CALL FOR IDEAS
The Lab is holding an open call for ideas for financial instruments that can unlock investment to tackle some of the most difficult climate and sustainable development challenges.
➤ October 9th, 2018: Call for ideas opens
➤ November 7th, 2018: Webinar; View the recording here.
➤ December 19th, 23:59 PST: Deadline for idea submissions
➤ February, 2019: Idea proponents are notified of selection
WHAT IS THE LAB LOOKING FOR?
The Lab is seeking ideas for financial instruments that can unlock investment for climate mitigation and adaptation projects in developing countries. This year, the Lab has a special call for ideas that target sustainable agriculture for smallholders in West & Central Africa, sustainable energy access, blue carbon in coastal & marine ecosystems, and sustainable cities. Ideas that target other sectors will also be considered.
SUSTAINABLE AGRICULTURE FOR SMALLHOLDERS
With support from the International Fund for Agricultural Development, the Lab is seeking proposals for innovative and transformative financial instruments to mobilize climate investment to benefit smallholders and rural economies in West and Central Africa.
Countries in Sub Saharan Africa remain among the most vulnerable in the world to the impacts of climate change, which are already a major cause of out-migration and poverty across West and Central Africa. Here, climate impacts on agriculture, which employs 60% of the workforce, will increase vulnerability and further threaten rural poverty, which is particularly acute among women and young people.
Key barriers to rural transformation and improved resilience in the region include a lack of land tenure, basic infrastructure, technology and knowledge, as well as insufficient access to well-organized markets and financial services, including credit and insurance.
Overcoming these barriers requires the development of new business models and approaches that are (1) attractive to the financial sector and (2) supportive of a paradigm shift toward low-emission, climate-resilient agriculture in a way that transforms the livelihoods of women and young people, and increases food security and nutrition.
SUSTAINABLE ENERGY ACCESS
Sustainable Development Goal 7 aims to ensure affordable, reliable and modern energy for all by 2030. However, more than 1.2 billion people currently live without access to reliable electricity.
Significant investment is needed in order to close the gap, and achieve universal energy access by 2030, though CPI research has found that there are relatively few blended finance initiatives that focus on distributed and off-grid electricity generation. There is a key need to identify, develop, and scale financial solutions that enable private sector capital to flow into energy access investments, including solutions for distributed generation, off-grid, and “last-mile” grid connection, thereby creating a viable market for generating and delivering energy to the developing world.
With additional support from The Rockefeller Foundation, the Lab is seeking proposals for innovative financial instruments to address market barriers and support the scale-up of sustainable energy access for both residential and business application.
These sustainable finance vehicles will offer returns for investors, while reducing emissions, supporting improved livelihoods and access to education and opportunities, and reducing negative health impacts associated with carbon-intensive forms of energy production.
BLUE CARBON IN COASTAL & MARINE ECOSYSTEMS
Blue carbon is the carbon stored by the world’s oceans and coastal ecosystems – primarily in mangroves, tidal marshes and seagrasses. The focus is on the protection and restoration of these coastal ecosystems in recognition of their role in reducing the impacts of global climate change.
Healthy marine ecosystems support coastal water quality, healthy fisheries, secure livelihoods and provide coastal protection against floods and storms. When protected or restored, blue carbon ecosystems sequester and store carbon, contributing to global emissions reduction targets including Nationally Determined Contributions. Conversely, when degraded or lost, coastal blue carbon ecosystems can become significant emissions sources.
Marine coastal ecosystem restoration has to date been funded almost exclusively by limited public or philanthropic investment. New innovative approaches, which catalyze private sector investment in marine ecosystem conservation and restoration, will be crucial in achieving Sustainable Development Goal 14, and creating a viable market for blue carbon investment.
With support from Australia’s Department of Foreign Affairs & Trade and other funders, the Lab is seeking innovative financing solutions to support climate mitigation and adaption in coastal ecosystems. The Lab is open to solutions for all developing countries including, but not limited to, those in the Pacific region.
Cities are critical players on climate change. More than half of the global population lives in cities, which consume over two-thirds of the world’s energy and account for more than 70 percent of global carbon emissions. And with 90 percent of the world’s urban areas situated on coastlines, cities are at high risk from climate change impacts such as sea level rise and extreme weather events.
