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Accelerating Climate Innovation in Developing Countries THE CLIMATE TECHNOLOGY PROGRAM
Accelerating Climate Innovation in Developing Countries
THE CLIMATE TECHNOLOGY
PROGRAM
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“The key to solving the problem of
climate change will be innovation”
Bill Gates
“Climate Innovation Centers will help private sector entrepreneurs to
transform climate challenges into growth opportunities”
Andrew Steer, Special Envoy for Climate Change, The World Bank Group
“The Government of Vietnam supports this important initiative and proposes developing
the necessary policy framework to facilitate its effective operation”
Vice Minister Mr. Tran Hong Ha from the Ministry of Natural Resources and Environment, Vietnam
“The Climate Technology Program has helped us develop a CIC to achieve the Gauteng govern-ment’s Green Economy objectives.”
McLean Sibanda, CEO, The Innovation Hub, South Africa
“The Climate Innovation
Centre (CIC) has a role to play in
transforming Kenya specifically
to catalyze innovative technology
among SMEs.”
Alex Alusa, Office of Prime Minister, Kenya
INNOVATION WILL TRANSFORM CLIMATE CHALLENGES INTO ECONOMIC GROWTH OPPORTUNITIES
• InnovationinwaterandirrigationtechnologieswillhelprelievetheincreasedwaterstresscausedbyclimatechangeformillionsofpeopleinAfricaandelsewhere.
• SustainableagriculturaltechnologiesdeployedinCen-tralandSouthAsiawillhelpoffsettheprojected30%fallincropyieldsintheregion,duetoclimatechange.
• SmallandMediumEnterprises(SME)areeconomicenginesforgrowthandjobsindevelopingcountries.SMEsinIndonesiaaccountforover90percentofthetotalworkforce,andespeciallyemploywomenandyouth.
• Tensofmillionsofjobswillbecreatedinrenewableenergyandenergyefficiencysectorsby2020with10to40foldincreasesinjobsinsolarandbiomasssec-torsrespectively.
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OVERVIEWDEVELOPING COUNTRIES WILL DRIVE THE GROWTH OF GLOBAL CLIMATE TECHNOLOGY MARKETS
• AcleantechnologyrevolutionwillrequireaUSD100billioninvestmentannuallyinR&Dtohalvecarbonemissionsby2050.
• Growthisincreasinglydrivenbynon-OECDcountries,whoseshareofglobalinvestmentinrenewablesgrewfrom29%in2007to40%in2008.
• Thecleaneconomyoffersmoreopportunitiesandbet-terpayforlow-andmiddle-skilledworkersthanthenationaleconomyasawhole.
• TheInternationalEnergyAgencypredictsthatoverthenext25years,90%oftheprojectedgrowthinglobalenergydemandwillcomefromnon-OECDeconomies.
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>THE CLIMATE TECHNOLOGY PROGRAM
TheClimateTechnologyProgram(CTP)ishousedatinfoDev,aglobaltechnologyandentrepreneurshipprogramintheWorldBankGroup.TheCTPsupportstheprivatesectorindevelopingcountries-targetingSMEsandentrepreneurs-toinnovatenoveltechnologiesandbusinessmodelstoaddresslocalclimatechallenges.Bysupportingthestakeholder-drivendevelopmentofinnovativesolutions,theCTPallowsdevel-opingcountriestomitigateemissionsandincreaseclimateresiliencywhilealsoactivelyandprofitablyparticipatingintheglobalcleantechnologyrevolution.Inadditiontoachievingclimateandenergyimpacts,resultsaremeasuredinnewjobsandbusinessescreated,helpingcountriesachievetheirgreengrowthobjectives.
TheCTP’sflagshipinitiativeisthedevelopmentandimple-mentationofcountry-levelClimateInnovationCenters(CICs).TheCICsaredesignedaslocallyownedandruninstitutions
thatprovideasuiteofservicesandventurefinancingthataddressthespecificneedsoflocalclimateinnovatorsandcompanies.Atthegloballevel,theCTPisprovidinglinkagesbetweenCICsbyfacilitatingmarketentry,accesstoinforma-tionandfinancingfortheprivatesector,whilealsoofferingimportanttoolsforpolicy-makerstomeasureandimprovedomesticclimateinnovationactivities.
TheCTPcomplementsotherclimateeffortsbyprovidingapipelineofviablecompaniesandprojectsthatcanbefurthersupported.Byhelpingearly-stageinnovatorsovercomeinitialchallenges,theCTPwillprovideviableinvestmentopportu-nitiesforclimatefinanceprograms.TheCICscanalsolinktotheUNClimateTechnologyCenterandNetwork(CTC&N)byprovidingexpertinstitutionsonthegroundwithexcellentknowledgeoflocalclimatetechnologychallenges.
