Investments in the Environment

Sustainable investing is becoming increasingly important around the world, as shown by a few examples.

At this year’s World Economic Forum in Davos, a coalition of private and public sector organizations (including United Nations entities, non-governmental organizations and a private equity firm) have announced the launch of SDG500 – a new investment platform to help achieve the Sustainable Development Goals (SDGs).

According to the information published at the annual meeting in Davos, the goal is to mobilize 500 million US-Dollar toward achieving the SDGs in emerging markets across individual funds. The platform would offer exposure to six different underlying funds, which are or will be managed by Bamboo Capital Partners. “The funds will use debt and equity to invest at Seed, Series A and Series B stages in hundreds of businesses in emerging and frontier markets,” a press release said. “SDG500 aims to address the ‘missing middle’ financing gap that affects entrepreneurs in these markets, where growth is constrained by a lack of access to follow-on financing.” The financing gap to achieve the SDGs in developing countries is estimated to be 2.5 trillion US-Dollar per year.

The target of the funds of SDG500 will be businesses in the agriculture, finance, energy, education and healthcare sectors across Africa, Asia, Latin America and the Caribbean and Pacific regions. “There will also be a gender-lens focus and some of the funds will specifically invest in businesses that empower and provide jobs for women.” The blended finance structure of SDG500’s underlying funds is designed to catalyze and de-risk further funding from institutional investors to make a significant contribution to achieving the SDGs by 2030. As reported, initial sponsors of the catalytic layers of the funds of SDG500 include the European Union, the African, Caribbean and Pacific Group of States, the Governments of Luxembourg, Togo and Tunisia, CARE and the Alliance for a Green Revolution in Africa.

The underlying six funds are:

  • the ABC Fund (an impact investment vehicle targeting smallholder farmers and small and medium agribusinesses in developing countries);
  • BUILD (a fixed-income fund aimed at early-stage enterprises in the Least Developed Countries);
  • the CARE SheTrades Fund (a gender- lens fund which will use debt and equity to invest in businesses in Asia);
  • BLOC SmartAfrica and BLOC Latin America (venture capital funds targeting technology enterprises in Africa, Latin America and the Caribbean respectively); and
  • HEAL (a venture capital fund investing in health-tech businesses in emerging and frontier markets).

(GR12020, Page 3, Photo: edar / Pixabay)