More than 2 billion people worldwide, especially in Sub-Saharan Africa, do not have access to clean cooking fuels and technologies. This situation has significant effects on health, gender equality, and the environment. In Sub-Saharan Africa alone, the annual cost of not addressing this issue is estimated at $330 billion. Smoke from traditional stoves leads to health problems, reduces productivity for adults, affects children’s development due to household air pollution, and causes environmental harm.
The World Bank has launched a $200 million Clean Cooking Outcome Bond to address these challenges by mobilizing private capital for clean cooking projects in Ghana. The bond aims to provide clean cooking solutions to 1.3 million people in the country.
“We are proud to catalyze private investment to deliver clean cooking to 1.3 million people in Ghana. By linking returns to verified ITMOs, this outcome bond advances access to carbon markets, supports local manufacturing, and delivers measurable climate and health gains. We are committed to support our clients, including in mobilizing private capital, to bridge financing gaps, de-risk investments, and bring climate-smart technologies to communities faster," said Robert Taliercio O'Brien, Division Director for Ghana, Liberia, and Sierra Leone at the World Bank.
Like other outcome bonds issued by the World Bank, investors receive a fixed return that is lower than typical World Bank bonds of similar maturity. For this bond, funds that would usually be paid as returns are instead frontloaded through a hedge transaction with Standard Chartered Bank (SCB) and used by UpEnergy—a project developer operating across Africa—to distribute over 400,000 clean cooking systems in low-income communities. Investors also have an opportunity for higher returns linked to the sale of Internationally Transferred Mitigation Outcomes (ITMOs), which are generated if project goals are met.
ITMOs represent verified reductions in greenhouse gas emissions that can be traded between countries or jurisdictions as part of global efforts under Article 6 of the Paris Agreement. This system allows countries to collaborate on emission reduction targets while reducing risks such as double-counting credits.
UpEnergy will receive funding from SCB after reaching certain project milestones. The carbon credits produced from using cleaner cookstoves will be purchased by KliK Foundation in Switzerland under an agreement with UpEnergy. By integrating ITMOs into its structure, the bond demonstrates how financial innovation can combine with carbon markets for large-scale health and environmental benefits.
The initiative led by UpEnergy seeks to increase access among households in Ghana to Improved Charcoal Stoves (ICS) and Electric Cookstoves (ECs). The goal is not only improved air quality but also reduced dependence on biomass fuels like charcoal—helping prevent deforestation—and lower household fuel costs. Additional expected benefits include job creation and time savings for households; women may especially benefit by having more time for other activities.
“For us, this is about what’s possible when climate finance is tied directly to real outcomes in people’s homes,” said Mitch Sauers, CEO of UpEnergy. “By pairing outcome-based finance with Article 6, we can expand access to reliable, culturally aligned electric cooking technologies while strengthening local supply chains and reducing reliance on charcoal. We’re grateful to Ghana and Switzerland for their leadership, and to the World Bank and Standard Chartered for structuring a model that channels private capital into climate and household-level benefits.”
Investors could see enhanced yields compared with regular World Bank bonds if performance targets are achieved through these projects. The Clean Cooking Outcome Bond serves as an example of how creative financing structures linked with carbon markets can speed up progress toward universal access to clean cooking solutions.
According to recent reports from the World Bank, progress on basic energy access has reversed recently after years of improvement globally.
Additionally, studies indicate that investing in clean cooking solutions helps protect human capital across Sub-Saharan Africa by improving public health outcomes.