infodev s Climate Technology Program BBL Program Manager infodev - Valerie D Costa April 15

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1 infodev s Climate Technology Program BBL Program Manager infodev - Valerie D Costa April 15 The World Bank 1818 H Street NW Washington, DC 20433

2 Agenda Agenda: infodev introduction The Climate Technology Program Update on India Pilot Update on Kenya Pilot

3 Introduction: infodev Goal: Build local capacity in developing countries to create and accelerate innovative technology SMEs. Focus: infodev focuses on enterprises that use technology to deliver innovative solutions or to increase their competitiveness and market reach. Foundation: A global network of 290+ business incubators in 80+ developing countries Facilitating Communities of practice infodev s brands: Innovate. Connect. Transform. Providing Training, Toolkits and Advisory Services Building Local Capacity & Catalyzing Innovative Solutions Donors in 2010 Pioneering Experiencedbased Research

4 infodev s track record In less than 2 years infodev doubled number of incubators reached SMEs assisted in network increased 10x Jobs created by SMEs increased 30x Creating Opportunities for Human Empowerment The Poor; 134 Youth; 123 Women; 79 infodev: A Snapshot of infodev s track record 300 incubators globally Six Regional Networks 80+ developing countries 20,000+ SMEs 220,000+ Jobs created 90% success rate of incubators 75% survival of SMEs after 3 yrs ~1:1 leverage with local partners Increasing Productive Capacity Across Sectors Manufacturing: 63 ICT: 129 Mixed: 82 Agriculture: 57

5 Introduction: Climate Technology Program Can innovation centers facilitate the growth of locally relevant climate technology sectors in developing countries? infodev s track record in cleantech commercialization Fuel-efficient bread-oven (Rwanda) Wind turbines for off-grid communities (Mexico) Solar panels (Armenia) Potable UV water treatment (Ecuador)

6 Network Pilot Feasibility Program Goals 1 Assess the feasibility for establishing a Climate Innovation Center in three developing countries to: 1. Produce a tangible, grassroots driven support mechanism for technologyenabled entrepreneurship and private sector development 2. Accelerate the development, deployment and transfer of technologies for mitigation and adaptation of climate change 3. Promote economic and social transformation through SME development and job creation Global Innovation Center best practice report with UNIDO 2 Based on the outcomes of the feasibility studies, implement pilot Innovation Centers in each country over a 3-4 year period 3 Network centers internationally to promote south-south learning, business linkages and exploit synergies.

7 Momentum and demand The CLIMATE TECHNOLOGY PROGRAM Copenhagen Accord Paragraph 11. In order to enhance action on development and transfer of technology we decide to establish a Technology Mechanism to accelerate technology development and transfer The EGTT has asked UNEP to prepare a paper to present and evaluate options for implementing the functions of the climate technology center and network as described in paragraph 10 of the draft Copenhagen technology decision. World Bank Climate Change Strategy: Strategic Framework for Development and Climate Change Advancing Technology: Climate Technology Program launched by InfoDev Kenya Demand: National Climate Change Response Strategy Establishing Local Technological Innovation Centres: Kenya should establish and fund local technological centres that can be used to develop, advance and disseminate local technologies. Such centres can be used for educational purposes (e.g. train local communities on early warning systems), and to promote sustainable agricultural practices, enhance the growth of indigenous small and medium enterprises (SMEs). Demand to Implement CICs: India s Commitment The Prime Minister of India, Manmohan Singh expressed India s commitment to Climate Innovation Centers; India has proposed the setting up of an international network of Climate Innovation Centers (CICs) which should act as vehicles for enhancing technology innovation and capacity building in developing countries. These Centers could assess and identify locally-relevant key technologies and support their successful and faster development and deployment. Each such center could focus on a key technological product that addresses climate change. The CICs in different countries may also cross-fertilize each other bysharing of learning-by-doing experience.

