ImpactAlpha, April 9 – The Climate Finance Facility will focus on non-industrial off-grid electricity and water projects in regions of South and southern Africa that lack access to basic services. The blended finance network Convergence provided a grant to help structure the green bank, southern Africa’s first, to the Washington, DC-based nonprofit Coalition for Green Capital.
- Launch plans….The partners hope to have the bank up and running by year end. Reed Hundt, CEO of the nonprofit Coalition for Green Capital, says green banks typically need to raise $10 million to $20 million to launch.
- Catalytic capital…The Climate Finance Facility is intended to become a subsidiary of the Development Bank of Southern Africa. It would raise initial funding from development finance institutions to help green project developers secure financing from commercial lenders and private investors.
- Project pipeline…“There’s more investor interest in green energy than there are projects,” Hundt says. “It needs to be jump started through institutions like green banks.”
Green banks around the world have driven investments of $29 billion with $9 billion in public funding. Most green banking activity has been focused in advanced economies, while “most of the impact of global warming and climate change is going to happen in the developing world,” Convergence CEO Joan Larrea told ImpactAlpha.
