Apply for funding
The first MCFA Call for Proposals (MCFA1) is now closed and shortlisted projects have been invited to the due diligence stage. First contracts are expected to be signed during summer-autumn 2023.
How to apply for funding
The first MCFA Call for Proposals has been closed. The MCFA expects to launch a second funding round for tier 4-5 (3+ for gasifiers) cooking solutions by the end of 2023. To read more about the requirements for the first Call for Proposals, please see:
- Invitation Letter for MCFA1
- Pre-Qualification Guidelines for MCFA1 – English
- Pre-Qualification Guidelines for MCFA1 – French
- Final Application Guidelines for MCFA1 – English
Who can apply
Private entities, Cooking Service Providers, which are locally registered in an MCFA project country or committed to being registered prior to contract signing can apply for funding.
‘Applicants should be legally incorporated and included in the register of for-profit companies in an MCFA project country or commit to being incorporated and registered as such before signing a possible contract. Applicants should further be in compliance with all tax and regulatory and legal frameworks in both their home country and the project country (if different).
Applicants are allowed to include non-profit entities, public institutions, community-based organisations or other non-commercial entities to take part in the project implementation as project partners or consortium members.
Supported technologies
The MCFA programme can support higher tier cooking solutions for urban and peri-urban customers. In the first funding round the eligible technologies included electric, biogas, bioethanol and solar thermal stoves that meet Tier 4-5 performance standards as well as Tier 3+ stoves using sustainable briquettes and pellets. An Applicant is required to show a relevant supply of fuels that meets the MCFA requirements for eligible supply of clean cooking services. MCFA can further support an integrated ‘tool and fuel’ business model.
Eligible fuels include:
- sustainably produced bioethanol
- bioethanol and bio-LPG
- biogas
- solid sustainable biofuels, e.g. pellets and briquettes
- green electricity
MCFA also incentivises projects deploying pay-as-you-go business models (PAYGO), and clean cooking technologies using stove-use monitoring (SUM) will be specially incentivised by the MCFA programme through a multiplier added to the core incentives. Read more about this in our insight article on Incentivising change in the clean cooking sector.
The primary aim of the MCFA funding is to incentivise Cooking Service Providers to target their sales of modern, high-technology cooking solutions to customers living in the MCFA project countries. Funded projects can also support sales of energy-efficient stoves for commercial use as well as institutional stoves to serve critical needs related to education, such as school meals, food security, medical equipment sterilisation and clean drinking water.
Funding opportunities
Financing can be disbursed flexibly, including up to 30% up front as a non-reimbursable catalytic grant component and the rest as results-based finance. Up-front payments can be made for Cooking Service Providers to:
- establish their business in a new market
- roll out and scale themselves as a company already active in one of the project countries
- launch a new Tier 4-5 or Tier 3+ product
- implement a PAYGO business model
Disbursements of results-based financing are made in return for Cooking Service Providers implementing their proposed project and selling and sustaining the offered number of Clean Cooking Services to end-customers. Results-based finance payments will be made in arrears and against Cooking Service Providers’ proven sales and the establishment of an agreed minimum number of Clean Cooking Services defined as milestones in a possible contract.
Technical assistance support
MCFA financing is complemented by selective technical assistance offered to support the clean Cooking Service Providers to develop key aspects of their business.
During the programme implementation phase, funded clean Cooking Service Providers will be eligible to receive technical assistance funded by MCFA, including advice on, for example, product and business model development (e.g. PAYGO and SUM), basic business fundamentals and formalisation, strategy and human resource management.
MCFA supports the development of clean cooking markets
The MCFA approach combines direct results-based financing with up-front, non-reimbursable catalytic grant financing to clean Cooking Service Providers to unlock structural challenges in the market, build business and investor confidence, and proactively mobilise various types of downstream investment and debt financing.
Support to access carbon finance
Carbon finance has been an important source of funding for clean cooking companies in recent years, and it is expected that it will continue with the growth of voluntary markets, growth of national carbon markets and credits sales related to the Paris Agreement. With modern energy technologies, all common cooking fuels can be measured, including electricity, ethanol and biogas.
The contribution to the UN Sustainable Development Goals, particularly within the areas of health, gender, livelihood and environment, can be expected to allow MCFA supported Clean Cooking Service Providers to access carbon finance to make products more affordable.
The MCFA programme will provide technical assistance for the supported clean cooking companies, i.e. the service providers, to overcome existing cost barriers, and to access or set up their own carbon credit programmes. MCFA will be able to finance support to access carbon credits by linking the Cooking Service Providers to carbon markets and helping them to align their Monitoring, Reporting and Verification (MRV) data collection methodologies.
The MCFA programme can also finance the provision of advisory services to organisations that seek to establish a Programme of Activities. Such transaction costs will be advanced by MCFA on a case-by-case basis and where appropriate, recovered if carbon revenues materialise.
Neither Nefco nor MCFA or its donors will establish any claim on carbon credits. All such income should be used to benefit the Cooking Service Providers’ end-customers in the relevant markets. Where appropriate, carbon revenues should be supportive of national climate policies and commitments such as provisions of Nationally Determined Contributions.