WASHINGTON, May 11, 2016—Climate change presents prodigious challenges to developing countries but also tremendous opportunities. A key part of the World Bank Group’s approach to the global climate change agenda lies in helping these countries cope with the challenges while exploiting the opportunities.
The opportunities are considerable. The Bank Group estimates that investments in 15 clean technology sectors in 145 developing countries are expected to exceed $6.4 trillion over the next decade, with a quarter of that market accessible to small and medium enterprises. These sectors include renewable energy technologies, energy-efficient irrigation and water purification, climate-resilient crops, public transit, and electric vehicles.
It is with those numbers in mind—and the idea that big things have small beginnings—that the Bank Group has launched a network of Climate Innovation Centers (CICs) in the developing world. This month, Ghana formally joins the Caribbean, Ethiopia, Kenya, Morocco, South Africa, and Vietnam in hosting a CIC that will offer seed financing, policy interventions, network linkages, and technical and business training to new enterprises in the climate change space.
“We are seeing keen interest from developing countries in supporting initiatives that help their industries innovate and deploy new solutions for economic development and environmental protection,” said Ganesh Rasagam, who oversees the CIC program. “The Climate Innovation Centers are supporting a rapidly growing roster of new and growing businesses turning clean-tech ideas into economic growth opportunities.”
Two Bank Group initiatives seek to maximize the impact of the CIC Network in contributing to the commitments reached in Paris at the 21st Conference of the Parties (COP21) during which countries agreed to reduce greenhouse gas emissions and develop national climate action plans to hold global temperature increases this century to well below two degrees Celsius. One involves expanding the CIC Network by launching new CICs in countries requesting them. The other involves developing an enhanced system to identify clean-tech startups with the greatest potential to grow and deliver significant economic as well as environmental benefits.
Anabel Gonzalez, Senior Director of the Bank Group’s Trade & Competitiveness Global Practice (T&C), summed up the challenge at a recent gathering of CIC chief executives.
“So the question becomes,” she said, “How can we take the many exciting climate innovations emerging around the world and scale them up to achieve the environmental and economic potential that they promise?”
New CIC in Ghana
The Ghana CIC, developed with the support of the Bank Group in partnership with Ashesi University and the governments of Denmark and the Netherlands, will provide local companies with the knowledge and resources they need to prototype, develop, and market innovative clean technologies in a variety of sectors, including agriculture, waste water treatment, and off-grid renewable energy.
Fred McBagonluri, CEO of the Ghana CIC, emphasized the basics in discussing the key to successful business incubation: “The idea must solve a customer’s problem. It must be technologically feasible within a short period of time—two years.”
Scaling up for Impact
With many climate enterprises already scaling up with the help of CICs, a key next step involves identifying the most promising ones and helping them accelerate their growth, create more jobs, and possibly export products or services. Another way of achieving scale-up involves replicating in other countries a successful micro-business concept incubated by one of the CICs. Scale-up could involve helping clean-tech businesses accelerate the pace of technological development and changes in practice that have been hampered by economic or political barriers. And yet another form of scale-up involves expanding the capacity to innovate within a city or country or region by the fostering of an entrepreneurial culture.
In Ghana, a “Green Innovators Bootcamp” held in advance of the CIC launch identified 20 of the country’s most promising clean-tech startups selected through a competitive review process. During the bootcamp, participants refined their business concepts, identified customer bases, and competed in a pitching contest judged by a panel of local investors and industry experts.
The well-established CIC in Kenya, presented in this video, has become the country’s leading support center for climate technology entrepreneurs by incubating more than 100 businesses in fields ranging from waste-to-energy solutions to off-grid solar power.
The ultimate test for any new commercial solution will be whether the level of market demand supports scaling. Therefore, the Bank Group project will analyze both the emerging technologies with the most promising climate applications for developing countries and the demand for those emerging solutions. The Bank Group’s work in this field to date strongly supports the conclusion that the market for climate innovation is strong.
“There’s a tremendous demand for new innovative climate products,” said Jonathan Coony of T&C’s Climate Technology Program (CTP). “New products, such as solar energy to provide energy access, solve a serious problem in a profitable, commercial way.”