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#Featured: ImpactAlpha Original
“There has been a bottom-up movement across Asia.” The growing social-impact economy in places like Vietnam, Cambodia and Myanmar has grabbed the attention of governments in the region. Education remains a hot investment sector in China. Environmental investments lag across the region. Human rights, democracy promotion and political freedom remain tough issues. But organizations focused on healthcare, education and livelihoods have increased room to operate.
At last week’s Asian Venture Philanthropy Network conference in Bangkok, ImpactAlpha got a personal tour from the authors of “Social Investment Landscape in Asia,” an in-depth, two-book report covering the landscape for impact investing in 14 Asian countries. The report includes a Sustainable Development Goals dashboard that ranks how each country is doing in meeting the global goals.
Get the briefing from ImpactAlpha correspondent Michael Standaert:
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#Dealflow: Follow the Money
Access Power backs three African renewable-energy projects. The renewables project developer is committing $7 million to a 30-megawatt solar project in Tanzania, a 9.7-megawatt hydro project in Rwanda, and a 48-megawatt wind project in Ghana. Access Power is making equity investments via its Access Co-Development Facility, which also provides technical assistance. The projects were selected from 82 applications from 23 countries and announced at the Africa Energy Forum in Copenhagen. Nearly half the proposals were solar projects but hydropower is also an under-tapped resource in Africa. All but five of the 23 countries in the competition have electrification rates below 30 percent.
Prince helped incubate solar startups in Oakland. Several years before he died, the pop icon anonymously donated close to $1 million to Powerhouse, a for-profit solar incubator in Oakland, Calif. Prince’s support came after a suggestion from the wife of CNN commentator Van Jones. “He asked, ‘If I have a quarter-million dollars, what can I do with it?’ My wife said he should put solar panels all over Oakland,” Jones told Bloomberg. Since then, Powerhouse has supported 43 early-stage solar companies with business support and investor introductions. Half of those businesses are women- and minority-run.
NXTP Labs gets $5 million to back early-stage tech startups in Latin America. The Inter-American Development Bank is anchoring NXTP Labs’ new impact equity fund. NXTP is seeking to raise $120 million to support 30 to 40 early-stage companies in Argentina, Paraguay and Uruguay. The fund’s mandate is tech-based impact, covering fintech, edtech, agtech and other sectors that aim to “democratize access to products and services” unavailable to much of the region’s population. NXTP, launched in Argentina in 2011, raised $38.5 million for its first fund and invested in 184 companies. NXTP has been successful at leveraging small investment amounts from a large number of investors. In 2015, it launched its Emerging Markets High Impact Tech Startups on the Vienna Stock Exchange.
See all of ImpactAlpha’s recent #dealflow.
We’re looking for leaders driving impact investing around the world. The Global Steering Group for Impact Investment will honor investors, managers, entrepreneurs and market-builders. Deadline: June 16. Submit an entry
#Signals: Ahead of the Curve
Employee ownership can pay dividends for investors, too. Employee-owned firms reduce the disconnect between workers and owners, but they still need significant investment to scale. Investment opportunities in employee ownership are limited but emerging, says a new report from the Democracy Collaborative, authored by Mary Ann Beyster of the Foundation for Enterprise Development. The report identifies six community development financial institutions, including Capital Impact Partners in Washington D.C and New York City-based The Working World, that focus on financing employee ownership. Two private equity funds that back mid-sized employee-owned firms are Mosaic Capital Partners in Charlotte, North Carolina and and Long Point Capital, with locations in Royal Oak, Michigan, and New York City. Another investable option identified in the report: National Cooperative Bank, also in New York City. The bank has lent to worker-owned cooperatives and other employee-ownership models for decades. Employees that own part of their own companies are less likely to be laid off and are 92% wealthier and make 33% more than their non-employee owner peers.
Trump to tout apprenticeships to strengthen U.S. workforce. If last week was Infrastructure Week, this week is Workforce Development Week, the White House says. President Trump is pushing apprenticeship programs between businesses and universities to boost skills and fill vacant jobs. Apprenticeships in which workers get paid while gaining skills are one of the surest ways to boost employability. Nearly nine in 10 apprentices land jobs with an average salary of $50,000, according to the U.S. Department of Labor. Such programs also tend to increase productivity, lower recruitment costs and boost employee loyalty. President Obama gave apprenticeships a boost during his Presidency, signing the first-ever annual funding for apprenticeships in 2016. In the last two years, the U.S added 130,000 apprenticeships, bringing the U.S. total to 505,000. Trump, who hosted “The Apprentice,” reportedly won’t boost federal funding. Apprenticeships are more common in Europe. The U.K. wants to add three million apprenticeships by 2020.
From Pittsburgh to Paris, the climate race is on. Ever since President Trump announced plans to withdraw from the Paris climate agreement, city, state and business leaders have been tripping over themselves to show their support for — and intention to uphold — the international agreement on climate change mitigation. The latest case? The city of Santa Barbara, Calif., which just announced plans to switch to 100% renewable energy by 2030. Earlier this month, Portland, Ore. announced a similar commitment, with a 2050 target, rather than 2030.
“Cities are stepping up and re-committing to adopt, honor and uphold the Paris climate goals,” said Santa Barbara Mayor Helene Schneider. How Santa Barbara will reach 100% goal isn’t clear, but it’s already about 30% of the way there. Both Santa Barbara and Portland have joined nearly 300 cities in a pledge to uphold the Paris agreement. They’re among 90 cities committed to a 100% renewably-powered future (though 19 have given themselves until 2035 to get there).
The roster is not limited to liberal municipalities in coastal blue states. Pittsburgh, Pennsylvania, mentioned by Trump in his announcement, jumped on the Sierra Club’s 100% Clean Energy pledge after the White House’s announcement. The small town of Greensburg, Kansas, signed too. Its Republican mayor, Bob Dixson, was elected on a platform of sustainability and climate change mitigation after a 2007 tornado devastated the town. Columbia, S.C. Mayor Stephen Benjamin is co-chair of the 100% Clean Energy pledge. He’s a Democratic mayor in an overwhelmingly Republican state, as is fellow co-chair Jackie Biskupski, mayor of Salt Lake City, Utah. Benjamin says the city’s 1,000-year flood two years ago made it impossible for the city to ignore the signs of climate change. “We lost 19 people, hundreds of roads damaged, 45 dams destroyed, billions of dollars of damage here across our state,” Benjamin told CityLab.
“I tend to believe that most of the challenges we face are psychological,” Benjamin said. “There are certain things that we occasionally dismiss as just not possible, but more and more, I’m seeing people buy into the idea that we can be at the center of good, progressive policies that also strengthen our local economy, strengthen our businesses, strengthen our citizens.”
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