World Bank Unveils US$200m Outcome Bond to Support Clean Cooking Access in Ghana
By Praisebell Rosemond Larbi
The World Bank has launched a new US$200 million Clean Cooking Outcome Bond aimed at expanding access to cleaner cooking solutions for more than one million people in Ghana. The innovative instrument, issued through the International Bank for Reconstruction and Development (IBRD), is the latest addition to the Bank’s growing portfolio of development-focused outcome bonds and will mature on 31 March 2032.
A key feature of the bond is its dual coupon structure, which combines a fixed-rate component with a variable segment linked directly to revenue from carbon credits generated through the project. Under the terms of the arrangement, a portion of the coupon payments ordinarily due to investors will be redirected upfront to finance the distribution of more than 400,000 cleaner cookstoves in Ghana. Proceeds from the bond will also support wider World Bank–financed sustainable development programs globally.
Anshula Kant, Managing Director and Chief Financial Officer of the World Bank Group, said the transaction highlights how capital markets can be used to deliver measurable social and environmental benefits.
“This transaction shows how investors can align financial returns with tangible development outcomes – expanding access to cleaner cooking solutions in Ghana,” she said. “Strong investor uptake reflects a growing appetite for outcome bonds and the potential to use this kind of financial structure to address pressing development challenges.”
The project will be implemented by UpEnergy, an East Africa–based company specialising in clean energy technologies. Through the bond financing, approximately US$30.5 million in private capital will be mobilised to support the deployment of electric and high-efficiency charcoal cookstoves. The initiative is expected to reach 1.3 million beneficiaries, reducing household air pollution, lowering greenhouse gas emissions, and supporting local job creation in manufacturing and distribution.
Standard Chartered served as the sole Lead Manager and Bookrunner for the transaction. Henrik Raber, Global Head of Global Banking at Standard Chartered, described the initiative as a milestone in sustainable finance.
“The US$200 million size for the outcome bond and the diverse investor base from four regions across our footprint is testament to the success of this innovative transaction. The bond underscores the power of our global network and expertise to deliver long-term health, social and environmental outcomes in Ghana,” he said.
The bond is fully principal protected, with the World Bank guaranteeing the US$200 million investment. Carbon credits generated under the project, formally recognised as Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6 of the Paris Agreement, will be purchased by Switzerland’s KliK Foundation under a forward offtake agreement. Revenue from these credits will fund the variable coupon component paid to bondholders.
Several global institutional investors, including Nuveen, Skandia, Mackenzie Investments, Velliv Pension, Legal & General, Rathbones, and RBC BlueBay Asset Management, have backed the transaction, citing its strong impact credentials, robust verification processes and attractive risk-adjusted returns.
Stephen M. Liberatore, CFA, Head of ESG/Impact for Global Fixed Income at Nuveen, said the structure reflects growing investor confidence in Article 6 mechanisms.
“We are especially excited to support the operationalization of Article 6.2 of the Paris Agreement by investing in a transaction that will create high-quality ITMOs, helping Ghana and Switzerland collaborate to meet their Nationally Determined Contributions,” he noted.
Other investors echoed similar sentiments, stressing the importance of linking fixed-income products to measurable development outcomes while maintaining principal protection and commercial value.
The Clean Cooking Outcome Bond represents the first time a financing instrument has tied bond cash flows directly to the generation of ITMOs, marking a significant innovation in global climate finance and offering a new pathway for mobilising private capital toward clean energy access in developing countries.
