How a new green business facility in South Africa is connecting local companies to the global green economy
Traditional trade mission functions are becoming obsolete. Over hors d'oeuvres, business cards are exchanged, elevator pitches are delivered but, in most cases, entrepreneurs leave with empty promises to stay in touch and no useful contacts. This may sound a little cynical but the reality is that in an age of business models “ripe for disruption,” the ways to create viable business partnerships across borders have not changed for decades.
You are young, poor, living in a remote rural area, and one day your whole life is turned upside down by a sexual assault. No matter whether the offender is your partner or spouse, another family member, a teacher, a co-worker or a stranger, you will need to make choices.
Kayole-Soweto, an informal settlement on the eastern periphery of Nairobi, is home to approximately 90,000 residents. And during a recent discussion I had with the Settlement Executive Committee (SEC) there, a female representative told me about her community and home: “This place has changed so much that we need a new name! Our community is improving because our houses have more value, we feel safer and businesses are growing.”
Despite localized success stories, electricity access is still increasing slowly in Sub-Saharan Africa. According to the Global Tracking Framework, access in Africa increased from 31% to 38% over the period from 2007 to 2014. Globally, just over one billion people today have little or no access to electricity. The 2030 Sustainable Development Goals (SDGs) aim to achieve affordable and clean energy for all with SDG 7. Efforts toward this goal were in sharp focus at the SEforALL Forum in New York City last month, where the latest progress, data, problems and achievements around the Sustainable Energy for All program were assessed and discussed.
Amongst clean cooking solutions, off-grid solar innovations and many others, the World Bank and partners launched a new data initiative. The ENERGYDATA.INFO platform aims to empower stakeholders from every side of the equation ‑ governments, private industry, financers, analysts, NGOs and the public ‑ with access to more and better quality data as well as analysis and tools that are simple and insightful.
One of the flagship apps released along with this platform is the Africa Electricity Grids Explorer, which presents the most complete and up-to-date openly available data on the electricity transmission and distribution networks in Sub-Saharan Africa. The last time a concerted effort was made to map Africa’s grid infrastructure was the Africa Infrastructure Country Diagnostic, now 10 years old. The Africa Electricity Grids Explorer attempts to bring such approaches into the modern era, by combining data from utilities and World Bank projects with crowd-sourced data from OpenStreetMap, satellite imagery analysis, and on-the-ground GPS tracking. This has already had a positive response from both policy-makers (who want to see data improved in their home countries) and modelers (who are using this new data in their efforts).
In extreme conditions, a human can survive three minutes without air, three days without water, and three weeks without food. To support a global population that has grown to 7.5 billion, the demand for these essential natural resources is increasing, leading to deforestation, habitat degradation and fragmentation, overgrazing, and over exploitation.
The Democratic Republic of Congo’s efforts to shift to sustainable land use is producing first results in the Mai Ndombe province- an encouraging model for other countries seeking to reduce deforestation and forest degradation.
As I look out the window of our small propeller plane heading toward Inongo, the capital of the Mai Ndombe province in the Democratic Republic of Congo (DRC), the difference in landscape is jarring. The areas around Kinshasa, the sprawling capital city with a population over 10 million, are marked by degraded lands with barely a tree in sight. As we fly further north and east, we pass over scattered patches of green on savannahs, but when we cross over into the Congo Basin, there are suddenly forests as far as the eye can see. Mai Ndombe, my final destination, spans more than 12 million hectares, most of which are forest, and is part of one of the most important tropical ecosystems left on earth.
Two weeks ago, I blogged about a new paper by Arielle Bernhardt and coauthors which looked at the idea that when women receive a cash infusion from a program, they may give it to their husbands to invest in their business.
Managers of initiatives that support innovative entrepreneurs have a choice to spread their resources (and luck) among many opportunities or focus them on the most promising few. In developing countries, public and donor programs can learn a lot from how private investors pick and back innovative ventures.
In the early days of infoDev’s Climate Technology Program, our thinking was very much about letting a hundred flowers bloom: supporting a large number of firms with the hope that a few would emerge as blockbusters. Firms were selected on the basis of objective metrics tied to the innovative nature of their ideas and their economic, social and climate-change impacts. For example, while infoDev’s partner the Kenya Climate Innovation Center has more than 130 companies in its portfolio, a $50 million venture-capital fund in California would have at most six. Inspired by private investors, we have since rethought our program objectives for these centers, as well as the way we select and support businesses. The Kenya center is going through a rationalization of the firms it supports.
Like many public programs, infoDev and its network of Climate Innovation Centers had good reasons to support large numbers of companies. The main reason is the need to spread the entrepreneurship risk through a diversified portfolio. A recent infoDev literature review found that up to a third of all new firms do not survive beyond two years, let alone grow. Out of those that survive, data from high-income countries suggest that fewer than 10 percent become high-growth firms. So casting a wide net increases the chances of hitting the jackpot. The opposite approach, picking winners, is seen as destined to fail and distort the market.
Governments spend a lot of money to contain violence. In 2015, some $1.7 trillion was spent on defense by governments worldwide . While the primary responsibility for the provision of security and justice services lies with governments, those functions may carry a heavy fiscal burden as they often make up significant portions of national budgets. Yet little work has been undertaken on the composition of security sector budgets, or on the processes by which they are planned and managed.
In an effort to address this issue, the World Bank Group and the United Nations embarked on a three-year partnership that led to the publication of a new report titled Securing Development: Public Finance and the Security Sector. It is a sourcebook providing guidance to governments and development practitioners on how to use a tool called “Public Expenditure Review (PER)” adapted to examine the financing of security and criminal justice institutions.
Public-Private Partnerships (PPPs) require the coordination of an impressive number of stakeholders to mobilize the commercial financing needed to achieve sustainable, inclusive growth in challenging environments. A great deal of analysis, negotiation, and hard work goes into every project. And each one presents an opportunity to encourage investors to venture into countries and compete for projects they wouldn’t have considered before and, ultimately, to create new markets.
While the commercial and legal challenges involved in structuring PPPs are well known, the efforts that go into conducting rigorous technical due diligence are less well known. For example, projects that aim to provide utility scale solar PV on short order, like the World Bank Group’s Scaling Solar program, require a team of experienced engineers from IFC’s Energy and Water Advisory working hand in hand with our PPP transaction advisors, legal experts, and environmental and social specialists to make them a reality.