Climate Finance | March 10, 2021

Six financial innovations for a sustainable recovery in Africa, Asia and Latin America

Amy Cortese
ImpactAlpha Editor

Amy Cortese

ImpactAlpha, March 10 – Voluntary and mandatory carbon markets are starting to drive sustainable investments around the world. Energy Peace Partners’ Peace Renewable Energy Credits, or PRECs, offer a way to bring such investments to 27 countries in Africa, the Middle East and South Asia that face a triple threat of climate vulnerability, energy poverty and conflict.

Microsoft in November purchased the first PRECs issued by Energy Peace Partners for a commercial solar-plus storage project underway in the Congo to install 35 micro-grid connected street lights. The PREC concept is among a half-dozen ideas selected by the Global Innovation Lab for Climate Finance, an accelerator for sustainable finance innovations.

The solutions, which span sustainable food systems, energy access and infrastructure, can help “enable a true transition as the world recovers from the pandemic,” said Barbara Buchner, who heads the Lab, which has helped mobilize $2.4 billion for 49 instruments since 2014. 

Energy access

Women-led Nithio leverages data and AI to expand renewable energy lending to borrowers who lack credit scores, and combines that with cash-flow backed debt financing to improve energy access. The Brazilian Biogas Association is creating a fund that will provide financial guarantees required by banks for biogas projects. African infrastructure investor and asset manager ARM Harith is developing a blended-currency fund vehicle with credit enhancements to scale up climate infrastructure investment in West African cities. 

Sustainable food

A Smallholder Resilience Fund proposed by One Acre Fund would deploy “synchronized investments” across the value chain of climate-friendly crops in Kenya and Rwanda. Brazil’s Maua Capital is providing upfront finance for sustainable supply chains based on customer commitments.