Long before impact investing was hot, back in 2001, the Acumen Fund was created as a nonprofit venture capital fundback for-profit solutions to global poverty. It's received backing from any number of foundations, including Gates. Now known simply as Acumen, it's board and advisory council is packed with an electic combination of heavy hitters.
Acumen makes impact investments in six main areas of interest to promote global health and development. Those areas of interest include: agriculture, water, education, energy, health, and housing. Two of the three top investment sectors at Acumen are energy and health.
Health wise, Acumen’s historical investments tend to focus on access to affordable health care including healthcare education, insurance, and eye care. Energy wise its investments tend to revolve around the provision of sustainable and renewable energy sources in rural communities. For the first time in its history, Acumen has made an investment in clean cookstoves, which addresses both energy and health concerns at the same time.
Acumen has been searching for a cookstove company to throw its support behind for nearly 15 years, so its $750,000 investment in BURN Manufacturing is a pretty big deal. Over the years Acumen researched 20 or so worthy cookstove candidates, however none of them cut the muster because, according to Acumen founder and CEO Jacqueline Novogratz, very few of those companies were “able to solve for one of the biggest consumer challenges: purchasing power.” That is until BURN came along.
BURN’s stoves, called Jikokoas, use 50 percent less charcoal and cook 50 percent faster than its nearest competitor’s stoves. The design of its new line of clean burning stoves have the ability to burn different types of sustainable fuels including ethanol, biofuel, and agricultural waste. The cost of each Jikokoa is around $40 USD (3800 Kes.). That $40 dollars can amount to nearly two-thirds of the monthly income of BURN’s target market, making the purcase of the stove out of reach. To solve this problem, BURN developed relationships with M-Kopa and Equity Bank to help consumers finance the cost of the stoves for around 40 cents a day, paid over the course of four months.
BURN was relatively established prior to Acumen’s $750,000 investment. In 2012, the company was awarded a $500,000 grant from the Global Alliance for Clean Cookstove’s Spark Fund. The alliance is a public-private partnership headed up by the UN. The grant effectively removed BURN’s remaining investment barriers, and in 2013, it received a $3 million loan from the Overseas Private Investment Corporation (OPIC) as well as $1 million in financing from the GE Company to establish its cookstove manufacturing plant in Kenya.
Clean cookstoves are a bigger deal than one may think. It’s estimated that nearly 3 billion people cook their meals over dirty burning charcoal or wood fires. Prolonged exposure to the indoor pollution caused by dirty cookstoves often leads to deadly illnesses and the wood needed for the fires is not only expensive, but increases deforestation. The Alliance for Clean Cookstoves estimates that over the next 10 years, clean burning cookstoves will impact 10 million lives by reducing annual household fuel costs by up to $250, decreasing indoor air pollution by 90 percent, and preserving over 100 million trees.
Like we said, clean cookstoves are a bigger deal than one may think. And it’s not only impact investment outfits like Acumen that are joining the movement, NGOs are putting up some grant dollars as well. Namely, the Caterpillar Foundation, which awarded $1 million to the UN Foundation’s Clean Cookstove Initiative to support its work in Ghana, Kenya, Nigeria and Uganda.