8 infodev s Climate Technology Program Task Manager Anthony Lambkin Climate Technology Program April 15 The World Bank 1818 H Street NW Washington, DC 20433

9 What is an Innovation Center? Policy advocacy and market intelligence Grants, Seed financing and soft loans International networking and collaboration Coordination of R&D Tech testing, demonstration & certification facilities Innovation Center Capacity building, training and mentoring services Business incubation services Tech transfer and IP policy advisory Key Success Factors: A coordinated and holistic approach to innovation Based on local context, market needs and opportunities Aggregates existing country initiatives Leverages public-private partnerships and resources Networked nationally and internationally facilitating collaboration India Brazil Kenya

10 Examples of Innovation Centers The UK s Carbon Trust EXECUTIVE AND ADMINISTRATIVE CENTRE NATIONAL STRATEGY GROUP Examples may include: IN-HOUSE AND THIRD PARTY PROGRAMMES IN-HOUSE AND THIRD PARTY DELIVERY AGENCIES (dependent upon local needs and existing organisations and activities) RESEARCH INSTITUTIONS BUSINESS INCUBATORS CAPACITY BDG PROGRAMME TECHNOLOGY ACCELERATORS VENTURE FUNDS LOAN PROGRAMME Other examples of Innovation Centers supporting Climate Technologies around the world: Agri-business Incubator at ICRISAT, India Sistema Brasileiro de Tecnologia (SIBRATEC), Brazil Kinrot Ventures Water Technology Incubator, Israel ATI Clean Energy Incubator (CEI), USA

11 The positioning Addressing barriers along the value chain Supporting local technology adaption Building and a innovation pipeline of sustainable Providing SMEs access to risk capital Creating and opening markets Informing and linking innovative policy mechanisms Technology Journey Company Journey Finance Journey Market Journey Policy Journey Basic and Applied Research Individual Start-up Growth Established Government Venture Financing Public Equity Markets Credit (Debt) Markets Benefit Technology push Market Pull Feedback quantified General Regulation Development and demonstration Sector Regulation Scale-up Technology Specific Regulation Commercial Comprehensive Framework Adapted: Advanced Energy Tech Brief - Coony, 2008

12 The positioning: India example Sector: LED Lighting Barriers to scale-up: Technology Journey High costs of components: Basic and Development and copper, aluminum alloys Applied Research demonstration and lenses Service delivery and distribution Scale-up model Commercial Company Journey Lack of talent and know-how in Entrepreneurs lack Individual related Start-up industries (e.g. semiconductors) Growth Established business acumen Finance Journey Government Investors seeking Venture Financing guaranteed returns Public Equity Markets Credit (Debt) Markets Market Journey Policy Journey Low understanding of No Technology push Benefit benefits quantified vs. costs by Market Pull incentive Feedback users mechanis Price of adoption ms to General Sector vs traditional Technology drive Comprehensive Regulation Regulation bulbs/fuels Specific Regulation demand Framework

13 Feasibility study process for CIC: India The CLIMATE TECHNOLOGY PROGRAM Stakeholder identification and outreach Sector mapping: Main issues Workshop 1: Brainstorming and networking Applied Technology Materials, Moser prioritization Baer, General Electric, IBM, Gaps Tata analysis Power, McKinsey & Company, IIT, Intel, Workshop Acumen Fund, Sun Group, Cleantech Group, PwC, E&Y, NVI, Azure Power, SurveysIndian Angel Network, DST, Model MNRE, design BEE, Carbon Trust, Teri, Proposal CGIAR-ICRISAT Follow up: Quantitative analysis Workshop 2: Model design and working groups Develop proposal with key stakeholders and government endorsement

14 Stakeholder feedback example: India The CLIMATE TECHNOLOGY PROGRAM Research insitutions are not effectively linked with commercialization activities Innovation center should have specialized programs for specific technologies 14% 19% Disagree or strongly disagree Neutral 6% 26% Disagree or strongly disagree Neutral 67% Agree or strongly agree 68% Agree or strongly agree Stages in value chain center should support 0% 20% 40% 60% 80% 100% Basic research Applied research Proto-typing and proof of concept Demonstration and field testing Market entry and first production First expansion Scale manufacturing Scale installations and deployment Center priorities Connect and provide a pool of mentors for entrepreneurs Collect data including market and industry intelligence Set priorities for national research labs and institutions Network exsisting R&D centers and incubators Provide support and guidence to inform policy makers Networked with climate innovation centers globally

15 Technology Prioritization Example: India The CLIMATE TECHNOLOGY PROGRAM Evaluation Criteria Stakeholder feedback NAPCC (National Action Plan) 1. Energy Efficiency 2. Water 3. Transport Evaluation Criteria: Leverage of Indigenous Resources Technology Readiness Clear & Ready Stakeholders Business Model Entrepreneurial Capacity Workforce Market Demand Policy Availability of Funding Economic Impact Carbon Impact

16 Example: India Model The CLIMATE TECHNOLOGY PROGRAM Central center based in Delhi Cells formed in major areas as hubs for service delivery, linking and accrediting existing service providers: Building capacity where needed.

