TGIF, Agents of Impact!
- Ode to spring
- Public policy and private investment for US climate manufacturing
- Bridging financial gaps for African infrastructure
🗣 New leaves. Anyone living in a place with four seasons or long winters can spot the moment spring arrives. When it’s not just an odd sunny day or stretch of warmth before the chill and gray return, but when the season has changed. New York’s public radio station—I still listen every day, seven years after leaving New York—was giddy with reports this week of sunshine and temperatures suited for a single layer. Time to get outside.
In Washington, DC this week, cherry blossoms in the Tidal Basin were not the only signs of spring. The throngs of people and protesters on 18th Street signaled the Spring Meetings of the World Bank. Green shoots are sprouting at the 80-year-old institution, with a new president and reforms to meet global climate and development challenges that are “starting to bear some real fruit,” observed Alexia Latortue of the US Treasury Department. The International Finance Corp., the African Development Bank and a few other development finance institutions got a shout out for showing progress on impact measurement and disclosures.
Hundreds of millions of smallholder farmers worldwide are sprouting literal seeds. Startups and investors are waking up to the need and the opportunity in supporting them in the face of climate change. Kenya-based Pula closed a new equity round this week to provide “parametric,” or incident-based, insurance coverage in the event of extreme events like last year’s devastating drought in East Africa. Prime Coalition is backing first-of-a-kind deployments of new climate technologies through Trellis Climate, a new investment vehicle, as Amy Cortese reports. Historically Black colleges and universities that are preparing the next generation of Black talent represent fertile ground for impact investors, as Kresge Foundation’s Erika Brice argues.
Old growth nurtures the new. Jeff Skoll has shuttered his social impact production house, Participant Media, but its two decades of films, documentaries and social and political activism campaigns have helped awaken investors to the power of film and culture in driving impact at scale, as Dennis Price reveals. The state of Colorado is seizing the retirement wave among small business owners to build the infrastructure for broader-based employee ownership; it hopes to be a model for other states, reported Roodgally Senatus from the Employee Ownership Ideas Forum in Washington, DC last week.
Reforming legacy structures and institutions, redirecting capital, creating more inclusive systems and communities – Agents of Impact are planting seeds and nurturing saplings. In the final installment of his Macro Impact series, contributing editor Robert Brown sees a “green rebound” as the ESG backlash subsides and impact companies enjoy “a more constructive investment environment for the longer term.” Cast off the gray and dreary and celebrate renewal and rebirth. It’s spring. —Jessica Pothering
The Week’s Podcasts
🎧 This Week in Impact. Host Brian Walsh and ImpactAlpha editor David Bank take up the good news on the good economy, Participant’s lasting legacy, and the signs of change at the World Bank. Plus: an early listen to the electrifying single, “I’m Your Heat Pump.”
- Listen to the new episode of This Week in Impact. Get the podcast in your feed by subscribing on Apple or Spotify.
- Agents of Impact. Co-host Sherrell Dorsey reprises her conversation with Olivia Watkins of Black Farmer Fund, which aims to meet the modern needs of Black farmers and food entrepreneurs with affordable capital and technical assistance. Have a listen.
