20 July 2026: Financing the future of carbon markets: Africa Go Green backs BioLite’s clean cooking rollout in Zambia under Article 6.2 of the Paris Agreement

A new debt-financing model – anchored by an Article 6.2 offtake and supported by insurance – shows how the carbon market can access the capital it needs to scale.

Africa Go Green (AGG), the climate-focused debt fund managed by Cygnum Capital, has provided a USD 10.7 million Senior Debt Facility to BioLite to finance the purchase and distribution of at least 163,500 improved cookstoves across Zambia. The carbon credits generated by the project will be sold to Switzerland’s KliK Foundation under a Mitigation Outcomes Purchase Agreement (MOPA) entered into between BioLite and the KliK Foundation. The transaction is being implemented pursuant to the Article 6.2 bilateral implementing agreement between Zambia and Switzerland

A new financing model

The facility is a pioneering example of how carbon projects can be financed. Where such projects have typically relied on grants, equity or upfront credit pre-purchases, this transaction is repaid from future carbon revenues – demonstrating that high-integrity carbon projects can be structured as investable, bankable assets. For a market that needs to scale quickly, that matters: debt financing widens the pool of capital available to developers and offers a replicable model others can follow.

A credible demand anchor

The financing is underpinned by a long-term, compliance-driven offtake. KliK will purchase the project’s Internationally Transferred Mitigation Outcomes (ITMOs) under a MOPA entered into with BioLite. The transaction is being implemented pursuant to the Article 6.2 bilateral implementing agreement between Zambia and Switzerland – one of the newest cooperative mechanisms under the Paris Agreement. That predictable revenue stream is what makes the project financeable, and shows how the still-young Article 6.2 market can support institutional-quality transactions.

The role of insurance

Insurance is the final piece. A carbon insurance solution provided by CFC Underwriting, alongside Kita, and brokered by Texel, enhanced AGG’s confidence to lend – lowering the barriers that have kept many lenders out of carbon markets. As these markets mature, insurance is increasingly the bridge between high-integrity carbon projects and the capital they need, helping the market develop and giving developers access to financing on better terms.

Together, these elements form a template that other developers and financiers can follow, helping move carbon finance from pilot-scale toward something repeatable and bankable.

Clean cooking is among the most underfunded climate solutions. In Zambia, where many households still cook with charcoal and firewood, BioLite’s cookstoves will cut fuel use and emissions while improving health and household economics; and disproportionately improving the lives of women and children especially in rural regions.

Laurène Aigrain, Managing Director AGG, commented:

“By pairing a compliance-backed Article 6.2 offtake with debt financing and an insurance overlay, AGG has shown a route from pilot-scale carbon projects toward something commercially repeatable – and  in doing so, helped move the market a step closer to maturity.”

Dr. Ethan Kay, Managing Director of Emerging Markets, commented:

“Most rural Zambian households still cook over smoky open flames – a practice that threatens both families’ health and the climate. By deploying 163,500 improved cookstoves, this initiative will actively combat deforestation, mitigate greenhouse gas emissions, and alleviate the burden of fuel collection, while fostering cleaner, safer homes. A large-scale transformation of this magnitude is only achievable through our partnerships with the Cygnum’s Africa Go Green Fund, the KliK Foundation, our local Zambian distributors, and the Government of Zambia.”

CFC Underwriting

Aditya Sanghvi, Carbon Practice Leader at CFC:

“We are very pleased to support AGG on this landmark transaction, which will help unlock capital for clean cooking solutions in Zambia and improve quality of life for thousands of people. This transaction is particularly important in the context of the carbon market because it creates a replicable template for how Article 6.2 can be operationalised in practice, bringing together multiple stakeholders to channel investment into initiatives that accelerate climate action in emerging markets.”

Kita Earth Limited

Thomas Merriman, Kita’s CUO and Co-Founder:  

“We are delighted to have supported AGG with a collaborative carbon insurance solution enabling this landmark financing of a clean cooking rollout in Zambia. This transaction demonstrates both the value of insurer collaboration in expanding insurance capacity and the critical role insurance can play in unlocking investment into high-integrity carbon projects by giving market participants greater confidence to engage with carbon markets.”

Texel Finance Limited

Simon Bessant, Director at Texel, commented:

“We are honoured to have been able to support AGG in structuring an insurance solution that helped facilitate their landmark financing with BioLite. Combining the risk-taking capacity of the leading specialist carbon insurance providers with the expertise of a climate focused debt fund evidences a replicable way to help scale financing for such projects.”

About Africa Go Green

AGG is designed to support activities that mitigate GHG emissions in Africa. The fund provides debt financing to businesses and projects across the spaces of industrial energy efficiency, green buildings, clean transport, and green appliances. AGG was established by KfW and has received funding commitments from the German Federal Ministry for Economic Cooperation and Development (“BMZ”) through KfW, in addition to funding commitments from the African Development Bank (and in its own capacity as the implementing entity for SEFA and the Clean Technology Fund (“CTF”)), the International Finance Corporation (“IFC”), Nordic Development Fund (“NDF”), British International Investment (“BII”) and Calvert Impact Capital, Monday Charitable Trust (MCT) and DEG (Deutsche Investitions - und Entwicklungsgesellschaft). The fund’s current committed capital is at USD 232 million.

About Cygnum Capital

Cygnum Capital Group is an investment bank and asset manager operating across frontier and emerging markets. Founded in 2008, Cygnum Capital is a global provider of tailored and innovative financial solutions to meet its clients’ diverse needs. Cygnum Capital uses long-term relationships, networks and local market understanding to deliver a best-in-class service. With offices in London, Nairobi, Lagos, Dubai, and Amsterdam, Cygnum Capital’s dynamic team of 70 finance professionals provide deep sectoral expertise, a broad product offering, an asset management platform and the ability to leverage synergies between our corporate finance, asset management and advisory activities.

Cygnum Capital manages seven pioneering funds: six debt funds including: (i) the African Local Currency Bond Fund (“ALCBF”), a ground-breaking investment vehicle established to support local currency capital markets, (ii) Off-Grid Energy Access Fund (“OGEF”) which supports companies in off grid energy such as SHS and small- medium mini-grids, (iii) Facility for Energy Inclusion (“FEI”) which support companies that provide a range of renewable energy solutions such as medium - large mini- grids, C&I and IPP with a maximum capacity of 25 MW, (iv) AfricaGoGreen (“AGG”) Fund which supports companies combating climate change by reducing the use of fossil fuels through new technologies that increase energy efficiency, (v) the Universal Green Energy Access Programme (“UGEAP”), a co-investment and on-lending vehicle targeting distributed renewable energy investments in Africa, (vi) the Africa Agriculture Trade and Investment Fund (“AATIF”) ; and (v)  a VC private equity fund E3 Low Carbon Economy Fund for Africa (“E3 LCEF”) which invests in climate-smart services, digital connectivity & Applications, low-carbon productivity enablers. Cygnum Capital Asset Management has over USD 1.44 billion of assets under management with investments in 38 African countries.

About Hunton

Hunton advises clients on complex, cross-border energy and infrastructure transactions across Africa. With over 30 years of experience advising on projects and transactions in 45+ African countries, the firm’s international, sector-focused team advises sponsors, developers, investors, lenders and other stakeholders on project development, financings, acquisitions, strategic transactions and disputes. Hunton advised AGG as lender’s international counsel in connection with the transaction. The team was led by partner Ferdinand Calice, with support from senior attorney Olamide Falomo and associate Lucy Robertson.

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