African Green Business
Green Business in Africa Market Assessment
Green Business investment in Renewable Energy and Energy Efficiency has experienced a sharp upswing in recent years as economies seek to diversify energy portfolios, improve energy security, and seek stability in the wake of the financial crisis. In 2009, UNEP highlighted that leading governments have committed approximately $183 billion to clean energy in financial stimulus packages, including $61 billion targeting Energy Efficiency and $34 billion for Renewable Energy projects.
Such green business investment has not, however, been reaching Sub-Saharan Africa despite enormous economic development and climate mitigation opportunities. To help fill this gap, the Green Business Market Development Facility works with the African financial sector to increase green business investment.
The goal of the Programme was to understand the potential for and specific banking needs of green business in Sub-Saharan Africa. This included identifying the market barriers that had thus far limited green business commercial growth.
The Programme consisted of four complementary elements: (i) market survey to investigate the market environment for green business; (ii) formulating specific recommendations of a high-profile demonstration pilot of an innovative application of financial mechanisms that will lead to uptake of the technology; (iii) technical assistance provided to the financial sector to build their expertise and comfort level in green business investment; and (iv) pilot project implementation. Throughout the Programme, UNEP worked closely with specific financial institutions to tailor a showcase pilot project suited to their green business capabilities and needs that they could replicate in Africa.
The pilot was comprised of innovative financial mechanism models fit to local sector conditions, including green business credit lines, investment funds, guarantees, and equity participation.