SCALING-UP INFODEV’S CLIMATE TECHNOLOGY PROGRAM
The Climate Technology Program (CTP) continues to see strong demand from stakeholders and is now scaling up its activities.
• Governments see the CTP as a key tool to support domestic private sector participation in growing climate tech opportunities to achieve economic growth and job creation.
• Climate technology enterprises and entrepreneurs are eager for the investment and advisory services the CICs will provide for them to succeed.
• The CTP will catalyze innovations that leverage private investment at a ratio of 8 to 1.
The program’s expansion will develop new CICs in additional countries and launch a set of global activities to support the CICs and create market linkages. This builds on infoDev’s network and long-standing experience in technology entrepreneurship and innovation.
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Improvingaccesstocleanwaterfor90,000Ethiopian
households
Providing1400 MW inoff-gridrenewable
energyaccess
>
>
>
>
>>
>CO2
CO2
Providingcleanenergytoanadditional35,000homesinSouthAfrica
Mitigatingupto50M tonsofCO2
Achieving75%companysurvivalrate3yearsafterexitfromCICs
3YRS
THE CLIMATE TECHNOLOGY PROGRAM WILL DELIVER GLOBAL IMPACTS
Deliveringandfacilitatingfinancingtoover2,500 innovativecompanies
Creatingover200,000 longtermjobopportunitiesAllowing3,000,000peopleincludingwomenandgirlstobelessvulnerabletotheeffectsofclimatechange
Leveragingupto8 times privatesectorinvestment
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DESIGNING THE CIC MODEL: IDENTIFYING GAPS IN EXISTING INSTITUTIONS
infoDev and Bloomberg New Energy Finance ana-lyzed 500 hundred private and public initiatives that support climate and clean energy innovation. These included centers of excellence, seed funds, technol-ogy accelerators, business incubators and other pro-grams. The report found that only a few institutions provided holistic solutions to addressing the broad number of barriers preventing climate innovation in their countries. These included China’s Baoding New & High Tech Industrial Development Zone, the UK’s Carbon Trust and Brazil’s Center for Innovation, Entrepreneurship and Technology (CIETEC) at the University of Sao Paulo.
Climatechangeisaffectingecosystemsaroundtheworld.Manyoftheimpactsarebeingfacedbythepoorestnations.Changingclimatesarealreadycausingirreversibleeffectsonagriculture,waterresources,forestry,societyandindustry.Furthermoreenergyaccess,securityandpricevolatilityarefurtherconstrainingglobaleconomicgrowth.
TherearemanybarrierstodevelopingthenewtechnologiesneededtoaddressclimatechangeandachieveGreenGrowth.Thesebarriersaremorepronouncedindevelopingcountries.Thesebarriersincludegapsinappropriatefinancing,laggingtechnicalandbusinesscapabilities,entrepreneurialcapacityconstraintsanduncertainregulatoryenvironments.Moreover,manydevelopingcountrieslackthepublicandprivatesectorbodiesthatsupportinnovation.
Whilelocalizationofexistingtechnologiesorthedevelop-mentofentirelynewsolutionscanplayanimportantrole,successfulcommercializationindevelopingcountriesisoftenlinkedtonewbusinessmodels,processesororganizationalapproaches.
WHY INVEST IN CLIMATE TECHNOLOGY INNOVATION?
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Inclusiveinnovationinclimatetechnologiesisalsoparticularlycentraltomeetingtheneedsofthepoorandmarginalized.Womenandgirls’contributionstoclimatesectorsremainavastuntappedresourceintermsofdevelopment.Moreoverinnovationhasanimportantmultipliereffect.Investingsmallamountsupfrontleadstomuchlargerenvironmental,socialandeconomicimpactsdownstream.
Bygrowinglocalandglobalmarketsforclimatetechnologyproductsandservices,innovatorsindevelopingcountriescanseizetheopportunitytobepartofthegreatesttechnologyrevolutionofthe21stCentury.
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Investmentininnovationcountersbarriersandacceleratescommercialization
Barriersslowlaunchandgrowthofnewtechnologies
INVESTING IN INNOVATION RESULTS IN FASTER AND CHEAPER COMMERCIAL SUCCESS.
Withouttherequiredfinancing,businesssupport,knowledgeandassociatednetworks,climatebusinessesoftenfallvictimtothewell-referenced‘ValleyofDeath’.Byinvestingininnova-tion,thepublicsectorplaysakeyroleinreducingtheriskforprivatesectorparticipation.Thismakesthepathtocommer-cialsuccessfasterandlesscostlyfornewmarketentrants.
