Greetings, Agents of Impact!
In today’s Brief:
- Trendspotting in impact, climate and AI for good
- Sustainable infrastructure in Africa
- Direct air capture in Kenya
Featured: Looking Ahead
15 trends driving impact investing, climate action and AI for good in 2024. Nobody is as smart as everybody, the sage Kevin Kelly likes to say. ImpactAlpha looked ahead to 2024 in our roundups of our coverage of ownership and inclusion, impact investing in emerging markets, climate finance and impact and ESG. To help all of us navigate this consequential year, we’ve also collected predictions and trendspotting from Agents of Impact across the landscape.
The push and pull of impact investing.
- Regulatory push for transparency. The coming year will bring “a push to enhance the consistency, accuracy and transparency in sustainability and ESG reporting,” writes Plan A’s Lubomila Jordanova.
- Impact investing talent pipeline is robust. “The demand for impact investments continues to grow even in a tough fundraising year, yet the real story is the supply side of investors,” writes Priya Parrish of Impact Engine.
AI applications come into focus.
- AI and nature tech. With AI-supported sensing technology, genomics and public datasets on nature, “we have never had a more data-rich training set for nature-related machine learning,” writes the team at biodiversity VC Superorganism.
- AI and inclusive healthcare. When looking for AI and other tech solutions in medicine, “it is necessary to understand whether fund managers are prioritizing race and gender disparities in their decisions,” writes Daryn Dodson of Illumen Capital.
Climate action gets real.
- Decarbonizing fertilizer and livestock. “Nothing says ‘next-level carbon transition’ quite like agriculture,” writes Andrew Beebe of Obvious Ventures. Beebe likes companies including Kula, Pivot Bio and Nitricity in decarbonizing and upleveling fertilizer, and Alga, Blue Ocean Barn and Volta Greentech in livestock. Says Beebe, “This space looks to me like mobility did five years ago: early, target rich, and very impactful.”
- New energy stacks. Innovations in generation, storage and distribution will power the energy transition, argues Fred Wilson of Union Square Ventures. “In the process of rebuilding the infrastructure and systems by which we power this planet, we are also modernizing the energy stack and making it decentralized, modular and programmable.”
- Explore 15 trends driving impact, climate and AI for good in 2024.
Dealflow: Sustainable Infrastructure
African investors back Africa50 to accelerate sustainable infrastructure. Morocco-based Africa50 aims to help infrastructure developers in Africa overcome financing hurdles in project planning, development and operations. Its Infrastructure Acceleration Fund will make majority equity and quasi-equity investments in energy, transportation and logistics, water and sanitation, and digital and social infrastructure. It has raised $222.5 million toward its $500 million goal, with backing from 16 African institutional investors. The African Development Bank and International Finance Corp. also backed the fund.
- Electricity grids. The upgrade of Africa’s inadequate electricity transmission requires at least $45 billion in financing. Africa50 is developing a solar + transmission project with the government of Mozambique and a public-private transmission partnership in Kenya. “It is time for the private sector to jump on the billions of dollars a year transmission infrastructure opportunity in Africa, and for governments to embrace private sector participation in the sector,” Africa50’s Alain Eboisse wrote on ImpactAlpha.
- ESG advantage. Africa50 believes its focus on green and sustainable projects, community benefits and responsible investing give it an advantage in a tough fundraising environment. “With access to capital being highly competitive, the company aims to strategically leverage the fund’s ESG performance as a competitive differentiator,” the firm wrote.
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Renew Capital backs Octavia Carbon for direct air capture in Kenya. African leaders and innovators are starting to tap global carbon markets. Nairobi-based Octavia Carbon is a rare direct air capture startup on the continent. Its projects include a partnership with New York’s Cella Mineral Storage to suck carbon out of the air and store it in mineral rock in Kenya’s Great Rift Valley. Ethiopia-based impact private equity firm Renew Capital invested an undisclosed amount in Octavia “to position Africa as an active contributor to global climate solutions,” said Renew’s Esther Mwikali.
- Carbon markets. At last year’s climate summit in Nairobi, international governments and organizations pledged hundreds of millions of dollars to support Africa’s nascent carbon credit ecosystem. It’s been a bumpy road, including a scandal in Zimbabwe that led to the resignation of South Pole’s founder Renat Heuberger. African business and policy leaders want to ensure African countries get fairly compensated for conservation and biodiversity preservation (see, “Can’t we just pay the Democratic Republic of Congo to keep its oil in the ground?”). “We should focus on conservation and reforestation – with local actors driving the projects, the financing, the verification and the trading,” said Africa Finance Corp.’s Samaila Zubairu.
- Dive in.
Dealflow overflow. Investment news crossing our desks:
- New Forests raised A$450 million (US$300 million) for its Australia and New Zealand-focused sustainable forestry and landscapes fund, with backing from Swedish pension fund AP2 and Australia’s Clean Energy Finance Corp. (New Private Markets)
- Resolve Ventures scored investment for its Climate Impact Fund from the Irish Innovation Seed Fund and the Irish government to invest in startups helping Ireland meet its climate goals. (Impact Investor)
- UK-based TDC, a KKR-backed private credit investment firm, raised £70 million ($89 million) for its impact loan fund to invest in small businesses in northern England. (British Business Investments)
- The Robert Wood Johnson Foundation committed $1 million to Quantified Ventures and the Coalition for Green Capital to test water infrastructure financing models through the coalition’s network of green banks. (Quantified Ventures)
- Silicon-graphite battery cell manufacturer Rincell Corp. secured $1.2 million in seed funding, backed by NextGen Battery Chem Ventures. (Rincell Corp.)
- Tokyo-based Mitsui OSK Lines launched MOL Switch with plans to invest $100 million in decarbonization tech startups in the US. (MOL)
Agents of Impact: Follow the Talent
Amber Banks-Bond, previously with Davos Inc., becomes the first female president of the African American Alliance of CDFI CEOs. Lenwood Long Sr. will continue as CEO… Nataša Goronja, formerly with the Miller Center for Social Entrepreneurship, moves to Accion’s Center for Financial Inclusion as managing director… Impact Capital Managers promotes Diane Kulju to director of impact measurement, management and research.
Bridge Investment Group promotes Lindsay Clark to sustainability vice president… Parina Parikh, previously with San Diego Workforce Partnership, joins Jobs for the Future as workforce and regional economies associate vice president… Blume Equity brings Rens Mathot, formerly with Rabo Investments, onto its investment team. Blume is looking for an investment analyst in London or Amsterdam.
Global Endowment Management has an opening for an impact investments director in Charlotte… The GIIN is recruiting an associate for its global climate solutions initiative in New York… Nonprofit Finance Fund seeks an underwriting manager in California… Global Innovation Fund is hiring a donor relations advisor in London… Aurum Impact is on the hunt for an impact investing intern in Berlin.
Thank you for your impact!
– Jan. 10, 2024