Category: News

Ethiopia gears up for launch of first-ever securities exchange

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Addis Ababa, July 6, 2023 – Efforts are underway to develop Ethiopia’s financial market as the government prepares to launch its first-ever securities exchange in 2024.

In light of this, representatives from the public and private sectors, potential investors, policymakers, and regulators are meeting in Addis Ababa for a two-day workshop aimed at strengthening the capabilities of key market participants, preparing potential issuers and investors for the ESX’s portfolio of instruments, and garnering support from key policy-making institutions and regulators.

Speaking at the opening of the workshop on July 6, Antonio Pedro, Acting Executive Secretary of the Economic Commission for Africa (ECA), described the ESX as a “game-changer for Ethiopia and the region.” He stressed the importance of inclusivity, sustainability, and connectivity to harness the platform’s full potential.

The workshop is co-organized by the Economic Commission for Africa (ECA), Ethiopian Investment Holdings (EIH), Ethiopian Securities Exchange (ESX), and FSD Africa.

Mr. Pedro reaffirmed ECA’s commitment to supporting African countries in their socio-economic development and expressed enthusiasm for partnering with Ethiopia on this groundbreaking financial market initiative.

According to Brook Taye, Director-General of the Ethiopian Capital Market Authority (ECMA), the ESX will serve as a “key part of a functioning Ethiopian capital market ecosystem.”  Mr. Taye emphasized that ECMA was “fully committed to supporting the launch of the ESX and will work closely with the ESX team as it becomes a full-fledged securities exchange over the next year.”

Mark Napier, CEO, FSD Africa said: “We are pleased to be collaborating with the Government of Ethiopia in this historic initiative that will accelerate the development of capital markets in Ethiopia. Our assistance for establishing the Ethiopian Securities Exchange will leverage FSD Africa’s vast expertise and experience in developing capital markets infrastructure across Africa. This support signals our long-term commitment to a thriving capital market that is deep, liquid, and efficient”.

As a pioneer securities exchange and market organizer, said Michael Habte, ESX Project Manager, the platform will “play a critical role in the development and growth of the Ethiopian capital markets.” He stated that ESX will deploy a “state-of-the-art electronic trading platform for the equity and fixed-income markets as well as an innovative alternative capital market that caters specifically to up-and-coming SMEs.”

Mr Habte underscored the importance promoting accessibility of the market to issuers and investors in Ethiopia and abroad, including Ethiopia’s large retail and diaspora investor base.

“A thriving, deep, and liquid Ethiopian capital market will require the full support of valuable development partners to realize the catalytic development impact of a modern securities exchange as we embark on the launch of the Ethiopian capital markets,” said Mr Habte.

The capacity-building workshop addresses a wide range of topics, including the money market, fixed-income market, equity market, policymaking, and market development.

Experts from the National Bank of Ethiopia, ECMA, ESX, FSD Africa, Afreximbank, the International Growth Centre, NCBA Investment Bank, Old Mutual Investment Group, and the Pension Benefit Guaranty Corporation will deliver training presentations and participated in interactive panel discussions to share their valuable experiences and insights.

With technical support from ECMA and financial assistance from the Bill & Melinda Gates Foundation, the workshop aims to establish the groundwork for a prosperous securities exchange in Ethiopia. This initiative can spur economic growth while fostering a robust financial ecosystem for investors and issuers alike.

About ECA

Established by the Economic and Social Council (ECOSOC) of the United Nations (UN) in 1958 as one of the UN’s five regional commissions, the United Nations Economic Commission for Africa’s  (ECA’s) mandate  is to promote the economic and social development of its  Member States , foster intraregional integration and promote international cooperation for Africa’s development. ECA is made up of 54 Member States and plays a dual role as a regional arm of the UN and as a key component of the African institutional landscape.

For more information, visit:   www.uneca.org 

About EIH

EIH is a wholly state-owned company created under Proclamation No. 1263/2021 and Regulation No. 487/2022 as a strategic investment entity of Ethiopia to serve the strategic needs of its economy and build multi-generational wealth. EIH aims to achieve its purposes by bringing together public assets under a professional management structure and investing judiciously on a diversified range of strategic investment targets. EIH is operated as a private business organization with a view to driving performance of public assets using modern management practices, corporate governance standards, and systemic mechanisms to ensure the protection of shareholder’s interests.

