Accelerating Climate Innovation in Developing Countries

THE CLIMATE TECHNOLOGY

PROGRAM

THE WORLD BANK

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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 Tech-nology Program has helped us develop a CIC to achieve the Gauteng government’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• Innovationinwaterandirrigationtechnologieswillhelp

relievetheincreasedwaterstresscausedbyclimatechangeformillionsofpeopleinAfricaandelsewhere.

• SustainableagriculturaltechnologiesdeployedinCentralandSouthAsiawillhelpoffsettheprojected30%fallincropyieldsintheregion,duetoclimatechange.

• SmallandMediumEnterprises(SME)areeconomicen-ginesforgrowthandjobsindevelopingcountries.SMEsinIndonesiaaccountforover90percentofthetotalwork-force,andespeciallyemploywomenandyouth.

• Tensofmillionsofjobswillbecreatedinrenewableener-gyandenergyefficiencysectorsby2020with10to40foldincreasesinjobsinsolarandbiomasssectorsrespectively.

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OVERVIEWDEVELOPING COUNTRIES WILL DRIVE THE GROWTH OF GLOBAL CLIMATE TECHNOLOGY MARKETS• AcleantechnologyrevolutionwillrequireaUSD100bil-

lioninvestmentannuallyinR&Dtohalvecarbonemis-sionsby2050.

• Growthisincreasinglydrivenbynon-OECDcountries,whoseshareofglobalinvestmentinrenewablesgrewfrom29%in2007to40%in2008.

• Thecleaneconomyoffersmoreopportunitiesandbetterpayforlow-andmiddle-skilledworkersthanthenationaleconomyasawhole.

• TheInternationalEnergyAgencypredictsthatoverthenext25years,90%oftheprojectedgrowthinglobalen-ergydemandwillcomefromnon-OECDeconomies.

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>THE CLIMATE TECHNOLOGY PROGRAM

TheClimateTechnologyProgram(CTP)ishousedatinfoDev,aglobaltechnologyandentrepreneurshipprogramintheWorldBankGroup.TheCTPsupportstheprivatesectorindevelopingcountries-targetingSMEsandentrepreneurs-toinnovatenoveltechnologiesandbusinessmodelstoaddresslocalclimatechallenges.Bysupportingthestakeholder-drivendevelopmentofinnovativesolutions,theCTPallowsdevelopingcountriestomitigateemissionsandincreaseclimateresiliencywhilealsoactivelyandprofitablyparticipatingintheglobalcleantechnologyrevolution.Inadditiontoachievingclimateandenergyimpacts,resultsaremeasuredinnewjobsandbusinessescreated,helpingcountriesachievetheirgreengrowthobjectives.

TheCTP’sflagshipinitiativeisthedevelopmentandim-plementationofcountry-levelClimateInnovationCenters(CICs).TheCICsaredesignedaslocallyownedandruninsti-

tutionsthatprovideasuiteofservicesandventurefinanc-ingthataddressthespecificneedsoflocalclimateinnova-torsandcompanies.Atthegloballevel,theCTPisprovidinglinkagesbetweenCICsbyfacilitatingmarketentry,accesstoinformationandfinancingfortheprivatesector,whilealsoofferingimportanttoolsforpolicy-makerstomeasureandimprovedomesticclimateinnovationactivities.

TheCTPcomplementsotherclimateeffortsbyprovidingapipelineofviablecompaniesandprojectsthatcanbefur-thersupported.Byhelpingearly-stageinnovatorsovercomeinitialchallenges,theCTPwillprovideviableinvestmentopportunitiesforclimatefinanceprograms.TheCICscanalsolinktotheUNClimateTechnologyCenterandNetwork(CTC&N)byprovidingexpertinstitutionsonthegroundwithexcellentknowledgeoflocalclimatetechnologychal-lenges.

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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Improvingaccesstocleanwaterfor90,000 Ethiopian

households

Providing 1400 MWinoff-gridrenewable

energyaccess

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>CO2

CO2

Providingcleanenergytoanadditional 35,000homesinSouthAfrica

Mitigatingupto50MtonsofCO2

Achieving 75%companysurvivalrate3 years afterexitfromCICs

3 YRS

THE CLIMATE TECHNOLOGY PROGRAM WILL DELIVER GLOBAL IMPACTS

Deliveringandfacilitatingfinancingtoover2,500 innovativecompanies

Creatingover200,000longtermjobopportunitiesAllowing3,000,000 peopleincludingwomenandgirlstobelessvulnerabletotheeffectsofclimatechange

Leveragingupto8 timesprivatesectorinvestment

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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, technology accelerators, business incubators and other programs. The report found that only a few institutions provided holistic solutions to addressing the broad number of barriers preventing climate innovation in their coun-tries. These included China’s Baoding New & High Tech Industrial Development Zone, the UK’s Carbon Trust and Brazil’s Center for Innovation, Entrepreneur-ship and Technology (CIETEC) at the University of Sao Paulo.

