Six new finance solutions to drive a net-zero economy

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The Global Innovation Lab for Climate Finance (the Lab) launched six innovative finance solutions to drive private capital towards climate action in developing economies.

The six instruments seek to unlock $380 million in climate finance from commercial, concessional, and philanthropic investors for sustainable energy access, food systems, and urban infrastructure.

This Lab cohort also includes instruments with a regional focus on Brazil and Southern Africa.

Since its launch in 2014, the Lab is an initiative of over 70 public and private investors and institutions accelerating investment solutions to support sustainable development goals in emerging markets. The initiative has now launched 55 instruments that have collectively mobilized over $2.5 billion. 

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The six new financial instruments include: 

  • The ARM-Harith Cities & Climate Transition Fund (The ACT Fund) to expand the pipeline of sustainable infrastructure projects in West Africa through a blended-currency mechanism that reduces financing friction at early project stages while providing structured exit solutions that mobilize local institutional investment. 
  • The Amazônia Sustainable Supply Chains Mechanism will leverage off-take agreements for forest-compatible products to provide upfront finance, technical assistance, and structural community resources that catalyze the bioeconomy and keeps forests standing in the Brazilian Amazon. 
  • Data-Driven Energy Access for Africa uses artificial intelligence to leverage customer and geospatial data to better understand solar distributors’ portfolio repayment risk and offer them sustainable and competitive financing, thus expanding PAYG energy access. 
  • The Guarantee Fund for Biogas is the first environmental guarantee fund in Brazil and the first to focus on the biogas industry, providing construction-phase loan guarantees to project developers in Brazil, enabling existing credit lines that are currently difficult to access for small- and mid-size biogas developers. 
  • The Peace Renewable Energy Credits (P-REC) Aggregation Fund is a unique financing facility monetizing unbundled environmental attributes of renewable energy, to provide project developers in fragile countries with an additional revenue stream that they can use to unlock further finance. 
  • The Smallholder Resilience Fund (SRF) is a blended investment fund and supporting venture studio that deploys synchronized investments and provides technical assistance to small- and medium-sized enterprises across the entire agricultural supply chain of high-value, climate-smart crops. 

Barbara Buchner, the global managing director of climate policy initiatives, said the instruments “show there are plenty of investor-ready solutions to address the climate crisis.”

Abyd Karmali, Managing Director, Environment, Social and Governance Client Advisory at Bank of America, adds: “The private sector must deploy and mobilize trillions by 2030 to accelerate the transition to a low-carbon, sustainable economy. This year’s class of Lab instruments, like years prior, demonstrate the need to scale investment and mobilize more capital to drive clean technology and innovation for a net-zero future.”

Kome Johnson-Azuara, Associate Vice President, African Finance Corporation (AFC), added: “The fact that four of the six endorsed ideas have pilots planned for Sub-Saharan Africa confirms what we have already known: the continent provides a myriad of opportunities for entrepreneurs and investors ready to pursue low-carbon and climate-resilient investments.”