Global private investment firm LeapFrog Investments plans to commit $500 million to companies combating climate change in Africa and Asia, providing green tools and technologies to 50 million low-income people. 

The firm said in a statement on Tuesday that the funding is aiming to support a transition to green technologies in emerging and low-income markets.

The announcement was made on Monday at the US-UK Climate Finance Mobilization Forum in the United Kingdom attended by leading investors, companies and philanthropies.

Its Chief Executive Officer and Founder Dr Andy Kuper has highlighted the urgent need to direct private capital to green initiatives in emerging markets, where over 80 percent of the world’s population lives. 

UK Secretary of State for Energy Security Grant Shapps also said that helping emerging economies in Africa and Asia to tackle climate change is one of the only ways they will ensure children across the globe grow up on a planet that is fit and safe for them.

He opined that LeapFrog’s plan to invest in green technologies for developing nations, not only helping them to cut their emissions, but also deliver national and energy security as their economies continue to grow.

According to the statement, LeapFrog as a pioneer in impact investing across the emerging world, will target climate investments accelerating a green transition in the built environment, energy, mobility, and food sectors.

It said by 2030, clean investment across these four sectors alone could help low-income markets to avoid more than eight gigatonnes of greenhouse gas (GHG) emissions, and generate 90 million new jobs, per new internal modelling.

It also said a compelling business case already exists for a wave of green investment across the emerging world in the next decade.

LeapFrog said its modelling suggests multiple technologies in these sectors – from electric scooters in India, rooftop solar panels in Nigeria, to data-driven farming software in Vietnam – have now hit a price inflection point where they offer a ‘green discount’ of up to 30 percent to 40 percent less than incumbent carbon intensive alternatives.

Coupled with accelerating advances in technology, and broadening regulatory support, this is driving a major reallocation of capital towards sustainable business models, it said.

While funding for these green businesses has grown 28 percent annually over the last decade in emerging markets, LeapFrog said deal flow still represents less than 5 percent of the required $330 billion annual investment to support a full transition to clean alternatives, presenting a compelling opportunity and critical challenge for private capital markets. 

“Investing in climate solutions across emerging markets is not just the right thing to do, but also a highly compelling commercial opportunity,” said Kuper.

He said in the next decade the firm wants to act as a catalyst and enabler for billions of low-income consumers finding clean pathways into prosperity by accessing – via LeapFrog companies – sustainable, efficient products that both improve their quality of life and protect their environment.

“Climate is a global problem that capital markets need to approach through a global lens, and we urgently need to invest more in these countries if we have any hope of hitting the emissions reduction targets we have set for our planet,

“Our internal modelling paints a stark picture. India, Southeast Asia and Africa, which today represent 25 percent of global emissions, could account for as much as 84 percent of emissions by 2050 without urgent action, undoing any climate gains made in wealthy nations,” he added.

LeapFrog recently led a $70 million investment round into Sun King, the world’s largest off-grid solar energy company, which was started in Kenya and to date has provided 102 million people with clean energy access, saving households almost $6 billion on energy expenditure and avoiding 27.9 million metric tons of carbon dioxide (CO2) emissions.

LeapFrog said it will support the firm to reach even more of the 1.8 billion off-grid and under-electrified consumers in Africa and Asia over the next five years.

LeapFrog also anchored a $250 million investment round for market-leading mobility platform, CarDekho, which is powering a revolution in two- and three-wheeler electric vehicles sweeping South Asia.

It said four million searches for electric vehicles are registered across its sites monthly, in a region where already the total cost of ownership for electric scooters is up to 30 percent less than traditional petrol alternatives. 
 
LeapFrog is a firm invests in healthcare, financial services and climate solutions businesses in high-growth global markets.

Its companies deliver distinctive impact and robust returns, growing on average 24 percent a year.

LeapFrog companies now reach 451 million people in 30 countries.

The firm has raised billions of dollars from global institutional investors, including a recent $500 million commitment by Temasek to LeapFrog and its growth equity funds.

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