Kenya Climate Ventures has signed a refinancing agreement with Acacia Innovations Limited. The funding aims to scale the production and distribution of their Kuni Safi energy efficient briquettes to schools and industries.
Acacia Innovations is a for-profit social enterprise that has shown commitment by re-investing majority of their profits back into the business to achieve sustainability, grow impact and fulfil their mission.
According to the most recent Kenya Forest Research Institute (KEFRI)’s report (2019-2020), it is estimated that 90% of the rural and peri-urban in Kenya use fuelwood energy. Another report by the ministry of Environment and Forestry (2020) shows that Kenya is a low forest cover country with a total forest area of 3,462,536 ha about 5.9% of the total national area. Increased human activity such as charcoal and timber production have continued to decrease forest cover, contributing to negative impacts like climate change.
The Kuni Safi technology manufactured and distributed by Acacia Innovations Limited serves as an alternative for charcoal and firewood. Their briquettes are distributed to institutions, mainly schools that use them for cooking and industries that use the briquettes in their boilers.
“We are the largest supplier of clean cooking fuels to Kenyan schools. Our briquettes are much more affordable, cleaner and healthier for the school cooks and students. Every one tone of our product saves about 13 trees and 600 kg of carbon emissions and also has a positive impact on keeping school meals affordable for the children and making sure that the cooks as well as children don’t suffer from the negative impacts of toxic cooking smoke as there’s no smoke entering the classrooms”, says Elana, the CEO of Acacia Innovations.
Small and Medium Enterprises (SMEs) play a key role in a country’s economy. They however face challenges like lack of supportive governance framework and limited access to finance. Eric Magu, the Investment Lead at Kenya Climate Ventures categorizes these challenges into four; lack of asset or collateral for debt funding, uncertainties surrounding their businesses since most people are investing in the future potential of the enterprise, lack of bankable business plans and limited sources of financing.
Kenya Climate ventures has been on the frontline in supporting early and growth stage businesses who have invested in climate-smart technologies, and who mostly face challenges accessing financing from mainstream commercial sources.
“KCV helps these enterprises to access capital. We are willing to go as long as 7 years in terms of investment horizon. To help the enterprises navigate through the challenges they face in formalizing their businesses as well as support them in building a base for best practice in strategic and operational aspects of the business, we offer technical assistance and business development support along with our capital.”, adds Magu.
The Kenya Vision 2030 blueprint set a goal for the country to increase the area under forest and sustainably manage natural forest resources for environmental protection and enhanced economic growth.
“Kenya is seeking an ambitious target of 30% forest cover by 2030 and subsequently growing that. KCV’s contribution into this arrangement is that we continue to provide concessional, affordable and patient capital to private sector companies that can venture into supply chains that provide alternative energy for industrial boilers and for institutional use in this market.”, says Victor Ndiege, CEO, Kenya Climate ventures.