Unlocking financing for youth-led climate innovations

As the globe grapples with the devastating effects of climate change, the imperative to drive innovations in climate mitigation becomes increasingly urgent. In a recent interview with CNBC Africa, Christine Mbaabu, a Business Analyst at Kenya Climate Innovation Centre, shed light on the importance of financing youth-led smart innovations for Africa. Mbaabu highlighted the significant role of programs like Energy Catalyst and the Kenya Climate Innovation Centre in supporting young innovators to develop solutions that combat climate change. These initiatives play a crucial role in fostering the growth of innovative ideas and addressing key challenges in climate mitigation. Let's delve into the key industries that provide opportunities for young innovators in the climate space. The first industry with vast potential for youth-led innovations is renewable energy, specifically in the burgeoning sector of e-mobility. Research indicates a substantial market size for e-mobility, projected to reach billions of dollars by 2032. This signals a massive opportunity for innovation in clean transportation solutions. Additionally, productive use of solar energy, such as powering refrigeration or value addition technologies, presents avenues for sustainable energy practices. Clean cooking is another critical area within renewable energy that offers opportunities for innovative solutions. The waste management sector, within the circular economy framework, emerges as the second industry ripe for youth-led innovations. With a market opportunity worth billions of dollars, activities like recycling, upcycling, and developing organic fertilizer showcase the potential for impactful solutions in waste management. Efficient waste aggregation and sorting technologies can significantly contribute to building a more sustainable future. The building and infrastructure industry also holds promise for young innovators, particularly in adapting existing structures to withstand extreme weather conditions. As climate change accelerates, the need for resilient infrastructure becomes paramount. Through innovative approaches to retrofitting buildings and infrastructure, youth-led solutions can address the challenges posed by climate change. However, despite the immense potential in youth-led climate innovations, there are significant barriers that impede the growth of these initiatives in Africa. One key challenge is the lack of investor readiness among innovators. Financial institutions often require comprehensive business documents like business plans, pitch decks, and audited accounts to consider financing youth-led projects. To address this issue, programs like the Innovator Knowledge Bridge, in collaboration with Energy Catalyst and Kenya Climate Innovation Centre, aim to equip innovators with the necessary tools to become investor-ready and bankable. Another barrier identified by Mbaabu is the trend towards large ticket sizes by financial institutions, which poses challenges for early-stage startups and innovators seeking funding. While some investors focus on higher ticket sizes for risk mitigation, there is a critical need for investment in smaller ticket sizes to support budding startups in the climate space. By bridging this gap, more opportunities can be unlocked for youth-led climate innovations to thrive and make a significant impact. Mbaabu also reflected on the outcomes of the recent SandClub Forum, emphasizing the importance of innovation, entrepreneurship, and ecosystem collaboration in driving sustainable businesses. Technology plays a crucial role in enabling business growth and sustainability, while the long-term impact of innovations is crucial in determining their potential. Factors like environmental, social, and corporate governance standards are instrumental in evaluating the effectiveness and impact of business initiatives. The insights shared by Christine Mbaabu underscore the vital role of financing, investor readiness, and ecosystem support in fostering youth-led innovations for climate mitigation. With the right resources and collaborative efforts, young innovators in Africa can pioneer transformative solutions to combat climate change and build a more sustainable future for generations to come.