PFAN standalone event at COP27: Closing the Financing Gap for Climate Adaptation SMEs

As the world gathered in Egypt for the COP27 Climate Conference, the Private Financing Advisory Network (PFAN) hosted an evening event on the sidelines of COP27 titled “Closing the Financing Gap for Climate Adaptation SMEs” on Finance Day, 9 November 2022.

The event highlighted the actions needed to mobilise the necessary capital to finance climate adaptation projects and businesses and emphasised how the roles of both the public and private sectors are critical in catalysing investment.

To create an engaging programme and facilitate dialogue around this topic, PFAN invited three of our supported entrepreneurs to pitch their ideas to an invited group of stakeholders of climate adaptation finance, including entrepreneurs, investors, development finance institutions, NGOs and the donor community.

Marko van Waveren Hogervorst, PFAN Partnerships Manager at UNIDO and the evening’s Master of Ceremonies, said “It was great to have senior representatives from the donor, climate and investor community including from our donors USAID, Norad and Department of Foreign Affairs and Trade (DFAT) Australia, and partners like Camco, AECF, West African Development Bank (BOAD), Development Bank of Southern Africa (DBSA), BASE and Convergence together. PFAN has the ambition to significantly increase our project development and transaction advisory support to adaptation SMEs and enhance our adaptation expertise and knowledge management in this area to contribute to closing the financing gap. The event was a great opportunity to hear from great minds how we can collectively make this happen and we are looking forward to continuing the conversation.”

Following an introduction by Tareq Emtairah, Director of the Decarbonization and Sustainable Energy Division at UNIDO, and a setting the scene session with PFAN veterans Peter Storey and Patrick Nussbaumer, the participants heard elevator pitches from innovative climate adaptation businesses from sub-Saharan Africa to learn about their challenges and needs.

Marianne Walpert, co-CEO of Simusolar, provides funded solar productive use solutions such as solar water pumps, solar fishing lights, solar security lights, and solar freezers which contribute to increasing the share of productive use of energy of agriculture (PUE) in Tanzania and Uganda.

EMFED Farms & Trading in Ghana, represented by CEO Kwabena Mends, is a social enterprise providing farm management and certification services as well as selling agro-inputs to enable sustainable cocoa farming, which helps to increase the resilience of farmers and their capacity to adapt to the effects of climate change.

Next up, CEO Chip Stem of Livestock Trade Services in Kenya explained how his business procures livestock from smallholder pastoralists, sets up livestock quarantine and manages the export of live animals to the Middle East. The company’s regenerative grazing, solar irrigation and methane-reducing feed additives cut GHG emissions and provide significantly increased incomes and resilience of 500,000+ farmers.

After the pitches, a lively Q&A session offered the floor to the participants to gain a better understanding of the businesses’ positioning and goals and ask questions from perspectives on gender-lens investing to how the entrepreneurs would utilise 20 million dollars. Their responses showed while such an injection of funds would certainly be welcomed, it is not the focus of many early-stage SMEs to access and manage such large sums. Smaller scale investment is crucial for scaling up their businesses, highlighting the need for PFAN in closing the gaps between climate SMEs and investors making direct investments in adaptation businesses. In parallel, PFAN is co-designing an investment vehicle together with Camco (Resilient Investment in Southern Africa (RISA), which was announced separately at COP27) which would be able to absorb bigger investment amounts.

The entrepreneurs did not come to this high-level group unprepared: on the day before the main event, PFAN organized a Preparatory Workshop on how to make a good short pitch, understand the investors’ mindset and how to respond to investors’ questions most effectively. Coached by PFAN experts, including sub-Saharan Africa Regional Coordinator Wilfred Mworia and Uganda-based Advisor Lukas Gruener, had the opportunity to practice their pitches and receive feedback on how to refine their presentations to be ready for the evening event with ‘say it in a minute’ sessions and other capacity building activities which are part of PFAN’s core competencies.

After an engaging two days, Marianne said ‘’I’d like to thank PFAN for the opportunity to refine our pitch and help build awareness of Simusolar with an interesting group of stakeholders. It’s encouraging to see the focus on funding for adaptation to climate change. We appreciate PFAN’s platform for discussing the challenge of getting funding from large-scale programs for climate finance to support the SMEs on the ground in Africa. The focus on financing SMEs at a smaller scale was really valuable.’’

PFAN would like to thank the entrepreneurs for pitching their projects and all the attendees, including all the organisations below, for joining us. We look forward to continuing working towards a net-zero future!