Catalytic Funding in Early Stage Cleantech

Cleantech is a huge investment opportunity during this decade. At the same time we are addressing the biggest challenge of our lifetimes, being Climate Change. How can we promote early stage investment in Climate Action as both Opportunity and Urgency seem to converge?

Next week we will have our first webinar in a series where we discuss different aspects of the cleantech sector in Colombia. We hope you are as excited as we are, to learn more about early stage investment in Latam cleantech.

According to a report from the Global Commission on The Economy and Climate, the cleantech industry will be multi-trillion dollar opportunity by 2030.

Cleantech is more than just clean energy. Most of current cleantech investments are focussed on clean energy generation, storage and propulsion solution. However, there are also other developing trends around GHG emissions capture, mitigation, clean air and water. Other industries that will see a significant capital influx over the coming years will be Agriculture, Infrastructure and Industry.

Many different trends are at the point of converging with the global transition towards a cleaner economy. Circular Economy, Sharing Economy, Autonomy, AI, Blockchain, will all have a significant impact. One thing we know for sure, nobody knows exactly how this future would look like.

As renewables have become the cheapest source of energy in many countries, investment in cleantech will most likely follow the hockey stick curve of exponential growth going forward. This transition will not be smooth. It will cause significant disruption during in multiple industries.

Different from the Fintech, Cleantech innovation is not only happening in the digital world of Bits, but in the physical world of Atoms. This fundamental difference will have an impact on the ability to proof, adopt and scale. It will most likely be much more capital intensive.

2020 is an important year under the Paris Accord. It will be the first year in which all countries signatory to the agreement need to report. For Colombia this means it will need to outline and communicate its post-2020 climate actions. Also referred to as NDC’s (Nationally Determined Contributions).

But how is Colombia currently doing on investing in Climate Action?

• According to the National Climate Finance Strategy, developed in collaboration between Colombia’s Public and Financial Sector, it is estimated that the country needs to mobilize close to COP 3.1 billion (USD 830 million) annually to finance climate mitigation actions. The annual average of mobilized capital right now is around COP 0.8 billion.
• Based on an Analysis from the Public and Private Expenditure and Institutional Framework for Climate Change (CPEIR), covering the years 2011-2015, between 60% and 70% of the resources needed to finance climate actions (adaptation and/or mitigation) would need to come from the private sector.
• According to a survey conducted by Colombia's Financial Superintendence in 2018, more than half of the entities in the financial sector (banking and insurance) said they did not consider environmental issues when making investment and/or commercial decisions.
• In 2019, Environmental Issues, was identified as the biggest challenge in corporate philanthropy by Colombia's 500 largest corporations (46%, up from 30% in 2017). The National Association of Large Enterprises (ANDI) conducted a study amongst its members on their CSR programs. They identified that only 11% of CSR funds are currently directed towards investment in environmental impact mitigation. While 64% say they are working on environmental issues.
• Based on data collected by the Association of Family and Corporate Foundations ('AFE') of Colombia, there are only 17 out of the 251 project dedicated to environmental challenges. None of these 17 are focused on entrepreneurship or innovation in Climate Action.

During this webinar we want to focus on the investment in the development of cleantech ideas into green businesses in Colombia. From the afore-mentioned it becomes clear that there co-exists a great Urgency and Opportunity in Climate Action. However, the Private Sector corporations or their foundations have not yet put their money where their mouth is.

In this webinar we would like to explore the reason why. This is great panel discussion with leaders from Colombia’s Investment Industry representing a wide range of actors.

If you wish to participate in the event, please make sure you register

See you next week!

ClimateLaunchpad (‘CLP’) is the world’s largest green business ideas competition. Our mission is to unlock the world’s cleantech potential that addresses climate change. The competition helps teams to transform their cleantech idea to a sustainable business model and eventually turn it into reality. Fixing climate change, one start-up at a time.