#Featured: ImpactAlpha Original
The surprising leader in the $36 billion global market for ‘payments for ecosystem services.’ Environmentalists have talked for decades about the value of the clean air, clean water, biodiversity and other “services” provided by nature. Now comes the fullest accounting to date of actual transactions that pay for such services. The headline number: between $36 billion and $42 billion per year is paid annually, in more than 550 “payment for ecosystem services” programs worldwide, according to the compendium, published in the peer-reviewed journal Nature Sustainability. “These markets are growing,” said James Salzman, the professor at both the UCLA School of Law and UC Santa Barbara who led the study, told ImpactAlpha. “This is still a relatively young approach. It hasn’t grown as fast as some boosters had hoped. But this is real money.”
Spoiler alert: China’s market-based system that pays farmers and households more than $5 billion per year to reduce deforestation is the largest ‘eco-compensation’ program in the world. After a series of floods and droughts two decades ago, the Chinese government established the Sloping Land Conservation Program (focused on converting steep farmland to forest and grassland) and the Natural Forest Conservation Program (to encourage logging bans and reforestation). The two programs distributed between $50 and $100 billion between 2000 and 2010 and continue to operate. “The take-home message for China is, ‘This is not a blip,” Salzman told ImpactAlpha. “Their goal is to increase payments in coming years, not to reduce them.”
Read “The surprising leader in the $36 billion global market for payments for ecosystem services,” by David Bank in ImpactAlpha.
#Dealflow: Follow the Money
SEAF backs maternal and infant care center in Vietnam. The investment will allow Phuong Chau hospital, a 250-bed obstetrics and gynecology facility in the Mekong Delta city of Can Tho, to expand to a nearby community. Washington DC-based Small Enterprise Assistance Fund made a $2.9 million investment in the hospital in 2011, which was founded by Nguyen Thi Ngoc Ho, who was frustrated by the lack of quality maternal health care in Vietnam. The new investment was made through SEAF’s Women’s Opportunity Fund, launched last year with backing from the Australian government to invest in women-led businesses in the Philippines, Vietnam and Indonesia.
Ten startups selected for Village Capital US healthcare cohort. The startups are using technology to tackle issues including remote rehab and preventive care (Moving Analytics), early detection of deterioration (Nonnatech), and care provider and caregiver matchmaking services (Reciprocare). Village Capital launched the health startup program with Kaiser Permanente to focus on care for an aging population. The US’s over-65 population will reach 88.5 million in 2050 — double its size in 2010. “Too many Americans don’t have the opportunity to age in their home and with dignity,” says Village Capital’s Allie Burns. At the end of the program in July, participants will vote to choose two startups to receive $75,000 investments.
Hatch aquaculture accelerator gets funding from Aqua-Spark. Aqua-Spark, based in the Netherlands, invests in small and mid-size sustainable fishing ventures, including frozen meals company Love the Wild, feedstock venture Calysta, and others. The firm’s co-founders are backing Hatch, a Bergen, Norway-based accelerator program, to cultivate investable startups. Hatch says it is the first accelerator specifically for aquaculture. “Aqua-Spark often encounters great ideas, products, and technologies that could have benefitted from ideation phase support,” Aqua-Spark said in a statement. Aqua-Spark did not disclose the amount of the investment. The accelerator will work with eight companies in Bergen between April and June 2018.
Agents of Impact. The Private Financing Advisory Network is calling for proposals for climate-resilience and clean-energy projects in sub-Saharan Africa and Asia that are seeking investments up to $50 million…Lauren Booker has joined Jordan Park from the Omidyar Network. The multi-family office, founded last year by Goldman Sachs veteran Frank Ghali, says it is “empowering a distinct community to impact the world.”
#Featured event: The Impact Summit Europe
Catalysing private institutional capital for the 2030 Global Goals. European investors may be ahead of their US peers in seizing the opportunity to finance the Sustainable Development Goals. The Impact Summit Europe aims to mobilize institutional capital for the SDGs. Join this investor-only event at the Hague, Mar. 21–22. Register now.
#Signals: Ahead of the Curve
Corporates look to impact entrepreneurship to drive innovation. The hunt for new customers and new innovations has pointed multinationals toward entrepreneurs rolling out bank accounts, farm inputs, mobile clinics and off-grid energy sources to the billions of people around the world lacking access to such services. When Microsoft went looking for businesses working to bring the internet to unconnected communities, it turned to Village Capital, a venture capital firm, to find 10 firms working on the problem and establish a support network to help the companies grow. Village Capital today announced Village Capital Innovations, a new line of business, to help corporations connect with and learn from such entrepreneurs. “The power of entrepreneurship is pretty significant,” Rob Tashima, who is heading the new effort, told ImpactAlpha. “If you’re a corporation wanting to plug into the sheer power of economic activity of small businesses in emerging markets, or a foundation looking to how problems are being solved, you need to connect with entrepreneurship.”
Read, “Corporates look to impact entrepreneurship to drive innovation,” by Dennis Price on ImpactAlpha.
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