LIVE GREEN · 2018-07-24 · high-quality entrepreneurs for investment, showcasing 20 enterprises to investors an-nually and helping the enterprises negotiate terms and navigate due

@KenyaCIC ClimateInnovationCenter www.kenyacic.orgwww

LIVE GREEN LIVE GREEN ISSUE 05 JUL - SEP

LIVE GREEN ISSUE 05JUL - SEP2018

Investing in climate change

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Providing an enabling environment to grow start ups

Climate smart businesses for sustainable resilience in Kenya

Hivos goes the full mile in addressing climate change


LIVE GREEN LIVE GREEN ISSUE 05 JUL - SEP 2

Intellecap’s Investment footprints in Africa

Intellecap is a pioneer in providing innovative business solutions that help build and scale profitable and sustainable enterprises dedicated to social and environmental change. Founded in 2002, the Aavishkaar - Intellecap Group now manages assets of over USD 650 million and have directed over USD 1 Billion of Capital to entrepreneurs working on such challenging problems sustain-ably through equity funds, venture debt vehicle, microfinance lending or investment banking intermediation. Martin Wambua and Arielle Molino from Intellecap give us insights on

the company’s investment in climate change.

In which sectors does Intellecap invest in specifically in Kenya?

Intellecap’s role over the years has been to facilitate investments to early stage companies through its initiative Intellecap Impact Investment Net-work (I3N). The ticket sizes that we focus on ranges from $50 thousand to $1 million. We select companies that are from the agriculture, liveli-hoods (education, water and sani-tation etc), healthcare, energy, and financial inclusion sectors which in our experience are the sectors we

have identified as having great impact.That being said, our sister company, Aav-

ishkaar, which does direct investments into high impact businesses will soon start to deploy capital in East Africa in 2019.

What has been the impact of the Intel-lecap’s investment in innovations?

Intellecap does not only facilitate mon-etary investments in enterprises but also works with enterprises to support them pre-investment and give tailor made busi-ness development support services. As such, these support services have gone a long way to improve the investment landscape in the region. For example, close to 50% of the companies that Intellecap has supported have gone ahead to raise investments from different investors as well as reporting growth in both revenue and employee numbers.

Some of our key impact being:• Worked with 200+ enterprises provid-

ing both business development and invest-ment readiness support

• 53 enterprises showcased to our net-work of investors

• Built a network of 40+ local and for-eign investors

• Directly facilitated 5 investments worth $1.2 million

• 25 enterprises we have worked with went on to raise $25 million plus worth of investment from other investors

• $6 million in additional revenues across 42 companies supported.

• 350+ jobs created in enterprises sup-ported

What role does Intellecap Impact In-vestment Network (I3N) play?

I3N is a network of 40+ local and foreign investors seeking to make investment in early stage enterprises in East Africa. The network sources both local and foreign angel investors with an aim of giving them access to a pipeline of investment ready

enterprises. Our aim is to plug the pre-VC funding gap in impact enterprises by making impact enterprises accessible and investible for Investors.

We do this by sourcing and prepping high-quality entrepreneurs for investment, showcasing 20 enterprises to investors an-nually and helping the enterprises negotiate terms and navigate due diligence before the investment happen.

Kenya Climate Innovation Center Strathmore Business School, P.O. Box 49162-00100 Nairobi, Kenya.+243703034701

About KCICThe Kenya Climate Innovation Center (KCIC) pro-vides holistic, country-driven support to acceler-ate the development, deployment and transfer of locally relevant climate and clean energy technologies. KCIC provides incubation, capacity building services and financingto Kenyan entrepreneurs and new ventures that are developing innovative solutions in renew-able energy, water and agribusiness to address climate change challenges.

EditorMercy [email protected]

ContributorsMartin Wambua Arielle MolinoLinda OdhiamboMercy MumoBoniface KiomeMelina Ex Graham Majorhart

continued on page 3

By Martin Wambua & Arielle Molino



What are some of the successful investments that intellecap has made?

Having being in the market for the past 4 years, Intellecap has directly facilitated funding to 5 early stage en-terprises with a cumulated capital of $1.2 million. However through the support that Intellecap gives, 25 other compa-nies have raised investments post the support from Intellecap.

Facilitated investments include Kigali Farms and Lotec from Rwanda, Eco-zoom and Corec from Kenya as well as Jibu that has operations in Rwanda, Uganda and Kenya. The investments have been from a range of investors in-cluding local and foreign angel investors, venture capital funds and development

finance institutions.

Are there any climate-change re-lated investments that Intellecap has made? If so, what has been the impact?

