The launch of a USD 200 million Clean Cooking Outcome Bond represents a pivotal advancement in using innovative financing mechanisms to expand access to clean cooking solutions in Ghana, while simultaneously leveraging carbon markets under Article 6.2 of the Paris Agreement. Structured by Standard Chartered and issued by the World Bank’s International Bank for Reconstruction and Development (IBRD), the bond’s implementation will be led by UpEnergy. By directly tying investor returns to the generation and sale of high-integrity carbon credits, this transaction establishes a new model for mobilizing private capital to support measurable climate and development outcomes. This initiative is projected to benefit over one million people in Ghana, reduce GHG emissions, and alleviate long-standing public health issues related to household air pollution.
Innovative Finance Structure and Article 6.2 Carbon Credits
This Bond sets a precedent as the first capital markets instrument featuring coupon payments linked to Internationally Transferred Mitigation Outcomes (ITMOs)—carbon units authorized and transferred between countries under Article 6.2. Under this structure, investors receive a traditional fixed coupon from the IBRD alongside a variable coupon component determined by the volume of verified emissions reductions generated by the project and purchased by the KliK Foundation of Switzerland. This approach demonstrates how Article 6.2 can be leveraged to direct private investment toward projects that deliver positive climate impacts and align with the host country’s national goals, while assisting cooperating countries in meeting their Paris Agreement targets.
The Bond is principal-protected by IBRD, a critical feature for attracting global investors. With a principal amount of USD 200 million, the issuance reflects robust market confidence in outcome-based financing. Consequently, private capital can be mobilized to achieve development goals previously funded exclusively by public sources. Approximately $30.5 million from the investor coupon payments is being allocated to cover early-stage project financing needs. This structure allows funds to be deployed immediately, circumventing the need to wait for longer-term project revenues.
Upon verification, ITMOs generated by the project will be credited to KliK Foundation’s account in the Swiss Emissions Trading Registry, after accounting for the Overall Mitigation in Global Emissions (OMGE) deduction required by Switzerland. Switzerland will retire these units against its Nationally Determined Contribution (NDC), and Ghana will record the mitigation impacts within its Article 6 cooperation framework. This collaboration exemplifies how international carbon markets can support tangible climate action in host countries.
Large-Scale Clean Cooking Deployment in Ghana
The proceeds from this instrument will fund the distribution of over 400,000 clean, energy-efficient cooking devices in Ghana from 2025 to 2028. This initiative is being implemented by UpEnergy, leveraging its expertise as a carbon project developer operating across Africa. UpEnergy will deploy Improved Cookstoves (ICS) for households relying on biomass and Electric Cookstoves (EC) for households with access to the electricity grid. This dual-technology approach aligns with Ghana’s diverse household energy profiles, particularly in rural and low-income urban areas where reliance on solid biomass fuels remains high.
Currently, approximately 75% of Ghanaians utilize traditional solid biomass fuels, such as wood and charcoal, for cooking. Beyond driving deforestation and environmental degradation, this reliance causes severe household air pollution, contributing to an estimated 28,000 premature deaths annually. This particularly affects women and children who spend significant time near cooking areas. The clean cookstove program is expected to materially improve indoor air quality and health outcomes across participating communities by enhancing combustion efficiency and reducing smoke exposure.
Furthermore, the transition to efficient cooking technologies will lower household energy costs by reducing fuel consumption. Regarding electric cookstoves, the need for biomass will be eliminated entirely. These improvements strengthen local resilience and contribute to broader social and economic development. UpEnergy’s implementation strategy prioritizes affordability, access to electricity, and the specific needs of Ghanaian households.
The initiative is projected to reach approximately 1.3 million people and create local jobs in manufacturing, distribution, maintenance, and community engagement. According to the World Bank and Standard Chartered, the success of this transaction underscores the increasing demand among investors for instruments that align financial returns with social and environmental impact. The credibility and accountability of the program are further reinforced by government authorization from both Ghana and Switzerland.
Ultimately, the Clean Cooking Outcome Bond establishes a benchmark by linking capital markets to Article 6.2 carbon mechanisms. By delivering quantifiable climate, health, and economic benefits at scale, this transaction serves as a blueprint for future outcome-based financing aimed at addressing global development challenges with innovative, market-oriented solutions.
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