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REPIC blog
13 May 2024

Scaling sustainability investments in the Global South: how REPIC supports climate innovation and entrepreneurship in emerging economies

5m read
Green investments Renewable energy
Dimitri Lenzin
Dimitri Lenzin Lead Specialist, Climate Investments

Over the past two decades, the REPIC platform has provided grants through the Pilot instrument to over 200 projects, helping to attract more private investments for climate action in emerging economies.

South Pole and NET AG, a Swiss energy consultancy, oversee the REPIC climate finance instrument, handling the sourcing, evaluation of projects while providing guidance to projects. The proven pilot instrument addresses the early development stage (pre-commercialisation phase). In 2022, the new REPIC Rollout instrument was launched, providing support for projects entering the early commercialisation phase.

Recently, the first three REPIC Rollout projects have been awarded funding support. Here, we take a look at the challenges of driving private investment into climate smart projects in the Global South and the three exciting new projects awarded funding.

The challenge: increasing flows of climate finance to emerging economies

The need for robust climate finance instruments in emerging economies has never been more critical. The 2023 World Energy Outlook by the International Energy Agency reveals a troubling gap: despite being home to two-thirds of the global population, emerging markets and developing economies receive only 15% of the total clean energy investments.

In a world where the consequences of climate change are increasingly being felt by communities and countries in the Global South – those least prepared to weather the storm despite contributing little to its causes – increasing levels of climate finance is now urgent.

Financial instruments and mechanisms like REPIC can address relevant hurdles to deploying climate finance in these countries.

REPIC: fostering sustainable development worldwide

The REPIC instrument serves as a vital bridge, empowering renewable energy, energy efficiency and resource efficiency projects in emerging economies. The innovative projects supported are transforming regions by bringing renewable energy storage solutions, clean drinking water, sustainable fishing and other resources to areas that lacked access before. This improves the lives and livelihoods of local communities.

Early-stage startups in developing countries, particularly those in rural areas, face many challenges when starting out due to a lack of stable infrastructure, high production costs and difficulty finding trained staff. REPIC aims to help climate-smart projects overcome these obstacles through exchanging knowledge and sharing technologies.

The first rollout project: Sustain Switzerland

The first project supported by REPIC Rollout is Sustain Switzerland. Together with local partner Tanganyika Blue, this project is leading the way in smart technology for solar-powered, energy- and resource-efficient aquaculture in Tanzania. By partnering with the Swiss venture builder Sustain, REPIC is helping scale up a commercial fish farming operation based at Lake Tanganyika, while introducing more sustainable practices to the region.

Sustain aims to have a positive impact by integrating solar power into the aquaculture operation and implementing energy efficiency and resource efficiency practices. This helps to reduce production costs significantly and allows for the more efficient use of fish feed. In addition the project no longer relies on expensive and unstable electricity sources. This in turn decreases the risk for investors while also encouraging more private investments. Encouraging sustainable practices that reduce risk and attract private capital for a project like Sustain is what REPIC is all about.

Sustain: integrating solar power into aquaculture in Tanzania

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Image credit: SUSTAIN Switzerland GmbH

A majority solar-powered fish farm in Lake Tanganyika, Tanzania. The AQUASMART Concept, an energy and resource efficiency application, ensures that water is pumped when the sun is shining.

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Image credit: SUSTAIN Switzerland GmbH

To keep the fish cold, solar powered ice production allows for the team to create a 'cold chain' that allows for fresh fish delivery to the point of sale (market, restaurants, hotels, wholesaler).

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Image credit: SUSTAIN Switzerland GmbH

A Tanganyika Blue team member in the cold storage room with the catch of the day.

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Image credit: SUSTAIN Switzerland GmbH

Mara Menz, South Pole's Senior Impact Funds Specialist and REPIC consultant visits the Sustain project in Tanzania.

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Image credit: SUSTAIN Switzerland GmbH
Co-founder of Sustain Switzerland GmbH and Tanganyika Blue, Severin Spring and Mara Menz from South Pole with the team from Tanganyika Blue.
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Image credit: SUSTAIN Switzerland GmbH

A majority solar-powered fish farm in Lake Tanganyika, Tanzania. The AQUASMART Concept, an energy and resource efficiency application, ensures that water is pumped when the sun is shining.

sustainbild2.jpg
Image credit: SUSTAIN Switzerland GmbH

To keep the fish cold, solar powered ice production allows for the team to create a 'cold chain' that allows for fresh fish delivery to the point of sale (market, restaurants, hotels, wholesaler).

sustainbild3.jpg
Image credit: SUSTAIN Switzerland GmbH

A Tanganyika Blue team member in the cold storage room with the catch of the day.

sustainbild4.jpg
Image credit: SUSTAIN Switzerland GmbH

Mara Menz, South Pole's Senior Impact Funds Specialist and REPIC consultant visits the Sustain project in Tanzania.

sustainbild5.jpg
Image credit: SUSTAIN Switzerland GmbH
Co-founder of Sustain Switzerland GmbH and Tanganyika Blue, Severin Spring and Mara Menz from South Pole with the team from Tanganyika Blue.

