Greetings, Agents of Impact!
Featured: Catalytic Climate Capital
Measuring and valuing climate adaptation to mobilize capital for low-carbon development. Solar irrigation to increase crop yields. Clean cookstoves to improve indoor air quality. Cold storage to raise farmers’ incomes. Water harvesting and storage to weather droughts. The catalog of high-priority projects for climate adaptation is increasingly converging with the economic development agendas of many middle- and low-income countries. That suggests a new path for mobilizing capital for products and services to increase the resilience of low-income communities around the world. “What we heard loud and clear is that the G7 and these big-country platforms are very interested in climate mitigation as a focus. And the countries themselves are not,” says Duke University’s Jonathan Phillips, who has convened stakeholders to identify effective strategies. “They’re interested in development. They’re interested in resilience and adaptation.”
New initiatives are aiming to quantify adaptation benefits, link them to development goals, and blend capital from development finance institutions and multilateral banks to attract private investors to climate adaptation. “There are not many bankable or commercially-viable adaptation projects,” Shell Foundation’s Ashish Kumar tells ImpactAlpha. To stock the pipeline, the Dutch Fund for Climate and Development provides technical support to early-stage initiatives and graduates them to land and water facilities to promote “climate-resilient economic growth.” Switzerland-based Landscape Resilience Fund, launched last year with $25 million from Chanel, supports enterprises providing smallholder farmers drought-resistant seeds, better farm equipment, training and finance. Distributed Renewable Energy Credits, or D-RECs, are a new mechanism to channel corporate dollars to high-impact projects in Africa and elsewhere. Lightsmith Group has developed a taxonomy for what it calls “adaptation SMEs” – small and medium-sized enterprises that increase climate resilience with products or “climate adaptation intelligence.”
- Keep reading, “Measuring and valuing climate adaptation to mobilize capital for low-carbon development,” by David Bank on ImpactAlpha.
- Answer the Call. Join Kumar, Phillips, BlocPower’s Donnel Baird and other Agents of Impact for “Mapping opportunities for catalytic climate capital,” Wednesday, Sept. 14, at 10am PT / 1pm ET / 6pm London. Bonus: Vibrant Data Labs’ Eric Berlow will launch ImpactAlpha’s Climate Finance Tracker, an interactive map of climate investments and trends. RSVP today.
Dealflow: Food Waste
Misfits Market acquires Imperfect Foods to consolidate the food-waste reduction market. Even amid the downturn in venture funding this year, significant raises for companies in food waste management and upcycling provided positive signals for addressing food waste, reported ReFED’s Alejandro Enamorado in a market update for ImpactAlpha (see, “Silver linings in an uncertain fundraising market for food waste innovation”). San Francisco-based Imperfect Foods, launched in 2015, and New Jersey-based Misfits Market, launched in 2018, “share a vision for a food supply chain that tackles waste and inefficiency and turns that into value for consumers,” said Misfits’ Abhi Ramesh. Ramesh will lead the combined company as CEO. By delivering food deemed too “ugly” for supermarkets to consumers at affordable prices, Imperfect Foods and Misfits Market have redirected nearly 500 million pounds of food that may otherwise have gone to waste.
- Food waste market. SoftBank’s Vision Fund led Misfits’ Series C funding round last year on the thesis that “the bottom two-thirds of American society is poorly served when it comes to affordable, fresh and sometimes organic groceries,” said SoftBank’s Lydia Jett. The deal valued Misfits at $2 billion. The Imperfect acquisition, ReFED’s Enamorado told ImpactAlpha, represents “one of the few exits in the food waste space showing investors realizable returns.” Enamorado said the transaction brings total U.S. food waste investment to nearly $1 billion so far this year.
- Dive in.
British International Investment lends $25 million for clean energy in Nepal. The U.K. development agency made the loan to NMB Bank to boost the bank’s renewable energy lending. The aim is to help Nepal unlock its hydropower potential. The country has developed just 2.3 gigawatts of its 43-gigawatt hydropower generation potential. BII’s loan is expected to enable NMB to finance 50 megawatts of new clean energy projects.
