Aug 11, 2017

Investing in green businesses is viable

Kenya’s economy is the largest in East Africa. With the growth comes depletion of natural resources at a rate not fast enough to regenerate more. The Kenya National Climate Change Action Plan 2013-2017 states that climate change events such as droughts and floods could cost the economy as much as US$500 million a year. This means that the cost of sustaining the current economy growth rate will be extremely high by the year 2020.

Innovations can barely get through the idea stage without support. Most innovators have either to dig deeper into their pockets with loans and handouts from friends and family. After graduating from college, with the limited blue collar opportunities, budding innovators come up with hands on technologies to solve day to day challenges. In the climate change adaptation space, the story is no different.  

Green technology continues to gain support both the national and county governments. The level of awareness on the various green technologies in energy, water, agriculture, manufacturing, transportation among others has grown. According to Investopedia, there are a good number of investment opportunities which in most instances support specific programmes. These can range from mutual funds, exchange-traded funds, stocks, bonds and even money market funds, equity, venture capital and loans.

The last two years have seen a big shift globally in investments in green technology. The good news is, there is a market for clean technology considering the relatively low costs in sustaining the projects. For instance, solar and wind energy have been seen as attractive investments opportunities.

A number of green technology projects have received investment support due to the policy commitment to inclusive green economic growth and investment by the Kenyan government.  Kenya’s financial sector coupled with public-private investors have the capacity to upscale the adoption of various clean technologies.

The Kenya Climate Ventures (KCV) has also set its foot print in green technology investment. Commercialization of climate-tech companies is needed in order to demonstrate the potential and viability of green economic growth. Established in 2016 as a subsidiary of Kenya Climate Innovation Center, the firm seeks to accelerate the development of the clean-tech industry as a whole by providing much needed tailored and targeted financial and managerial support to innovative early stage businesses. KCV seeks to invest in businesses that have relevant products or services, sustainable competitive advantage, good management teams and ethical business practices. So far the firm has been able to initialize investment in Hydroponics Africa, a company that provides sustainable and affordable farming without soil and Kilifi Moringa Estates that processes moringa commercially.

KCV plays the role of a strategic financial investor in developing a profitable investment model in clean tech. It also plays a catalytic role in catalyzing and facilitating investment in clean tech. Some of their products include debt and equity financing services.

Some of the gaps that KCV is seeking to address include the growing demands for energy by complementing the government efforts from a private sector perspective.

Picture courtesy: kilifimoringa.org

 

By Mercy Mumo

 

 

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