Overcoming financial hurdles

Navigating towards a low-carbon economy means that businesses must adopt innovative solutions. The major barrier businesses, projects and governments face is the costs involved in research, development, and scaling proven new technologies. This cost can be substantial.

As a result, these startups need to receive financial support such as grants, early-stage equity and guarantees that eliminate substantial risks for any investors. This, in turn, successfully crowds in private capital. Switzerland's endorsement of the REPIC instrument serves as a good example of the impact that government-backed instruments and initiatives can have.

How to scale projects: reducing risk and increasing returns for investors

Early-stage ventures and projects in developing countries are perceived as very risky by private investors. REPIC steps in to finance the riskiest parts of these ventures' early development stages. This makes the project more appealing to private investors, unlocking investment and support for scaleable projects.

However, at least half of the costs for the projects in the REPIC Rollout must be covered by private investors. Our goal is to not only ensure that projects are supported through their lifetime. We go beyond by fostering relationships so that investors would consider follow-on investments for subsequent scale-up of the project.

The second project that REPIC Rollout is supporting is Openversum, a company that develops energy-efficient water filters in Colombia. Facing the challenging "valley of death" stage, during which many investors are hesitant to invest, REPIC stepped in and provided the much-needed capital to reduce the project's initial production costs.

Openversum: energy-efficient water filters in Colombia

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Image credit: Openversum GmbH
Openversum water filters work with gravity and avoid the need to boil water. The filter removes up to 99.9 percent of impurities such as bacteria, heavy metals and micropollutants from the water.
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Image credit: Openversum GmbH
An Openversum employee demonstrates how the water filter works in rural Colombia.
openversum-blue-filter.jpg
Image credit: Openversum GmbH
Openversum water filters work with gravity and avoid the need to boil water. The filter removes up to 99.9 percent of impurities such as bacteria, heavy metals and micropollutants from the water.
openversum-4.jpg
Image credit: Openversum GmbH
An Openversum employee demonstrates how the water filter works in rural Colombia.

REPIC transfers  knowledge from north to south

REPIC also encourages projects to work with technology and know-how from Switzerland and helps apply these practices within the country and context where the project operates. For example, the third REPIC Rollout project, ASG International, develops an energy-efficient salt battery system, called SaliAfrica, tailored to the specific needs of the African market. The salt battery is a product developed in Switzerland by Innovenergy GmbH, a project partner. Through the exchange of this technology, the project aims to set up local manufacturing for SaliAfrica in Ghana and train local engineers in Ghana and Cameroon.

SaliAfrica: salt battery systems

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Image credit: ASG International GmbH

ASG International is a Swiss solar company that plans, builds and maintains solar installations (up to 250 kWp) in sub-Saharan Africa with the help of local companies.

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Image credit: Innovenergy GmbH

Salt batteries are made from non-toxic and sustainable materials, are non-flammable, fully recyclable and ideal for use in high temperature areas as they do not require cooling.

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Image credit: Innovenergy GmbH

The salt battery is a product developed and REPIC facilitates the exchange of clean technology. The goal is to set up local manufacturing for SaliAfrica in Ghana and train local engineers in Ghana and Cameroon.

bild1-asg.jpg
Image credit: ASG International GmbH

ASG International is a Swiss solar company that plans, builds and maintains solar installations (up to 250 kWp) in sub-Saharan Africa with the help of local companies.

bild2-asg.jpg
Image credit: Innovenergy GmbH

Salt batteries are made from non-toxic and sustainable materials, are non-flammable, fully recyclable and ideal for use in high temperature areas as they do not require cooling.

bild5-asg.jpg
Image credit: Innovenergy GmbH

The salt battery is a product developed and REPIC facilitates the exchange of clean technology. The goal is to set up local manufacturing for SaliAfrica in Ghana and train local engineers in Ghana and Cameroon.

The opportunities presented by a net zero future

Moving to a net zero future presents challenges and opportunities that must spur innovation and create meaningful jobs. By supporting innovators and their novel products and processes, government-backed instruments such as REPIC, combined with private investments, play a critical role in accelerating progress towards a sustainable future in emerging markets.

Communities in the Global South bearing the brunt of climate impacts have the potential to create locally driven, clean, sustainable growth. REPIC enables this by providing finance, access to technology and knowledge sharing. Get in touch with our team if you would like to benefit from REPIC finance or become part of the change as an investor.

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