Lagos, Nigeria – BURN Manufacturing, a global leader in clean cookstove production and distribution, has announced plans to open a new manufacturing plant in Lagos, Nigeria, following the issuance of Sub-Saharan Africa’s first-ever green bond. The Kenyan-based firm is set to expand its production capacity and bring life-saving biomass, electric, and LPG stoves to a broader audience.
The groundbreaking $10 million green bond will not only support the expansion into Nigeria but also enhance manufacturing capabilities in Kenya. BURN’s monthly production output will rise from the current 400,000 units to an impressive 600,000 units, offering a diverse range of environmentally friendly cooking solutions.
Peter Scott, CEO and Founder of BURN, emphasized the significance of financial innovation in driving positive environmental and social change. “Our decision to issue the first green bond to support clean cooking underscores our strong belief in the power of financial innovation to drive positive environmental and social change,” said Scott.
Green bonds, known for attracting interest from investment communities and offering potential tax advantages to investors, have gained considerable momentum in recent years. BURN’s innovative use of green bonds aims to catalyze sustainable development in the clean cooking sector, while also setting a precedent for eco-conscious financing in the region.
The bond issuance was facilitated by DRY Associated Limited, acting as the Placement Agent. FSD Africa, a specialist development agency funded by UK International Development, played a pivotal role by providing technical input on the bond framework and contributing technical assistance for the second-party opinion, which was conducted by Agusto & Co., a leading Pan-African Credit Rating Agency and Green Bond Verifier.
“We are proud to have supported this landmark issuance, the first-ever green bond to finance clean cooking activities in sub-Saharan Africa,” said Evans Osano, Director, Capital Markets, FSD Africa. Osano emphasized the importance of transitioning households in Africa from biomass fuel to more sustainable alternatives, which not only benefit the environment but also have health advantages, particularly for women.
Sub-Saharan Africa faces the urgent need to mobilize $50 billion annually to address climate adaptation in agriculture, power, and urban infrastructure. Rising temperatures, sea levels, and erratic rainfall patterns are causing natural disasters, disrupting agricultural production, and threatening urban sustainability in the region.
Green bonds offer a crucial avenue for supporting the transition to cleaner cooking solutions, aligning with the goal of achieving universal access to clean cooking fuels and technologies by 2030, as highlighted in a 2022 report by the International Energy Agency.
BURN stoves, independently verified by reputable institutions, have consistently demonstrated substantial health, financial, and climate benefits. The funds from the Green Bond are expected to extend these benefits to an additional 2 million households by 2024.
Ikechukwu Iheagwam, Regional Director (East Africa) at Agusto & Co., praised BURN Manufacturing’s commitment to environmental standards and efficiency, citing the stoves’ reduced wood and charcoal fuel consumption and substantial environmental impact.
Reuben Mabishi, Head of Research at Dry Associates Investment Bank, expressed pride in being the Transaction Advisor on BURN’s Green Bond program, emphasizing the opportunities it presents for fixed-income investments in Kenya. BURN Manufacturing’s growth story reflects the potential of Kenyan companies to deliver quality products to the world.
The expansion of BURN Manufacturing’s operations into Nigeria represents a significant milestone in the company’s journey to make clean cooking solutions accessible across Africa. Nigeria’s status as an economic powerhouse in the region makes it a strategic location for the new manufacturing plant. Lagos, the country’s economic capital, offers a vibrant business environment and access to a vast consumer base.
The decision to issue the green bond is a testament to BURN’s commitment to sustainability and reducing the carbon footprint associated with traditional cooking methods. Clean cookstoves provide a cleaner and safer alternative for households across the continent, reducing the health risks associated with indoor air pollution, which affects millions of people, especially women and children.
Additionally, the issuance of Sub-Saharan Africa’s first green bond underscores the growing interest in environmentally responsible investments. The bond serves as a model for other companies in the region to explore innovative financing solutions that contribute to sustainable development while attracting socially responsible investors.
As BURN Manufacturing expands its reach and production capabilities, it not only contributes to addressing environmental challenges but also plays a significant role in supporting economic growth and job creation in both Kenya and Nigeria. The manufacturing sector has the potential to boost local economies and provide employment opportunities, aligning with broader goals of reducing poverty and promoting economic development.