About ESX

The Ethiopian Securities Exchange (ESX) is being established in line with the Capital Markets Proclamation (No. 1248/2021). Article 31 of the Proclamation provides that ESX shall be established as a share company by the government in partnership with the private sector, including foreign investors. The Government of Ethiopia is expected to hold a minority share in the establishment of ESX. The establishment of ESX is primarily led by EIH with the support of Financial Sector Deepening Africa (FSD Africa). A dedicated Project Offi­ce, the ESX Project O­ffice, leads the development work in preparation for the official launch of the exchange.

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It was announced that the purchase of the financial documents trading system to start the capital market is being completed

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In order to start the capital market, it has been announced that the process of purchasing financial documents from foreign companies is being completed.

After the establishment of the Ethiopian Capital Market Authority, the Ethiopian Securities Exchange (ESX), which is being established, is said to be selected and evaluated by a foreign institution that will develop the Internet infrastructure that will enable it to carry out its trading activities.

This was announced by the United Nations Economic Commission for Africa with partners on Thursday, June 29, 2015. He is at the Capital Markets Capacity Building Workshop held at the Radisson Blu Hotel. Representatives of the authority, the National Bank and foreign institutions supporting the capital market were present at the forum.

The Capital Market Establishment Proclamation stipulates that the Central Securities Depository (CSD) is a place where financial documents are stored in a consistent manner and converted to electronic, and where financial documents are traded and paid and delivered without physical transmission.

Wineshet Zeberga, a representative from the National Bank, said that having a strong Internet infrastructure is important for transferring ownership and marketing. The development of the infrastructure in Ethiopia’s capital market, he said, “will help us strengthen what we have been lagging behind in.”

“With the support we received from FSD Africa and with stakeholders such as the capital market authority and the securities market, we are working hard to have the infrastructure,” he said.

According to Tilahun Kasahun (Dr.), the senior project manager of the Ethiopian document Muale Newaiyo market that is being established, the selection of the institution that will develop the system has been completed and the stakeholders are conducting an evaluation.

Tilahun (Dr.) added that the evaluation which is being conducted by the National Bank, the authorities and the market will be completed in the next month and the selected institution and full information will be made public soon.

It is known that the Financial Sector Deepening Africa (FSD Africa) office, which is based in England and works on financial issues in various African countries, has provided financial support for the purchase of the infrastructure.

FSD Africa’s capital market specialist, Victor Nkirim, told a reporter how much the purchase was, and said that the contract will be announced and the purchase process is being finalized.

“Currently, a general evaluation of the structure and operation is being evaluated by the National Bank,” Victor added.

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Advocating for Nature and Climate

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In this edition of the African Business podcast we speak to Elizabeth Maruma Mrema about her role as co-chair at the Taskforce for Nature-related Financial Disclosures. Maruma Mrema is also the United Nations Assistant Secretary General and the Deputy Director of the United Nations Environment Programme. She is one of Time magazine’s Most Influential People for 2023 – having been a key figure at the Nature COP 15 in Montreal spearheading a groundbreaking agreement on biodiversity protection.

In this episode she tells us how the Taskforce on Nature-related Financial Disclosures (TNFD) was established to develop a risk management and disclosure framework for organisations, aiming to shift global financial flows towards nature-positive outcomes.

As climate change and nature are interconnected, an integrated approach has become necessary to effectively address these challenges. Maruma Mrema tells us about the significance of integrating nature-related disclosures within climate-related reporting and the role of corporate disclosures in promoting transparency and accountability.

The TNFD also complements the Task Force on Climate-related Financial Disclosures (TCFD). By integrating nature-related information into financial decision-making processes, businesses can mitigate risks, identify sustainable opportunities, and contribute to nature conservation. The TNFD has closely aligned its recommendations with the TCFD to promote consistency and facilitate the adoption of an integrated climate-nature disclosure framework.

We also look ahead to the launch of the TNFD framework in September in New York and to Cop28 in December in the UAE.