17 Example of finance pillar of India Innovation Center The CLIMATE TECHNOLOGY PROGRAM Finance Risk Capital Fund Fund Activity Description Proof of concept grants (up to 25k) Seed investments (up to 100k) (flexible funding: Equity, quasi-equity Expansion investments (up to 250k) Needs Addressed Covers valley of death funding gaps Reduces risk and incentivizes private sector investment Funding types are simple, transparent and easy to apply for Crowds-in multiple private sector investment (leveraging) Management & oversight Co-investment from the affiliated investors and partners is required Explicit selection criteria: Triple bottom line impact Oversight includes CIC management, part or full-time investment officers, mentors Investment partners are members of the investment committee Outcomes 10 POC grants per year 10 Seed investments per year 2 expansion investments per year 70% success in receiving follow-on funding 10-30% success in medium-term exits (3-5 years) Partners Seed funds: i2india, CIIE, Indian Angel Network, Mumbai Angel Network, NVI, IV VCs: DFJ, Nexus, IDG, Accel, NEA-IUV, Sequoia, Foundation, Helion, KPCB, SHerpalo, SONG, Acumen, KSK, Venture East, Applied Ventures Banks: ICICI, SBI, HSBC, HDFC, AXIS, CANARA, SIDBI, NABARD Government: NRDC, DST, MNRE, BEE, DBT, IREDA Foundations: Shell Foundations, Phillips Foundations, Clinton Climate Initiative

18 Next Steps The CLIMATE TECHNOLOGY PROGRAM India May Finalize Business Plan June Deliver endorsed proposal October Agreement on implementation Other markets under investigation for pilot work: Vietnam Ethiopia Gauteng Province, South Africa Ghana

19 infodev s Climate Technology Program Joseph Nganga InfoDev April 15, The World Bank 1818 H Street NW Washington, DC 20433

20 Kenya Workshop Kenya Workshop March 2010: Mugo Kibati, Director General Vision2030 Cleantech Sector Mapping: infodev Session 1: Technology Session 2: Finance The Carbon Trust Experience Session 3: Collaboration Session 4: Commercialization Example participants: Tony Ngeny CEO WinAfrique George Njenga Country Director GE Jack Kimani Director Clinton Found. Prof. Keriko Jomo Kenyatta University Bill Makhoka Kenya Ind. Research Inst. Patrick Chabeda Prime Minister s office

21 And Key take-aways from the 1 st workshop Key challenges to accelerating the development and adoption of clean technology and role the innovation center could play to address them. Barriers Lack of risk capital Standardization Policy Business support Equipment and tools Solutions Center could offer start up risk funding Center could offer standards for various tech Center could act as an Industry Association Center could provide business training, market data etc. Center could provide workshop facilities where entrepreneurs could prototype their innovations and produce initial products for proving the market.

22 Barriers climate technology SMEs are facing Company: Craftskillz Entrepreneur: Simon Mwachiro Clean Technology: Small Wind Current capacity: 10 to 20 turbines a year. Employees: Between 3-20 How can an innovation center help: Standards ( KBS, NEMA, ERC etc) Business dev management, financing, market data Facility Tools etc.

23 Other examples.. Company: Eastleigh Community Center Entrepreneur: Vincent Ayako Clean Technology: Ceramic Water filtration Company: Goodlite Energy Systems Entrepreneur: B. M. Kiranga Clean Tech: LED lighting for rural homes How can an innovation center help: Standards ( KBS, NEMA, ERC etc) Business dev management, financing, market data, business model Facility Tools etc. Strengthening management capacity

24 Policy advocacy and market intelligence Grants, Seed financing and soft loans International networking and collaboration Coordination of R&D Capacity building, training and mentoring services Tech transfer and IP policy advisory Business incubation services Facilities: Models to learn from An example TechShop in Menlo Park, CA Facility housing workshop space, variety of equipment, offices. Membership based program for revenue predictability financially sustainable Classes on the various equipment for safety as well as revenue Both permanent and temporary office rental arrangements. Provide design software such as AutoCAD that is otherwise prohibitively expensive for entrepreneurs to purchase Rapid prototyping through 3D printing machines. Tech testing, demonstration & certification facilities Innovation Center

25 And next steps? May June July Develop a couple of models and share with stakeholders at the second workshop Continue with stakeholder engagement to both gain support as well as refine the final design. Complete proposal for presentation to partners end of June/beginning of July

26 infodev s CLIMATE TECHNOLOGY PROGRAM The CLIMATE TECHNOLOGY PROGRAM More information available at