Bridging the funding gap for early stage off-grid energy companies to scale modern energy cooking services

Over the last 19 years of investing, Acumen has seen that few investors are willing to provide financing in the earlier stages in the emerging markets where poverty is most acute. The majority of investors prefer to invest in the later stages, once commercial viability is proven and conditions for sustainable scaling are present. This is especially true in the cooking sector. According to SEforAll, an annual investment of USD 4.4 billion is required to close gaps in access to clean cooking, yet only USD 32 million in finance commitments for clean cooking solutions were tracked—representing less than 1 percent of the estimated finance required for universal clean cooking access by 2030. Without the additional infusion of capital, clean cooking markets are unlikely to develop, scale, and fulfil their role in helping serve the 2.8 billion people (IEA,2017) who do not have access to clean cooking facilities. Acumen supports Modern Energy Cooking Services (MECS) and their aim to investigate how to rapidly accelerate a transition from biomass to genuinely ‘clean’ electric or gas cooking. MECS works to support the research and development necessary to get e-cooking appliances to a place where they are both affordable and reliable for low-income households in Africa. Yet innovations in financing and distribution at the nexus of e-cooking, and solar home system (SHS) and mini-grid business models will be necessary for these solutions to scale. Not only will strong coordination across business models be required, but it will be necessary to understand what type of capital is needed, how best to crowd in additional leverage and manage risk. In partnership with MECS, this grant will enable Acumen to support its current investees who are already exploring or piloting modern cooking solutions as part of their product suite.