Read an excerpt from the interview in IC Intelligence Insights 09: Nature and Climte Redux 

Credits

Host and executive producer: Dr Desné Masie

Co-producer: Peter Doerrie

Digital Editor: Charles Dietz

Design: Jason Venkatasamy

Music: Corporate Uplifting Chill by MusicLFiles

Licence: http://creativecommons.org/licenses/by/4.0/

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Democratising insurance in Africa

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Opinion by: Elias Omondi

It is a cruel irony that Africa – the continent arguably most exposed to the risks and ravages of a changing climate and economic uncertainty – is also the continent least protected by insurance instruments. African insurance penetration drives 3% of the continent’s GDP, a figure dwarfed by the global average of around 7%, and premiums per capita are 11-fold lower than the world average.

Unprecedented ecological change, compounded by global economic instability and woefully disrupted international supply chains, demand that Africans and African businesses enjoy the basic security and protection of insurance products.  Moreover, the preponderance of small and medium-sized enterprises (SMEs) in Africa’s economic life only intensifies the need for some kind of safety net – so that already vulnerable communities are afforded a level of security to which they are surely entitled.

Though rarely cited as a fundamental bedrock for development, insurance and insurance-applicable technology are indispensable, and their importance is only growing. Indeed, the Brookings Institution characterises insurance as an “often overlooked” but nonetheless a crucial “behind-the-scenes factor driving growth at all levels of society, from family life to massive infrastructure projects to technology development”.

It is in this context that FSD Africa – the specialist development agency working to make finance work for Africa’s future – established the “BimaLab” programme in 2020. With the support of African regulators and backers such as Swiss Re Foundation, Prudential, SCBF, GIZ and FSD Ethiopia, we have developed an insurtech programme driving the development and scalability of inclusive and innovative insurance products which are tailored to address evolving African concerns and exposures.

BimaLab seeks to address – and ultimately plug – the “protection gap” predominant in Africa, cultivating the next generation of insurtech innovators through a combination of capacity building, technical assistance, funding support and help ensuring regulatory alignment and, where necessary, reform (take, for example, Ghana’s revisions of its Insurance Act to accommodate an “innovative licence category”).

Beginning three years ago with a pilot in Kenya, and then expanded to Nigeria and Ghana in 2021 and 2022, the programme has this year rolled out the accelerator programme in 10 African countries.

A cursory look at the numbers demonstrates the value this, and programmes like it, are already delivering for communities on the continent. In Kenya, Nigeria and Ghana, BimaLab-sponsored insurtechs have reached a million customers and have created 43 new insurance products and technologies. Moreover, close to 20 of BimaLab’s cohort have managed to sign strategic partnership agreements with major insurance players in the region, thereby accelerating the process of bringing new products and services to market and raising over $3m. Graduates of the BimaLab programme – CoverApp in Kenya, SosoCare in Nigeria and BeNew Insurance in Cameroon – have even won African Insuretech awards.

Bringing insurance to Africa’s SMEs

The urgency of democratising insurance in Africa derives in large part from the central role played by SMEs in the continent’s economic development. SMEs represent around 90% of all African businesses, generating 40% of the continent’s GDP and up to 80% of jobs. The resilience of these businesses, which do not enjoy the kinds of balance sheets that can withstand major disruptions unsupported, depends on our ability to create a viable and accessible insurance market.

Moreover, compounding Covid-19 and the economic chaos ensuing from the Russia-Ukraine conflict, African businesses are contending with the sharp end of climate change. Of the 10 countries most vulnerable to a changing climate, seven are located in Africa, and the sub-Saharan region contains 95% of the world’s rain-fed agriculture. Dwindling or unpredictable rainfall – as has been affecting East Africa recently – as well as rising temperatures, hurt small businesses in already impoverished communities, risking their economic collapse.

Access to insurance products has a transformative effect on the stability and resilience of African SMEs, through developing insurance products that are for once affordable and effective. Moreover, by supporting businesses at their most vulnerable, we can help cultivate the major enterprises of tomorrow, which will accelerate Africa’s development and its prominence in the global economy.

There is a widening protection gap in Africa that exposes tens of millions of people to radical unpredictability and leaves them entirely at the mercy of a rapidly changing climate and a destabilised global economy. By convening innovators, insurance companies, technology service providers, regulators and investors, we can transform insurance and the scale at which it is delivered, to communities where a basic safety net is of existential importance.

