Featured: Catalytic Capital

Allianz’s SDG Loan Fund leverages a $25 million guarantee to catalyze $1.1 billion. A novel financing mechanism has stacked a small guarantee and a larger first-loss reserve to raise $1 billion from the German insurance giant Allianz and Swedish bank Skandia. The purpose: expand financing for small and growing businesses, resilient agriculture and climate solutions in emerging markets. The new SDG Loan Fund, one of the largest “blended finance” funds to date, could serve as a model for efforts to put private capital to work for the Sustainable Development Goals. “It has proven very difficult to create the vehicles that work for that mobilization, so this one was created to show it could be done, and it could be done at scale,” says Debra Schwartz of the MacArthur Foundation, who worked with Allianz and the Dutch development bank FMO to structure the fund (disclosure: MacArthur Foundation leads the Catalytic Capital Consortium, which supports ImpactAlpha’s coverage of catalytic capital). Blending finance to mobilize private capital for climate action will be high on the COP28 global climate summit agenda getting underway this week in Dubai.

Dealflow: The Transition

French nuclear startup NAAREA raises €60 million to build modular reactors. NAAREA, short for Nuclear Abundant Affordable Resourceful Energy for All, is looking to raise €150 million to build a nuclear reactor about the size of a bus that can be operated independently from electrical grids. The vision is to have reactors that “produce power and heat as close as possible to industrial customers to relieve the grid,” said NAAREA’s Jean-Luc Alexandre. The initial funding includes €50 million ($55 million) from French family offices and €10 million from the French government. NARREA is looking to build a full-scale prototype to produce 40 megawatts of electricity, enough to power a car factory or large desalination plant, by 2028.

Signals: Climate Finance

From ‘carve-outs’ to ‘aligners,’ five family-office archetypes for climate investing. Wealthy families are feeling the pull of climate investing. In a new report, the nonprofit CREO, which works with family offices and foundations to help them invest in climate solutions, identifies five archetypes to guide families wherever they are on their journey. From “Carve-outs” to “Aligners,” there is no one path. “Many [families] investing in climate for the first time are coming to CREO with more ambitious climate aspirations,” says CREO's Regine Clement. Many don’t know where to begin, or how to optimize their investments for impact. “All families can see themselves in at least one of the archetypes, in whole or part, whatever the stage or experience of their climate investing or philanthropic activities.”

Agents of Impact: Follow the Talent

The Climate Investment Funds names Tariye Gbadegesin of ARM-Harith Infrastructure Investments as CEO, effective in March. The first African to lead the multilateral lender, she replaces Mafalda Duarte, who left in July to lead the Green Climate Fund… AI Collaborative, a new initiative of Omidyar Group, appoints Martin Tisné, ex- of Luminate, as chief executive officer.

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