The Brief | September 7, 2023

The Brief: ImpactAlpha in Copenhagen, Africa’s climate opportunity, zero-emission steel, landscape restoration, acquisition of Energy Capital Partners

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Greetings, Agents of Impact! 

🤝 Let’s meet in Copenhagen. Heading to the GIIN Impact Forum next month? Kick off the networking with drinks with ImpactAlpha, along with Oxford’s Saïd Business School and Founders Factory Africa, on Tuesday, Oct. 3, at the National Museum of Denmark’s Glass Hall. Don’t miss it.

Featured: Africa Climate Summit

Hit hard by climate change, African nations lean into opportunities in the green transition. African countries top the list of the world’s most climate-vulnerable places, despite having contributed little to the greenhouse gas emissions that are causing global warming. African leaders gathered in Nairobi this week to voice their climate concerns. Their message: The world needs Africa’s help in the climate fight just as much as Africa needs the world. Africa has the capacity to produce nearly 40% of global renewable energy and contains 30% of the world’s mineral reserves, many of which are critical to the energy transition. “We have an opportunity to turn the climate crisis into an opportunity for our continent,” said Kenyan President William Ruto, whose government hosted the Africa Climate Summit with the African Union. “We have an opportunity to unlock the renewable assets available on our continent, whether they are minerals, whether they are energy, whether it is our young people, whether it is smart agriculture.” The three-day summit drew more than 30,000 policymakers, NGOs, entrepreneurs, private sector and civil society representatives, and citizens. From Nairobi, ImpactAlpha’s Jessica Pothering and contributor Lucy Ngige share highlights: 

  • Carbon tax and debt reform. What’s needed, of course, is money. Just $30 billion in annual climate finance flows to Africa; the continent needs at least $250 billion annually to meet its climate goals, much less support other countries with resources to meet theirs. The Nairobi Declaration, presented on the third day of the Summit, called for a global carbon tax to redirect financial flows from industrialized, high-polluting countries to capital-constrained, lower-income countries. The declaration took aim at the debt burden crippling many African countries, and called for reforms to the International Monetary Fund’s “special drawing rights” to unlock climate finance. Missing: Significant attention to climate adaptation strategies and how to fund them. “This is concerning,” said Bogolo Joy Kenewendo, the UN Climate Change High-Level Champions’ special advisor for Africa, “because we are spending well over 30% of our government budgets on adaptation and resilience that we can not afford.”
  • All about renewables. Africa’s leaders are aiming to increase the continent’s renewable energy generation from 56 gigawatts today to 300 gigawatts by 2030. Kenya launched the Accelerated Partnership for Renewables in Africa, with Ethiopia, Namibia, Rwanda, Sierra Leone and Zimbabwe, along with the International Renewable Energy Agency, Denmark, Germany, and the UAE, to mobilize finance and technical assistance to Africa’s renewables sector. Virunga Power, which supports small-scale hydro projects in Africa, announced a $1.4 billion initiative to privatize Burundi’s power distribution. USAID and the DFC announced $200 million in investments for African renewable energy development and access.
  • Catalyzing local capital. Developed countries have failed to live up to a promise to direct $100 billion annually in climate finance to lower-income countries. In Kenya and South Africa, local pension fund consortiums are mobilizing hundreds of millions of dollars to finance new infrastructure. A partial credit guarantee for Kenya’s first green bond catalyzed private sector financing for green, affordable student housing. The Nordic Development Fund’s Karin Isaksson called for development finance institutions to step up their catalytic role for Africa’s climate resilience. “You cannot change the world without taking risks, and someone has to also pay for this risk.”
  • Keep reading, “Hit hard by climate change, African nations lean into opportunities in the green transition,” by Jessica Pothering on ImpactAlpha.