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ASEA nears uniting Africa’s stock exchanges

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The African Securities Exchanges Association (ASEA) is moving closer to linking the African capital markets by facilitating cross-border trading and free movement of investments in Africa.
Already, the African Exchanges Linkage Project(AELP) has onboarded 30 broker firms to facilitate cross-border trading.

Meanwhile, Ethiopia’s Ministry of Finance, the Ethiopian Investment Holdings and FSD Africa, has signed a cooperation agreement to establish the Ethiopian Securities Exchange (ESX).
Once established, the ESX will become the 30th exchange on the continent. At least fifty companies, including banks and insurance companies, are expected to list at the launch of the exchange. The exchange is designed to provide a fundraising platform for small and medium-size enterprises, which are the backbone of the Ethiopian economy. The exchange will also offer a platform for the privatisation of Ethiopia’s state-owned enterprises.

In the past few years, the Ethiopian government has implemented several reforms to open the economy and the launch of a securities exchange will be a catalyst for attracting new investment from the private sector.

In a joint statement, the three parties said that through the Exchange, the Government of Ethiopia will be able to finance its budget deficits by issuing long-term bonds in local currency thereby reducing reliance on inflationary and foreign sources of budget financing.

Through the cooperation agreement, FSD Africa will fund technical support, legal advice, and the costs associated with getting the exchange operational.

“The establishment of a securities exchange, the first in our nation’s history, through such a public-private partnership will usher a new era for the Ethiopian financial industry and the economy as a whole. Today’s cooperation agreement between the Ministry of Finance, EIH, and FSD Africa is a first concrete step towards realizing our vision,” said H.E Ato Ahmed Shide, Minister, Ministry of Finance.

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FSD Africa £1 million in Africa Climate Ventures

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…The investment represents the first institutional backing for the venture builder, which aims to assemble a portfolio of businesses focused on climate action across Africa, boosting continental participation in global carbon markets.

FSD Africa Investments (FSDAi) has invested £1 million in Africa Climate Ventures (ACV), a pioneering venture builder working to build a US$45 million portfolio by the end of 2024.

ACV will catalyse the carbon asset class in Africa by building innovative businesses focused on solving our generation’s greatest challenge and at the same time capturing a significant share of global carbon markets in Africa.

The venture represents a series of “firsts” in Africa: from its entirely Africa-based founder team and its permanent capital structure based in Kigali International Financial Centre, to its exclusive focus on carbon mitigation, capture and removal, the continent’s fastest evolving sector.

ACV represents a historic evolution in Africa’s carbon ecosystem and will contribute directly to capital mobilisation in climate action. Indeed, by 2030 ACV aims to eliminate one million tonnes of carbon every year while improving the lives of 50 million Africans and creating at least 5,000 jobs on the continent.

The venture builder features a peerless bench of experienced Africa-based founders with a record of pioneering innovation on the continent and championing disruptive enterprises.

James Mwangi is a 2022 Climate Breakthrough Award Winner and the founder of the Climate Action Platform for Africa, a non-profit organization that aims to help Africa achieve broad-based economic growth through climate action leadership.

James is best known as a co-founder of Dalberg Advisors, the firm’s first elected Global Managing Partner and then Dalberg Group’s Executive Director.

Mohamed Cassim is a South African investor best known as an angel investor, the Chair of MFS Africa Board, and the Founder of Abacus Advisory. CJ Fonzi was also a Partner at Dalberg Advisors, with the firm for over a decade he served as the Group Director of Innovation and then founded Dalberg’s Rwanda business in 2017.

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This team is working to build a portfolio of climate positive businesses across Africa, with the ultimate aim of launching and scaling 15 ventures in the next four years.

ACV is seeking to build this portfolio by investing to:

  1. bring proven global climate technology to Africa,
  2. accelerate and de-risk the continental expansion of technologies and business models that have gained traction in one or a few African market(s), and
  3. add carbon revenue streams to existing African businesses with the potential to scale climate positive solutions.

ACV has adopted a structure more in-line with a global north venture studio in which the vehicle is structured as a permanent capital vehicle which sells equity rather than securing fund management mandates.

This has allowed ACV to begin building ventures in parallel with fund raising, which the founders believe is paramount given the urgency of climate change, and the need for Africa to quickly establish itself as part of the solution.

