Second Call for Proposal: CookFund Programme in Tanzania

The fund will be disbursed in consecutive rounds until completion during a three-year period with current funding of up to EUR 9.7 million in total.

The CookFund Programme, funded by the European Union (EU), is a three-year programme (2022 – 2024) that seeks to accelerate market rollout of clean cooking solution in Tanzania mainland, targeting five regions namely Dar es Salaam, Pwani, Morogoro, Dodoma and Mwanza. The Programme is implemented by the United Nations Capital Development Fund (UNCDF) in collaboration with United Nations Industrial Development Organisation (UNIDO). UNCDF is both the Fund Manager and implementor of the Programme.

Objectives

• The main objective (impact) of the programme is to reduce climate change impact in Tanzania by increasing the share of the population with access to sustainable cooking solutions. The specific objective (outcome) is to increase usage of modern and clean cooking solutions in urban areas for improved environment and inclusive wellbeing of the population. CookFund aims to bridge a critical gap between early-stage support, equity financing and concessional/commercial debt needed to transition to modern, clean cooking at scale.

Funding Categories

• Funding will competitively be provided to address end-user affordability barriers as well as undercapitalization on the side of enterprises and companies (category one) and to leverage technology focused business models to overcome affordability areas especially upfront costs for household energy products (category two).
  • Category One: This is a combination of investment and working capital growth grants and of performance-based subsidy. The latter will be provided as a result of attained sales volume or number of units to end users and upon third party verification of sales with price reduction.
  • Category Two Working and Investment Capital -PAYGO: This CookFund Programme is also encouraging new digital innovations in reaching out more end-users. Working and investment capital will be provided to enterprises or companies that reach out to users with clean cooking products and services through flexible payment systems and digital communications.

Funding Information

• The size of individual awards will range from €10,000 – €300,000, with a possibility for follow-on funding subject to performance and availability of funding.

Target Beneficiaries and Locations

• The CookFund targets suppliers of clean cooking technologies in urban areas in the targeted regions of Dar es Salaam, Pwani, Morogoro, Dodoma and Mwanza. Suppliers include producers, importers, wholesalers, super-dealers and retail distributors of clean cooking technologies. Indirectly, the CookFund targets end users of clean cooking technologies. The primary aim of CookFund is to incentivize enterprises and companies to make sales to household end-users more affordable. However, sales of energy-efficient stoves to commercial and institutional cooking services to serve critical needs (e.g., food vendors) could be considered.

Target Cooking Technologies

• The Programme provides technical and financial support to eligible enterprises and companies to increase their operating capacities and end-user’s uptake in the use and utilization of Liquified Petroleum Gas (LPG), Liquified Natural Gas (LNG), Bioethanol/ Ethanol, Electric Cookers, Briquettes, and Improved Charcoal Stoves (only energy efficient charcoal stoves). CookFund places a strong emphasis on the provision of highquality sustainable clean cooking services thaT the clean cooking technologies (CCT) and sustainable fuels.

Uses of Funds

• Funding may be deployed for a range of uses including end-user discount, expanding, businesses and increase outreach, depending on the requirements of the enterprise. The applicant can outline multiple uses of funds, and will be encouraged to consider the following areas:
  • Price discount to incentivising end-users to switch to a cleaner energy efficient cooking technology.
  • Improving the marketing and sales strategy and effectiveness, including training staff and refining marketing and sales approaches.
  • Conducting pilots or expanding businesses related to product outreach and end user payment facilitation.
  • Market new products and/or new business models through innovation (last phase – close the market solutions), refining design, production of existing products, piloting products and /or offering innovative financial solutions to increase affordability to end users.
  • Developing, refining, and modelling commercial and go-to-market strategies and cooking solutions.
  • Incentivising end-users to switch to a cleaner energy efficient cooking technology.
  • Implementing or refining management information systems to improve business processes as well as tracking and reporting units sold.
  • Capital expenditures including purchase of production equipment, distribution trucks, storage facilities all aiming at scaling up business operations, energy access and outreach.
  • Applicants proposing alternative use of grant not on the list, will be reviewed on case-by-case basis.

Eligible Enterprises

• Eligible enterprises and companies to be supported by the CookFund programme will be impact oriented small and medium enterprises (SMEs), companies and innovators engaged in commercially driven and environmentally friendly cooking technologies. The funding eligibility will mostly consider businesses and operators with good combination of outreach and end-user affordability, innovation, energy efficient and less carbon emission cooking technologies suitable for roll-out in the programme areas.
• The following categories- of enterprises/companies will be considered:
  • SMEs/Companies (producers, importers, distributors, assemblers, wholesalers, retailers) engaged in various clean cooking technologies: These include enterprises that can scale up production and/or sales to penetrate the market as well as those that can import and replicate proven and certified energy efficient cooking technologies for local assembly and/or distribution.
  • Innovators and suppliers of end user payment modalities for alternative energy for cooking solutions. These are clean cooking businesses with innovative solutions which make easy access of alternative cooking solutions for end users such as flexible payment systems (e.g., Pay as You Go platforms), finance options, etc.

Eligibility Criteria

• The CookFund Programme is open to SMEs and companies that will have the following criteria:
  • Geographical Scope: Have operations in the urban areas of Dar es Salaam, Pwani, Morogoro, Dodoma and Mwanza regions only.
  • NOTE: Players in the bio-ethanol cooking solution for Dar es Salaam only should apply through a different window which is managed by UNIDO.
  • Thematic Scope and Product Eligibility: Committed to adhere to targeted cooking technologies (LPG, Natural Gas, Ethanol, Electricity, Briquettes, and ICS) and related quality standards and industry best practices by Tanzania Bureau of Standards (TBS) or similar regional/international standards setting and certification bodies.
  • Size and modality of financing requirements are consistent with budget levels and tranches provided in of the Call for Proposals.
  • For profit and market-oriented enterprises and companies: Have existing business, a welldeveloped business plan, cash flow positive and profitable, or showing a clear path to expansion and profitability following support by the Programme.
  • Professional capacity requirements:
    • Applicants should be able to show that they have/has sufficient resources, competence and experience to perform projects in the clean cooking market.
    • Applicants will also be required to establish a key management team responsible for performing and coordinating the project.
    • The qualification of the team members must be adequate for the implementation of the proposed project activities.
  • Market experience requirements:
    • Applicants should demonstrate that they have sufficient market experience of working in one or more country, region, or district level market(s).
  • Applicants should specify the total amount of funding being requested and their predicted annual funding requirements for the project implementation period (2023-2024).
  • The funding should not replace the pre-allocated national expenditure in the sector/subsector or crowd-out commercial lenders from serving the enterprises or companies. This is in line with the EU principle of additionality.
  • The successful applicant should open a separate and dedicated bank account for receiving CookFund grant support. The grant paid to the beneficiary enterprise or company should not be used to service pre-existing financial obligations i.e., bank loan etc.
  • Impact driven as well as operating a business model which includes selling to the household market or agents who are directly selling to end-users either households, businesses, or institutions. To receive programme funding, successful applicants are required to deliver and sell affordable and high-quality clean cooking services directly to end-users in a stable and sustainable manner.
  • Monitoring and Reporting: The applicant’s capacity and readiness to track and report sales to end users of the technology, including data management and data quality checks. Baseline data on existing performance should be provided.

For more information, visit UNCDF.