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MCFA launches second clean cooking funding round

MCFA launches second clean cooking funding round
A bottle of Nigerian-produced ethanol gel fuel and cookstove.

The financing program Modern Cooking Facility for Africa (MCFA) has announced that it will open a second funding round to support access to and scale-up of high-technology clean cooking solutions in seven Sub-Saharan African countries.

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The 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.

Modern Cooking Facility for Africa (MCFA) 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.

In most of the MCFA target countries, the current access rate to clean cooking is less than 20 percent, and MCFA announced its first funding round in spring 2022. So far signed six agreements in the Democratic Republic of the Congo, Kenya, Mozambique, Tanzania, Zambia, and Zimbabwe.

Demand for financial support

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.

我们新的一轮融资将进一步支持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, commented Ash Sharma, VP at Nefco and Head of MCFA.

Up to EUR 16 million in funding

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 and the individual ticket sizes will vary from EUR 500,000 to EUR 2.5 million.

The catalytic window will be targeted at earlier-stage companies with the potential to scale; 50 percent 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 percent of available funding in the form of non-reimbursable catalytic grants and the rest as result-based financing.

Higher-tier cooking solutions

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.

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, said Heli Sinkko, Programme Manager at Nefco.

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