Introductory presentation - climate innovation pull financing

Tender description

Introductory presentation - climate innovation pull financing -BEIS Monday 12th December 2022 at 12:00-12:45pm (GMT) The UK Department of Business, Energy and Industrial Strategy (BEIS) is exploring the development of a new concept for a facility– provisionally a climate innovation pull facility, of circa £100-150m (details subject to change and approvals). Through pull finance, this facility would support the development, scale up and market building for innovative climate change solutions for developing country contexts. For BEIS, it would focus on innovative clean energy technology and business models in a small number of specific applications/sectors, where the evidence shows support can have the most impact. The facility would aim to test, validate and build a knowledge base on the novel use of pull mechanisms to support innovation in developing countries. The concept for this facility is being led by one of our International Climate Finance facing teams and would be funded with Official Development Assistance. In public innovation financing, “pull” (or demand-pull) mechanisms create incentives for innovators and other actors by creating viable market demand. They seek to reduce viability gaps and induce innovation by signalling demand for solutions to specific problems. Mechanisms often cited include variations of Advanced Market Commitments, Results or Outcomes Based Financing, Prizes/Challenges, Bulk Procurements, Contracts for Difference, among others. By contrast, most innovation support programmes to date have utilised “push mechanisms” directly subsidising up-front Research, Development and Demonstration costs. The facility would contribute to the UK government’s Ayrton Fund commitment, to support clean energy research, development and demonstration (RD&D), as part of the wider UK commitment to tackle climate change.