The Global Innovation Lab for Climate Finance (the Lab), the only climate finance incubator that provides significant technical assistance at the concept stage of development, has launched a new program to support the replication of successful initiatives in new markets and sectors. The new program will provide technical support for strategy and business model development to expand the impact of initiatives previously incubated through the Lab that have strong momentum and are ready to scale on an accelerated timeframe.
The Lab is an investor-led initiative that incubates promising solutions to drive investments to action on climate change. In six years, the Lab has become a leader in accelerating investment where it is needed most, having launched 49 finance instruments that have already mobilized USD 2.45 billion for projects in emerging economies.
“The Lab has a strong track record as an incubator of early-stage financial solutions. This new step will extend the Lab’s impact beyond concept development, ensuring transformative ideas, once proven, are better able to scale,” said Dr. Barbara Buchner, Global Managing Director of Climate Policy Initiative, which serves as Secretariat of the Lab.
Lab members evaluated and selected three instruments from the Lab portfolio that will receive support in 2021 for replication in Brazil and India. The two countries were selected not only for their market potential but also to leverage the Lab’s dedicated regional programs and benefit from an established local network of stakeholders, including public and private investors.
In India, Cooling as a Service (CaaS), from the Lab class of 2019, is a pay-per-service model to encourage adoption of energy-efficient and cleaner cooling services. The model, proposed by BASE and K-CEP, will enable small and marginal farmers to make optimal cool storage choices based on data science through a mobile app.
“The Lab program has emerged as one of the most successful acceleration programs in the climate finance space in India promoting myriad technologies and businesses in the climate change arena. We have a huge requirement for cold storage and clearly the instrument chosen for replication has tremendous potential to address several market opportunities,” said Lab Member Sanjeev Aggarwal, CEO of Amplus Energy Solutions.
In Brazil, two instruments were selected for replication.
The Cloud Forest Blue Energy Mechanism, developed in 2017 by Conservation International and the Nature Conservancy, allows hydropower plants to pay for measurable ecosystem benefits provided by cloud forests within its catchment. Roughly 70% of the Brazilian energy mix is hydro-based, but still, no financial instruments incentivize the restoration and preservation of catchments.
Albion Capital‘s Green Receivables Fund (Green FIDC), from the Lab 2017 cohort, has raised USD 50 million for clean energy and energy efficiency projects in Brazil by securing financing based on future cash flows from energy sales. Now the same framework will be applied to a new sector.
“The Lab is a reference in innovation for the climate finance field in Brazil: from clean energy to the agriculture sector, and from climate financiers to people in the government. Now it’s time to show that our market has what it takes to catalyze greater investments,” said Lab Member Gustavo Fontenele, coordinator of green economy at the Brazilian Ministry of Economy.