Continental Renewable Energy (COREC) was founded in 2012 and recy-cles waste plastic into building hardware such as fencing posts, roofing tiles, manhole covers and pavement blocks. Over the years, the company has recy-cled over 700 tonnes of plastic waste and made over 26,000 fencing posts. The investment raised by the compa-ny has been deployed to acquire new equipment for large scale production of roofing tiles and paving blocks. The company seeks to offer these products

to lower the cost of construction while saving the nation from harmful effects of waste plastic.

Ecozoom is a social enterprise that was established in 2013 with the goal of transforming lives by supplying healthy, efficient, ecofriendly products some of which include efficient cook stoves that are designed to preserve the environ-ment whilst saving people money and improving their health. These cook stoves reduce the consumption of charcoal by 70% which saves up to 25 trees over its lifetime and up to 10 tons of CO2 over its lifetime. The cook stove also emits 60% less smoke than tradi-tional charcoal jikos.

What are some of the challenges that the company has faced in terms of investments?

• Given that Impact investing in East Africa is nascent, deals tend to take far too long to close compared to other mature markets, putting undue pressure on the enterprises.

• We would also like to see more local angel investors actively investing, but the perceived risk and the oppor-tunity cost of investing in early-stage companies is still a challenge that we are trying to overcome.

• Risks posed by macro-eco-nomic factors. For example, the political volatility, forex risks among others which pose a challenge to the investment land-scape in the region.

Are there areas that have the poten-tial for investments in Kenya but have not been tapped into?

Overall investments into early growth stage companies have yet to take off in Kenya. There are numerous enterprises we work with who are too large for mi-cro finance, too small for venture capital, and cannot secure banking loans. This leaves a huge untapped market for investments of between $50,000 and $1 million. According to Intellecap’s own research in #ClosingTheGap found a $5 billion dollar credit gap for SMEs in Kenya alone. These enterprises need financing to grow their businesses, but have nowhere to turn to. We think this gap could be closed through local angel investors and through more innovative debt facilities, where banks are not will-ing to take the risk.

What direction does the company intend to take with regards to invest-ment?

Intellecap’s objective is to increase the capacity of local angels to start investing into early stage companies in the region. The company plans to achieve this by increasing the number of investor knowledge forums where local HNIs get to interact with institutional funds and foreign counterparts to get them comfortable and later co- invest in syndicated deals.

Intellecap in future will seek to catalyze investments locally by being lead investors and possibly pay for due diligence costs in a deal where local in-vestors can be follow on the deals. We are also developing more innovative fi-nancing and blended finance structures to help close this $5 billion credit gap.

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Climate smart businesses for sustainable resilience in Kenya

Our way of life is greatly influenced by climate. The way we live, the crops we grow, the infrastructure we build are all subjected to climate. The IPCC 5th Assessment report predicts that climate change could create some extreme events such as coastal flood-ing, extreme tropical storms, a more complex and harder to predict rainfall pattern and increased evaporation resulting in prolonged drought condi-tions.

What’s worse is that emerging econ-omies stand to be disproportionately affected by climate change due to their geo-positioning and lesser financial strengths. They firmly believe in the urgent need to address these concerns and adopt the two widely accepted strategies – mitigation and adaptation.

At the AECF, we believe that adopt-ing both the “preventive” and the “cu-rative” approaches positions the rural communities in sub Saharan Africa to overcome the existing threats posed by a changing climate.

Enhancing resilience to effects of climate change needs to be targeted and integrated within agribusiness and supply. Engaging private sector to offer market based climate technologies pro-vides the surest path to sustainability in getting rural Africa out of poverty and supporting their livelihoods.

Through its REACT Portfolio, the AECF has invested in innovative tech-nologies with the ability to stimulate

the local market to appreciate private sector and market based approach to sustaining water supply, improving post-harvest storage of farm produce, providing alternative incomes to rural farmers through drought tolerant agro value chains, diversifying clean cooking and lighting solutions to rural custom-ers and availing water and low cost small holder irrigation systems.

The AECF has supported over 15 cli-mate technologies across sub Saharan Africa. Take the case of Bell Industries, a Company that is creating a market for Purdue Improved Crop Storage (PICS) bag is proof that farmers in ag-riculturally productive lands are equally affected.

The company targets farmers in the fertile and productive regions of Rift Valley in Kenya. For the small holder farmers here, post-harvest losses are a major concern and contributor to food insecurity in Kenya. Losses of 10-20% are usually reported three months after storage and can go up to 50% after six months with most of the damage caused by weevils and the grain borer.