For this reason, cities are on the front lines of climate action, making bold commitments around climate-resilient, low-carbon development pathways. To mobilize the finance needed to bring these commitments to fruition, policy-makers, the business community, philanthropic actors, and all classes of investors must work together to pilot, implement, and scale up sustainable investment models.
With the support of Bloomberg Philanthropies and other funders, the Lab is seeking proposals for innovative financial instruments to address market barriers and support the deployment of climate solutions in cities in developing countries. Proposals may be completely new – i.e., ideas never before implemented – or may seek to adapt or replicate a previously piloted instrument in new developing country city contexts. The Lab will work closely with The Global Covenant of Mayors for Climate & Energy, an international alliance of nearly 10,000 cities and local governments, throughout the Lab process.
WHO IS INVOLVED?
The Lab is composed of over 60 expert institutions in government, development finance, philanthropy, and the private sector. The full list of Lab Members can be found here. The funders for the Lab’s 2019 cycle are included below. Climate Policy Initiative serves as the Lab Secretariat.
HOW ARE IDEAS SELECTED?
Successful ideas are selected by Lab Members and other experts based on the following criteria.
Identifies (1) the type of entity(ies) that could implement it, (2) the pathway towards implementation, including the timeframe, activities, and key milestones, and (3) possible challenges to implementation and related management strategies.
Demonstrates the ability to address, directly or indirectly, barriers to private climate finance that (1) have not yet been addressed or (2) that will be addressed more effectively compared to other instruments in the market.
Demonstrates potential to (1) mobilize private climate capital within a sizeable market, (2) be scaled up or replicated in other contexts and, (3) achieve socioeconomic, development, and environmental impacts.
Identifies (1) a strategy to phase out public financial support, thereby achieving market viability and (2) possible challenges to achieving its intended objectives and related management strategies.
WHY SUBMIT AN IDEA?
Selected ideas will receive guidance and support from high-level leaders from both the public and private sectors, who contribute expertise, political capital, and financial capital to the instruments. See the full list of Lab Members here.
Selected ideas will also benefit from robust analysis, stress-testing, and development by Climate Policy Initiative’s team of experts.
value of analytical and communications support received by selected Lab ideas
mobilized by Lab instruments endorsed in previous cycles
invested by Lab Membership of over 60 expert institutions
WHAT HAPPENS IF YOUR IDEA IS SELECTED?
For the 2019 cycle, all selected ideas will be taken forward by the Global Lab program. If your idea is selected by Lab Members, you will work with a team of analysts, key stakeholders, and experts to:
✓ Develop or refine the mechanics of your idea
✓ Survey comparable instruments, ensuring the final instrument is innovative and impactful
✓ Develop robust financial modeling
✓ Assess and document potential social and environmental impacts
✓ Map risks and risk mitigation strategies
✓ Develop a detailed implementation plan
✓ Produce promotional content
✓ Present your idea to donors and investors
✓ Potentially receive endorsement from the Lab
HOW HAVE PREVIOUS LAB INSTRUMENTS PROGRESSED?
Below are a few examples of Lab instruments that were launched and endorsed in previous Lab cycles, and their latest impact and progress. To learn more about all previous Lab instruments, visit Ideas.
CLIMATE INVESTOR ONE
Climate Investor One, a 2015 Global Lab instrument that provides funding for renewable energy projects in Africa, Asia, and Latin America, recently announced third close, which increased the facility by an additional $75 million, for a total of $535 million.
The Oasis Platform, a 2016 Global Lab instrument for catastrophe and climate change risk assessment and adaptation, announced $3.5 million from the German government for a pilot in Southeast Asia. It was also selected as a 2018 winner of the Financial Times/IFC Transformational Business Awards.
ENERGY SAVINGS INSURANCE
Energy Savings Insurance, a 2015 Global Lab instrument that insures the financial performance of energy efficiency savings projects in Latin America, recently received funding from the Green Climate Fund to scale up private investment for energy efficiency projects in Paraguay and Argentina. The product is already in action in seven additional countries in Latin America.
Loans4SME, a 2016 India Lab instrument that is a curated lending marketplace for small businesses in renewable energy and energy efficiency in India, has enabled 60 loans so far, totaling $35 million of capital raise.