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FEATURE STORY November 1, 2018

What Does it Take to Scale Green Businesses?

To help entrepreneurs scale, the World Bank Group’s Climate Technology Program (CTP) is building a global network of donors, foundations, venture funds, and climate innovation centers

This feature is an outcome of infoDev, a multi-donor program administered by the World Bank Group, with a focus on entrepreneurs in developing economies. This piece was originally published on March 22, 2017. 

When we think about clean technology, electric cars, fields of solar panels, and big wind turbines come to mind. We often associate new, green technologies with big scale, big investments, and big profits. 

The reality is that most clean technology entrepreneurs in emerging markets struggle to scale or even make revenue due to complex market barriers and finance challenges. According to a Shell Foundation report, “it can take 6 to 10 years and anywhere between $5 million and $20 million” for a breakthrough innovator to understand the market and build a sufficiently strong customer base to achieve a net positive cash flow.

Given the significant costs, time, and skills required to successfully take a business idea to market, entrepreneurs rarely accomplish the “impossible mission” on their own. To help entrepreneurs access the resources they need to scale, the World Bank Group’s Climate Technology Program (CTP) is building a global network of public and private institutions, which includes donors, foundations, venture funds, and seven climate innovation centers.

The network fills a strategic niche in the global climate innovation ecosystem. Achieving scale for any new business requires an integrated support system. Different institutions offer — and require — different resources, expertise, and market connections. For example, impact investors are known for providing high-risk and longer-term capital for innovative enterprises. However, they require the expertise and outreach of local business incubators and other specialized market enablers to identify and develop a pipeline of companies ready to absorb their investment. 

The CTP network leverages the competitive advantages of a wide range of partners by connecting green entrepreneurs to local and global sources of technology, finance, and expertise. Last month, at the 4th Sankalp Africa Forum in Nairobi, Kenya, CTP gathered over 40 representatives of its partner organizations, connecting them with over 900 entrepreneurs, investors, and corporations from across the region. The forum provided an ideal learning and networking space for CTP partners, which include Climate Innovation Centers in seven countries — Ethiopia, the Caribbean, Ghana, Kenya, Morocco, South Africa, and Vietnam — and other institutions supporting green entrepreneurship, such as GreenCape, Carbon Trust, and Intellecap. 

CTP organized several interactive sessions to share lessons learned and gather insights on a wide range of technical areas, including design and implementation of business incubation programs, promotion of cross-border business model diffusion, and rollout of early stage financing models. 

Many new ideas and collaboration opportunities emerged from the sessions:

Sankalp was a tremendously great experience; I particularly liked the format as it was not just presentations for an audience to sit back, listen and take notes but we were all engaged in meaningful discussion sessions,” said Tameka Lee from the Caribbean Climate Innovation Center. “We also have expanded our mentor network through our attendance at Sankalp as we connected with quite a number of experts at Sankalp who agreed to provide mentorship support to entrepreneurs within our programmes.” 

In addition to the Sankalp forum, CTP partners participated in a weeklong training and a series of workshops designed to share lessons learned, foster collaboration, and develop new approaches to supporting green entrepreneurs in developing countries. The group discussed various ways to address barriers for clean-tech entrepreneurs, such as new policies, a global mentoring and coaching program, and a trading platform to connect entrepreneurs with supply chain partners. 

By catalyzing collaborations and leveraging collective impact, CTP and its partners help green entrepreneurs overcome market barriers and scale their innovative products. The success of these growing clean-tech firms leads to emissions reduction and improved climate resiliency, while also enabling developing countries to capture greater value in the innovation value chain, build competitive sectors, and create jobs.

The World Bank Group’s Climate Technology Program (CTP) is supported by the U.K.’s Department for International Development, Australia’s Department of Foreign Affairs and Trade (Australian Aid), Denmark’s Ministry of Foreign Affairs (DANIDA), Norway’s Ministry of Foreign Affairs, and the Netherlands’ Ministry of Foreign Affairs.