Access to chemical free hermetic grain storage bags thus provides an opportunity to households to store grains for a longer time contributing to improved food security and increased income from sale of the yields at a higher price.

Over 500 km away North West of Kenya in Baringo county, an arid and

semi-arid area, the AECF is supporting another company to develop dryland pasture for pastoral communities. The recent waves of prolonged drought conditions have hindered pasture development and contributed to the escalation of conflict between neigh-boring communities. Rehabilitation of Arid Environments (RAE) Ltd is pro-moting grass farming among pasto-ralist communities in Kenya’s vast arid and semi-arid areas by rehabilitating, developing and training communities in sustainable management of pasture-lands while working with the County Government of Baringo.

The profitable utilization of pasture, through the sale of grass seed, fattened cattle and other income generating activities, is supported by extension services and consultancies provided by the company. Grasslands are also vital carbon sinks that contribute to cli-

mate change mitigation as well as the rehabilitation of degraded rangelands. Expanded pasture production for sale will go a long way in reducing conflicts amongst pastoralist communities.

While contributing to the aspira-tions of The Paris Agreement, The AECF continues to invest in inclusive business models which transform the lives of rural farmers in sub Saharan Africa. Supporting private sector to stimulate market systems for climate smart products is expected to, not only provide a sustainable response to livelihood effects of climate change but also contribute to keeping the aver-age global temperature below 2o C. Through REACT, The AECF has mobi-lized additional US$ 48 million to invest private sector companies to deliver quality, affordable renewable energy for productive and domestic use in sub Saharan Africa.

By Linda Odhiambo



KCV’s investment in Kenyan companies

With the impacts of climate change being felt world over, with ex-treme weather conditions becoming more frequent and severe, heat waves and drought plaguing many countries, destroying agriculture, increasing the risk of wildfires and endangering lives. Also, rising sea level threatening the coastal communities and infra-

structure by amplifying flooding and storm surge. In Kenya, the effects are already being felt with erratic and un-predictable weather changes leading to shifts in seasons, drought, extinc-tion of wildlife and loss of biodiversity among others.

Financing innovations that ad-vances transformative solutions that

mitigate climate change and/or help communities adapt to its impact can thus not be understated. Kenya Climate Ventures (KCV) targets investments in the climate space such as cli-mate-smart agriculture, water manage-ment, energy efficiency and conser-vation – sustainable transport, urban planning, sustainable green architecture and green buildings, renewable energy, forestry conservation.

KCV eyes companies that are have proven their business models and are generating revenues and developing customer base having identified suit-able distribution models and supply chain infrastructure for initial service delivery and market penetration, with the ability to scale-up this further to continue to grow and attract further capital over time. In the last one year, KCV has invested in three companies namely Kilifi Moringa Estates (KME), Hydroponics Africa Limited (HAL) and very recently Sistema.bio.

The KCV invested $500,000 in Kilifi Moringa Estates as seed funding for the expansion and extraction of additional value to increase supply over the long term. The money will be used for the expansion of the out growers programme, research and develop-ment, capital expenditure and the value addition of the moringa by products. The organic certified company is in the business of growing moringa trees and producing products such as moringa powder, tea, and massage oil from the leaves and seeds.

Hydroponics Africa limited is an organic certified company in the busi-ness of growing moringa trees and producing products such as moringa powder, tea, and massage oil from the

leaves and seeds. The company re-ceived $350,000 as convertible loan. The funds will be used for product standardization to ensure consistent consumer offering, achieve operational efficiencies by lowering costs, imple-mentation of a consumer financing strategy that will increase sales and ac-celerate revenue growth. It will also go to distribution network development to improve access to new markets, in-ternational expansion strategy to grow organically or establish joint-venture and licensing arrangements. The money will also be used for business expansion (assets and physical facilities).

Recently, the company invested in Sistema.bio $350,000 to scale its hybrid reactor bio digesters, deliver-ing sustainable renewable energy and agricultural solutions to more farmers in Kenya. The company has sold over 800 Hybrid Reactor biodigesters, giv-ing access to clean cooking energy to thousands of consumers.

KCV makes strategic minority equity investments with ticket sizes of be-tween $100,000 to $ 1 million. Due to the nature of companies and clients, the investments can be initially in the form of convertible debt or preferred equity allowing conversion at later stages of the company’s growth. KCV takes keen active management of the business at the board of directors’ level to steer the company’s strategic direction. As the companies grow, KCV aims to help the companies attract further capital from its own follow on investments and other co-investors. KCV provides a patient, flexible tailored and risk tolerant medium to long-term capital with investment time horizon averaging 7 – 10 years.

