THE LAB: DEMO DAY 2020

Investment Opportunities

 

The Lab’s Demo Day introduced this year’s instruments to potential investors, funders, and implementation partners.

About the investment opportunities

The Lab’s class of 2020 targets four main areas: nature-based solutions, sustainable agriculture, sustainable cities, and sustainable energy access. This Lab cohort also includes instruments with a regional focus on Brazil, India, and Southern Africa.

Each of this year’s eight instruments underwent a competitive application process, followed by seven months of rigorous analysis and modeling to maximize the potential for success. Important to the COVID-19 outbreak, each instrument also incorporates elements that help overcome the pandemic’s economic distress for the most vulnerable, while also building long-term resilience.

The 41 businesses that have gone through the Lab’s previous cycles have mobilized over USD 2 billion in climate investment since 2015.

Sustainable Investment Opportunities

Climate Adaptation Benefit Units

Climate Adaptation Notes

The first instrument to address water scarcity in Southern Africa by streamlining adaptation project financing into a single instrument through a partnership between commercial banks and institutional investors.

Opportunity: CAN is seeking approximately USD 1 million in technical assistance grants for preparation and structuring work, which will then enable commercial banks, institutional investors, and DFIs to finance a pilot issuance of approximately USD 125 million in the Southern African Customs Union.

Conexsus Impact Fund. Photo by Kate Evans/CIFOR

Conexsus Impact Fund

The only fund in Brazil designed to redirect federal subsidized credit (Pronaf) to sustainable production systems that keep forests standing.

Opportunity: Conexsus is seeking USD 1 million in concessional capital as part of a first loss tranche. Proponents are also seeking USD 7 million of commercial capital to form the senior tranche, and an additional USD 1.75 million to support the technical assistance and monitoring efforts over the fund’s 10-year lifetime.

GreenStreet Africa

GreenStreet Africa

The company develops and aggregates portfolios of distributed solar projects at public health & education facilities for implementation by private IPPs/ESCOs, financed with local capital markets solutions.

Opportunity: GreenStreet Africa is initially seeking USD 2 million in grant funding for the initial 20-month pilot implementation.

 

Mangrove trees

GROVE: Forestry Smart Ledger (FSL)

The solution mobilizes capital for small-scale forestry projects, reducing verification costs, improving biomass estimations and enhancing local community impact through smart-contracts.

Opportunity: FSL is seeking a one-time USD 1 million capacity-building grant to develop the service. In addition, proponents are seeking ongoing grants to fund mangrove restoration projects, which cost approximately USD 5,000 per hectare. The proponent has already secured USD 1 million in seed funding to launch Greeen Company, a for-profit digital marketing company that will accelerate crowdfunding for projects listed on GROVE.

Monetizing Water Savings. Photo by Marizilda Cruppe/ WRI Brasil

Monetizing Water Savings

A new collaborative approach to improve economic outcomes for farmers, create resilient supply chains & increase water efficiency by using “pay for performance” to accelerate sustainable agriculture practices in water-stressed regions.

Opportunity: MWS will initially require an investment of USD 10 million to fund a 20,000-hectare pilot project. RRG Solutions Mexico will be involved in raising capital and identifying the proper mix of investors, capital amounts, and returns.

Photo by Will Anderson/WRI

Rural Prosperity Bond

A unique debt instrument to provide credit to rural entrepreneurs working in land restoration in Africa, South Asia and Latin America.

Opportunity: WRI seeks to raise USD 2 million in grants for the pilot phase and USD 2.5 million for the scale-up phase. They will also be fundraising USD 15.3 million in concessional finance to constitute the first-loss tranche and an additional USD 56.2 million in commercial investments to be deployed in years 2 to 6 for the scale-up and the commercial phases.

Sub-National Climate Finance Initiative (SnCF)

SnCF is expected to be the first private equity instrument that provides both local government capacity building & certifies climate adaptation and mitigation projects for SDG impact prior to investment.

Opportunity: SnCF is seeking USD 600 million in commercial equity for the commercial tranche of the fund and USD 9.5 million in grant financing for the technical assistance facility, in addition to the capital that the consortium seeks to raise from the GCF.

 

Sustainable Agriculture Finance Facility

Sustainable Agriculture Finance Facility (SAFF)

The facility provides customized bundled loans that match the farmers’ needs and takes into account specific integrated crop-livestock-forestry (ICLF) parameters.

Opportunity: SAFF seeks USD 68 million for the pilot, across concessional, private and philanthropic investors. Philanthropic grants will fund the technical assistance program. Concessional funds will be used to develop the initial pilot and to to de-risk the portfolio, assuming a ‘first-loss’ position and realizing a return of about 12%. Private investment will be used to scale the instrument, realizing a ‘preferred return’ of 5.5%.

Find out more

Full announcement

Lab Members, who include over 60 institutions in government, development finance, philanthropy, and the private sector, endorsed all eight ideas.

All previous instruments

The Lab has incubated and endorsed 49 sustainable investment instruments since 2015, which to date have mobilized over USD 2 billion.

How the Lab works

The Lab selects and develops well-designed financial instruments that can unlock billions for climate action in developing countries.