More Money Going to African Climate Startups
2024-05-08
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1Financial support for climate technology startups in Africa from the private sector is growing.
2Businesses have raised more than $3.4 billion since 2019.
3However, the continent requires $277 billion each year to meet its climate goals for 2030.
4Experts say to receive more money, African countries need to deal with risks such as unexpected currency value changes.
5And they say investors need to expand into different climate sectors, including flood protection, disaster management and heat management.
6Investors should also use more kinds of funding methods.
7Africa: The Big Deal is a financial support database.
8It says that last year, climate tech startups on the continent raised $1.04 billion.
9That is a 9 percent increase from the year before and three times what they raised in 2019.
10That increase comes as overall money for startups in Africa fell last year.
11The money climate tech startups raised last year was more than one-third of all monies raised by startups in Africa in 2023.
12It came in second to financial technology, a more established sector.
13Venture capital is usually given to business with large risk but great long-term growth possibilities.
14Startups use it to expand into new markets and to get products and services on the market.
15Even with the noted growth, private sector financing represented only 14 percent of all of Africa's climate finance from 2019 to 2020.
16That information comes from a study by Climate Policy Initiative, a finance and policy research organization.
17That number is far lower than in other parts of the world.
18In East Asia and the Pacific, for example, private sector financing represents 39 percent of climate finance.
19And in Latin America and the Caribbean, it makes up 49 percent.
20Sandy Okoth works at FSD Africa. The non-profit organization receives funding from the British government.
21Okoth said the low financial support in Africa is linked to investors putting money in areas they are more familiar with, such as renewable energy technology.
22Less money comes in for "more complex" technology, Okoth said.
23That includes technology for adapting to climate change, he added.
24Wetility is a renewable energy startup based in South Africa.
25Last year, it secured funding of $48 million, mostly from private equity, to expand its operations.
26The startup provides solar panels for homes and businesses and an online service that permits users to remotely access power usage.
27It aims to solve the problems of energy access and dependability in southern Africa.
28Vincent Maposa is founder and chief executive officer of Wetility.
29He said, "Private sector financing in African climate is still rather low." But he added that there is clear growth.
30Maëlis Carraro is partner at Catalyst Fund.
31The Kenya-based venture capital fund supports climate adaption solutions.
32She urged for more diverse funding, such as mixing private and public sector funding together.
33She said one aim of public financing should be to bring more private sector capital into financing climate initiatives.
34She added, "We need the private sector and the public sector to work together to unlock more financing."
35I'm Gregory Stachel.
1Financial support for climate technology startups in Africa from the private sector is growing. Businesses have raised more than $3.4 billion since 2019. However, the continent requires $277 billion each year to meet its climate goals for 2030. 2Experts say to receive more money, African countries need to deal with risks such as unexpected currency value changes. And they say investors need to expand into different climate sectors, including flood protection, disaster management and heat management. Investors should also use more kinds of funding methods. 3Africa: The Big Deal is a financial support database. It says that last year, climate tech startups on the continent raised $1.04 billion. That is a 9 percent increase from the year before and three times what they raised in 2019. That increase comes as overall money for startups in Africa fell last year. 4The money climate tech startups raised last year was more than one-third of all monies raised by startups in Africa in 2023. It came in second to financial technology, a more established sector. 5Venture capital is usually given to business with large risk but great long-term growth possibilities. Startups use it to expand into new markets and to get products and services on the market. 6Even with the noted growth, private sector financing represented only 14 percent of all of Africa's climate finance from 2019 to 2020. That information comes from a study by Climate Policy Initiative, a finance and policy research organization. 7That number is far lower than in other parts of the world. In East Asia and the Pacific, for example, private sector financing represents 39 percent of climate finance. And in Latin America and the Caribbean, it makes up 49 percent. 8Sandy Okoth works at FSD Africa. The non-profit organization receives funding from the British government. Okoth said the low financial support in Africa is linked to investors putting money in areas they are more familiar with, such as renewable energy technology. Less money comes in for "more complex" technology, Okoth said. That includes technology for adapting to climate change, he added. 9Wetility is a renewable energy startup based in South Africa. Last year, it secured funding of $48 million, mostly from private equity, to expand its operations. 10The startup provides solar panels for homes and businesses and an online service that permits users to remotely access power usage. It aims to solve the problems of energy access and dependability in southern Africa. 11Vincent Maposa is founder and chief executive officer of Wetility. He said, "Private sector financing in African climate is still rather low." But he added that there is clear growth. 12Maëlis Carraro is partner at Catalyst Fund. The Kenya-based venture capital fund supports climate adaption solutions. She urged for more diverse funding, such as mixing private and public sector funding together. 13She said one aim of public financing should be to bring more private sector capital into financing climate initiatives. 14She added, "We need the private sector and the public sector to work together to unlock more financing." 15I'm Gregory Stachel. 16Carlos Mureithi reported this story for The Associated Press. Gregory Stachel adapted it for VOA Learning English. 17_____________________________________________ 18Words in This Story 19sector - n. an area of an economy 20currency - n. the money that a country uses 21fund - v. to provide money for (something) 22venture capital - n. money that is used to start a new business 23adapt - v. to change (something) so that it functions better or is better suited for a purpose 24equity - n. a share in a company 25solar panels - n. a large, flat piece of equipment that uses the sun's light or heat to create electricity 26remotely - adv. from a distance 27access - n. a way of being able to use or get something 28initiative - n. a plan or program that is intended to solve a problem