Small and medium-sized enterprises should be a focus for CTC&N

04-12-2012, Doha, Qatar

Director General Martin Hiller writes from Doha where REEEP co-hosted a side event with CTI-PFAN on how the new Clean Technology Centre & Network could help galvanise private sector resources for technology transfer, particularly to support small and medium-sized enterprises or SMEs.

At the moment of writing, negotiations are going on upstairs on the new Clean Technology Centre and Network – CTC&N – the new facility under the UN Climate Convention which is meant to stimulate technology cooperation and to enhance the development and transfer of technologies and to assist developing country Parties at their request, as Mark Radka from UNEP explained at our side event on November 30th, 2012.

(Editor's note: It has since been confirmed that CTC&N will be hosted and managed by UNEP in collaboration with UNIDO and 11 leading technical organizations from both developing and developed countries.)
This could become a first breakthrough in a field with has been contentious for the best part of 20 years – how to transfer technology to developing countries.  The side event hosted by the CTI Private Financing Advisory Network (PFAN) and REEEP explored this question of how CTC&N could galvanise private sector efforts from two angles:

  • private investment
  • modern information services

The overarching question was: how can our organisations - PFAN and REEEP - support the mission of CTC&N and in turn, what do we expect from it?
We believe that a special focus should be put on the development of small- and medium-sized enterprises (SMEs), for a number of reasons.  They have the strongest economic impact and job creation, while contributing to the build-up of local industry and infrastructure.  They can create a good basis for exports, and are likely to bring income to poorer populations.  Their co-benefits contribute to the achievement of all of the MDGs.
So if we accept the premise that SMEs are vital, the next question is what do they need in order to prosper?  From our long experience, we think the following are the most important factors:

  • Supportive legislation
  • Access to private investment
  • Management support
  • Start-up funding
  • Information and data

 PFAN focuses on the second and third elements in this list, attracting private investment into clean energy projects in developing countries by coaching and training entrepreneurs in investment thinking, business planning and other necessary applied skills.

Globally, PFAN has raised over 412 million of investment for clean energy and has a development pipeline of more than 160 projects. Developing country entrepreneurs and officials like working with them because they have an acute understanding of both the technical and business sides, as well as the constraints that developing countries face.
REEEP leverages start-up funding into promising projects – not as investment but as grants. These allow the testing of new propositions, business models and policy approaches. In this way, we can identify successes as well as learning from failures.

In addition, REEEP focuses on the provision of data and information, supported by cutting edge technology. I emphasised this part of the equation specifically because it is at the origin of knowledge, insight and understanding.
To support SMEs in developing countries, accurate energy information needs to be:

  • Made available through practical channels, e.g. smart phones
  • Provided at a relevant level, i.e. mostly national and subnational information but also examples and learnings from elsewhere
  • Cost-free, since SMEs in developing countries will mostly not yet be able to pay for such a service, especially the very small enterprises.

Opening up government-owned data has become a movement since governments have started to realise that they are potentially sitting on goldmines of information which – kept confidential – prevent the market from putting them to good use.

Most European and North American countries are in the process of opening up their countries, led by the US and the UK. But there are also front runners in Africa. Kenya and Ghana – the latter of which launched its Open Data portal this week - are showing the way for other African nations.
Finally both PFAN and REEEP gave their views on the cooperation with CTC&N. While PFAN is already working on a detailed relationship, REEEP has put forward several key requests for CTC&N:

  • Build a specific focus on SME development – SMEs will not profit from more generic work, they need and deserve a special focus
  • Focus on sharing – orchestrate cooperation. Involve partners to harness key strengths, avoid unnecessary repetition, and use knowledge, information and data tools to combine efforts rather than compete
  • Think multicultural – languages, accessibility, relevance.