team and programme donors at a launch event in Lusaka, Zambia in March 2023 – Jason Mulikita for MCFA