There are already two ventures in the portfolio:

KOKO Networks Rwanda, a co-venture between ACV and KOKO Networks which already provides sustainable bioethanol cooking fuel to over 900,000 Kenyan families and aims to reach a million Rwandan families by 2027, and Great Carbon Valley, a Kenya based developer of direct-use clean energy applications currently focused on developing a direct air capture and permanent carbon storage site in Kenya.

ACV’s pipeline of further opportunities demonstrates the breadth and versatility of the venture builder. They range from biochar and enhanced rock weathering technologies, to biodigester and e-mobility businesses, to harvesting carbon revenue for green growth across the portfolio of a well-established continental private equity fund.

These are businesses and technologies which have the capacity to transform African economies and make a meaningful difference in climate change but they require risk capital and hands on venture builders to scale, attract further investment, and reach their potential.

FSDAi’s investment in ACV takes the form of a convertible loan of £1 million to support the venture builder’s formalisation and build additional ventures as demonstrations to attract investment from larger funds.

On top of this investment, FSD Africa will provide £75,000 in grant funding to support the development of premium carbon credits and the marketing of portfolio and pipeline companies. Moving forward, FSDAi has secured the right to invest up to £8 million in ACV’s planned 2024 close.

FSDAi is the investment arm of specialist financial development agency FSD Africa which receives funding from the UK government and provides tools and resources to drive large-scale change in financial markets and support sustainable economic development.

ACV is the latest in a series of investments by FSDAi in innovative green investment vehicles including Persistent Energy, a leader and pioneer investor in the off-grid energy and e-mobility sectors in Sub-Saharan Africa, and Nithio, which invests in renewable off-grid energy.

FSDAi has committed to support ACV on the basis that its activities will actively contribute to Africa’s transition to net-zero, the promotion and acceleration of the continent’s green sector, and the creation of quality, skilled jobs (around 600 will be created via this initial £1 million investment) in a strategically vital sector.

Ultimately, FSD Africa believes that ACV can help the continent’s businesses participate in global carbon markets and capitalise on the continent’s unrivalled capacity for profitable climate-smart businesses.

Moreover, FSDAi’s investment aligns with the emerging priorities of African policymakers who will gather in Kenya in September at the Africa Climate Summit to co-ordinate a unified, collective pan-African approach to the discussions at the next COP in Dubai.

Anne-Marie Chidzero, CIO of FSD Africa Investments, said:

“In backing the ACV partners, FSDAi sees a tremendous opportunity to galvanise global investment and finance to promote Africa’s status as the pre-eminent climate investment destination.’’

James Mwangi, CEO of Africa Climate Ventures, said: “We are thrilled that FSDAi has joined us in building ACV.  The involvement of FSDAi has already been invaluable in refining the ACV model. As we work towards ambitious objectives, we believe FSDAi will be a key partner in ensuring our success.”

Rachel Turner, Director, International Finance, Foreign, Commonwealth & Development Office, said:

“We are excited to be supporting this enterprising partnership between FSD Africa and ACV. The need to mobilise climate finance for Africa has never been greater, and this can’t happen without innovations that can build the pipeline of opportunities to absorb and deploy capital into productive, sustainable and inclusive uses. Tapping into the developing carbon market ecosystem represents a significant opportunity for Africa to raise capital at affordable terms whilst contributing directly to the climate challenge. This partnership with an impressive African team is pioneering in its approach.”

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Green technology fund raises Sh171 million from FSD Africa

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Venture fund startup Africa Climate Ventures (ACV) has raised £1 million (Sh171.1 million) for investing in companies focused on environment-friendly projects in the continent.

The capital raised from FSD Africa Investments (FSDAi) is in the form of a convertible loan to support the venture builder’s formalisation and develop its capacity to attract investments from larger funds.

ACV is working to build a $45 million (Sh6.2 billion) portfolio by the end of 2024.

“We are thrilled that FSDAi has joined us in building ACV, and has already been invaluable in refining the ACV model,” said ACV chief executive and founder James Mwangi who is best known as a co-founder of Dalberg Advisors, the firm’s first elected global managing partner and then Dalberg Group’s executive director.

FSDAi is the investing arm of FSD Africa, a UK International Development-funded regional programme operating in more than 30 countries from its Kenya base.

