RWK Goodman advises TASC in relation to climate change mitigation project in Zambia
RWK Goodman has advised established client The African Stove Company Limited (“TASC”) in relation to a project to finance and distribute 90,000 fuel-efficient cookstoves in Zambia.
The project involves the distribution of cookstoves to families in rural Zambia who rely heavily on wood as a source of cooking fuel. The burning of wood fuels contributes significantly to climate change through the emission of greenhouse gases, as well as having a significant adverse impact on human health. Each fuel efficient cookstove can remove up to 75% of toxic indoor pollution and reduce by at least 50% the time and money otherwise spent on fuel.
TASC has a strong track record of financing and developing high impact climate mitigation projects in Australia, South Africa, Uganda, Zambia and Zimbabwe. In Sub-Saharan Africa alone, TASC has been involved in the distribution of nearly 800,000 cookstoves.
As a key part of this recent project, funding has been provided by Spark+ Africa Fund, a Luxembourg-based impact investment fund advised by Switzerland-based Enabling Qapital and focused on clean and modern cooking energy solutions in Sub-Saharan Africa. This collaboration between TASC and Spark+ Africa Fund is expected to impact over half a million Zambians living in rural communities.
Shelley Estcourt, CEO of TASC Africa, said: “TASC prides itself on implementing high-quality carbon projects with a focus on integrity and transparency – we are very excited about this new project in Zambia and the significant impact it will have on the lives of many Zambians.
It was great to work again with the team at RWK Goodman who understand our cross-border structured finance model, and work closely with us to pull together the project and financing aspects of the transaction. With the multiple jurisdictions involved, it’s challenging to implement the contractual arrangements around a project like this. RWK Goodman have worked with us to develop our funding model, and provided great advice throughout leading to a successful and efficient completion process.”
RWK Goodman lead partner, Paul Webb, said: “We were delighted to have been part of this groundbreaking initiative aimed at improving the lives of Zambian communities, and to support TASC on the legal structuring and negotiation of appropriate project documentation, including offtake arrangements. The limited recourse, project specific structure is well established for various types of infrastructure development, and is a good basis for implementing projects designed to generate verified emission reductions under an international accreditation programme such as the Gold Standard.
The development of sustainable projects, such as this one, which generate carbon credits is a key element in achieving the removal of greenhouse gas emissions, on which the transition to a net zero economy depends.
There is increasing interest in promoting both investment in projects designed to reduce greenhouse gases (for example, the London Stock Exchange’s Voluntary Carbon Market initiative), and the secure and efficient trading of carbon credits (the objective of the Carbonplace initiative from a syndicate of leading banks). RWK Goodman strongly supports these developments as part of a culture focused on the climate change challenge.”
Spark+ Africa Fund was advised by Morgan Lewis Bockius with input from its Boston, London and Philadelphia offices.