Energy Transition in Emerging Markets

At Mirova, we are committed to supporting the energy transition in regions most vulnerable to climate change. By focusing on both financial returns and positive impact, we create investment strategies designed to accelerate access to low-carbon energy, primarily in Africa and the Asia Pacific, as well as in Latin America and the Middle East. Together with investors, we can drive meaningful change while achieving your investment goals.

The future of our climate hinges on the energy transition in emerging markets, which are set to become the key drivers of global energy demand. In 2023, over 775 million people—primarily in Africa and developing Asia—still lacked access to energy¹. These populations are also the most vulnerable to the impacts of the climate crisis. 

Based in Africa, Asia, and Europe, our seasoned investment team embodies core values and boasts extensive expertise in the field. A one-stop shop for clean energy investments, we leverage our in-house legal, technical, and ESG expertise to position ourselves as leading experts in energy transition finance within emerging markets.

Our investments are strategically focused on fast-growing markets in countries demonstrating strong development potential. Together with investors, we can transform challenges into sustainable opportunities, contributing to a more equitable and resilient energy future.

A HIGH POTENTIAL INVESTMENT THEME

• Exponential energy demand: By 2050, global power demand will rise by 60%, driven by the emerging economies’ growth². By 2030, African electricity demand will increase by around 75%³
• High growth potential: Solar photovoltaic (PV) or wind represent the cheapest source of new electricity generation in most regions³ Africa has 60% of the world’s solar resources, with only 1% of PV capacity installed⁴. The distributed energy sector has grown from experimentation to scale over the past decade through business model validation and the first wave of M&A.
• High-impact potential: the strategies designed by Mirova aim to help increasing access to reliable and affordable energy and ensuring viable alternatives to fossil fuel-based activities in emerging countries, thus improving quality of life, supporting economic development, and reducing inequalities.

AN INNOVATIVE APPROACH FOR ALL INVESTORS

To enhance the return/risk profile of investing in emerging economies, Mirova is developing innovative investment strategies that leverage blended finance instruments. These strategies empower institutional investors to scale their support for impactful clean energy projects in emerging markets, backed by public and philanthropic investors such as sovereign funds, development banks, and foundations.

A WIDE RANGE OF INVESTMENT OPPORTUNITIES

By providing private debt financing to businesses active in solar power for homes, agriculture, telecommunications and industry, mini-grids and green energy sectors including electric vehicles mobility, storage, climate-smart food systems, energy efficiency, Mirova means to help increasing access to reliable and affordable energy and ensuring viable alternatives to fossil fuel-based activities in emerging countries.

AN IMPACT-DRIVEN APPROACH

Contribution to the UN SDG (Sustainable Development Goal): We conduct a thorough pre-investment analysis to assess each investment opportunity's contribution to the United Nations SDG:

• ENERGY ACCESS: connecting millions of people of off-grid areas to modern energy services through clean energy distribution, bringing transformational social and economic benefits (SDG 7, indirectly SDG 1, 3, 4, 10)
• CLIMATE CHANGE MITIGATION: displacing fossil fuel power generation and lighting with clean energy, helping to set the world’s fastest growing regions onto low carbon development pathways (SDG 13, indirectly SDG 11)
• CLIMATE CHANGE ADAPTATION: delivering improved food security, water efficiency, economic productivity, and other climate resiliency, particularly in agriculture and rural areas likely to experience the worst effects of climate change (SDG 13, indirectly SDG 11)
• GENDER LEADERSHIP: making women benefit from the social and economic benefits of distributed solar, by committing to gender leadership: our funds qualify for the 2X Challenge⁵on gender (SDG 5)
• ECONOMIC DEVELOPMENT: better energy access, improved reliability, jobs creation and energy cost savings (SDG 8)
• EQUITABLE GROWTH: setting robust ESG practices and supporting customer protection: Mirova Kenya is the first investor to endorse the GOGLA⁶ Consumer Protection Code for the off-grid solar industry.

Mirova also enhances its impact and contributes to the transition to a more sustainable economy by:

• Maintaining an ongoing dialogue with each individual project or company we support in order to encourage continuous improvement of practices,
• Advancing the state of knowledge and expertise in the area of sustainable development both internally and collectively – particularly by supporting academic and applied research (more information here)
• Promoting the development of sustainable finance by being an active participant in professional organizations and through advocacy,
• Strengthening the importance of impact at Mirova through innovative initiatives and commitments, such as incorporating ESG criteria into variable compensation for management teams
• Supporting philanthropic activities (more information here)

¹Source: International Energy Agency, World Energy Outlook 2023
²Source: BloombergNEF
³Source: International Energy Agency, World Energy Outlook 2023
⁴Source: International Energy Agency, Africa Energy Outlook 2022
⁵References to a ranking, award or label have no bearing on the future performance of any fund or manager. Further information on: https://www.2xchallenge.org/
⁶Global Association for the off-grid solar energy industry. Further information on: https://www.gogla.org/