The Lightsmith Group Receives $1.6 Million of Funding from Nordic Development Fund and Global Environment Facility for Climate Resilience Investment Strategy
Lightsmith Will Use the Funding to Complete Development of and to Launch the First Private Sector Investment Strategy for Climate Adaptation and Resilience
Bonn, Germany – November 13, 2017: The Lightsmith Group (Lightsmith), a US-based investment firm, today announced that it is receiving $1.6 million in funding from Nordic Development Fund (NDF) and the Global Environment Facility (GEF). Conservation International is the GEF Implementing Agency for this project. The funding will support development and launch of the first private sector investment strategy for climate adaptation and resilience solutions, including in developing countries where the need for adaptation is greatest.
The funding was announced at the UN Climate Change Conference 2017 in Bonn, Germany, where nations of the world are meeting to advance the aims and ambitions of the Paris Agreement. The conference, officially referred to as COP 23, is being presided over by the Republic of Fiji.
Climate change is already increasing risks and impacts to all parts of the world economy, particularly in developing countries with less capacity to adapt. The United Nations Environment Programme estimates that the costs of adaptation in developing countries alone could reach $300 billion per year by 2030. Yet, according to Climate Policy Initiative, less than 16% of public climate finance is currently being directed towards adaptation or resilience.
Founded in 2016, Lightsmith pursues investment strategies that generate superior returns for investors by investing in companies that address critical societal needs. Lightsmith co-founder Jay Koh combines a career in private equity with experience in government and climate finance. After joining The Carlyle Group in the early 1990s, Mr. Koh most recently served as Managing Director at Siguler Guff, a private equity firm with over $10 billion under management, and as the Head of Investment Funds and Chief Investment Strategist at the Overseas Private Investment Corporation, the U.S. government’s $20 billion development finance institution. Lightsmith co-founder Sanjay Wagle also combines investment experience with government service. Mr. Wagle most recently has served in senior management roles in fast growing clean technology companies after a career in investing at VantagePoint Capital Partners and advising the Secretary of Energy on $15 billion of clean energy financing programs at the U.S. Department of Energy during the Obama Administration.
Lightsmith has identified 20 market segments where companies have existing technologies, products, and services to manage weather volatility, physical disruption and damage, operational risks, and resource scarcity – the kinds of risks and impacts increased by climate change. Last year, $130 billion was spent on these solutions. Even without climate change, that spending is expected to double by 2020.
“We believe there is a great opportunity to invest in the tools – the ‘picks and shovels’ – that can help our economies and communities adapt to climate change and become more resilient,” said Jay Koh, Managing Director of The Lightsmith Group. “These companies may not call themselves ‘climate resilience’ companies, but their solutions are already being used to address the same kinds of impacts and risks that are being made worse by climate change.”
“Given their leadership in climate finance, GEF and NDF are ideal partners for this effort to launch the first private sector climate adaptation and resilience investment strategy,” said Sanjay Wagle, Managing Director of The Lightsmith Group. “This funding demonstrates the public sector’s commitment to working with the private sector to address climate change and its recognition of Lightsmith’s unique combination of investment expertise and government experience.”
Nordic Development Fund, the development finance institution of the five Nordic countries, is focused on facilitating private investment to address climate change, especially in low-income countries. Leena Klossner, Deputy Managing Director of NDF, said, “Nordic Development Fund is happy to support The Lightsmith Group’s effort to scale up private sector solutions for climate resilience and adaptation and apply them in developing countries. This effort complements our existing work on climate adaptation through programs such as PROADAPT, which supports micro, small, and medium enterprises in building climate resilience.”
Announcing the GEF’s contribution of $1 million, GEF CEO and Chairperson, Naoko Ishii, said “The tide is changing with respect to private sector support for resilience. Our role as a public institution is to share the risks. I hope the new equity fund, the first of its kind for the GEF, can serve as an example of how to get more private sector capital into the resilience space.”
“Many of the most cost-effective solutions for building resilience to the impacts of climate change come from nature itself. Conservation International, as the GEF Implementing Agency, is pleased to be part of this partnership,” said Shyla Raghav, CI’s Climate Change Lead. “As pressure mounts to find new and innovative sources of climate finance, this effort is a promising approach to scale up finance for climate change adaptation.”
ABOUT THE LIGHTSMITH GROUP
The Lightsmith Group is an investment firm pursuing superior returns by investing in companies that address critical societal needs. Lightsmith invests in growth-stage companies providing technology-enabled business services and solutions in the areas of energy, water, food and agriculture, and climate resilience. Lightsmith won the Global Innovation Lab for Climate Finance competition in 2016 for its concept for the first climate adaptation and resilience private investment strategy and received the Lab’s formal endorsement in September 2017. For more information on The Lightsmith Group, please see: www.lightsmithgp.com.
ABOUT NORDIC DEVELOPMENT FUND
Nordic Development Fund (NDF) is the joint development finance institution of the five Nordic countries. The objective of NDF’s operations is to facilitate climate change investments primarily in low-income countries. For more information on NDF, please see: www.ndf.fi.
ABOUT THE GLOBAL ENVIRONMENT FACILITY
The Global Environment Facility (GEF) was established on the eve of the 1992 Rio Earth Summit to help tackle our planet’s most pressing environmental problems. Since then, the GEF has provided over $17 billion in grants and mobilized an additional $88 billion in financing for more than 4000 projects in 170 countries. Today, the GEF is an international partnership of 183 countries, international institutions, civil society organizations and the private sector that addresses global environmental issues. For more information on the GEF, please see: www.thegef.org.
Sanjay J. Wagle
The Lightsmith Group