The Investment Fund for Developing Countries (IFU) has endowed the new Spark+ Africa fund with €4.5 million for clean cooking in sub-Saharan Africa.
The new fund, Spark+ Africa Fund, will aim investments at the health and climate challenges facing the rural population in Africa by replacing the current use of open fires, charcoal, and kerosene for cooking with healthier and cleaner alternatives. IFU invests EUR 4.5m in the fund, which has a target size of EUR 63m.
900 million people in Sub-Saharan Africa lack clean and modern cooking solutions. Without the electric stoves and piped natural gas prevalent in developed countries, they are forced to spend an estimated $35 billion annually on unhealthy and polluting open fires, charcoal, and kerosene.
According to a recent World Bank report, this generates annual social, environmental, and economic costs of more than $330 billion in Africa, while the required private sector investment to deliver access to modern alternatives would be a fraction of that at $2.6 billion per year.
Spark+ Africa Fund is a new investment fund that will contribute to this investment need by financing pioneering companies that offer life-improving biomass, biogas, ethanol, electric, as well as LPG-based cooking technologies to low-income consumers. Such solutions can have a range of individual and societal benefits, including improved respiratory health, reduced time poverty for women and greater gender equality, reduced greenhouse gas emissions and deforestation, industrial and economic development, as well as poverty reduction.
IFU is investing DKK 33m/EUR4.5m in Spark+ and is joined by several other investors, total funds committed in the first round are EUR 36m. Spark+ has a target size of EUR 63m.
Reik Haahr Müller, VP, Head of Green Energy & Infrastructure at IFU said, “Spark+ is targeting one of the most serious challenges facing rural populations’ health and climate change in Africa. Replacing the use of open fires, charcoal, and kerosene with more clean alternatives like processed biomass, biogas, and electricity will have a profound impact on lowering respiratory health risks and reducing deforestation and GHG emissions. The fund’s blended financing structure is the right approach to speed up the green transition in this sector.”
“It was a profound realization that the cooking methods used by nearly half the global population have remained fundamentally unchanged for the past 40,000+ years, and so many around the world have not benefitted from the introduction of modern cooking methods. Fortunately, visionary entrepreneurs, new business models, and technologies are poised to allow Africa to leapfrog the more centralized technologies of the 20th century in favor of innovative distributed energy solutions, and we are therefore pleased to have collaborated with our partners to launch Spark+. Enabling Qapital is thrilled to leverage its best-in-class investment management experience to accelerate growth in this important space,” said Xavier Pierluca, Co-Investment Director of Spark+ and Managing Partner of Enabling Qapital.
