United Nations Development Programme Financial Innovations for Clean Energy in Africa Presenting the Seven Innovations Supported by UNDP’s Climate Aggregation Platform January 2024 UNDP UNDP is the leading United Nations organization fighting to end the injustice of poverty, inequality, and climate change. Working with our broad network of experts and partners in 170 countries, we help nations build integrated, lasting solutions for people and the planet. Learn more at undp.org or follow @UNDP The Climate Aggregation Platform (CAP) The Climate Aggregation Platform is a Global Environment Facility (GEF) funded flagship initiative of UNDP, which seeks to support the structuring and deployment of innovative business models and financial mechanisms to accelerate energy access and a just energy transition. The CAP seeks to advance and raise awareness for innovative solutions to market barriers for financial aggregation in the small-scale, low-carbon energy sector – with the goal to increase access to low-cost financing for clean energy in emerging markets. Learn more at https://www.undp.org/climate-aggregation-platform GEF The Global Environment Facility (GEF) is a family of funds dedicated to confronting biodiversity loss, climate change, pollution, and strains on land and ocean health. Its grants, blended financing, and policy support help developing countries address their biggest environmental priorities and adhere to international environmental conventions. Over the past three decades, the GEF has provided more than $23 billion and mobilized $129 billion in co-financing for more than 5,000 national and regional projects. Acknowledgements The development of this report was co-funded by the GEF and UNDP. It was prepared by UNDP with inputs from the seven CAP Financial Innovation Challenge awardees listed below. The UNDP task team responsible for the production of this report was composed of Teresa Le, Eduardo Appleyard and Mateo Salomon. The report includes inputs from Louise Pos, Peter van der Linde, Patricia Espinosa and Christiaan Pennekamp (Hypoport), Nicole Kugelmass and Christiane Wurdemann (Mirova SunFunder), Jude Sandouk, Ben Storrs and Gregor Paterson Jones (PJ&Company / EVAF), Anshul Patel and Andreas Lehner (Incharge Energy / Powerblocks), Manon Dubois and Siten Mandalia (Solaris Offgrid), Grace Fenton Olatunji and Njeri Kara (Nithio), Jon Ridley (4R Digital). Suggested citation: UNDP (2024). Climate Aggregation Platform: Financial Innovations for Clean Energy in Africa, Copyright ©UNDP 2024. All rights reserved. One United Nations Plaza, New York, NY10017, USA Disclaimer: The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNDP, or the UN Member States. Cover photo: UNDP / Karin Schermbrucker Page 2 | Climate Aggregation Platform | Financial Innovations for Clean Energy in Africa New York. Contents Acknowledgements 02 Table of contents 03 The CAP financial innovation challenge 04 UNDP’s Climate Aggregation Platform (CAP) 04 What is financial aggregation? 05 The need for information sharing about innovative financial aggregation models and structures 06 The CAP Financial Innovation Challenge 07 The Winners 08 The 7 innovative financial models Climate asset financial aggregation solution by Mirova SunFunder 09 09 An electric vehicle growth fund by PJ&Co 11 AI-enabled financing to scale energy access by Nithio 13 A financing platform to enhance mini-grid utilization by incharge energy 15 PAYGO receivables financing platform by Solaris Offgrid 17 Synthetic securitization for solar home system contracts by Hypoport Africa 19 A digital platform to bundle debt and results-based finance with climate finance by 4R Digital 21 Page 3 | Climate Aggregation Platform | Financial Innovations for Clean Energy in Africa The CAP Financial Innovation Challenge Last year marked the halfway point towards the 2030 deadline for achieving the Sustainable Development Goals (SDGs).1 While considerable progress has been made towards the SDG 7 targets on clean and affordable energy, in particular in relation to energy access (7.1), 675 million people remain without access to electricity and a further 2.3 billion have no access to clean cooking solutions.2 Based on the current pace of progress, efforts must be significantly ramped up to achieve the SDG targets by 2030.3 What’s