The Stove Maker's Sustainable Leap
Stove manufacturing company Burn is making significant strides in the pursuit of clean energy solutions for households in Africa. The company has issued a $10 million (Sh1.5 billion) green bond, with the aim of supporting clean energy projects in Kenya and Nigeria. This strategic financial move reflects Burn's commitment to enhancing its production capacity and fostering environmental sustainability.
Heating Up Production
Burn intends to allocate the proceeds from the green bond to bolster its existing manufacturing capabilities in Kenya and to establish a new manufacturing facility in Lagos, Nigeria. This expansion is set to increase the current manufacturing capacity from 400,000 units per month to an impressive 600,000 units. The stoves produced will encompass a range of life-saving options, including biomass, electric, and liquefied petroleum gas (LPG) stoves.
The significance of this endeavor extends far beyond industrial growth. The increased production capacity is anticipated to impact an additional two million households by 2024, providing them with clean and sustainable cooking solutions.
Innovative Finance for Sustainable Progress
Peter Scott, CEO and founder of Burn, is enthusiastic about this green bond initiative, recognizing its potential to catalyze sustainable development. Scott emphasizes the vital role of financial innovation in driving positive environmental and social change. The concept of green bonds, supported by environmentally conscious investment communities and offering potential tax advantages to investors, has gained substantial traction in recent years. Burn's adoption of this innovative financing instrument underscores its dedication to the cause of sustainable development.
Burn's eco-friendly approach is not limited to its financial activities. The company initially launched its first full-scale manufacturing facility in Kenya back in 2014. This solar-powered facility boasts an impressive capacity of 250,000 stoves produced per month. The bond issuance is a result of collaborative efforts, with Dry Associated Limited acting as the placement agent and FSD Africa, a specialized development agency funded by the UK International Development, contributing technical input on the bond framework.
Additionally, Agusto & Co., a prominent Pan-African credit rating agency and green bond verifier, conducted a second-party opinion, further affirming the bond's alignment with green financing and sustainable development goals. This issuance is a significant milestone, marking the first-ever green bond intended to finance clean cooking activities in sub-Saharan Africa.
Facilitating Sustainable Transition
The green bond's proceeds are expected to offer critical support to African households. Biomass fuel remains the primary energy source for cooking in the majority of homes across the continent. Burn's efforts will enable these households to transition to more sustainable and environmentally friendly alternatives. The director of Capital Markets at FSD Africa, Evans Osano, expressed pride in the agency's role in supporting this landmark issuance. He acknowledged the pivotal role of biomass in African households and how the bond's capital raise will be instrumental in steering them toward sustainable energy options.
Burn's $10 million green bond stands as a testament to the evolving landscape of sustainable financing in Africa. As the continent embraces clean energy solutions, Burn's initiatives reflect its commitment to being a pioneering force in driving positive environmental and social change. This green bond not only fuels the company's expansion but also lights the way for cleaner and more sustainable cooking practices in African households.