10 But the sector faces vital issues, with the main challenges to growth identified as access to capital, regulatory hurdles, and the difficulties of market scaleup opportunities. Of 200 Israeli climate companies surveyed for the report, 72% said their most significant challenge is securing funding. One key issue is how to encourage banks, pension funds and other financial institutions to divest from fossil fuels and invest in green projects and technologies instead. Presently, there is not enough private capital in climate tech companies and that such operations were often heavily supported by the government. Between 2018 and 2020, the IIA has supported 290 Israeli ventures with a total budget of USD 250million,which amounted to 16%of its annual budget, and has also launched a number of initiatives to back ideation and earlystage ventures via incubators and innovation labs. According to this State of Climate Tech 2021 report, Israeli climate tech companies attracted over 550 investment groups and private investors, but need dedicated funds for climate tech here. The government also has an important role to play in raising Israel’s profile in climate tech.AsAri Siegmann,chief of staffof theCEOof the Israeli Innovation Authority, said: “We need towork together with the regulators,withinministries to push Israeli climate tech forward. Start-ups need to be connected to the relevant government authorities early on to build solutions. In many cases, the technologies they develop are used in national infrastructure industries [which are usually government-owned].” With money the catalyst, securing funding is key, say large majority Regulatory challenges
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