On top of the capital investment in ACV, FSD Africa will provide £75,000 in grant funding to support the development of premium carbon credits and the marketing of portfolio and pipeline companies.

Moving forward, FSDAi has secured the right to invest up to £8 million in ACV’s planned 2024 close.

The venture builder’s team is working to build a portfolio of climate-positive businesses across Africa, with the ultimate aim of launching and scaling 15 ventures in the next four years.

ACV is seeking to build this portfolio by investing to add carbon revenue streams to existing African businesses, bring proven global climate technology to Africa and accelerate and de-risk the continental expansion of technologies and business models.

ACV is the latest in a series of investments by FSDAi in innovative green investment vehicles including Persistent Energy — a pioneer investor in the off-grid energy and e-mobility sectors in sub-Saharan Africa— and Nithio, which invests in renewable off-grid energy.

“In backing the ACV partners, FSDAi sees a tremendous opportunity to galvanise global investment and finance to promote Africa’s status as the pre-eminent climate investment destination,” said Anne-Marie Chidzero, the chief investment officer at FSDAi.

Ultimately, FSD Africa believes that ACV can help the continent’s businesses participate in global carbon markets and capitalise on the continent’s unrivalled capacity for profitable climate-smart businesses.

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Africa Climate Ventures Raises Ksh.171M To Support Green Tech Start-Ups

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Africa Climate Ventures (ACV), a venture capital firm focused on climate action start-ups on the continent, has announced a Ksh.171 million (£1 million) investment from FSD Africa Investments.

The investment is in the form of a convertible loan to support ACV’s formalisation and build additional ventures as demonstrations to attract investment from larger funds.

On top of the investment, FSD Africa said it will provide Ksh.13 million (£75,000) in grant funding to support the development of premium carbon credits and the marketing of portfolio and pipeline companies.

ACV seeks to build a portfolio of climate-positive start-ups across Africa, with the ultimate aim of launching and scaling 15 ventures in the next four years.

Moving forward, FSD Africa has secured the right to invest up to Ksh.1.4 billion (£8 million) in ACV’s planned 2024 close.

“The involvement of FSDAi has already been invaluable in refining the ACV model. As we work towards ambitious objectives, we believe FSDAi will be a key partner in ensuring our success,” James Mwangi, the ACV CEO, said.

Mwangi said they aim to eliminate one million tonnes of carbon every year by 2030, while improving the lives of 50 million Africans and creating at least 5,000 jobs on the continent.

The VC firm already has two ventures in its portfolio; KOKO Networks Rwanda, a co-venture between ACV and KOKO Networks which provides sustainable bioethanol cooking fuel in Kenya and Rwanda, and Great Carbon Valley, a Kenya-based developer of direct-use clean energy applications.

“In backing the ACV partners, FSDAi sees a tremendous opportunity to galvanise global investment and finance to promote Africa’s status as the pre-eminent climate investment destination,’’ Anne-Marie Chidzero, CIO of FSD Africa Investments, said.

FSD Africa receives funding from the UK government and provides tools and resources to drive large-scale change in financial markets and support sustainable economic development.

There has been increased interest in green technology ventures as the world seeks to reduce carbon emissions and transition to green energy.

Just last week, Kenya-based climate tech start-up Amini announced the closure of a Ksh.275 million ($2 million) pre-seed funding round led by Swedish climate tech-focused venture capital firm Pale Blue Dot.

Amini uses artificial intelligence and satellite technology to create data infrastructure and address climate data scarcity in Africa.

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Lab announces new class of ground-breaking solutions to drive public and private investment in emerging markets

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LONDON – Members of the Global Innovation Lab for Climate Finance (the Lab) gathered in London to select the innovative climate finance solutions that will be accelerated in 2023. Lab members voted to choose six new models to channel investments in challenging sectors such as climate adaptation and gender equality.

“We are thrilled about the quality and breadth of the types of innovative financial solutions that we see in this new Lab cycle. It’s fantastic that our members continue to help the Lab expand our boundaries, focusing more on where we can have the highest impact on the ground,” said Dr. Barbara Buchner, Global Managing Director of Climate Policy Initiative.

The Lab is an investor-led initiative that identifies, develops, and launches promising solutions to drive critical public and private investment in climate change in developing economies. Each year, the Lab competition selects promising, early-stage ideas for sustainable investment and rapidly develops these ideas into fundable, scalable investment vehicles and business models.