By Mercy Mumo


LIVE GREEN LIVE GREEN ISSUE 05 JUL - SEP

Hivos goes the full mile in addressing climate change

Dealing with climate change at both policy and practice levels may be the way to go if the world is to fast track its actions in dealing with the threat. In Africa, both the public and the private sector have realized that moving with speed from the boardroom talks may be our only option.

Hivos has been in the business of tackling climate change through five key programmes namely; Africa Part-nership Biogas Programme, 4S@Scale, Open Source Seed System, sustainable Diet for All (SD4ALL) and Gender and Generation Empowerment Program in Uganda. All these programmes are driven by capacity building, partner-ships with multi actor initiatives, front runners, policy formulation and advo-cacy which is key strategies for Hivos.

With the Africa Partnership Biogas Programme, over 60,000 bio digesters were constructed in five counties out of which 18,000 were in Kenya. The pro-gramme has also scaled into Uganda, Tanzania and Ethiopia. The bio slurry which is a byproduct of the biodigester is used as organic fertilizer to reduce overreliance of chemical fertilizer and pesticides that pollute the environment hence improve food security.

The Sustainable and Secure Small holder System @scale (4S@Scale) has pumped €5.5 million in minimis-ing using of artificial fertilizer by use of bio slurry, advocating for reduced tree cutting and more planting by coffee farmers via use of Biogas.. Small

holder farmers are given tree seedlings and encouraged to include the trees amongst the coffee plantations to pro-vide shade and increase forest cover.

“This five year programme target-ed 85,000 farmers from Kenya and Uganda for climate adaptation through sustainable agricultural practices. The emphasis of the programme has been on the coffee value chain and promot-ing the adoption of renewable energy,” noted Boniface Kiome, Programme Development Manager for Sustainable Foods and Practices.

The Open Source Seeds Systems is another initiative of Hivos which targets the adoption and promotion of adapt-ed resilient seeds to encourage breed-ing and diversity of the seeds.

“The Open Source Seeds Systems encourages farmers to adopt indige-nous seeds that are less prone to pests and diseases,” emphasized the East Africa Programme Officer for Green Foods and Productive Landscape, Anne Majani, adding that by working together with farmers making the seed market open will ultimately improve accessibility and discourage the intel-lectual property rights system in the seed sector.

In Uganda, Hivos has been work-ing with Kabarole Research Center in Uganda in creating messages for cli-mate mitigation and adaptation using various forms of art like song, dance, paintings through the media to com-municate the effects of deforestation

and poor farming methods that have huge effect on climate change. “The idea is to drive policy change and cre-ate awareness on stiffer penalties for the destruction of forest cover,” averred Mr. Kiome. The initiative is also working towards influencing policy and the gov-ernment to allocate more resources in the budget to tackle climate change.

Caffe Del Duca is a social enterprise working in Kiambu, Bungoma and Nyeri counties with smallholder farmers in coffee sector through integrated farm-ing systems. Hivos in partnership with the SMEs has been at the forefront in distributing disease and pest resistant coffee seedlings to farmers in the said counties and advocating for planting of fruit seedlings to enhance food security and income.

Under the Green and Inclusive Energy Programme, Maimuna Kabate-si Advocacy Officer for Climate and Energy alludes to the fact that Hivos is working on improving energy ac-cess through policy advocacy on the adoption of green energy especially in Kenya, Tanzania and Uganda. To this

end, Hivos has budgeted for €1 million for five years (since 2016) to intensify its partnerships on public policy on energy.

“We have rolled out renewable ener-gy programmes in all the 47 counties in Kenya focusing on biogas through sustainable private sector partnerships. We are also working closely with the County governments on policy formu-lation,” said Ms. Kabatesi.

Ultimately, it has not been a walk in the park trying to run the various pro-grammes on mitigating climate change. She notes that the literacy levels espe-cially in the rural areas have contribut-ed to the slow flow of information on climate change and adoption from fos-sil fuels to clean renewable energy. “A lot of capacity building is required to sensitize the public on climate change and increase the capacity of citizens to articulate these issues.”

Implementation of county policies has also been slow due to lack of commitment. Little attention is given to matters climate change.

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By Mercy Mumo & Boniface Kiome


LIVE GREEN LIVE GREEN ISSUE 05 JUL - SEP N

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Trainer Jennifer Githinji moderating a session during the sales, marketing and branding training in May 2018.