Investingininnovationachievesmultiplebenefits.Researchhasshownthatnearlyallnetjobcreationcomesfromin-novativestartupfirmslessthanfiveyearsold.Theclimatetechnologysectoralsoposessignificantmarketopportunitiesforinnovation.NeededinvestmentinenergyaloneisUSD45trillioninthenext40years.
CTPACTIVITIES
LAUNCH LAUNCH
CONCEPTUALIZATION EARLY-GROWTH SCALE-UP FULLDEPLOYMENT
INV
ESTM
ENT
AN
D R
EVEN
UE
JOBS
CRE
ATED
88
MOROCCO
THECARIBBEAN
KENYA
INDIAETHIOPIA
SOUTHAFRICA
VIETNAM
TheCTPwillexpandscopinganddesignactivitiestomeetstrongclientcountrydemandforCICs.ThedesignofeachCICistailoredtotheparticularneedsofeachcountry.ThedetailedoperationalandfinancialplansforeachCenterarepackagedinabusinessplanwhichisusedasablueprintforlocalimplementation.
1. CIC DESIGN
TheCTPwillmobilizeandsyndi-categlobalfundingforinnovativetechnologiesintheformofstrategicappliedR&Dprizes,innovationprizesandseedinvestments.Globalfinancingwilladdresscrucialfund-inggapswhileofferingdeal-flowtopublicandprivateinvestorseagertosupportpromisingclimateventuresindevelopingcountries.
2. GLOBAL FINANCING
CLIM
ATE
TECH
NO
LOG
Y PR
OG
RA
M
The CTP will provide a range of global activities to serve the needs of private sector innovators in developing countries by provid-ing access to the latest technolo-gies, information, financing and expertise to participate in growing international climate sector op-portunities. Country-level CICs will serve as delivery hubs for global activities coordinated by the CTP.
GLOBAL
The CICs build local capacity and address barriers to innovation by offering a tailored suite of financ-ing and services that support domestic SMEs. With the CIC’s assistance, innovative enterprises become more competitively and profitably involved in booming local and international cleantech markets - creating jobs and leading to economic growth.
LOCAL
TheCTP
link
sactiv
itiesatthe
localand
globa
llevelstodriv
einno
vatio
nofclim
atetech
nologiesfo
rdevelop
ingcoun
tries.
CIC Design
GHANA
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TheCTPwillactivelypackagelessonsfromindividualCICsandprovidecuttingedgeanalyticalproductsandpolicytoolkitsonsupportingprivatesectorinnova-tors.TheexperiencesfromtheCICswillprovidetremendouslearningonclimateinnovationacrossmultiplecountriesandregions.
3. EVIDENCE-BASED ANALYSIS
VialinkagestoCICs,theCTPwilllinkpromisingcompanieswithglobalpartnersandexpertise.Connectingentrepreneursinternationallytofindsuppliers,partners,financingandexportmarketsisessentialtogrowingaworld-classbusiness.TheCTPwillalsoestablishthreeregionalinnovationnetworksinEastAfrica,NorthAfricaandtheCaribbean.
4. CONNECTING MARKETS
CTPwillprovideclientgovern-mentswithaCIC-basedMonitoringandEvaluation(M&E)tooltotrackdomesticinnovationprogress.ThisproductwillbehighlyusefulforpolicymakerstoaccesstimelydataonR&Dactivity,employmentnumbers,technologyimpacts,andtheinvolvementofwomeninlocalclimatesectors.
5. MEASURING RESULTS
ACCESSTOFACILITIES
+ Officespaceandservicesforentrepreneursandstart-ups
+ Accesstotechnicalfacilitiestotestanddemonstrateproducts
GOVERNMENTADVISORY
+ Researchonsectorpolicytrendsandbestpractice
+ EngagementwithgovernmentonSMEpolicyissues
+ Policydialogues,roundtablesandevents
VENTUREFINANCE
+ Proof-of-conceptgrantsuptoUSD50k
+ SeedCapitalInvestmentsfromUSD50k-1m
+ Investorfacilitationandsyndication
MARKETINTELLIGENCE
+ Accesstodatabasesontechnologies,standardsandsuppliers
+ Informationonmarkets,competitors,potentialpartners
+ Research,reportsandanalyticsonsectortrends
BUSINESSADVISORY&TRAINING
+ Businesstraining,mentoring,accesstoprofessionalservices
+ Technicaltrainingandskillsdevelopment
+ Education,seminarsandevents
Climate TRACKClimate Technology Research, Analysis,
Communication and Knowledge
MarketCONNECT Impact Xchange
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THE CTP HARNESSES THE CREATIVE SPARK OF INNOVATIVE CLIMATE TECHNOLOGY ENTERPRISES
SOUTH
AFR
ICA
INDIA
ETHIOPIA
GUAT
EMALA
SUNAIRPOWERinIndiaisahybridrenewableenergysystemsproviderproducinggeneratorsthatharnessbothsolarandwindpowerwhichisthenstoredinabatteryforoff-griduses.SunAirneedsfundingfortechnologydevelopmentandproof-of-concepttoimproveproductdesign.
