On November 10th, the Bridge Tank participated in an event organized by the Moroccan Agency for Sustainable Energy (MASEN) as part of the COP 22. The event presented recommendations to address the financial challenges of green greenfield.
The main obstacles presented by the moderator were: (1) green technologies will compete with entrenched technologies; (2) the real and perceived returns on investment cannot be immediate and are difficult to anticipate; (3) there is still uncertainty associated with emerging technologies such as market size, lack of awareness etc.
Jonathan Coony, the Global Lead for Green Competitiveness at the World Bank, emphasized the importance of the green greenfield as an investment mechanism, since clean technology investment in developing countries grew more than 19% in 2012, which is a major driver of Climate Innovation.
He also gave three models that the Green Competitiveness Program is working on to boost the financing of Climate Innovation and address the challenges stated above:
Peer to peer lending platform by enabling access to working capital for Green Small and Growing Businesses (SGBs) in Africa via alternative credit platforms.
Crowdfunding: The World Bank is working on a Pilot project in Kenya and Morocco that will host two platforms.
Fund of Funds (Blended Finance) which will test green outcomes based on impact investing fund of funds mechanism to de-risk local impact investing funds while achieving climate outcomes.
Andrea Karpati, the Head of Policy at Climate-KIC, brought up other aspects of addressing the financial challenges of deploying green greenfield from a research perspective. Climate KIC directly addresses climate change across four priority themes; Urban Transitions, Sustainable Land Use, Sustainable Production Systems and Decision Metrics & Finance. She also talked about CLIMPAX, an initiative created by Climate KIC, which is the first public rating on the Climate Impact of funds.
Moreover, Hicham Zanati Serghini, the Managing Director of Morocco’s Central Guarantee Fund (“Caisse Centrale de Garantie” in French), discussed the importance of dealing with the risks associated with green greenfield. In this perspective, the CCG has developed many tools to overcome those risks for investors, such as providing guarantees for loans.
Mohammed Alaoui, who is managing the engineering and financial teams in Morocco (MorSEFF) and Jordan (JorSEFF), emphasized also the fact that innovation needs to be promoted in all sectors to push new technologies and develop more renewable energy. He also presented the initiative “ Climate Business Innovation Network” launched by the Moroccan Ministry of Industry.
Last but not least, Mounir Zraidi, Head of Development of the National Agency for the Promotion of SMEs- Maroc PME, highlighted the importance of increasing the competitiveness of SMEs, because this will lead to the growth in the market size, hence improving the green greenfield ecosystems.