A participant contributes to the discussions at the Water Dialogue event which was held on 22nd June 2018.

Panellists at the Innovate 4 Water Dialogue event on 30th April 2018Edward Mungai KCIC CEO, gives opening remarks at the Laikipia Innovation and Entrepreneurship Week which was held at the Nyahururu Stadium in May 2018.

KCIC staff participate in a tree planting activity in Makueni County to mark the National Tree Planting Day in May 2018.

KCIC clients visit a textile company at EPZ , Athi River during the Annual Study Tour in June 2018.

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LIVE GREEN LIVE GREEN ISSUE 05 JUL - SEP LIVE GREENMatching tech innovation with carbon offsets

Carby Box (www.carbybox.com) is a company based in New York, which has created the world’s first carbon offset to be sold on Amazon.com, providing an avenue for 160 million Amazon custom-ers to invest in climate change solutions in one click or via voice command.

On one end of the Carby Box solution are the 160 million Amazon customers in the United States, at the other end are two carbon offset projects located in Kenya and Congo. The projects, owned and operated by Carby Box’s partner Wildlife Works Carbon, prevent defor-estation, carbon emissions and uplift local communities. The project in Kenya is located in the Kasigau wildlife corri-dor, which is a critical wildlife passage between the Tsavo East and Tsavo West national parks, and home to up to 2,000 elephants at any given time. Carby Box empowers individuals to offset their car-bon footprint in one click and to protect forests and wildlife in Kenya as well as support the local communities in the Kasigau region.

Today, approximately 99% of carbon offsets sold on the voluntary carbon market in the United States are sold to companies – from a CSR perspective, this is promising, but also shows that the 165 million people in the United States who want to act on climate change do not feel empowered to do so. Buying carbon offsets in bulk is not very diffi-cult for companies. Many of the carbon

brokers offer certified carbon offsets from various sources and help with the assessment of how many tonnes to buy.

For individuals, the carbon offset pur-chase path used to look very different. To purchase carbon offsets, individuals first had to judge for themselves which websites were reliable and then answer a gauntlet of questions such as ‘how many kilometres did you drive last year?’ and ‘how many kilowatt/hours of elec-tricity do you use every month?’ Need-less to say, these types of questions and carbon calculators make it difficult for most people to accurately judge their own carbon footprint and feel confident in the end result.

“We felt that the barrier for individu-als who were motivated to offset their carbon footprint was way too high – too many questions were barriers to doing the right thing,” says Graham Majorhart, Co-Founder of Carby Box. “We wanted a simple and intuitive solution that could reach everybody in one click. That’s why we focused entirely on Amazon.com and offsetting the average American carbon footprint for Carby Box carbon offsets.”

Carby Box has earned the “Amazon’s Choice” label as well as being named a top 40 innovation to fight climate change by Sustainable Brands.

The innovation is an example of our globalized world – voice commands in the United States powering forest conservation efforts in Kenya. The

carbon offset dollars in Kenya are spent in three key areas to promote conservation: 1) forest conservation and protection, 2) sustainable land use, 3) local community investments. The Wildlife Works carbon offset project in Kasigau, which Carby Box funds, is REDD+ certified, which means that it adheres to guidelines envisioned by the United Nations for projects Reduc-ing Emissions from Deforestation and Degradation in developing countries. The project supports many of the UN sustainable development goals.

Carby Box is the most scalable carbon offset project ever created. It completes the global connection be-tween low-carbon development, com-munity empowerment, and empow-ering millions to take immediate and measurable action on climate change.

Carby Box is the first carbon offsets to be sold on Amazon.com and Ama-zon Alexa, and was recently selected as a Top 40 Innovation to fight climate change by Sustainable Brands.

www.carbybox.comMelina Ex is the Co-founder of

Carby Box and holds an MBA in Man-agement Consultancy. Prior to Carby Box, Melina was Managing Partner at a digital advertising agency in New York City and Berlin. Melina has extensive global experience having lived and worked in London, China, South Africa, Germany and New York City.

Graham Majorhart is the Co-found-er of Carby Box and is completing an MBA in Renewable Energy. Previous to Carby Box, Graham worked in corpo-rate strategy at American Express in New York City. Prior, Graham spent six years in China where he worked for a Fortune 500 company consulting clients in expansion strategy.

ISSUE 05JUL - SEP2018

By Melina Ex & Graham Majorhart

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LIVE GREEN · 2018-07-24 · high-quality entrepreneurs for investment, showcasing 20 enterprises to investors an-nually and helping the enterprises negotiate terms and navigate due