World Bank Launches $200 Million Clean Cooking Outcome Bond to Tackle Biomass Reliance in Africa

Lusaka, Zambia – The World Bank has unveiled a USD 200 million Clean Cooking Outcome Bond aimed at expanding access to clean cooking technologies in Africa, highlighting the urgent need to reduce reliance on traditional biomass fuels such as wood and charcoal.

More than two billion people globally, many of them in Sub-Saharan Africa, still rely on biomass for daily cooking. This dependence exposes households to severe health risks from indoor air pollution, reinforces gender inequalities, and drives environmental degradation, including deforestation. The World Bank estimates that the cost of inaction in Sub-Saharan Africa alone could reach USD 330 billion annually.

The bond, launched in partnership with Standard Chartered Bank and UpEnergy, channels private capital to distribute over 400,000 cleaner cookstoves in Ghana, benefiting approximately 1.3 million people. Investors earn both a fixed return and a variable return linked to the sale of Internationally Transferred Mitigation Outcomes (ITMOs), carbon credits established under Article 6 of the Paris Agreement, offering potential enhanced returns compared to conventional World Bank bonds.

Robert Taliercio O’Brien, World Bank Division Director for Ghana, Liberia, and Sierra Leone, said: “This outcome bond advances access to carbon markets, supports local manufacturing, and delivers measurable climate and health gains. We are committed to bridging financing gaps and accelerating the deployment of climate-smart technologies.”

The initiative combines energy efficient Improved Charcoal Stoves and Electric Cookstoves to address household energy needs, reduce greenhouse gas emissions, lower fuel costs, and improve indoor air quality. Additional benefits include job creation and freeing up women’s time to engage in other social and economic activities.

Implications for Zambia

Zambia faces similar challenges, with a significant proportion of its population relying on charcoal and firewood for cooking. Indoor air pollution contributes to respiratory illnesses, while deforestation from unsustainable biomass use remains a growing environmental concern. Zambia could benefit from adopting outcome-linked financing models like the World Bank bond to mobilize private capital for clean cooking initiatives.

Experts suggest that leveraging carbon markets and climate finance could accelerate access to modern cooking technologies in Zambia’s urban and rural communities, improve public health, create jobs, and help meet climate commitments.

Mitch Sauers, CEO of UpEnergy, said: “By pairing outcome based finance with Article 6, we can expand access to reliable, culturally appropriate electric cooking technologies while strengthening local supply chains and reducing reliance on charcoal.”

The Clean Cooking Outcome Bond demonstrates how innovative financial mechanisms and carbon markets can converge to deliver tangible environmental, health, and economic benefits at scale a model that could provide a blueprint for similar interventions in Zambia and across Sub-Saharan Africa.