Egyptian partners launch Climate Resilience Fund to invest in ‘nature-positive’ start-ups

Two Egyptian partners have launched a new Climate Resilience Fund that will invest in nature-positive and sustainable agriculture start-ups in the Middle East and Africa.

Hossam Allam and Sherief Kesseba plan to deploy $25 million raised from investors over the first two years of the fund.

Half of that amount will go towards ventures in Egypt and the rest will be split evenly between the two regions.

The timing of the venture capital fund comes as Egypt prepares to host Cop27, the UN climate summit, in Sharm El Sheikh from November 6 to 18.

The fund will focus on pre-seed start-ups looking to tackle the problems of land misuse through tech-enabled and nature-enabled solutions.

Nature-positive solutions leverage the strengths that already exist in nature to mitigate or adapt to the impacts of climate change.

“Up to a quarter of the contribution to the problem of climate change comes from unsustainable land use,” Mr Allam told The National. “So if you’re going to make a substantial contribution to fight climate change, one of the problems you have to solve is this land-use issue.”

An estimated 23 per cent of greenhouse gas emissions caused by human activity between 2007 and 2016 came from agriculture, forestry and other land use, according to the UN’s Intergovernmental Panel on Climate Change.

The two founders of the Climate Resilience Fund come from varied backgrounds, including business, real estate, venture capital, oceanography and AgriTech.

Mr Allam, based in Cairo, was most recently chief executive of Hassan Allam Property Management, the asset management arm of family-owned conglomerate Hassan Allam Holding. He is also a founder and advisory board member of Cairo Angels.

After earning a bachelor’s degree in oceanography from the UK, Mr Allam worked as an environmental and commercial advisor for Shell oil and gas company.

Mr Kesseba, who is currently based in Copenhagen, Denmark, has more than 20 years of experience in the AgriTech field. He has been the non-executive chairman and board member of Nile Valley Group, an agricultural platform dedicated to producing and exporting a select basket of crops, since it was established in 2002.

He is also an angel investor and mentor for Rockstart in Copenhagen, a global accelerator with more than €60 million ($58m) in assets under management. He most recently established AgriTech consulting and investment firm worX.

Mr Allam said the moment for launching the Climate Resilience Fund is opportune, regardless of Cop27 being hosted in Egypt.

“It isn’t just about Cop27. Cop27 is very important and it gives Egypt an opportunity to kind of stand out in the climate debate, but there has been a turning point, a watershed moment in climate, which we’re seeing around the world,” said Mr Allam.

He cited natural disasters such as wildfires in Australia and floods in Pakistan.

Nature-enabled solutions include using insect protein, marine algae and mangrove forestry for carbon capture. For example, insects can be used as animal feed to avoid creating emissions in feed production.

Tech-enabled solutions include developing precision farming techniques and creating online marketplaces that give farmers better access to customers.

The fund is looking for start-ups that target sustainable agriculture practices that will help the land “return to its original function of balancing atmospheric carbons, supporting biodiversity, defending against weather shocks and supporting livelihoods”, Mr Allam said.

The first cheque per start-up will range from $100,000 up to $1m. For those deemed high potential following the first investment, the amount will go up to the next tier of between $500,000 and $1.5m and a third tier of between $1.5m and $5m.

“We expect our investors to make commercial returns on these investments, while also delivering carbon offsets, reducing poverty and improving nature balances,” Mr Allam said.

Early committers have so far included high net worth individuals in family offices, mainly in the Middle East.

The fund will run for eight years, which will be enough time to reach the phase where managers can acquire the companies, Mr Allam said.

“With climate coming to the fore of the attention of the general public, these opportunities are going to start taking their seat at the table as well," he said.