Climate Policy Initiative’s decade-old Global Innovation Lab for Climate Finance has mobilized $4 billion to urgent climate efforts in the Global South. To ensure local capital managers and other stakeholders have decision-making power over how money is deployed in their communities, CPI’s 10th and largest cohort is doubling-down on regional solutions.
From the Lab’s East and Southern Africa program, ICLEI Africa’s Resilient Municipal Market Fund is designed to bolster agri-food livelihoods and curb food waste in Africa. Grameen Foundation’s climate resilient agriculture bond is directed at women in Uganda.
Forest Carbon’s Model Forests and Biodiversity Bond aims to tap corporate green bonds to support forest conservation in the Philippines.
“We are expanding the Lab’s reach to address historically underfinanced and particularly vulnerable regions and thematic areas,” said CPI’s Barbara Buchner.
LatAm growth
Four new financing initiatives come from Latin America and the Caribbean. Among them: Regenera Ventures, which is making equity investments in farms in Mexico to support their transition to regenerative practices.
The Nature Conservancy and CIPAV are incentivizing cattle farms to transition to regenerative “silvopastoral” production with profit share-based financing, links to carbon markets and technical assistance.
The Lab is this year launching its first program in Latin America and the Caribbean, building on its track record in Brazil.
“The rationale for our broader focus in Latin America is that it’s a huge engine of economic growth, and it’s also very much at risk of food scarcity and other climate adaptation challenges,” CPI’s Ben Broché told ImpactAlpha.
The organization has seen increasing submissions for creative climate financing vehicles from Mexico, Colombia and Peru in recent years.
“Few have gotten Lab support, so we’re choosing to build a Lab community to make sure that local teams are making decisions about how capital is deployed in the region,” Broché said.
Three other cohort participants are taking a global focus. Sustana Cooling Partners and Climake’s Sustana Cooling Impact Fund seeks to blend capital to boost access to cooling technologies in fast-warming and vulnerable communities. Mzansi Clean Energy Capital is testing sustainable utility services for affordable housing residents. Fintech venture The Landbanking Group developed “nature equity asset purchase agreements” to connect sustainable land stewards to off-takers for their work and harvests.
Catalytic capital innovators
CPI seeks proposals through April 24 for grants of up to $500,000 from its Catalytic Climate Finance Facility to help bring early stage climate finance instruments to market. The facility, a partnership between CPI and blended finance network Convergence, launched last year with backing from the Gates Foundation, the International Development Research Centre, and the governments of Canada and Australia. It has raised $13.5 million in donor funding to date and is targeting $100 million to “catalyze the development of the next generation of climate finance vehicles,” Buchner said.
