The World Bank has launched a USD 200 million Clean Cooking Outcome Bond aimed at improving access to cleaner cooking solutions for over one million people in Ghana. The bond, which will mature on March 31, 2032, is designed to support the distribution of more than 400,000 cleaner cookstoves across the country.
A portion of the coupon payments that would typically go to investors will instead be used upfront to finance these projects. The bond's interest includes both a fixed rate and a variable component linked to carbon credits generated by the use of the new cookstoves. Proceeds from this bond will help fund sustainable development projects managed by the World Bank.
“This transaction shows how investors can align financial returns with tangible development outcomes – expanding access to cleaner cooking solutions in Ghana. Strong investor uptake reflects a growing appetite for outcome bonds and the potential to use this kind of financial structure to address pressing development challenges,” said Anshula Kant, Managing Director and World Bank Group Chief Financial Officer.
The initiative mobilizes approximately USD 30.5 million in private capital and is being carried out by UpEnergy, an East Africa-based company. The program is expected to reach about 1.3 million people in Ghana, reducing reliance on biomass fuels and cutting greenhouse gas emissions through improved cookstove technology and electric options. In addition to environmental benefits, it aims to reduce household air pollution, improve health outcomes, and create local jobs related to manufacturing and distribution.
Standard Chartered serves as sole Lead Manager and Bookrunner for this transaction.
“We’re proud to partner with the World Bank and UpEnergy to deliver the first Clean Cooking Outcome Bond. The bond underscores the power of our global network, which we have brought to bear alongside our capital markets, structuring, carbon and commodities markets expertise to deliver long-term value in Ghana, through the delivery of health, social and environmental outcomes. The USD 200 million size for the outcome bond and diverse investor base from four different regions across our footprint is testament to the success of this innovative transaction,” said Henrik Raber, Global Head, Global Banking at Standard Chartered.
The bond offers full principal protection while supporting global sustainable development activities led by the World Bank. Investors will forego part of their fixed coupon payments so that equivalent funds can be redirected—via a hedge transaction with Standard Chartered—to provide immediate financing for clean cooking initiatives delivered by UpEnergy in Ghana. These projects are authorized by both Ghanaian and Swiss governments and will generate Internationally Transferred Mitigation Outcomes (ITMOs), units representing verified reductions in greenhouse gas emissions transferable between countries under Article 6 of the Paris Agreement.
KliK Foundation from Switzerland has agreed under an offtake arrangement to purchase these carbon credits. Part of any revenue from selling these credits will be paid as a variable coupon component on top of a minimum fixed rate from the World Bank itself. This marks the first time cash flows on a bond have been directly tied to ITMO generation—a model intended as a blueprint for attracting private investment into effective development solutions.
“We are pleased to participate in this innovative transaction given its attractive relative valuation, strong verification process and comprehensive impact reporting alongside industry leading partners. We are especially excited to support the operationalization of Article 6.2 of the Paris Agreement by investing in a transaction that will create high-quality Internationally Transferred Mitigation Outcomes (ITMOs), helping Ghana and Switzerland collaborate to meet their Nationally Determined Contributions (NDCs) under the accord,” said Stephen M. Liberatore, CFA Head of ESG/Impact, Global Fixed Income, Nuveen.
“By being part of this transaction, we deploy capital where it makes most impact. We are actively supporting innovative projects that have real environmental and social outcomes. Financial performance and responsibility go hand in hand, creating value that extends beyond traditional returns,” said Alexander Onica, Head of Fixed Income and FX at Skandia.
“Mackenzie Investments is proud to partner with the World Bank on the Clean Cooking Outcome Bond. This innovative transaction, which helps fund the mass distribution of electric and improved charcoal cookstoves in Ghana, helps reduce emissions and represents a meaningful step forward in scaling the global adoption of Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6 of the Paris Agreement. By directly linking investor capital to measurable climate outcomes, the bond advances multiple sustainable development goals while delivering a compelling risk-adjusted return profile. Mackenzie is confident that the bond’s combined environmental and investment attributes will generate strong value for both society and our clients,” said Hadiza Djataou Vice President & Portfolio Manager Fixed Income Mackenzie Investments.
“Velliv is very pleased to support another impact investment through the World Bank’s innovative outcome bond structure. The World Bank Clean Cooking Outcome Bond will provide cleaner and more fuel-efficient cookstoves for the local population of Ghana in order to support country’s energy transition displace polluting inefficient cooking practices In addition bond provide attractive risk-adjusted return pension savers,” said Lea Vaisalo Chief Investment Officer Velliv Pension
“This marks L&G’s first outcome bond investment we’re proud partner with Standard Chartered important cause Harmful cooking practices impact health environment livelihoods yet Clean Cooking Alliance estimates USD billion funding gap achieve universal access clean cooking by Through Nature Social Outcomes strategy invest behalf Defined Contribution members demonstrating how pension capital deliver measurable social impact generating positive returns retirement members”said Jake Harper Senior Investment Manager Asset Management Legal General
“The Rathbone Ethical Bond Rathbone Greenbank Global Sustainable Bond funds pleased support another outcome New innovative structure offers principal protection same time provides funding clean cooking projects frontloaded portion coupon generating carbon credits Rathbones continue structures ways dealing Anthropocene” said Bryn Jones Head Fixed Income Rathbones Asset Management
“Our investment tangible example fixed income markets evolving facilitating opportunities direct impactful initiatives case improving everyday lives many people programs specifically targeted replacing polluting stoves fuels modern cleaner solutions scale natural evolution structures historically invested biodiversity reforestation retaining principal protection clear risk/return profile explicitly linking part economic value real world development outcomes” Harrison Hill Impact-Aligned Strategy Portfolio Manager RBC BlueBay Asset Management
The Clean Cooking Outcome Bond was issued at par with an annual fixed interest amount set at 1.093%, plus additional payments based on ITMO generation each year until maturity on March 31 ,2032 . It is listed on Luxembourg Stock Exchange .
The World Bank operates as an international cooperative owned by member countries since its founding in 1944 . It raises funds via bonds like this one—which adhere closely Sustainability Bond Guidelines—for global programs fighting poverty fostering prosperity planet-wide . More details about its sustainable debt offerings can be found at worldbank.org/debtsecurities .
For further information contact Heike Reichelt , Head Investor Relations Sustainable Finance Treasury debtsecurities@worldbank.org