Grace Ashiru
LeapFrog Investments, a distinguished firm known for merging profit with social purpose, has successfully secured a $500 million investment to advance its bold climate investment initiative in Africa and emerging Asia. This significant funding is provided by Temasek and has received backing from the European Investment Bank, with final approval pending from its decision-making bodies.
In 2021, Temasek made a notable $500 million commitment to LeapFrog, earmarking it for the firm’s future investment ventures, which includes a dedicated $100 million for the newly launched climate investment strategy. The European Investment Bank, which has a history of collaborating with LeapFrog on impact investing in emerging markets, is contemplating its fifth investment in the firm, contingent on further evaluation.
The “Investor Roadmap for Inclusive Green Growth,” a collaborative effort from LeapFrog, Temasek, and the CGAP think tank of the World Bank, highlights the critical need for tackling climate change in South Asia, Southeast Asia, and Africa. These regions account for 25% of the world’s climate emissions. This percentage is expected to escalate dramatically to 73% by 2050 if immediate measures are not taken.
LeapFrog’s approach to climate action involves directing investments toward businesses that offer eco-friendly solutions and technologies, particularly for emerging consumer markets. This strategy encompasses areas like electric two-wheelers, rooftop solar services, and intelligent farming operations, spanning the energy, transportation, construction, and agriculture industries. The objective is to foster growth that is both low in carbon emissions and resilient, especially as incomes increase. This focus is mainly on nations such as India, Indonesia, and Kenya.
Dr Andy Kuper, the Founder and CEO of LeapFrog Investments, highlighted the importance of addressing climate change globally. He stated, “Climate knows no boundaries, and global capital markets should reflect this reality.” Dr. Kuper praised the initial backing from Temasek and the European Investment Bank (EIB), acknowledging their foresight as long-term, forward-thinking investors committed to a comprehensive approach to climate change..
Benoit Valentin, who leads Impact Investing at Temasek, shared a positive outlook on the prospects for emerging markets. He believes these markets have the potential to bypass conventional technologies through the adoption of clean technology. Valentin emphasized the pressing need to capitalize on the green discount and to harness investment opportunities that promise a greener and more inclusive future.
Markus Berndt, currently the Acting Managing Director of EIB Global, has shared his enthusiasm about the strategy’s goals. These include investing in tangible solutions that will aid in developing the private sector and foster a green transformation in sectors such as transport, energy, and the environment, specifically focusing on Asia and Africa.
The climate team at LeapFrog has proactively established a substantial portfolio of green enterprises in Africa and emerging regions in Asia. They are gearing up to reveal their initial investments in these areas in 2024. LeapFrog’s prior investment funds have already been instrumental in the growth of successful climate-focused companies, including Sun King, Africa’s leading pay-as-you-go solar financing company.
LeapFrog’s recent attainment of support from Temasek and EIB is a significant milestone following their announcement of a $500 million commitment to climate initiatives. This commitment was made public four months ago during the US-UK Climate Mobilisation Forum. The forum was a notable event, bringing together prominent global figures, including LeapFrog’s Dr. Kuper. It focused on addressing climate change in developing economies and fostering a transition towards a resilient, net-zero future.
LeapFrog Investments, renowned for its unique ‘profit with purpose’ philosophy, operates in the financial services and healthcare sectors. The firm has successfully launched four growth equity funds and two separate accounts. This extensive portfolio encompasses a myriad of investments across 30 countries. Notably, companies within LeapFrog’s portfolio have consistently exhibited an impressive 24% average annual revenue growth. These companies have a substantial global footprint, reaching 492 million people worldwide. This reach translates to providing essential services such as healthcare, financial tools, and climate solutions to over 6% of the global population.
