The Brief | September 26, 2018

Get a job! energy access podcast, Prodigy tops $1 billion, state of blended finance, managing and certifying impact

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Greetings, ImpactAlpha readers!

Get a job! (in impact investing). Where are the employment opportunities? What skills and experience are employers seeking? Tomorrow’s Agents of Impact Call No. 4 will dig into one of the most-asked questions in impact investing, “How do I get a job?” Blue Haven’s Lauren Cochran, Korn Ferry’s Kate Kohler Shattuck and Megan Kashner from the Kellogg School of Management will share strategies for success. Join us for The Call, Thursday, Sept. 27 at 1 pm ET / 10 am PT / 5 pm GMT. RSVP today.

Featured: Returns on Investment podcast

Global energy access is an impact investment even curmudgeons can love (podcast). Lower-than-expected risk. Higher-than-expected impact. Access to off-grid electricity is emerging as an impact investing success story across the developing world. About 100 million people a year are gaining energy access each year, likely pushing the number of people worldwide without electricity below one billion sometime in the coming year. “It’s hard to think of a greater impact than bringing power to communities that don’t have it,” Imogen Rose-Smith said in the latest Returns on Investment podcast. “It’s a very robust, scalable market with a risk-return profile that makes sense to asset owners across the spectrum.”

Increased investment will be needed to meet Sustainable Development Goal No. 7: “Ensure access to affordable, reliable, sustainable and modern energy.” The Shine Campaign, which seeks to mobilize philanthropic and investment capital for energy access, identified 10 fund managers who expect to collectively deploy $1.3 billion in the next two years. “It’s a hockey stick,” says Shine’s Mark Correnti. One disagreement in the podcast: the nature of the critical capital gaps that remain. Rose-Smith named the shortage of early-stage equity financing. ImpactAlpha’s David Bank called out “good old-fashioned commercial bank loans to finance expansion of off-grid solutions,” based on accounts-receivable from low-income customers. Are you #TeamImogen or #TeamDavid?

Read on and listen in to “Global energy access is an impact investment even curmudgeons can love.” Catch up on all of ImpactAlpha’s Returns on Investment podcasts.

Event: Total Impact Boston, Oct. 4-5

Total Impact comes to Beantown. After a debut in Philadelphia, Total Impact will shine a light on impact investing across asset classes, as well as opportunities to address issues around Boston. The lineup: Liesel Pritzker-Simmons of Blue Haven Initiative, Putnam’s Katherine Collins, Christiana Bardon of MPM Capital, Paul Grogan of The Boston Foundation, Bank of America’s Jackie VanderBrug, Rekha Unnithan of Nuveen and more. Register now (Use code TI_IMPACTALPHA to save $250).

Dealflow: Follow the Money

SunFunder raises $25 million from OPIC for off-grid solar fund for Asia and Africa. Speaking of energy access: The off-grid solar lender’s $50 million in loans to almost 40 companies has helped more than 3.5 million people gain access to energy since 2012. SunFunder is now looking to raise an $85 million Solar Energy Transformation Fund for lending to solar companies serving off-grid households in Asia and Africa. OPIC committed $25 million in senior and subordinated debt. Shine on.

Prodigy tops $1 billion in debt for international student lending. Prodigy Finance reached the milestone in debt fundraising with backing from institutional lenders like Deutsche Bank, Goldman Sachs, M&G Investments and Sumitomo Mitsui Banking Corpor., as well as capital raised through an international “education note.” The U.K.-based student lender has provided nearly $540 million in loans to more than 11,200 students from 132 countries to help them pursue education abroad. Four out of five borrowers come from emerging markets. Get educated.

WeWork plans Creator Fund to back “the future of work” startups. The co-working colossus, which is valued at roughly $20 billion, is readying a fund to invest in “future of work” social enterprises and startups. The Creator Fund would help WeWork diversify revenues from space rentals to freelancers, small businesses and large companies. The size of the fund, which will likely absorb WeWork’s existing venture investments, was not announced. Get to work.

Signals: Ahead of the Curve

The 73rd U.N. General Assembly and dozens of side events are generating a slew of announcements and reports. A few worth noting:

An emerging impact measurement architecture… The Impact Management Project has driven consensus about what it means to deliver impact through investing. A new network of standard-setting organizations could help standardize such impact management. The new IMP Network aims to move impact investors and businesses beyond risk management and good intentions to measurable improvement. The Sustainable Development Goals challenge enterprises and investors to account for both positive and negative impacts, the network says, “and to improve those impacts over time.”

  • All together now. The network will be housed at Bridges Fund Management and led by Clara Barby. Members include UNDP, OECD and IFC, as well as Social Value International, Global Reporting Initiative, Principles for Responsible Investment, Global Impact Investing Network, World Benchmarking Alliance and the Global Steering Group for Impact Investment.
  • Impact, generally accepted. “In financial management, ‘general acceptance’ of norms for how we talk about, measure and manage financial performance enables capital to flow efficiently across value chains and across borders,” said Barby in statement. “If we want impact management to become the norm for every enterprise and investor, as the UN Sustainable Development Goals demand, we need shared principles, reporting standards and benchmarking methods for impact.”

…can help validate investments in the SDGs. Investor demand for SDG-aligned investments has been stalled by confusion about what is and isn’t an investment in the Global Goals. Principles and certifications under the banner SDG Impact are aimed at bringing standardization and clarity to SDG investing. First, the United Nations Development Programme will work with other members of the IMP Network to develop a set of “SDG impact standards.” UNDP will then manage a new seal and certification for investors and enterprises to authenticate their alignment with the SDG Impact standards. The UNDP “intends to help authenticate the contribution of SDG-aligned investment capital in the market today, and play a role towards increasing the total volume of SDG-enabling investment by encouraging participation from new actors,” said the UNDP’s Achim Steiner at a UNGA High-Level Event. “If we are successful, we can help meet a significant portion of the SDG funding gap.”

Blended finance deals are way up. Blended-finance deals for sustainable development are coming hot and heavy. The tally of $100 billion in deals to date in the “State of Blended Finance” report already is out of date. The up-to-date number from the website of blended-finance platform Convergence: $131 billion. Capital committed to blended-finance deals leveraging public and philanthropic funds to attract private capital to sustainable development more than doubled from last year’s total of $51.2 billion.

  • Follow the leaders. USAID (47), IFC (144), Omidyar Network (19), Gates Foundation (19), Calvert Impact Capital (20) and Deutsche Bank (12) are leaders in the total number of commitments to blended finance deals.

Share, “Blending finance and measuring impact for the UN Global Goals.”

Agents of Impact: Follow the Talent

Julia Stasch, who during four years as president of MacArthur Foundation launched a small number of “Big Bets,” is stepping down next year… Gary Edson, founder of the Millennium Challenge Corp., is the new president and CEO of the Global Development Incubator… Matt Zieger, who led impact investing and social entrepreneurship at Catholic Charities USA, is the new head of U.S. ventures at Village Capital… Palladium acquired Enclude from Triodos Bank.

September 26, 2018.