“This year, we were excited to introduce a Gender Equality stream and expand our Africa program,” said Lab Associate Director Ben Broché. “We need to see a rapid scale-up of investment across sectors, and the Lab is always keen to take on new challenges: since we launched nine years ago, the Lab has developed 62 solutions that have mobilized USD 3.5 billion for climate action in emerging markets.”

In 2023, the Lab received around 150 applications from leading asset managers, development finance institutions, global NGOs, prominent project developers, financial services firms, and entrepreneurs. The winners will undergo seven months of analysis, stress-testing, development, and preparation for launch later this year.

2023 LAB WINNERS

Catalyst Climate Resilience Fund supports pre-seed climate adaptation startups that improve the resilience of vulnerable African communities, fostering a more robust ecosystem of climate adaptation innovations. Catalyst Fund and BFA Global, an innovation consulting firm headquartered in Kenya, spearhead the idea

Climate Resilient Landscape Finance (CRLF) is a first-of-its-kind model where financiers, conservancy management, and landowners collectively share the risks and rewards of sustainable land management activities. The proponent is Platcorp, an established microlender and asset manager in Eastern and Southern Africa.

Impact Financing Facility for Climate-Focused Social Enterprises offers blended finance instruments to support social enterprises adopting climate-smart technologies and establishing a track record to access commercial capital. The idea proponent is Villgro, an Indian social enterprise incubator.

Lendable Emerging Market Sustainability-Linked Loan Fund provides loans to SMEs for implementing climate solutions. Borrowers who reach targets get lower interest, and the fund earns carbon credits. Proponent Lendable offers financing solutions for companies with a positive impact.

Social Infra Ventures (SIV) is a pan-African rental platform to service low and lower-middle-income families and vulnerable groups in Africa’s secondary cities designed around women’s needs. SIV will partner up with Cardano Development to pilot the idea in Morocco.

The VOX VERT Land Use Transition Fund finances the transition to sustainable agriculture in the Brazilian Amazon and Cerrado regions through a private credit fund with a blended finance structure. The proponents are Vert, a securitization company, and Vox Capital, an impact investment house.

Lab Members’ Quotes

Ajibola Olalowo, Advisor, German Federal Ministry of Economic Affairs and Climate Action (BMWK), said: “The Lab has been successful in delivering impact over almost one decade. Investments in Lab ideas span the globe, including challenging sectors such as climate risk, nature-based solutions, sustainable cities, and gender equality. However, there is still work to be done in mobilizing private finance for climate action, and Lab’s ideas are crucial for strengthening private sector investments to keep 1.5° alive.”

Antha Williams, who leads Bloomberg Philanthropies’ environment program, said: “Innovative financial solutions that address the climate crisis are pivotal to transitioning to a low-carbon economy at the speed and scale necessary. The Global Innovation Lab for Climate Finance’s innovative approach helps identify, develop, and scale pioneering financial instruments that are making a tangible impact in combating climate change. Bloomberg Philanthropies is delighted to support the India Lab to help transform promising ideas into viable investment opportunities that drive climate action in India.”

Sumaiya Sajjad, Head of the Technical Assistance Facility, FinDev Canada, said: “FinDev Canada is committed to advancing opportunities in the gender and climate nexus area through our investments and partnerships, which includes our support to the Lab. Women are disproportionately affected by climate change despite being at the forefront of adopting climate-smart solutions. The Lab is well positioned to support innovative solutions with an intentional gender approach and to capitalize on the growing momentum across the investment landscape to increase gender-responsive climate finance offerings.”

Nine additional ideas made it to the finalist stage

  • Altree Kadzi Gender Climate Fund, Altree Capital
  • Climate Agriculture Debt Restructuring Facility (CADRF), Abt Associates
  • Food&Forest, Impact Bank Amazônia Securitizadora de Créditos S/A
  • Gender-Based Smallholder Economic Liberation Project, Prado Power Limited
  • Green India Fund, Green Artha
  • Infrastructure Climate Resilient Fund (ICRF), AFC Capital Partners
  • Mobilize: De-risking E-mobility, VAI Capital
  • Offgrid Finance Pop-up SPV, Offgrid.finance Limited

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