Dealflow: Climate Tech

Boston Metal hauls in $262 million for green steel and metals. Boston Metal’s electro-chemical process turns iron ore into liquid metal, streamlining zero-emission steel production without the use of coal. The same renewable energy-powered technology can also recover valuable metals from mining waste. The Boston-based startup expects to deploy its green steel technology commercially by around 2026; a commercial facility for metals recovery is opening in Brazil this year. The diverse mix of investors in Boston Metal’s Series C financing includes ArcelorMittal, BHP Ventures, Breakthrough Energy Ventures, Microsoft’s Climate Innovation Fund, Prelude Ventures, IFC, Aramco Ventures and M&G Investments.  

  • Decarbonization. Steelmaking accounts for about 10% of global emissions. Sweden’s H2 Green Steel, which uses green hydrogen to replace coal, raised $191 million from investors including Al Gore’s Just Climate last October. H2 is building a first-of-its-kind green steel plant in Sweden. US-based Hybar snagged $700 million in debt and equity for a solar-powered recycled steel plant in Arkansas. Boston Metal “has the potential to decarbonize steelmaking at scale while delivering significant value and sustainability benefits for the metals industry,” said Carmichael Roberts of Breakthrough Energy Ventures.
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Bezos Earth Fund deploys $22.8 million for locally-led landscape restoration in Africa. The grants will support “African institutions that are at the heart of the continent’s restoration movement and begin the vital work of leveraging philanthropy into private investment,” Bezos Earth Fund’s Andrew Steer said at the Africa Climate Summit in Nairobi (see above). A few dozen countries in Africa, through the African Forest Landscape Restoration Initiative, or AFR100, have set out to restore almost 250 million acres of degraded land by 2030. “Locally-led and managed restoration efforts are more likely to deliver long-term success and can bring climate and biodiversity benefits along with economic prosperity for communities,” said Wanjira Mathai of the World Resources Institute, a grant recipient. WRI, in partnership with Realize Impact and One Tree Planted, finances community-based landscape restoration in Africa.

  • Catalytic capital. Other Bezos grant recipients include Rabo Foundation, the impact fund of Netherlands-based Rabobank, which provides Kenyan farmers with capital and capacity building for agroforestry projects. Barka Fund, an African accelerator and seed impact fund, provides funding for local restoration enterprises. The grants will help restore roughly 1.5 million acres of degraded land in the Great Rift Valley in Kenya, and Lake Kivu and Rusizi River Basin in the Democratic Republic of Congo, Rwanda and Burundi. Bezos Earth Fund says restoration at this scale can sequester 42 million metric tons of carbon emissions by 2050.
  • Check it out.

Dealflow overflow. Other news crossing our desks:

  • Adenia Partners, a private equity firm focused on sustainable investments in Africa, said it is on track to “exceed” its $400 million target for its fifth fund. (Adenia)
  • FSD Africa allocated a combined $19.5 million to Camco’s Spark Energy Services, Acre Impact and BFA Global’s Catalyst Fund to support climate adaptation and resilience in Africa.
  • Mentra, a Charlotte, NC-based company led by autistic founders, scored $3.5 million in a seed round to build a hiring platform for neurodivergent professionals. (TechCrunch)
  • The UK’s Bridgepoint Group is getting into energy transition infrastructure with the acquisition of New Jersey-based Energy Capital Partners (Bloomberg)

Agents of Impact: Follow the Talent

Richard Newell will step down as president and CEO of the environmental think tank Resources for the Future later this year… Mack Schow, ex- of German Investment Corp., joins Adenia Partners as head of investor relations… Waleed Elgohary, ex- of CPP Investments, joins Apollo Global Management in London to focus on climate investments… Neuberger Berman is hiring an investment ESG associate in New York… Mission Driven Finance is recruiting a remote Indigenous Futures director. 

Platinum Pacific Partners seeks a responsible investing and impact director in Sydney… GenZero has openings for a nature-based solutions vice president and an investment strategy senior associate in Singapore… Candide Group is accepting applications for community advisory board members for the Olamina Fund… A joint venture partnership between Phenix Capital Group and KKL Partners will provide placement services for impact fund managers to meet the criteria of European institutional investors.

👉 View (or post!) more impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Sept. 7, 2023