Selected Ideas and Finalists for 2020

The Global Innovation Lab for Climate Finance has selected eight innovative sustainable investment ideas to take forward for development in 2020. Lab Members chose the eight new ideas out of a highly competitive shortlist of 16 finalists, narrowed  from more than 200 initial proposals submitted by leading development finance institutions, global NGOs, prominent project developers, asset managers and financial services firms, and entrepreneurs.

Each year, Lab ideas represent the latest and greatest in sustainable investment. The 41 businesses that have gone through the Lab’s previous cycles have mobilized over US $2 billion since 2015. The new ideas target four areas where accelerated investment for climate adaptation and mitigation is urgent: nature-based solutions, sustainable agriculture, and energy access.

NATURE-BASED SOLUTIONS
Nature-based Solutions are actions to protect, sustainably manage, and restore natural or modified ecosystems, in order to reduce emissions, enhance resilience, and offer human development and biodiversity benefits

Despite their importance, the conservation and restoration of natural ecosystems have been funded almost exclusively by limited public or philanthropic funding, though the introduction of innovative approaches that catalyze private sector investment will be crucial in achieving multiple Sustainable Development Goals and creating a viable market for nature-based solutions.

The Lab’s nature-based solutions stream aims to support innovative financing solutions that seek to unlock private investment in projects that conserve and restore biodiversity and ecosystems in developing countries around the world.

Relevant solutions include (but not be limited to) financial instruments that focus on scaling up the preservation and restoration of forests as well as conservation and restoration of marine ecosystems and wetlands; prevention of desertification, other ecosystem services, or building climate resilient infrastructure.  

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’s energy access stream aims to accelerate 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.

SUSTAINABLE AGRICULTURE
With support from the International Fund for Agricultural Development, the Lab is accelerating innovative and transformative financial instruments to mobilize investment to overcome existing barriers to climate resilient, low emission agriculture, with a regional emphasis on sub-Saharan 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. 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 CITIES
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 aims to accelerate innovative financial instruments to address market barriers and support the deployment of climate solutions in cities in developing countries, including in energy efficiency, clean energy, low-carbon transport, and other sectors. 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’s cities stream works 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.

Winning Ideas

Climate Adaptation Notes

A new and innovative funding source for water and waste-related climate adaptation infrastructure projects in Southern Africa that have struggled to attract long-term sustainable financing.

 

Conexsus Impact Fund

The fund creates a business platform that can develop a variety of financial products tailored to specific communities and enterprises, addressing the gap in the way small-scale farms and forest-dwellers in Brazil access available financing.

GreenStreet Africa Development Company (GreenStreet Africa DevCo)

An energy as a service model to allow private ownership, operation and financing for distributed solar generation projects to supply Nigerian public facilities such as schools and hospitals with reliable on-site electricity.

GROVE: Forestry Smart Ledger (FSL)

The instrument combines satellite computer vision and remote sensing of biomass with blockchain verification of sustainable land-use impacts and restoration agreements to create performance rewards for Indian communities engaged in regenerative forestry.

Monetizing Cost Savings for Water and Nature Based Solutions

The idea leverages a “pay-for-success” model to monetize water conservation, efficiency, and nature-based solutions, creating incentives and revenue streams in areas where users often lack the necessary financial resources.

 

Sustainable Agriculture Finance Facility

An instrument to enhance the adoption of sustainable agricultural technologies (SATs) in Brazil by creating a credit facility for farmers who pass a Sustainable Agriculture Certification.

The Global Sub-National Climate Fund (SnCF)

The instrument creates a blended investment vehicle that increases the flow of capital for mid-size (US $5-75M) sustainable urban infrastructure projects, which often struggle to find financing yet can have strong social and environmental impacts.

 

The Land Accelerator Bond

The bonds allow small and medium enterprises working in sustainable agriculture to sell their products to smallholders on financially reliable credit, helping tens of thousands of farmers to adopt regenerative practices currently beyond their reach.

 

Finalist Ideas

Accelerating Sustainable Public Lighting Africa

A rent-to-own delivery model that accelerates the installation of sustainable public lighting by overcoming financial barriers in areas that do not have resources to initiate street lighting at all.

 

Climate Resilient African Communities Through Credit Scoring Application

A “credit scoring as a service” platform that helps distributed energy companies underwrite loans to smallholder farmers in Africa for solar-powered productive use equipment, and also allows companies and investors to easily monitor loan portfolio performance.

Financing for Last Mile Cargo Three-Wheeler Electric

The idea addresses the upfront cost barrier of obtaining delivery EVs and leverages a local EV manufacturer to unlock the electric three-wheel last-mile delivery market in India.

Great Sea Reef Development Company

An investment fund to support early-stage businesses and commercial projects contributing to the protection and restoration of the Great Sea Reef (GSR) in Fiji.

LandscapeCPR

A sustainable farm development and asset management business to acquire and restore degraded farmland in Africa.

 

Off-balance Sheet Financing in Brazil

A financing structure to provides capital for Energy Service Companies and off-takers through energy efficiency performance contracts, without compromising their balance-sheets.

Revolusolar

A social organization that promotes sustainable development of low-income communities in Rio through distributed solar energy. They operate a community fund that makes energy affordable via a rental model.

The Savings Groups Nature-Based Solutions Climate Fund

A US $1.2 billion fund designed to increase small-scale producers’ climate resilience through improving their access to credit. 

Find out more

Read the full announcement

Lab Members, who include over 60 institutions in government, development finance, philanthropy, and the private sector, met to select the winning ideas.

Meet the previous Lab instruments

The Lab has incubated and launched 41 sustainable investment instruments since 2015, which to date have mobilized over US $2 billion.

Find out how the Lab process works

The six new ideas will now move forward in the Lab’s 2020 cycle for analysis, stress-testing, development, and preparation for launch later this year.