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The heat is on…for financing climate action. The new report from the U.N’s Intergovernmental Panel on Climate Change makes abundantly clear the need for a full-scale mobilization to keep global temperature increases below 1.5 degrees Celsius. Will investors answer the call? There’s an estimated annual gap of between $320 billion and $480 billion in clean-energy and energy-efficiency investment in order to meet the goals of the Paris climate agreement, which itself only aims at keeping global warming below 2°C. The recent Climate Week at the United Nations, as well as the Global Climate Action Summit in San Francisco made clear the disconnect between the urgency of climate action and the sluggishness of climate financing.
“Not enough capital is flowing,” Michael Bloomberg warned last month. The former mayor of New York is heading a new Climate Finance Leadership Initiative, a one-year effort to drive toward U.N. Secretary-General António Guterres’ climate finance summit next September. Among the places Bloomberg will look for solutions is the San Francisco-based Global Innovation Lab for Climate Finance, or more simply, the Lab, which has launched nearly three dozen financing vehicles that have mobilized $1.15 billion for climate-change mitigation and resiliency. In the end, the innovation needed to deliver on climate action may be as much in finance as in technology. Says Bloomberg, “The markets’ allocation of capital is a powerful weapon in the fight against climate change.”
Keep reading, “The heat is on…for financing climate action,” by David Bank on ImpactAlpha.
Dealflow: Follow the Money
Australia social impact bond to tackle youth unemployment. Social Ventures Australia is looking to private investors for $5 million to expand employment training and coaching to reduce youth unemployment in New South Wales. Australia’s official unemployment rate is about 5.6%; youth unemployment is above 12%. New South Wales has agreed to invest $10 million in the project, which aims to work with 900 youth starting in April. Read on.
Meatable raises $3.5 million to make faster, cheaper cultured-meat. The Dutch lab-grown meat startup produces cultured meat from animal cells that produce meat faster but are reportedly more difficult to manage in a lab. Meatable was backed by BlueYard Capital, Atlantic Food Labs, Backed VC and several angel investors. Future Meat, SuperMeat, Beyond Meat and others also are racing to develop sustainable sources of protein. Dig in.
EDP backs SolarWorks’ off-grid expansion in southern Africa. Madrid-based renewable energy company EDP Renováveis has taken a €2 million ($2.3 million) minority stake in Dutch off-grid solar venture SolarWorks. SolarWorks, which provides pay-as-you-go home solar systems in Mozambique, will use the capital for expansion to Malawi. EDP’s investment is part of its €12 million “access to sustainable energy” initiative to support energy access in underserved markets. Learn more.
Signals: Ahead of the Curve
In New Delhi, the GSG recognizes leaders and launches funds. The annual Who’s Who of impact investing, hosted by Sir Ronald Cohen’s Global Social Impact Investment Steering Group, is convening for the fourth year. The GSG’s annual awards recognized individuals and organizations “radically reshaping how measurable impact on people and the planet is reflected in financial decision-making.” The U.S.-based family office Blue Haven Initiative was named “Impact Asset Owner of the Year” (listen to ImpactAlpha’s podcast interview); LeapFrog Investments won in the asset manager category; Devi Shetty of the Indian low-cost hospital network Narayana Health, was recognized as “Impact Entrepreneur of the Year. The “market builder” award went to the Bridges Fund Management-backed Impact Management Project. The “millennial honors,” awarded by the Aspen Network of Development Entrepreneurs and the GSG, went to Samir Ibrahim, founder of solar irrigation tech company SunCulture, and Ankit Agarwal, co-founder of HelpUsGreen, which collects and “upcycles” bio waste from the Ganges River.
- Capital for “large outcomes.” Four new funds officially launched at the Delhi summit. The India Education Outcomes Fund is looking to raise $700 million and invest in primary and secondary learning and workforce development, largely through pay-for-success programs. The India Impact Fund of Funds is focused on long-term affordable debt for renewable energy, financial inclusion and healthcare. The Africa and Middle East Education Outcomes Fund also will invest in education pay-for-success initiatives, leveraging development finance capital. The LATAM Impact Fund of Funds aims to catalyze blended finance for infrastructure development and social initiatives.
- Three more. Bangladesh, New Zealand, and South Africa joined the 18 countries and the European Union that have national advisory boards to champion impact investing.
- An obvious truth… In his keynote, Al Gore called climate change a “collision between how our civilization is built and a remarkably fragile ecosystem.” Delegates didn’t need the report from the Intergovernmental Panel on Climate Change (see above) to feel the urgency. Air quality in Delhi, one of the most polluted cities in the world, slipped back into “poor” category as the GSG convened.
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Agents of Impact: Follow the Talent
The Rev. William Barber, who has revived Martin Luther King’s poor people’s campaign, is one of 25 recipients of the MacArthur Foundation’s “genius awards.” Read, “A minister’s call for moral, as well as economic, revival”… Social Finance Netherlands joined the UK, US, Israel and India in the Social Finance network… Are monopolies crushing entrepreneurship? Open Markets Institute and Village Capital are bringing together Sens. Shelley Moore Capito, Cory Booker and Mark Warner, along with Kauffman Foundation’s Victor Hwang, Balle’s Rodney Foxworth, EIG’s John Lettieri, Vilcap’s Ross Baird and Ebony Pope Thursday in Washington D.C. Join in person or live stream…. SOCAP 365, ImpactPHL, Investors’ Circle – Social Venture Network and FS Investments are hosting “Investing To End Poverty” in Philadelphia Wednesday.
— October 9, 2018.