JABULANIHOLDINGSfromSouthAfricahasdevelopedlocalalternativestosolarwaterheatersmadefromAfrican-sourcedma-terials.JabulaniisseekingUSD1.6Mtobuildandoperate4factories,creatingneededgreenjobsintheregion.
DVENTUSTECHNOLOGIESbasedinAddisAbaba,Ethiopia,housesanelectronicslabandhigh-techworkshopwherelocalengineeringgraduatesaredesigning,developingandproducing1MWpermanentmagnetgeneratorsforwindturbinesandotheruses.Theyneedassistanceinaccessingproof-of-conceptfundingtoacceleratetheproductdevelopmentprocess.
GUATEMALANSTART-UPEcofiltroproduceswaterfilterscom-mercializedfromdomesticresearchandmadewithlocalmaterials.Thecompanyisseekingaccesstoglobalpartnershipstoexpanditsfranchisemodel.IthasrecentlysecuredUSD1minventurefinancingasaresultofinfoDev’sAccesstoMarketactivities.
INKENYA,windturbinemanufacturerCraftSkillzproducesuptotwenty150Wturbinesayear,employingupto20people.Toexpand,thecompanyrequiresadditionalfinancing,designsupportandac-cesstofacilities.
KENYA
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infoDevisaglobalpartnershipprogramintheFinancialandPrivateSectorDevelopmentNetworkoftheWorldBankGroup.Itsmissionistoenableinnovativeentrepreneurshipforsustain-able,inclusivegrowthandemployment.
TheCTPleveragesinfoDev’sten-yeartrackrecordofsupport-ingdomesticindustry,inparticularhigh-growthenterprises,todevelopinnovativeInformationandCommunicationTechnolo-gies(ICT)andbusinessmodels.Morerecently,infoDevhasappliedthissuccesstosupportinginnovationinbothclimateandagribusinesssectors.
infoDevhasanexistingnetworkofover400incubatorsin108countries.Thesehaveincubated25,000firms,75%ofwhichstillexist3yearsafterleavinganinfoDevincubator,leadingtothecreationofmorethan250,000jobs.ThisnetworkgivesinfoDevaccesstoavastcommunityoftechnologists,entrepreneurs,poli-cymakers,financiers,academics,governmentsanddonors.
Theirsharedvisionincludesenhancedbusinessopportunitiesforsmallandmediumenterprises,wealthgeneration,economicinclusion,andjobcreationastoolsforpovertyreduction,andsustainablegrowthofdevelopingcountries.
LEVERAGING A HISTORY OF EMPOWERING ENTREPRENEURS
THE CTP COMPLEMENTS ONGOING AND FUTURE CLIMATE TECHNOLOGY PROGRAMS
TheCTPcomplementsotherclimateeffortsbyprovidingapipelineofviablecompaniesandprojectsthatcanbefurthersupported.TheCTPwillprovideviableinvestmentopportunitiesforclimatefinanceprogramssuchastheClimateInvestmentFunds,carbonfinancing,InternationalFinancialInstitutionfinancingandtheprivatesector.TheCICscanalsobeaffiliatedwiththeUNClimateTechnologyCenterandNetwork(CTC&N)byprovidingcountry-levelexpertise,knowledgeandnetworks.
CAPACITY
BUILDING
FINANCING&
INVESTMENTS
CLIMATEFINANCE
UNCLIMATETECHNOLOGY
CENTER&NETWORK
CLIMATETECHNOLOGYPROGRAM
Networkparticipation
Pipelinedevelopment
CONCEPTUALIZATIONEARLY-GROWTHSCALE-UPFULLDEPLOYMENT
TheWorldBank|infoDev
1818HStreetNW
Washington,DC20433,USA
Tel:+12024584070
www.infodev.org
“The Climate Innovation Centre (CIC) has a role to play in transforming Kenya to a middle income country as called for in the Government’s Vision 2030. Specifically to achieve the essential technological advancement and catalyze innovative technology among SMEs.”
Alex Alusa, Office of Prime Minister, Kenya
