The winners of the CAP Financial Innovation Challenge
Launched in July 2022 with funding from the Global Environment Facility, the UNDP Climate Aggregation Platform (CAP) Financial Innovation Challenge aims to foster the development of innovative financial aggregation structures and models that can help increase the availability and reduce the cost of financing for low-carbon energy in developing countries. And, in doing so, help close the investment gap to achieve universal energy access. The CAP Financial Innovation Challenge is a global challenge, with a focus on solutions to be deployed in East Africa.
Recent research by UNDP shows that financial aggregation holds great potential in enabling these upfront large-scale investments. It could notably help reduce the mismatch between distributed renewable energy funding needs and investor requirements, and in turn, increase investments in such solutions. Yet, to date, there are few examples that have turned this potential into reality.
Through the CAP Financial Innovation Challenge, UNDP will support the development of seven solutions at the design stage, so that novel financial aggregation structures and models can be developed and lead to financially closed transactions in East Africa in the near future.
In response to the call, UNDP received many applications from around the globe, with diverse innovations, and targeting different energy sub-sectors and countries in East Africa. While the call for applications was open to applicants from any country, supported solutions are to be developed in view of being deployed in one or multiple developing countries in East Africa, with a special focus on the CAP’s two pilot countries, Rwanda and Uganda.
The seven solutions below were competitively selected as the winners of UNDP's CAP Financial Innovation Challenge. Each of them involves a different approach to financial aggregation to help unlock new sources of financing for the clean energy sector, including climate finance.
These target different sub-sectors, from off-grid and on-grid solar, minigrids, productive use appliances, and e-mobility, to clean cooking, and could be deployed across different countries in East Africa including Rwanda, Uganda, Kenya, Tanzania, Malawi, Ethiopia, Madagascar, Mozambique.