AfDB’s support to climate-focused ESOs through the Innovation & Entrepreneurship Lab | African Development Bank

According to the International Labor Office (ILO), “green jobs” are created by the shift of economies, businesses, workplaces and labor markets towards a sustainable, low-carbon paradigm that provides decent work. ILO estimates that a low-carbon economy will create 24 million jobs worldwide over the next 20 years.

As Africa faces significant climate impacts and challenges, many of those jobs will be created when the countries adopt renewable energy infrastructure. The opportunities for start-ups and small and medium-sized enterprises to meet these challenges will increase and need continued support from business support organizations and investors.

According to the African Private Equity and Venture Capital Association (AVCA), “climate awareness has permeated the African private investment landscape”. Through 2022, 79 climate-related deals worth $1.3 billion have been registered, 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 technology-related companies in the cleantech/climate tech sectors, developing hardware or digital technologies that reduce or mitigate human impacts on the climate. Most investments supported renewable electricity producers in the utilities sector, with a focus on solar energy. According to a 2012 study, Morocco’s renewable energy sector could create between 267,000 and 482,000 jobs by 2040.

Many of these opportunities will benefit SMEs in a variety of sectors, from agriculture (with precision irrigation initiatives such as Seabex in Tunisia) to e-mobility (e.g. electric motorcycle taxis such as those developed by Ecoboda in Kenya) or the circular economy (building plastic recycling industries like Coliba is doing in Ivory Coast and Ghana).

Unfortunately, given the need for scale and the costs associated with investing in renewable energy infrastructure, green job growth in Africa has, with few exceptions, been slow so far. A variety of public institutions, including the ILO, the Islamic Development Bank and private organizations such as Climate Innovation Hubs, are leading efforts to create green jobs across the continent. The participation of young people and women in the green economy must remain a priority.

To this end, the Lab has supported entrepreneurship support organizations (such as incubators, accelerators and fund managers) involved in driving sustainable, low-carbon development and prosperity in Africa, in line with the Bank’s strategies and the African Union’s 2063 Agenda. 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 encourage the creation and growth of more start-ups, creating jobs and value for their communities and customers.

As part of its capacity-building activities, the Lab, in partnership with the Frankfurt School of Finance & Management, VC4A & Hub Collective, has delivered tailored, high-quality training to incubators and accelerators across Africa through the ESO360 program. This program aims to strengthen incubator activities and better support the start-ups in their respective ecosystems.

Focus on 2 program participants who deliver outstanding work worthy of recognition as we strategically reflect on the steps forward at COP27:

• A women-led business support organization in Nairobi

About the ESO360 program, Diana Gichaga, Founder and Managing Partner at Private Equity Support says: “The ESO program was a platform that enabled peer learning and networking for organizations across the continent working to facilitate successful early stage investments. stage. Private Equity Support, through its work with SMEs in 17 countries and through partners such as the African Development Bank, can enhance the depth of its support to these SMEs by leveraging lessons from across the continent.”

Founded in 2017, Private Equity Support is a women-founded and led enterprise support consultancy based in Nairobi, Kenya and operating in Sub-Saharan Africa. PES works with small and medium-sized businesses and capital providers to improve early access to finance through investment facilitation and value creation. PES has worked with over 240 SMEs in various sectors. Of these, 43% represent young entrepreneurs (under the age of 35), while 48% are women-owned and led businesses operating in 17 countries in Africa.

PES was recently approached by the Kenya Climate Innovation Center (KCIC) to create a ‘Training Cohort’ Investor Readiness program for twenty-five (25) clients of its incubator and accelerator. The KCIC, a World Bank-backed initiative, provides incubation, capacity building services and financing to Kenyan entrepreneurs and new ventures developing innovative solutions in energy, water and agribusiness to address climate change challenges.

• Outside Cairo, an incubator in Upper Egypt solves social problems through entrepreneurship

On the ESO360 program, Shoaib Elqady, CEO of Athar says, “The program helped Athar build the capacity of its senior team members and employees, across various operational roles, resulting in delivering better mentoring programs for our beneficiaries and customers and getting more funding for our programs.”

Founded in 2014, Athar is a startup accelerator that supports entrepreneurs in Upper Egypt to unlock their potential, enabling them to solve local societal problems. The incubation program uses the lean startup methodology and provides startups with training, funding, one-on-one mentorship, networking opportunities, and office space. In 2021, ESO supported 105 startups and trained 1200 young people in digital skills.

Among other things, Athar launched Athar Green, a 4-month program for startups working on green businesses. The first phase is Athar Green Boot Camp – a month-long program that works with 20 entrepreneurs to help them work intensively on their startups through training and consulting sessions. The second phase, for the 6 most promising startups, is Athar Green Acceleration, in which startups gain access to methodologies, tools and expertise to take their business to the next level.