Climate markets beyond renewables, microfinance exit, driving inclusive growth, banking on climate…



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#Featured: ImpactAlpha Original

Climate investors look beyond renewables as Bonn gets down to business. There’s a buzz on as world leaders gather in Bonn this week to push forward the global climate-action agenda: the world is awash in private capital — we just have to go get it. Last week’s $653 million financing package for a 752-megawatt solar park near Aswan in Egypt showed how deals can be put together. Bids for the 300-megawatt Sakaka plant in Saudi Arabia showed why: at less than three cents per megawatt-hour, solar is just about the cheapest power there is. At COP23 in Bonn (the Paris climate agreement was reached at COP21), the world kicks off the real sprint to avoid the worst climate dangers.

With the U.S. moving toward pullout of the Paris accord, delegates are eager to accentuate the positive, such as record levels of private investment in renewables in 2015–2016, even accounting for a dip in 2016. And renewables, at about $300 billion a year, are only part of the $1 trillion annual market in “climate business solutions,” according to the International Finance Corp., an arm of the World Bank. Green buildings ($388 billion annually), climate-smart urban transport ($288 billion), water recycling ($23 billion), and municipal waste management ($160 billion) could all be ramped up six-fold or more. Energy storage, especially batteries, is only a $2.5 billion market now but has huge potential for growth.

Keep reading “Climate investors look beyond renewables as Bonn gets down to business,” by David Bank on ImpactAlpha. Follow all of ImpactAlpha’s COP23 and climate coverage.

Climate investors look beyond renewables as Bonn gets down to business

#Dealflow: Follow the Money

Oikocredit exits Peruvian microfinance institution. The Dutch impact investor invested in Financiera Confianza in 2005 and saw the institution grow to 500,000 customers; 51% are women, 39% are youth, 23% are rural and 87% live below the poverty line, according to the company’s latest (2014) impact statistics (in Spanish). Financiera Confianza says it has helped more than 40,000 small business owners obtain a first-time loan. Oikocredit sold its stake to BBVA Foundation, the philanthropic arm of the Spanish bank, for an undisclosed sum.

Women dominate John Hopkins Social Innovation Lab’s latest cohort. The lab selected 10 nonprofit startups for its 2017 to 2018 Social Innovation class out of 84 applicants. Eight of the finalists are women-led ventures, and five are minority-led. The school started the Social Innovation Lab six years ago to provide funding, mentorship and training to members of the Johns Hopkins community tackling social issues in Baltimore and globally. This year’s group includes Mera Kitchen Collective, a worker-owned food cooperative run by refugees and immigrants; PIVOT, a training program for women re-entering the workforce; and Active Bed Sore Prevention System, a product-based startup that uses pressure sensors to warn of potential bedsores for the sick and elderly. Since it launched, the lab has supported 62 ventures in raising $13 million in outside funding.

Shell Foundation, FMO and DFID partner on fund targeting the UN Global Goals. The foundation and the Dutch and U.K. development institutions said the planned fund will invest in startups tackling global access to finance and energy. They provided few other details about the fund, which will launch in early 2018, including its size. In the past, the partners have mobilised €70 million ($82 million) in clean cookstove, financial services, and small business-focused projects for poor and underserved communities in Africa and Asia. Achieving the U.N.’s Sustainable Development Goals by 2030 will require trillions of dollars in investment each year, and the goals represent at least a $12 trillion opportunity to businesses.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to thebrief@impactalpha.com.

#Signals: Ahead of the Curve

Tapping the inclusive-growth business opportunity. If you’re a CEO running a major corporation or a new business founder looking for an edge, finding new ways to foster inclusive growth “can have a significant impact on the value of corporations,” says Audrey Choi, Morgan Stanley’s chief marketing and sustainability officer. Inclusive growth means that economic gains are broad-based, sustainable and provide opportunity across the full range of participants in the economy. To put real best-practices behind the business case, Morgan Stanley has released, “Inclusive Growth Drivers: The Anatomy of a Corporation.” Building a workforce more representative of the population at large, for example, has been shown to increase a firm’s cultural sensitivity, knowledge of the market and its corporate reputation, the report says, while designing, marketing and pricing products for low-income consumers can boost financial performance. “Some companies have really figured out how to draw a diverse talent pool, put together a team and achieve better results,” John Streur, CEO of Calvert Research and Management, told Bloomberg. Read, “Tapping the inclusive-growth business opportunity,” by Dennis Price, on ImpactAlpha:

Tapping the inclusive-growth business opportunity

#2030: Long-Termism

On the front lines of climate change, South Florida banks on climate resilience. Sea levels could rise three feet or more by 2060 in South Florida, where the ocean is already rising six times faster than the global average. At least 85,000 people, 53,000 homes and $21 billion in assets in greater Miami are located less than three feet above high tide. Coastal real estate already suffers from “sunny-day flooding” during high tides. As rising water levelscause property values to fall, banks could stop writing 30-year mortgages for coastal homes, killing the market, slashing home prices and sapping local tax bases, said Jim Cason, the mayor of Coral Gables. Commercial real-estate projects also could have trouble getting financing in communities with rising sea levels, warned participants at a recent meeting of the Commercial Industrial Association of South Florida. Still the risks have not yet been priced into the market: Median home prices in Miami and surrounding areas rose 120 percent since 2010, three times the national average.

Risks create opportunities (see — and listen — to “Puerto Rico’s agony makes the case for climate-resilience investing). In Miami Beach, especially vulnerable to coastal flooding, the city is investing $400 million for infrastructure improvements to prepare for higher seas. Miami Beach Mayor Philip Levine, has called for a state “resiliency commission” to provide blueprints for community design, and a state-backed resiliency fund for infrastructure investments. A blueprint for such investments is under development at part the the 100 Resilient Cities initiative backed by the Rockefeller Foundation.

Onward! Please send news and comments to TheBrief@impactalpha.com.

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