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The Lab reaches $1 billion milestone in sustainable investment

March 6, 2018

London — The Lab – a public-private initiative composed of experts in sustainable investment from governments, development finance institutions, and the private sector – reached a significant milestone this week. The 25 investment vehicles incubated and launched by the Lab have now mobilized over $1 billion for sustainable development and action on climate change.

As nations around the world work to support the Paris Agreement on climate change, it has become clear that public finance alone won’t be enough to finance these goals. Based on IFC estimates, developing countries alone will need $1.5 trillion in climate investment annually through 2030.

In 2013 the German, UK, and U.S. governments met to consider ways to coordinate their public capital towards more effectively mobilizing private investment. The Lab was born out of the meeting, launching formally in 2014 with a mission to identify, develop, and launch innovative and transformative climate finance solutions to drive billions of dollars to the low carbon, climate-resilient economy.

Since its launch, the Lab has grown into a robust public-private partnership of over 60 expert Lab member institutions, spanning three programs – the Global Lab, India Lab, and Brasil Lab. The Lab’s programs have been supported by Bloomberg Philanthropies, the David and Lucile Packard Foundation, the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB), the Netherlands Ministry for Foreign Affairs, Oak Foundation, the Rockefeller Foundation, Shakti Sustainable Energy Foundation, the UK Department for Business, Energy & Industrial Strategy, and the U.S. Department of State.

The $1 billion includes more than $230 million in investment from Lab members, as well as over $300 million in private investment to date, with more expected as the instruments scale up. The Lab has incubated financial instruments that target every region of the world. It has been endorsed by the governments of the G7, India, and Brazil, and was recently named in the “Top 11 Best Bets” out of nearly 2,000 submissions to the Macarthur Foundation’s 100&Change competition.

Energy Savings Insurance, an instrument incubated by the Lab in 2015 that insures the financial performance of energy efficiency savings projects in Latin America, helped the Lab cross the $1 billion threshold this week. The Green Climate Fund announced new funding for the proponent of the instrument, Inter-American Development Bank (IDB), to scale up private investment for energy efficiency projects in Paraguay and Argentina. This brings the total amount that Lab instruments have mobilized up from $978 million to $1.06 billion.

Other Lab instruments that have contributed to the $1 billion include, among others:

  • Climate Investor One, which fast-tracks renewable energy projects in developing countries by combining three innovative investment facilities into a single, ‘whole-of-life’ financing solution for early-stage development, construction, and refinancing of assets.
  • CRAFT, led by the Lightsmith Group, which is the first dedicated commercial investment vehicle to focus on expanding the availability of technologies and solutions for climate adaptation and resilience.
  • Long-Term FX Risk Management, led by TCX, which provide tools to address currency and interest rate risk for climate relevant projects in developing countries. It is helping to connect nearly 500 African homes to solar power every day.
  • Loans4SME, which is a platform that crowdsources finance for small enterprises in renewable energy and energy efficiency in India.

Lab members include its programmatic funders as well as other experts and major investors from Africa Finance Corporation, the Asian Development Bank, Bank of America Merrill Lynch, Blackrock, the Brazilian National Development Bank (BNDES), CAIXA, Climate Investment Funds, Development Bank of Southern Africa, Deutsche Bank, Inter-American Development Bank, HSBC, OPIC, Willis Towers Watson, the World Bank Group, and the Brazilian, Indian, and Rwandan governments, among many others.

“The Lab is very proud to have supported these innovative solutions in getting off the ground and mobilizing over $1 billion in sustainable investment in just a few years. The speed and volume of the investment they’ve attracted signifies not only the relevance of the instruments, but also the effectiveness of the Lab’s public-private model.” – Dr. Barbara Buchner, Executive Director, Climate Policy Initiative and Lab Secretariat

ABOUT THE LAB

The Lab identifies, develops, and launches sustainable finance instruments that can drive billions to a low-carbon economy. It is comprised of several regional programs: the Global Innovation Lab for Climate Finance, the Brasil Lab for Green Finance, and the India Innovation Lab for Green Finance. The Lab’s programs have been funded by Bloomberg Philanthropies, the David and Lucile Packard Foundation, the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB), the Netherlands Ministry for Foreign Affairs, Oak Foundation, the Rockefeller Foundation, Shakti Sustainable Energy Foundation, the UK Department for Business, Energy & Industrial Strategy, and the U.S. Department of State. Climate Policy Initiative serves as Secretariat.

CONTACT

Maggie Young
Senior Communications Associate
Climate Policy Initiative
+1 (415) 336-5074
maggie.young@cpisf.org