ClimateCare wins Carbon Finance Transaction of the Year award

ClimateCare is delighted to win Environmental Finance’s Carbon Finance Transaction of the Year award, for a project that is kick-starting a new market for clean burning ethanol cookers that save lives and help tackle climate change.

The award acknowledges its pioneering Revolving Fund model, something ClimateCare believes will act as a blue print for financing sustainable development projects around the world.

Speaking of ClimateCare’s award win, Radha Muthiah, CEO UN’s Global Alliance for Clean Cookstoves said: “We’re delighted that ClimateCare’s work to develop innovative finance for clean cookstoves and fuels has been acknowledged with this award. Their work to kick-start a market for next generation ethanol cookstoves – which virtually eliminate household air pollution – has the potential to save many millions of lives. It’s exactly this kind of initiative that is needed to create a thriving global market for clean household cooking solutions that will save lives, improve livelihoods, empower women and protect the environment.”

Jonathon Porritt, Founder, Forum for the Future said: “ClimateCare’s revolving fund model and cookstoves programme exemplify the real value that can be achieved from businesses collaborating with government to deliver innovative financial models at scale. This award-winning ethanol stoves project and DFID partnership is a leading example of new ways to finance sustainable development programmes, which both improve lives and tackle climate change.”

A new market for ethanol cookers will save lives and fight climate change

In Kenya, 68 per cent of household, primary energy still comes from woody biomass. The majority of this is burnt on smoky open fires and inefficient cooking stoves leading to air pollution and contributing 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 from these traditional cooking methods 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 that cuts out indoor air pollution, saving lives. Using ethanol fuel also lowers greenhouse gas emissions – one ethanol stove saving 5 tonnes of CO2 per year, helping tackle climate change.

Whilst production of ethanol fuel might seem an obvious solution to household energy needs, ethanol cookers are out of reach financially for many families. As a consequence, there is limited accessibility of cookers and no distribution network for fuel.

ClimateCare, which has developed innovative financing streams for sustainable development for more than a decade, set out to address this and kick start the market for ethanol cookers and fuel. This meant selling cookers and ethanol fuel in tandem, creating distribution channels and marketing and selling the concept on the ground.

At least 8000 families will benefit from the initial project, and as the concept is rolled out with new partners and in new locations, ClimateCare expect 50,000 people to benefit by the end of 2015. “But the overall impact will be much greater than this” explains ClimateCare CEO Edward Hanrahan.

“Like many new markets, this one needs some help to pump-prime at the beginning. We expect the market to grow exponentially over time, as more people see the benefits and convenience of switching from woody biomass to ethanol. This will help create a steady, financially viable source of demand for the fuel and from there the market begins to function in its own right, bringing positive health and climate benefits at scale. To us, this represents true sustainability and as a profit for purpose business focussed on reducing emissions and improving lives, that is our ultimate aim.”

What’s the role of carbon finance?

Carbon finance provides a partial but vital part of the finance for this project, and Hanrahan sees this award as an acknowledgement that the role of carbon finance is changing; “Carbon finance still plays a vital role in these projects and represents the value placed on the abated emission. The Sustainable Development impacts are a separate output and their value should be considered as a separate element. However by blending these separate outputs we can provide more resilient finance for the project, whilst still monitoring and valuing the carbon reduction outputs. This project is prime example of this blended finance model and I’m delighted it has been acknowledged through this award.”

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.

Vote for this project

This project has been nominated for a 2 degrees Champions Award under the Social Value category. Please show your support for this project by voting on the 2degrees website and help us demonstrate the potential for ethanol cookers to improve lives and tackle climate change.

Please contact:
Rhiannon Szmigielski, ClimateCare
Tel: +44 (0)1865 591008
Email: rhiannon.szmigielski@climatecare.org

ClimateCare

ClimateCare is a profit for purpose company. We believe that climate change, poverty and sustainable development cannot be tackled in isolation. And that we cannot rely solely on aid. Governments and business must work together to deliver the speed and scale of change required to secure a sustainable future.

That’s why, for the past 18 years, we have mobilised the power and scale of both private and public finance for integrated Climate+Care programmes, which deliver positive environmental and social impacts around the world.

We combine the vision of a social enterprise and the commercial experience of an investment bank. Leveraging mainstream funding, we profitably deliver some of the largest, most successful sustainability initiatives in the world. To date we have worked with hundreds of partners to cut over 16.5 million tonnes of CO2 and at the same time, improved the lives of 6 million people.

Businesses and Governments alike, see the value and sense in our integrated Climate+Care approach and we have set an ambitious vision for 2020. To cut a further 20 million tonnes of CO2 and improve the lives of another 20 million people. Find out more at www.climatecare.org Twitter: @ClimateCare

ClimateCare and Efficient Cookstoves

ClimateCare is a leader in the implementation of cookstove projects and was a signatory at the UN’s recent Global Alliance of Clean Cookstoves Summit.

Nearly 3 billion people still cook their food and heat their homes with traditional cookstoves or open fires and 4 million people die prematurely every year from exposure to smoke from these cooking methods – more than HIV, malaria and tuberculosis combined.

Improved cookstoves offer a simple solution, reducing indoor air pollution. They also cut fuel costs for families, create local jobs and help tackle climate change.

ClimateCare led the development of innovative funding for cookstoves. It wrote the first consolidated methodology that allowed carbon finance to be used to support clean cookstoves and was the first company in the world to fund an improved cookstove project through 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.

Key supporters of cookstove projects include Jaguar Land Rover, who funded the first ever Gold Standard cookstove project through ClimateCare, and who have helped provide stoves to 832,000 families. The Co-operative and Aviva have also made significant contributions funding provision of stoves to 350,000 and 57,000 families respectively.

And if everyone already offsetting voluntary carbon emissions did so through a cookstove project, together they could help improve the lives of 432 million people, saving them £7 billion in fuel costs and generating £229 million of employment.

Partners in this Initial Ethanol Cooker Project

• UK Department for International Development - The Department for International Development (DFID) is leading the UK Government’s fight against poverty. Through its Climate Change programme, it contributes to the overall UK International Climate Fund (ICF) objectives on low carbon and climate resilient development.
• Safi International - a bioethanol stove and fuel company, designing, developing and manufacturing modern bioethanol cookers.
• Umande Trust – a community trust in Kibera, specialising in both sanitation and micro finance, empowering members through access to new savings and credit facilities.