LeapFrog, Temasek, EIB join forces to deliver $500m pledge for green solutions
- New strategy will invest in companies that provide green tools and technologies for 50 million emerging consumers.
COP28, Dubai: LeapFrog Investments, the Profit with Purpose firm, has announced investment from Temasek and support from the European Investment Bank subject to its governing bodies approval, for its strategy to deploy $500m to address climate change in Africa and emerging Asia.
In 2021, Temasek committed $500 million to LeapFrog to anchor its future investing activity, and this includes its $100 million commitment to the new climate investing strategy. The European Investment Bank, which is the lending arm of the European Union, is also a longstanding partner with LeapFrog in emerging market impact investing, and its cornerstone support, currently under appraisal, would represent EIB’s fifth investment with LeapFrog. Other investors that will support the climate investing strategy will be revealed in due course.
According to the Investor Roadmap for Inclusive Green Growth report – released today by LeapFrog with partners Temasek and the World Bank’s CGAP think tank – South Asia, Southeast Asia, and Africa today represent 25% of global climate emissions but could account for as much as 73% of emissions by 2050 without urgent action.
LeapFrog’s climate strategy will focus on investments in companies that provide green tools and technologies that tackle this challenge for rising consumers, such as 2-wheeler EVs, rooftop solar providers, and smart farming businesses. Targeting the energy, mobility, built environment and agricultural sectors, and providing growth equity and distinctive expertise to fast-scaling consumer companies, LeapFrog’s investments will support low-carbon and resilient growth as incomes rise in countries such as India, Indonesia and Kenya.
LeapFrog’s climate team has built a robust pipeline of green businesses in Africa and emerging Asia to accelerate this green global transition, with initial investments to be announced in 2024. LeapFrog’s previous funds have already backed successful climate companies such as Sun King, the largest pay-as-you-go solar financier in Africa.
Dr Andy Kuper, Founder and CEO, LeapFrog Investments, said: “The world has woken up to the opportunity and challenge of delivering a green transition, not only in developed economies but also across emerging economies. The swift and early support of our longstanding partners Temasek and EIB shows that long-term and progressive investors understand the global challenge of tackling climate change holistically. Climate has no borders, and so neither should global capital markets, as we work to rapidly scale clean, efficient, affordable climate solutions for the five billion people in the emerging markets of South Asia, Southeast Asia and Africa.”
Benoit Valentin, Head of Impact Investing, Temasek, said: “There is huge potential for emerging markets to leapfrog a generation of traditional and incumbent technology with access to clean technology, while improving lives and livelihoods. We need to take urgent action, tap on the significant green discount, and seize investible opportunities for a greener and more inclusive future. Our partnership with LeapFrog is one of the core pillars of our impact investing strategy and underscores our belief in the potential of impact investing to unlock capital to build a better, more inclusive, and sustainable world where every generation prospers.”
Markus Berndt, Acting Managing Director, EIB Global, said: “As the EU climate bank, with a global mission supporting the green transition and mobilising private finance, I am excited about the strategy’s objectives to invest in concrete solutions to local private sector development and a green transition in transport, energy and environment in Asia and Africa.”
The climate strategy strengthens LeapFrog’s position as the pioneer of profit with purpose investing in both financial services and healthcare, combining outstanding commercial returns and outsized impact. The group has raised four growth equity funds and two separate accounts spanning dozens of investments in 30 countries to date.
Over the life of LeapFrog, its portfolio companies have generated 24% annual revenue growth on average, and today LeapFrog companies reach 492 million people with healthcare, financial tools or climate solutions – over 6% of the world’s population.
Temasek and EIB’s support comes just four months after LeapFrog announced its $500m climate commitment at the US-UK Climate Mobilisation Forum hosted by US Special Envoy on Climate John Kerry and then UK Secretary of State for Energy Security Grant Shapps, where 20 global business leaders including LeapFrog’s Dr Kuper and the President of COP 28 were joined by HM King Charles III and US President Joe Biden at Windsor Castle. The Forum brought together key figures from finance, philanthropy, and government to tackle climate change in developing economies and accelerate a net-zero, resilient transition.
About LeapFrog Investments
LeapFrog invests in healthcare, financial services and climate solutions businesses in high-growth global markets. Its companies deliver distinctive impact and robust returns, growing revenues on average 24% a year. LeapFrog companies now reach 492 million people in 30 countries. The firm has raised billions of dollars from global institutional investors, including a recent $500m commitment by Temasek to LeapFrog and its growth equity funds. LeapFrog has twice been ranked by Fortune as one of the top Companies to Change the World and was named inaugural Pioneer in Impact by the FT and IFC at the Transformational Business Awards.
Montfort Communications – LeapFrog@Montfort.London