An industry knows it has gone mainstream when the most risk-averse money - institutional investors such as pension funds, insurance companies, banks, hedge funds and endowments - starts to move in. That happened on Friday for decentralised renewable energy, including home and business rooftop solar and mini-grids, in emerging and energy-poor economies in Africa.
At a board meeting in South Korea, the Green Climate Fund (GCF) agreed to become the anchor investor in a $3.5 billion debt fund for decentralised renewables proposed by Deutsche Bank AG.
The $10 billion GCF is set to channel billions of dollars in climate change funding to developing countries in the coming years. Deutsche Bank AG is an accredited entity under the GCF.
The GCF approved $80 million for the bank's Universal Green Energy Access Program (UGEAP), which will initially focus on Nigeria, Benin, Namibia, Tanzania and Kenya, according to Michael Hoelter, a director of sustainable investment at Deutsche Bank Asset Management.