- Power crisis. Nepal experiences consistent power shortfalls and is heavily dependent on imports from India, particularly in the dry season. Nepal has long seen hydropower “as an important cornerstone of its poverty reduction and economic growth strategy,” cites a report from the Asia Development Bank, which is supporting grid modernization in Nepal.
- Green infrastructure. Separately, Italy’s development finance institution Cassa Depositi e Prestiti, or CDP, provided a €100 million loan to Africa Finance Corp. for renewable energy, energy efficiency and climate resilient infrastructure projects.
- Check it out.
CcHUB backs nine fintech startups in Rwanda. The Nigeria and Kenya-based startup accelerator and angel investor network is supporting a cohort of early-stage fintech startups in Rwanda. Most are focused on financial inclusion for individuals and small businesses. Exuus provides financial services to the unbanked. PesaChoice offers salary advances to gig workers. Uplus is digitizing traditional savings groups. CentWise is providing credit to micro-traders and businesses. Quiqpay is a mobile payments service.
- Art and food. Bafana offers a digital wallet for artists and creatives to collect payments for their work. Food Bundles is a fresh food marketplace and distributor that focuses on smallholder farmers. Also in the cohort: online accounting service Kudibooks, and PayingTone, an eco-products market that offers credit.
- Read on.
Dealflow overflow. Other investment news crossing our desks:
- Bridger Photonics raised $55 million to help oil and gas companies, such as ExxonMobil, Chesapeake Energy and others, track and reduce their methane emissions.
- Clean energy and battery storage developer Pathway Power secured $36 million from the Forest Road Company’s climate-focused infrastructure investing initiative.
- Flair snagged $7.6 million in Series A funding co-led by Lowercarbon Capital and Active Impact Investments to make smart heating and cooling products for homes.
- Beehive Industries scored $2.1 million to provide software to municipal and private organizations to manage water and sewer resources and broadband infrastructure.
Signals: Personal Finance
Young savers, if not Republican governors, want their banks out of fossil fuels. Politicians that seek to ban ESG investing are up against serious headwinds from the next generation. “Banking with Impact,” a study of 1,000 adult consumers from creative agency Compose[d] suggests that combating climate change, investing with purpose, and environmental, social and governance factors are increasingly critical to Millennials and Gen Z savers. Among the findings: More than 80% of those surveyed want the ability to opt-out of investments that contribute to climate change. An even higher share want their banking and investments to have a positive impact on people and the planet. And more than 90% believe banks have a responsibility to disclose their investment activity in a transparent manner. Preferences for Millennials and Gen Z savers tended to be even stronger in each finding.
- Connect the dots. Awareness and preference for financial responsibility is not yet translating to action, according to the survey. More than half of Gen Z consumers bank where their parents bank; more than 70% of all savers value high interest rates on savings accounts above all. More than half, however, prefer that a bank “aligns with my personal values and invests accordingly.” Banks that “share the brand values and corporate social responsibility objectives in consumer-facing materials will win,” says Compose[d]’s Jason Parkin, “ensuring customers feel confident in where they choose to put their money.”
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Agents of Impact: Follow the Talent
Amalia Kontesi, ex- of JPMorgan Chase, joins Google as head of social impact communications for Europe, the Middle East and Africa… Sarah Kaplan is promoted to partner at Cutting Edge Counsel… National Community Investment Fund seeks a director of impact in Chicago… Washington Farmland Trust is looking for an operations and finance manager in Seattle… Acre is recruiting a director of impact investments in New York… Chan Zuckerberg Initiative is hiring a manager of special projects in Redwood City, Calif… Common Impact is looking for a chief program officer.
The Glasgow Financial Alliance for Net Zero, a coalition of financial institutions, is forming a network in Africa… Michelle Kiang of Impact Science Ventures, Faye Sahai of Telosity Ventures, Faye Walsh Drouillard of WakeUp Capital, and Kat Cruz of Anthemis will discuss “Women-led VC funds: Amplifying impact,” today, Sept. 8… ImpactAssets will host, “The race to net zero: a climate pioneer’s roadmap,” Thursday, Sept. 29.
Thank you for your impact!
– Sept. 8, 2022
