Clean Cooking Loan Fund – Frequently Asked Questions

What is the Clean Cooking Loan Fund (“CCLF”)?

The CCLF is a not-for-profit revolving loan fund created on the belief that there is a need for large-scale adoption of clean and safe household cooking solutions as a way to save lives, improve livelihoods, empower women, and reduce climate change emissions. The lack of commercial financing for the design, production, and distribution of clean cookstoves and fuels has served as a barrier to entrepreneurs and other stakeholders in the development of a thriving market for clean cookstoves and fuels. The purpose of the CCLF is to provide cost effective loans to clean cookstove and fuels enterprises to help finance carbon certification costs.

The CCLF is administered by Nexus Carbon For Development, which manages project origination, technical due diligence, performance monitoring, and financial management, including repayment.  In addition, there is a Technical Committee, which reviews the final outputs of the due diligence process, and an Investment Committee, which makes the final investment decisions after the full due diligence processes and reviews by the Technical Committee have been completed.

How large is the CCLF

The Global Alliance for Clean Cookstoves has kick-started the fund with US$290,000. It is expected that 4 to 5 projects will be funded from the initial Alliance investment and the co-investment from Nexus Revolving Fund. The target is to raise additional investment of US$300,000 to US$1,000,000 into the fund within 1 year. The fundraising target will be adjusted based on results from the call for proposals, which will help the CCLF determine demand.

What costs may a CCLF loan cover?

Eligible projects may use funds from a CCLF loan to cover the following costs:

  • General certification costs, including, but not limited to, validation, registration, verification and issuance fees;
  • For Gold Standard projects, funds from a CCLF loan may also cover any costs associated with the Local Stakeholder Consultation (“LSC”) or Stakeholder Feedback Round (“SFR”); and
  • Inclusion costs for any Programmes of Activities.

What costs may not be covered by funds from a CCLF loan?

Funds from a CCLF loan may not at any time be used to cover general operating costs (except for the LSC and SFR as noted above), marketing costs, or costs associated with transacting the carbon credits generated from a project.

What are the terms of a loan from the CCLF?

The terms of each loan will vary on a case-by-case basis in accordance with the amount of risk associated with a project.  In no case will the interest rate charged to a project exceed 15% per annum. The Fund will hold future carbon credits as collateral against the loan. As such, the amount of the loan will be determined by the project’s estimated future revenue from the sale of carbon credits. Similarly, the duration of the loan will be determined by the project’s expected first issuance date and will not exceed 4 years.

Who is eligible to apply for a loan from the CCLF?

Any project that delivers durable, efficient and clean cookstoves and/or clean cooking fuels to base of the pyramid households via a market-based approach is eligible to apply for a loan from the CCLF. Preference will be given to organisations with a track record in project delivery and to projects with a demonstrated potential for scale.

How can I apply for a loan from the CCLF?

A call for proposals will soon be opened. If you are interested and wish to receive application documents please send an email to Nexus (contact@nexus-c4d.org) stating “CCLF call for proposals” in the subject line.

Who are the Founders of the CCLF?

The Global Alliance for Clean Cookstoves is a public-private partnership hosted by the UN Foundation to save lives, improve livelihoods, empower women and protect the environment by creating a thriving global market for clean and efficient household cooking solutions. The Alliance’s 100 by ‘20 goal calls for 100 million households to adopt clean and efficient cookstoves and fuels by 2020. The Alliance is working with its public, private and non-profit partners to help overcome the market barriers that currently impede the production, deployment, and use of clean cookstoves in developing countries.

The Global Alliance for Clean Cookstoves sits on the Investment Committee and has contributed US$290,000 to establish and capitalize the CCLF.

Established in 2003, The Gold Standard Foundation has pioneered the way climate change is addressed. Its ‘results based finance’ approach – in which individuals, corporations and governments buy credits against verified emission reductions and sustainable development outcomes – has channelled billions of Euros into more than 1000 low carbon development projects. The Gold Standard was established by WWF and has more than 80 NGO partners worldwide.

The Gold Standard Foundation sits on the Technical Committee and the Investment Committee.

Nexus Carbon for Development is a cooperative of development organization which aims to reduce poverty by enabling the most vulnerable communities to have an improved access and control over energy while ensuring that the natural resources are managed sustainably and responsibly. Nexus central objective is to scale up its members’ successful climate-friendly projects in developing countries by providing technical assistance and facilitating their access to appropriate financing such as carbon finance. The expected results are: reduction of greenhouse gas emissions, improvement of living standards of populations in target countries, reduction of energy poverty and access to clean energy.

Nexus is the Fund Manager and sits on the Technical Committee and the Investment Committee.