By August 2, humanity had consumed all the natural resources that Earth is capable of producing in a year. This is what the American NGO Global Footprint Network says, which calculates each year what it calls “Overshoot Day”.
This date arrives earlier and earlier each year, a sign that man continues to have a lasting impact on the ecosystems that surround him. People all over the world are suffering consequences of climate change – droughts, floods, epidemics, famines – and if these effects cannot be avoided, we must at least learn to adapt to them.
In this daily negotiation with the elements, the African continent is particularly impacted, even if it represents only one percent of global greenhouse gas emissions. Leading development finance institutions are trying to respond to the emergency and are now urging all lenders and investors to place adaptation to climate change at the heart of their strategies.
100 billion dollars of investment
For some innovative companies, these challenges turn into opportunities. The International Finance Corporation (IFC), a private sector member of the World Bank Group, estimates that “investment opportunities in climate change adaptation in Africa could reach $100 billion by 2040.”
According to the Africa: The Big Deal database, of the funds raised in African tech in 2022, $1.2 billion were injected into start-ups developing solutions linked to energy, water, to agriculture and waste management, which professionals in the sector group together under the name “climate technology” label. This amount doubled compared to the previous year.
“Today, all development banks are focused on climate change adaptation issues,” says Maxime Bayen, co-founder of Africa: The Big Deal and partner at Catalyst Fund, a US-Kenyan investor who, since January, has chosen to concentrate all its activities. investments in start-ups which contribute more or less directly to adaptation to climate change.
Until now, Catalyst Fund was playing on two fronts: fintech and climate. But for the French investor, it is clear that “he will not be able to continue to finance only neo-banks”. In January, as part of its new $30 million pre-seed fund, Catalyst Fund announced it had invested $2 million in 10 start-ups. The investor has since secured four additional investments and is expected to be able to add 10 more startups to this new portfolio by the end of the year.
“We have more investment opportunities than a year ago,” Bayen says. Catalyst Fund received 860 applications, which it is currently reviewing for this second round, of which 129 match the investment thesis of the new fund.
Insurance, recycling and plastic bricks
His portfolio includes companies that, at first glance, seem irrelevant. For example, the Assuraf insurance platform which brings together and distributes offers from large insurers such as Axa and Allianz in West Africa. “All insurers have a climate resilience component,” explains Bayen. “One in two health incidents is linked to climate change, and epidemics such as Ebola and malaria are strongly influenced by these phenomena. »
A study published in 2019 in the journal Nature & Communication states that by 2070, climate change will create ideal conditions for the expansion of virus-carrying animal populations, such as bats and some monkeys. Thus, according to the investor, the acceleration of health insurance penetration will make populations more resilient faced with these new epidemic risks.
Other models have a more visible impact on the environment. In Morocco, Sand To Green, a start-up financed in part by Catalyst Fund, is developing technology that will enable the development of agroforestry farms in arid environments. The company, founded by agricultural engineer Wissal Ben Moussa and two French partners, Benjamin Rombault and Gautier de Carcouët, derives its income from agricultural production, as well as from carbon credits and the sale of biodiesel.
In Kenya, Amini, the company launched by Kate Kallot in 2023, has already raised $2 million from five investors. It uses artificial intelligence and satellite imagery to build a reliable database on the continent’s soils in order to improve agricultural yields and anticipate risks (pests, drought, high humidity).
Also in Nairobi, Kubik collects used plastics and transforms them into building bricks. The company, also present in Ethiopia, has raised $3.4 million since its creation. According to the company, the production of these bricks emits five times less CO2, for a finished product that costs 40% less.
A developing ecosystem
In Abidjan, Coliba is already a success story. The start-up was founded in 2015 by Genesis Ehimegbe and Yaya Bruno Koné and is supported by the start-up accelerator of the GSMA, the international telecoms lobby. It specializes in the collection and recycling of plastic waste, which is transformed into pellets and then resold to various industries. By March, it had secured $6 million of a total Series A target of $11.5 million.
The field of climate technologies is vast and constantly evolving, from aquaculture to control of the cold chain and food storage. “The three main pillars are: financial technology solutions improve the resilience of populations (insurance, carbon credits, emergency payments, risk pricing); solutions related to the development of sustainable livelihoods (precision agriculture, soil restoration); and essential services such as storage, logistics, healthcare, waste and water management“, says Bayen.
A growing number of funds specialize in financing these projects, including Novastar, CommerzVentures, Equator, Ambo Ventures, Katapult and RaliCap. In September, this ecosystem met in Nairobi to discuss investment opportunities. Initiated by AfricArena in partnership with Catalyst Fund, the Climate Tech Festival was the first event of its type to highlight need for financial support for African entrepreneurs build resilience to future climate challenges.
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