CEO Andy Kuper announced the commitment during the US-UK Climate Finance Mobilisation Forum taking place in London this week.
Today, at the US-UK Climate Finance Mobilisation Forum in London, Andy Kuper, LeapFrog’s CEO and founder, announced plans to commit $500m to companies combating climate change in Africa and Asia providing green tools and technologies to 50 million low-income people.
LeapFrog Investments invests in healthcare, financial services and climate solutions businesses in high-growth global markets. In a previous interview with Impact Investor, Kuper talked about his focus on “changing lives at scale.”
“Investing in climate solutions across emerging markets is not just the right thing to do, but also a highly compelling commercial opportunity,” said Kuper. “In the next decade we want to act as a catalyst and enabler for billions of low-income consumers finding clean pathways into prosperity by accessing… sustainable, efficient products that both improve their quality of life and protect their environment.”
The US-UK Climate Finance Mobilisation Forum was hosted by US special envoy on climate John Kerry and UK secretary of state for energy security Grant Shapps. King Charles III and US president Joe Biden joined participants following the forum.
Green transition
LeapFrog will target climate investments accelerating a green transition in the built environment, energy, mobility, and food sectors. According to their modelling, by 2030, clean investment across these four sectors alone could help low-income markets to avoid more than eight gigatonnes of GHG emissions, and generate 90 million new jobs.
LeapFrog further believes 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 30-40% less than incumbent carbon intensive alternatives.
Coupled with accelerating advances in technology, and broadening regulatory support, the company argues this is driving a major reallocation of capital towards sustainable business models.
Funding for these green businesses has grown 28% annually over the last decade in emerging markets, however, deal flow still represents less than 5% of the $330bn or so annual investment required.
“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,” Kuper added. “Our internal modelling paints a stark picture. India, Southeast Asia and Africa, which today represent 25% of global emissions, could account for as much as 84% of emissions by 2050 without urgent action, undoing any climate gains made in wealthy nations.”
Recent investments
LeapFrog recently led a $70m 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 $6bn on energy expenditure and avoiding 27.9 million metric tons of CO2 emissions. LeapFrog 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 5 years.
The company also anchored a $250m investment round for market-leading mobility platform, CarDekho, which is powering a revolution in two- and three-wheeler electric vehicles sweeping South Asia. 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% less than traditional petrol alternatives.
