New Financing Model to Bring Cleaner Cooking to 1.3m Ghanaians

 

Every evening in Ashaiman, 32-year-old food vendor Nana Yaa Mensah spends nearly half of her earnings on charcoal. The smoke from her coalpot hangs thick in the air, stinging her eyes as she prepares banku for her customers. It’s the same story for millions of Ghanaian households and small businesses that rely on polluting, expensive cooking fuels.

Ghana’s new USD 200 million World Bank Clean Cooking Outcome Bond could change this reality — not just by providing cleaner, affordable cookstoves, but by establishing an entirely new way for Ghana to earn money from climate action.

At the heart of the programme is a simple, powerful idea:
Turn future carbon revenues into immediate benefits for Ghanaian homes, markets, shops and communities.

 

A financing model built around Ghana’s emission reductions

The bond is the world’s first to link investor returns directly to Ghana’s ability to cut carbon emissions through clean cooking. These reductions are captured as Internationally Transferred Mitigation Outcomes (ITMOs) — internationally traded carbon credits under Article 6 of the Paris Agreement.

ITMOs represent verified greenhouse gas reductions that can be transferred between countries or jurisdictions. In this case, the KliK Foundation of Switzerland has already committed to purchase Ghana’s ITMOs under an offtake agreement.

Part of the money earned from these carbon credits will be used to pay investors a variable coupon, alongside a fixed minimum interest from the World Bank.

This arrangement — the first of its kind globally — connects the bond’s cash flows directly to the creation of ITMOs, showcasing a new pathway for channeling private capital into development solutions.

 

Immediate, practical benefits for Ghanaian households

Through the bond, more than 400,000 cleaner cookstoves — including electric and improved charcoal models — will be distributed nationwide, reaching over 1.3 million people.

For households, this means:

• Lower fuel costs as efficient stoves consume less charcoal and electricity
• Cleaner indoor air, reducing respiratory illnesses
• Quicker, safer cooking, especially for women and children
• Reduced household emissions, helping Ghana meet climate goals

For many families, the shift will free up money for school fees, food, or savings.

 

A boost for Ghanaian businesses and job creation

Local businesses stand to benefit significantly:

• Manufacturing jobs created through stove production and assembly
• New distribution and retail opportunities for SMEs across all 16 regions
• Increased logistics and supply-chain activity, benefiting transport firms
• Growth in carbon market services, including monitoring and verification
• New income streams for entrepreneurs working in clean energy technologies

By reducing reliance on charcoal and firewood, the programme also helps conserve forests, supporting agriculture, tourism and climate resilience.

 

Why global investors are backing Ghana’s clean cooking revolution

Global investors say the bond offers both solid financial returns and clear development impact.

Stephen Liberatore of Nuveen said the deal is particularly important because it helps operationalize Article 6.2 of the Paris Agreement, enabling Ghana and Switzerland to collaborate to meet their climate commitments while generating high-quality ITMOs.

Alexander Onica of Skandia added that the transaction shows how “financial performance and responsibility go hand in hand,” while delivering real social and environmental benefits.

Mackenzie Investments highlighted the bond’s role in scaling clean cooking across Ghana, noting that it provides “a meaningful step forward in expanding the global ITMO market.”

Other major investors — including Velliv Pension, Legal & General, Rathbones and RBC BlueBay — praised the bond’s principal protection, strong verification process, and transparent impact reporting.

For many of these institutions, this is their first-ever outcome bond investment, signalling rising global confidence in Ghana’s climate and development agenda.

 

A new era for Ghana’s carbon market and development financing

By linking clean cooking to carbon revenues, Ghana is now positioned as a continental leader in Article 6 carbon market implementation.
The bond introduces:

• A scalable model for financing major development programmes
• Private capital mobilization of USD 30.5 million upfront
• A blueprint for future climate-linked investments in energy, waste, agriculture and forestry

Above all, the transaction shows how Ghana can turn climate action into a new economic opportunity — one that improves lives, strengthens local businesses, and attracts long-term international investment.

For people like Abena, it means healthier air, lower costs, and a chance to grow her business.
For Ghana, it marks the beginning of a new clean energy chapter powered by innovation, partnership and climate-smart financing.