This Week’s Chart
Tracking the transition. Energy professionals and policy wonks piled into a midtown hotel in New York this week for BloombergNEF’s energy transition summit. The talk of the town was how the Inflation Reduction Act in the US has spurred private climate investments as much as public spending. By the end of last year, more than 100 new factories had been planned in response to the IRA for a total of $123 billion in new manufacturing investment. Most of that went to batteries and solar. The policy boost is showing up globally as well. Reshoring and “friendshoring” has led to a surge of factory investment in the US, Europe and elsewhere. That’s expected to cut China’s share of global clean tech manufacturing investment to 64% by next year, from around 90% today. Globally, investment in solar and battery factories are outpacing BNEF’s net-zero scenario. “The costs are going to keep coming down, and that will be another accelerator,” said BNEF’s Jon Moore. – Amy Cortese
The Week’s Short Signals
🇪🇺 EU’s impact manifesto. Ahead of June’s European parliamentary elections, Impact Europe (formerly the European Venture Philanthropy Association) and impact investing networks in Belgium, Italy, Spain and the Netherlands launched a manifesto calling on European policymakers to unlock private capital for impact. Among the planks: enable retail investing for impact. (Impact Europe)
🤖Responsible AI. With explosive growth, comes great responsibility. Efforts to benchmark AI models on features such as privacy, transparency and fairness are surging. TruthfulQA assesses the truthfulness of large language models, or LLMs, in their responses. RealToxicityPrompts and ToxiGen track the extent of harmful output produced by LLMs. (Stanford’s AI Index)
🔎 Failure to disclose. How much of the $566 billion managed by the 50 wealthiest colleges and universities is managed by diverse-owned firms? We still don’t know. After two years of prodding schools to disclose their diversity data, only 18 of the top 50 colleges and universities responded to Knight Foundation requests. (Knight Foundation)
🌎 Climate regs. Among the newest “Climate Change Laws of the World” are the EU’s Directive on Empowering Consumers for the Green Transition, Egypt’s sustainable finance regulations for banks, and Brazil’s National Environmental Policy for its judiciary branch. (LSE Grantham Research Institute)
🇨🇦 Indexing impact in Canada. Toronto-based SVX launched the SVX Impact Index on the Toronto Stock Exchange. The index tracks over 200 private debt and equity impact offerings available to Canadian investors, including the Thrive Impact Fund, the Ilu Women’s Empowerment Fund and the Keewaywin Private Credit Fund. (SVX)
The Week’s Deal Spotlight
Deal spotlight: African banks help Acre Impact Capital bridge gaps in infrastructure finance. It’s taken three years for Mauritius-based Acre Impact Capital to reach a first close for its first infrastructure finance fund. The firm is filling a funding gap for African infrastructure projects that are heavily guaranteed by international export credit agencies but still need to prove they can be fully financed before banks will step in (see how it works). African banks, including South Africa’s Rand Merchant Bank, joined the European Investment Bank, FSDAi, Trimtab Impact and family office Ceniarth to enable Acre Impact Capital to fill that 15% commercial tranche of infrastructure project finance. “You want African investors investing in solutions that will improve the continent, and you want the returns of those investments to go to these investors so they will hopefully reinvest with impact and intentionality,” Acre’s Hussein Sefian told ImpactAlpha.
- Rethinking risk. Just about 10% of infrastructure costs in Africa are covered by private investors. Governments largely depend on tax revenue or the bond markets to build schools, roads, water systems, and energy and Internet connectivity. Credit rating agencies have not looked favorably on many African countries in anticipation of a wave of upcoming debt repayment deadlines this year and next. A forthcoming white paper from Acre and Pangea Risk cites recent bond issuances by Kenya, Cote d’Ivoire and Benin as reasons for being “pretty bullish,” said Sefian, despite continuing high interest rates and debt ratios. “It shows that management improvements of government finances lead to better interactions and transparency with institutional investors. Ultimately, governments are rewarded with the ability to access capital markets.” Sefian and his team believe an African credit rating agency would be better able to assess “the actual operational risks faced by businesses in many African countries.”
- Go with the dealflow. And check out our full roundup of deal reporting this week.
The Week’s Talent and Jobs
💼 See and share two dozen new impact jobs posted this week on ImpactAlpha’s Career Hub and view hundreds of more jobs in impact investing and sustainable finance. Have a job listing to post? Submit it here.
Owl Ventures named Jessie Woolley-Wilson, former CEO of its portfolio company DreamBox Learning, as operating partner… The Rockefeller Foundation named Eason Jordan, formerly of NowThis and the Malala Fund, as senior vice president for connected leaders… Marlene Hormes, formerly of Annycent Capital, joined WaterEquity as chief investment officer… Appalachian Funders Network appointed Ryan Eller, previously president of Beloved Community Foundation, to executive director.
Former Shell CEO Ben van Beurden joined KKR as a climate senior advisor… Novata appointed Joel Raha, former VP of engineering at Alloy, as chief technology officer, and Jeanne Lee, previously with Coursera, as head of sales in the Asia Pacific region… Christina Shih, previously with the News Revenue Hub, joined Press Forward as associate director… American Family Insurance promoted Nyra Jordan to vice president of community and social impact associate.
Elaine Di Monaco, formerly with the Center for Public Integrity, joined The Pivot Fund as associate director of philanthropy… Alison Lingane, who co-founded Project Equity with Hilary Abell in 2014, is transitioning from her role as chief innovation and investment officer to senior advisor to Project Equity’s Employee Ownership Catalyst Fund… Woochong Um of the Asian Development Bank became the new CEO of the Global Energy Alliance for People and Planet.
That’s a wrap. Have a wonderful weekend.
– April 19, 2024