Climatechangeisaffectingecosystemsaroundtheworld.Manyoftheimpactsarebeingfacedbythepoorestnations.Changingclimatesarealreadycausingirreversibleeffectsonagriculture,waterresources,forestry,societyandindus-try.Furthermoreenergyaccess,securityandpricevolatilityarefurtherconstrainingglobaleconomicgrowth.

Therearemanybarrierstodevelopingthenewtechnolo-giesneededtoaddressclimatechangeandachieveGreenGrowth.Thesebarriersaremorepronouncedindevelopingcountries.Thesebarriersincludegapsinappropriatefinanc-ing,laggingtechnicalandbusinesscapabilities,entrepre-neurialcapacityconstraintsanduncertainregulatoryen-vironments.Moreover,manydevelopingcountrieslackthepublicandprivatesectorbodiesthatsupportinnovation.

Whilelocalizationofexistingtechnologiesorthedevelop-mentofentirelynewsolutionscanplayanimportantrole,successfulcommercializationindevelopingcountriesisoftenlinkedtonewbusinessmodels,processesororganiza-tionalapproaches.

WHY INVEST IN CLIMATE TECHNOLOGY INNOVATION?

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Inclusiveinnovationinclimatetechnologiesisalsoparticu-larlycentraltomeetingtheneedsofthepoorandmargin-alized.Womenandgirls’contributionstoclimatesectorsremainavastuntappedresourceintermsofdevelopment.Moreoverinnovationhasanimportantmultipliereffect.Investingsmallamountsupfrontleadstomuchlargerenvi-ronmental,socialandeconomicimpactsdownstream.

Bygrowinglocalandglobalmarketsforclimatetechnologyproductsandservices,innovatorsindevelopingcountriescanseizetheopportunitytobepartofthegreatesttechnol-ogyrevolutionofthe21stCentury.

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Investmentininnovationcountersbarriersandacceleratescommercialization

Barriersslowlaunchandgrowthofnewtechnologies

INVESTING IN INNOVATION RESULTS IN FASTER AND CHEAPER COMMERCIAL SUCCESS.

Withouttherequiredfinancing,businesssupport,knowl-edgeandassociatednetworks,climatebusinessesoftenfallvictimtothewell-referenced‘ValleyofDeath’.Byinvestingininnovation,thepublicsectorplaysakeyroleinreducingtheriskforprivatesectorparticipation.Thismakesthepathtocommercialsuccessfasterandlesscostlyfornewmarketentrants.

Investingininnovationachievesmultiplebenefits.Researchhasshownthatnearlyallnetjobcreationcomesfromin-novativestartupfirmslessthanfiveyearsold.Theclimatetechnologysectoralsoposessignificantmarketopportuni-tiesforinnovation.NeededinvestmentinenergyaloneisUSD45trillioninthenext40years.

CTP ACTIVITIES

LAUNCH LAUNCH

CONCEPTUALIZATION EARLY-GROWTH SCALE-UP FULL DEPLOYMENT

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MOROCCO

THE CARIBBEAN

KENYA

INDIAETHIOPIA

SOUTH AFRICA

VIETNAM

TheCTPwillexpandscopinganddesignactivitiestomeetstrongclientcountrydemandforCICs.ThedesignofeachCICistailoredtotheparticularneedsofeachcountry.ThedetailedoperationalandfinancialplansforeachCenterarepackagedinabusinessplanwhichisusedasablueprintforlocalimplementation.

1. CIC DESIGN

TheCTPwillmobilizeandsyndicateglobalfundingforinnovativetech-nologiesintheformofstrategicappliedR&Dprizes,innovationprizesandseedinvestments.Globalfinancingwilladdresscrucialfund-inggapswhileofferingdeal-flowtopublicandprivateinvestorseagertosupportpromisingclimateventuresindevelopingcountries.

2. GLOBAL FINANCING

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TheCTPwillprovidearangeofglobalactivitiestoservetheneedsofprivatesectorinnovatorsindevelopingcountriesbyprovidingaccesstothelatesttechnologies,in-formation,financingandexpertisetoparticipateingrowinginterna-tionalclimatesectoropportunities.Country-levelCICswillserveasdeliveryhubsforglobalactivitiescoordinatedbytheCTP.

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TheCICsbuildlocalcapacityandaddressbarrierstoinnovationbyofferingatailoredsuiteoffinancingandservicesthatsupportdomesticSMEs.WiththeCIC’sassistance,innovativeenterprisesbecomemorecompetitivelyandprofitablyinvolvedinboominglocalandinter-nationalcleantechmarkets-creat-ingjobsandleadingtoeconomicgrowth.

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CIC Design

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TheCTPwillactivelypackagelessonsfromindividualCICsandprovidecuttingedgeanalyticalproductsandpolicytoolkitsonsup-portingprivatesectorinnovators.TheexperiencesfromtheCICswillprovidetremendouslearningonclimateinnovationacrossmultiplecountriesandregions.

3. EVIDENCE-BASED ANALYSIS

VialinkagestoCICs,theCTPwilllinkpromisingcompanieswithglobalpartnersandexpertise.Con-nectingentrepreneursinternation-allytofindsuppliers,partners,financingandexportmarketsisessentialtogrowingaworld-classbusiness.TheCTPwillalsoestablishthreeregionalinnova-tionnetworksinEastAfrica,NorthAfricaandtheCaribbean.

