The Brief | May 7, 2018

China’s sponge cities, Kingdom impact investing, Singapore’s inclusive fintech boom

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China’s $300 billion investment plan for green stormwater infrastructure. When spring and summer rains hit the urban village of Gangxia near the center of Shenzhen, narrow streets become cascades. Water rises ankle-deep or, in sustained downpours, to the knees and higher. For a glimpse of a different future, walk down a narrow side street where an apartment building has been outfitted with gutters to capture rainwater for re-use and the roof is covered with potted plants. The project, one of about 100 around Shenzhen, is part of China’s plan to create 30 “sponge cities” and retrofit 80% of urban areas with green stormwater infrastructure by 2030.

Chinese cities join a growing number of urban areas around the world creating green infrastructure to manage floods, pollution and water waste from storms and seasonal rains. Cumulative investment in China’s sponge city projects could reach 1.9 trillion yuan ($300 billion) by 2020, mostly from national and local governments. The Nature Conservancy, a partner in the Gangxia project, is exploring how China could deploy “environmental impact bond” financing such as Washington D.C.’s 2016 green infrastructure offering. In the Chinese context, such structures may not be needed. As one global consultant told ImpactAlpha, “Once the government decides that a project is right to go ahead with, the job can be done very quickly.”

Read Michael Standaert’s report from Shenzhen, “Sponge Cities: China’s $300 billion investment plan for green stormwater infrastructure,” on ImpactAlpha.

Signals: Ahead of the Curve

Sizing the market for ‘Biblically responsible investment” and “Kingdom” impact investing. The Franciscan Sisters of Mary in St. Louis have backed the Lyme Forest Fund and pay-as you-go-solar firm M-KOPA. The Church Pension Fund and Wespath Benefits and Investments each invested $30 million in Developing World Market’s impact fund. Ascension, which manages $29 billion on behalf of Ascension Health and other Catholic institutions, backed Goodlife Pharmacy, a chain of pharmacies in East Africa. A new report from Nexus Impact Advisors in Washington D.C. estimates the size of Christian, or Biblically responsible investment, at $260 billion, or 3% of all socially responsible invested assets. Christian, or Kingdom, impact investing could be as much as $3-4 billion. The “measurable ‘Christian’ return” can take many forms, the report says, “from overt evangelism to the faith convictions of a company owner.”

  • Private-equity and venture capital… firms aligned with Christian values include Creation Investments in Chicago and Transformation SME in the Middle East and Asia. Business accelerators include Praxis Labs in the U.S., Sinapis Group in Brazil and Africa, and Ibec Ventures around the world.
  • Investment advisors… include Ascension Investment Advisors (see, “More Catholic capital flows toward impact investing”) and Christian Investment Services.

Agents of Impact: Follow the Talent

Omidyar Network and Village Capital are looking for ventures solving citizens’ problems for their civic tech accelerator in India (deadline: June 15)… SVX in Québec is hiring an analyst… Illumen Capital is recruiting a senior investment associate in San Francisco (see “Tackling investors’ racial and gender biases to unlock hidden value,” in ImpactAlpha’s New Revivalist series).

Dealflow: Follow the Money

Can inclusion power Singapore’s fintech boom? Singapore’s central bank has made “financial inclusion” a priority for the city-state’s booming fintech scene. Alternative credit scorer CredoLab raised $1 million; microfinance-focused Helicap took in $1.5 million. Get the details.

Capital from $100 million ‘Quality Jobs Fund’ starts to flow. The fund, seeded with a $100 million gift from the Federal Home Loan Bank of San Francisco, invested $3.2 million in Pacific Community Ventures. Read more.

LISC replicates local model to boost jobs and entrepreneurship in Atlanta. The Local Initiatives Support Corp. will provide $270,000 to three nonprofits to help Atlanta’s diverse population take advantage of the region’s job growth. Dig in.