In 2020, the World Economic Forum ranked climate change as the biggest threat to sustainable development. Therefore, to achieve climate goals, it is estimated that wind, solar and biogas must provide almost all new electricity and power capacity between now and 2040.
Private and government sectors have since established that investing in clean energy is the only way to help mitigate the effects of climate change and its unprecedented impacts which disproportionately burden the poorest and most vulnerable communities.
Access to clean and sustainable energy can transform broken lives, creating empowering communities and bridging the humanitarian-development divide by improving livelihoods, food security, health and environment hence the urgent need for investment.
Consequently, the most immediate priority for many developing countries is to expand access in order to progress towards other development objectives. However, many poor households and governments in developing countries cannot access clean energy due to lack of financial resources.
In order to avert or mitigate the effects of climate change and strengthen the clean energy sector, developing countries need new resources that humanitarian investors offer. The good news is several investors and organizations have been on standby to deploy their assets in form of loans and grants to address these challenges while achieving financial returns.
One such organization is Kenya Climate Ventures (KCV), which provides funding and advisory services to SMEs operating in sectors such as renewable energy, agribusiness and water management. The impact investment firm has currently invested in 15 companies with a fund size of USD3.2 million. Some of the companies benefiting from the investment include Exotic EPZ, Mace Foods, Kilifi Moringa which are in agribusiness, Vuma Biofuels (renewable energy), Sistema. bio (biogas solutions provider) and Ofgen a solar company (solar energy).
Ofgen looks forward to bridging the gap of renewable energy by ensuring the supply of clean and affordable energy becomes a reality, while Sistema Bio looks forward to increasing inclusivity, air quality and household cleanliness among small holder farmers.
This indicates that KCV is encouraging humanitarian investments by building resilience and self-reliance among startups, which will, in turn, go a long way towards strengthening and encouraging fragile communities who are at a high risk of experiencing cascading failures during a disaster.
It is important for the right partners, and investing firms to come together and build a humanitarian investment ecosystem by facilitating deals, determining good practices to enable cross-sector collaboration and setting standards to ensure that help reaches those in greatest need.