Market Scoping Studies for GCPF to Expand Beyond EE/RE Financing in Selected Markets

The Global Climate Partnership Fund (GCPF) is an investment company that tackles the shortage of appropriate financing for low-carbon projects in developing economies. Currently, GCPF focuses on financing energy efficiency and renewable energy projects for small and medium enterprises (SMEs) and private households in developing countries, primarily in cooperation with local financial institutions, but also directly. 

While renewable energy and energy efficiency financing remain at the core of GCPF on-lending, GCPF is eager to explore new potential climate relevant sectors and define adequate key performance indicators (KPIs) to ensure it remains relevant to partner financial institutions and deepen its climate impacts. Such new sectors include climate smart agriculture, electric vehicle infrastructure, recycling, as well as water and wastewater management. GCPF is also open to other new sectors with climate impact potential and that are relevant for the markets. Econoler was hired to conduct market scoping studies for Armenia, Colombia, and Vietnam by quantifying the investment potential for commercial lending to new sectors, reporting on drivers and barriers of new sectors and growth potential in selected markets, as well as verifying the feasibility of collecting data on recommended new KPIs. The market scoping studies were intended to complement other efforts to inform GCPF decision makers on the potential climate benefits and untapped market potential such a scope expansion may trigger as well as changes required to the GCPF carbon accounting and reporting framework.

In the three countries of intervention (Armenia, Colombia, and Vietnam), Econoler conducted detailed market scoping studies in the potential new investment sectors for GCFP: Electric vehicles infrastructure, recycling, low carbon agriculture, as well as water and wastewater. For each sector, Econoler:

• Conducted a review and analysis of available market data and existing literature;
• Identified information gaps and conducted market stakeholder consultations to assess market gaps and needs;
• Conducted consultations on and analyses of success stories in emerging/new industries/technologies;
• Identified technologies, practices, activities, and investments in new sectors and tested their feasibility;
• Identified relevant KPIs to be monitored by industry and type of investment;
• Estimated market potential and identified funding needs;
• Defined typical projects and clients in new sectors;
• Presented results to local GCFP teams.

Upon project completion, GCPF gained a comprehensive understanding of new investment opportunities for targeting climate change mitigation and adaptation in Armenia, Colombia, and Vietnam. The identified sectors with high potential in these countries were climate smart agriculture and recycling. 

This knowledge will support GCPF in maintaining its relevance for partner financial institutions and further deepen its climate impacts.