Going green in frontier markets
Frontier markets are one of the fastest-growing investment regions with high growth potential in resource-rich continents like Africa drawing investors who are keen to diversify their investment.
But one of the concerns has been that a speedy development would lead to environmental damage.
London-based alternative investment specialist Greenleaf Global is trying to mix frontier markets and environmentally friendly investment, saying that a changing global environment brings investment opportunities in biofuel, biomass and anaerobic digestion (generating electricity from renewable sources).
Investors can gain exposure to biofuel via its flagship project Jatropha Plantation in West Africa. Jatropha, a toxic wild plant, is resistant to drought and pests, and produces seeds containing 27-40 percent oil. Recently cited by Goldman Sachs as one of the best candidates for future biodiesel production, Jatropha grows fast in poor-quality soil, has a high yield per hectare and a long lifecycle.
Greenleaf estimates returns from its Jatropha plantation to be around 12 percent per annum, which compares favourably with return on cash and bonds around 3 percent.