AfDB's support to Climate-focused ESOs through the Innovation & Entrepreneurship Lab
According to the International Labour Office (ILO), “green jobs” are created by the shift of economies, enterprises, workplaces and labour markets toward a sustainable, low-carbon paradigm that provides decent work. ILO estimates that a low-carbon economy will create 24 million jobs globally in the next 20 years.
Since Africa faces significant climate impacts and challenges, many of those jobs will be created as its countries adopt renewable energy infrastructure. Opportunities for startups and small and medium enterprises to address these challenges will expand, and need continued support from enterprise support organizations and investors.
According to the African Private Equity and Venture Capital Association (AVCA), “climate consciousness has percolated into Africa’s private investment landscape”. Through 2022, 79 climate-related deals worth $1.3 billion have been recorded, with an average ticket size of $22.7 million.
Venture capital comprised 73% of these investments. Eighty five percent of climate-related investments were in tech-related companies in the cleantech/climate tech sectors, that are developing hardware or digital technologies that reduces the human impact on climate or mitigate its effects . Most investments backed renewable electricity producers in the utilities sector, with a focus on solar energy. According to a 2012 study, the renewable energy sector in Morocco could contribute between 267,000 to 482,000 jobs by 2040.
Many of these opportunities will fall to small and medium sized enterprises across a range of sectors, from agriculture (with precision irrigation initiatives such as Seabex in Tunisia), to e-mobility (for example, electric moto-taxis such as those developed by Ecoboda in Kenya) or the circular economy (building plastic recycling industries as Coliba does in Côte d’Ivoire and Ghana).
Unfortunately, given the need for scale and the costs involved in investing in renewable energy infrastructure, the growth of green jobs in Africa, with some exceptions, has been slow so far. A variety of public institutions, including ILO, Islamic Development Bank, and private organizations such as Climate Innovation Hubs are leading on efforts to create green jobs across the continent. Youth and women’s participation in the green economy must continue to be a priority.
To this effect, the Lab has been supporting Entrepreneurship Support Organizations (such as incubators, accelerators and fund managers) involved in driving sustainable, decarbonized development and prosperity in Africa, in line with the Bank’s Strategies and the African Union’s Agenda 2063. By supporting organizations that structure entrepreneurial ecosystems and provide direct support to start-ups, the African Development Bank hopes to create a ripple effect that will spur creation and growth of more start-ups, create jobs and value for their communities and clients.
As part of its capacity building activities, the Lab has provided customized, high-level training to incubators and accelerators across Africa through the ESO360 program, in collaboration with the Frankfurt School of Finance & Management, VC4A & Hub Collective. This program aims to strengthen incubator activities and provide better support to the start-ups in their respective ecosystems.
Created in 2019, the Innovation & Entrepreneurship Lab (the Lab) is an initiative of the African Development Bank, developed under its Jobs for Youth in Africa strategy. The Lab aims to create jobs for young Africans – women in particular – by supporting youth innovation and entrepreneurship. Beyond its focus on six pilot countries (Côte d’Ivoire, Egypt, Ghana, Kenya, Nigeria and South Africa), the Lab has continental reach and works to strengthen the entrepreneurial ecosystem of African countries . With a budget of $9.5 million, the Lab receives technical and financial support from the Swiss State Secretariat for Economic Affairs (SECO), the European Union, the Fund for Africa Private Sector Assistance (FAPA), and the Korea-Africa Economic Cooperation Trust Fund (KOAFEC)
Focus on 2 program participants that are doing outstanding work that deserves to be recognized as we strategically think of the steps forward at the COP27:
- A woman-led, Nairobi-based enterprise support organization
Of the ESO360 program, Diana Gichaga, founder and managing partner at Private Equity Support, ()says: “The ESO programme was a platform that enabled peer learning and networking for organisations across the continent that are working to facilitate successful early-stage investments. Private Equity Support, through its work with SMEs across 17 countries, and thanks to partners such as the African Development Bank, is able to improve the depth of its support to these SMEs, by leveraging off learnings from across the continent .”
Established in 2017, Private Equity Support is a women-founded and led Enterprise Support Advisory firm based in Nairobi, Kenya and operating across Sub Saharan Africa. PES engages with small and medium firms and capital providers to enhance access to early-Stage financing through provision of investment facilitation and value creation support. PES has worked with 240+ SMEs across various sectors. Of these, 43% represent youth entrepreneurs (aged below 35 years) while 48% are women-owned and led businesses, operating across 17 countries in Africa.
PES was recently approached by the Kenya Climate Innovation Center (KCIC) to curate a ‘Training Cohort’ Investor Readiness programme for twenty-five (25) clients of its incubator and accelerator. The KCIC, a World-Bank supported initiative, provides incubation, capacity building services and financing to Kenyan entrepreneurs and new ventures that are developing innovative solutions in energy, water and agribusiness to address climate change challenges.
- Beyond Cairo, an incubator in Upper-Egypt solves societal problems through entrepreneurship
About the ESO360 program, Shoaib Elqady, CEO of Athar says: “The program assisted Athar in building the capacity of its senior team members and employees, in several operations functions, which resulted in delivering better mentoring programs for our beneficiaries and customers and gaining more funding for our programs.”
Established in 2014, Athar is a startup accelerator that supports entrepreneurs in Upper Egypt to unleash their potential, enabling them to solve local societal problems. The incubation program adopts the lean startup methodology and provides startups with training, funding, one-to-one mentorship, networking opportunities, and office space. In 2021, the ESO supported 105 Startups and trained 1200 youth in digital skills.
Among other programs, Athar launched Athar Green, a 4-month program for startups that work on green businesses. The first stage is Athar Green Boot Camp – a one month program that works with 20 entrepreneurs to help them work intensively on their startups through training and consultation sessions. The second stage, for the 6 most promising start-ups, is Athar Green Acceleration, in which start-ups gain access to methodologies, tools and expertise to take their businesses to the next level.