4. CONNECTING MARKETS

CTPwillprovideclientgovern-mentswithaCIC-basedMonitor-ingandEvaluation(M&E)tooltotrackdomesticinnovationprogress.ThisproductwillbehighlyusefulforpolicymakerstoaccesstimelydataonR&Dactivity,employmentnumbers,technologyimpacts,andtheinvolvementofwomeninlocalclimatesectors.

5. MEASURING RESULTS

ACCESS TO FACILITIES

+ Officespaceandservicesforentrepreneursandstart-ups+ Accesstotechnicalfacilitiestotestanddemonstrate

products

GOVERNMENT ADVISORY

+ Researchonsectorpolicytrendsandbestpractice

+ EngagementwithgovernmentonSMEpolicyissues

+ Policydialogues,roundtablesandevents

VENTURE FINANCE

+ Proof-of-conceptgrantsuptoUSD50k+ SeedCapitalInvestmentsfromUSD50k-1m+ Investorfacilitationandsyndication

MARKET INTELLIGENCE

+ Accesstodatabasesontechnologies,standardsandsuppliers

+ Informationonmarkets,competitors,potentialpartners

+ Research,reportsandanalyticsonsectortrends

BUSINESS ADVISORY & 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

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SUN AIR POWER in India is a hybrid renewable energy systems provider producing generators that harness both solar and wind power which is then stored in a battery for off-grid uses. Sun Air needs funding for technology development and proof-of-concept to improve product design.

JABULANI HOLDINGS from South Africa has developed local alternatives to solar water heaters made from African-sourced ma-terials. Jabulani is seeking USD1.6M to build and operate 4 facto-ries, creating needed green jobs in the region.

DVENTUS TECHNOLOGIES based in Addis Ababa, Ethiopia, houses an electronics lab and high-tech workshop where local engineering graduates are designing, developing and producing 1MW permanent magnet generators for wind turbines and other uses. They need assistance in accessing proof-of-concept funding to accelerate the product development process.

GUATEMALAN START-UP Ecofiltro produces water filters com-mercialized from domestic research and made with local materi-als. The company is seeking access to global partnerships to ex-pand its franchise model. It has recently secured USD1m in venture financing as a result of infoDev’s Access to Market activities.

IN KENYA, wind turbine manufacturer CraftSkillz produces up to twenty 150W turbines a year, employing up to 20 people. To ex-pand, the company requires additional financing, design support and access to facilities.

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infoDevisaglobalpartnershipprogramintheFinancialandPrivateSectorDevelopmentNetworkoftheWorldBankGroup.Itsmissionistoenableinnovativeentrepreneurshipforsustainable,inclusivegrowthandemployment.

TheCTPleveragesinfoDev’sten-yeartrackrecordofsupport-ingdomesticindustry,inparticularhigh-growthenterprises,todevelopinnovativeInformationandCommunicationTech-nologies(ICT)andbusinessmodels.Morerecently,infoDevhasappliedthissuccesstosupportinginnovationinbothclimateandagribusinesssectors.

infoDevhasanexistingnetworkofover400incubatorsin108countries.Thesehaveincubated25,000firms,75%ofwhichstillexist3yearsafterleavinganinfoDevincubator,leadingtothecreationofmorethan250,000jobs.ThisnetworkgivesinfoDevaccesstoavastcommunityoftechnologists,entrepreneurs,policymakers,financiers,academics,governmentsanddonors.

Theirsharedvisionincludesenhancedbusinessopportunitiesforsmallandmediumenterprises,wealthgeneration,econom-icinclusion,andjobcreationastoolsforpovertyreduction,andsustainablegrowthofdevelopingcountries.

LEVERAGING A HISTORY OF EMPOWERING ENTREPRENEURS

THE CTP COMPLEMENTS ONGOING AND FUTURE CLIMATE TECHNOLOGY PROGRAMS

TheCTPcomplementsotherclimateeffortsbyprovidingapipelineofviablecompaniesandprojectsthatcanbefurthersupported.TheCTPwillprovideviableinvestmentopportunitiesforclimatefinanceprogramssuchastheClimateInvestmentFunds,carbonfinanc-ing,InternationalFinancialInstitutionfinancingandtheprivatesector.TheCICscanalsobeaffiliatedwiththeUNClimateTechnologyCenterandNetwork(CTC&N)byprovidingcountry-levelexpertise,knowledgeandnetworks.

CAPACITYBUILDING

FINANCING&INVESTMENTS

CLIMATE FINANCE

UN CLIMATE TECHNOLOGY

CENTER & NETWORK

CLIMATE TECHNOLOGY

PROGRAM

Network participation

Pipeline development

CONCEPTUALIZATIONEARLY-GROWTHSCALE-UPFULLDEPLOYMENT

TheWorldBank|infoDev

1818HStreetNW

Washington,DC20433,USA

Tel:+12024584070

info@infodev.org

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