Hello International Development Finance Corp., pay-for-success for veterans and forests, tobacco-free portfolios



Greetings, ImpactAlpha readers!

Featured: ImpactAlpha Original

Expanded U.S. development-finance institution will make equity investments, too. Once on the chopping block, the U.S. government’s development finance institution has a new name, new tools and an expanded mandate. When President Trump signs the Build Act, for Better Utilization of Investments Leading to Development, the new U.S. International Development Finance Corp. will have the ability to make equity investments, in addition to the loans made by its predecessor, the Overseas Private Investment Corp., or OPIC. Its financing budget will double, to up to $60 billion. Such catalytic capital will make the new agency a major player in global impact investing and could help draw in other private investors.

It’s a stark turnaround. In his first budget, President Trump placed OPIC on a list of agencies to eliminate entirely. What changed Trump’s mind: the chance to counter China’s rising global influence. Beijing is aggressively investing in infrastructure across Asia through its trillion-dollar Belt and Road Initiative. “This investment will allow us to reduce poverty in areas that are critical to our national security, compete with Chinese influence in the developing world, and help U.S. businesses grow and succeed,” tweeted Sen. Chris Coons, a co-sponsor. The new capital and new tools will help investees “increase their impact throughout the developing world,” Global Partnerships’ Mark Coffey told ImpactAlpha.

Keep reading, “Expanded U.S. development-finance institution will make equity investments, too,” by Dennis Price on ImpactAlpha.

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Dealflow: Follow the Money

V.A. tests a social-impact bond aimed at post-traumatic stress. The U.S. Department of Veterans Affairs and agencies in Massachusetts and New York are launching a three-year pay-for-success project to help veterans suffering post-traumatic stress disorder. Local V.A. medical centers will provide individual placement and support to 480 U.S. veterans to improve their employability. Social Finance developed the Veterans CARE project, which attracted $5.1 million in investment from BNP Paribas, Northern Trust, The Dakota Foundation, Deutsche Bank and Robin Hood Foundation. The V.A. and the federal Social Innovation Fund will provide $3 million, matched by the local governments, to repay investors if the project meets its targets. Untapped assets.

Pay-for-success pilot in Latin America makes the business case for forest conservation. Conservation International and The Nature Conservancy have secured $1 million from the Dutch development agency FMO, the Nordic Development Fund and the Global Environment Facility to pilot programs to conserve forests in Latin America. The projects aim to make the business case for positive environmental practices by showing hydroelectric plant owners that investing in forest conservation can help their business operations. Few of the dozens of pay-for-success models so far have taken on environmental issues. This is cool.

$200 million Fund Mujer to boost women’s entrepreneurship in Latin America. Investing in Latin America’s female entrepreneurs could be a $98 billion opportunity. IDB Invest, the private financing arm of the Inter-American Development Bank, joined with the Overseas Private Investment Corp. to create a $200 million fund to “narrow the gender financing gap” in Latin America and the Caribbean. OPIC’s commitment is part of its 2X Initiative aimed at mobilizing $1 billion for women-focused projects in emerging markets. Close the gap.

Bridges backs healthy school lunch partnership in the U.K. The U.K. school catering market is worth over €2 billion ($2.6 billion) per year. Bridges Fund Management invested an undisclosed amount in The Impact Food Group, a partnership between Innovate Services, in which Bridges already holds a majority stake, and school catering company Cucina Restaurants, which currently serves 50 English schools. Eat up.

Signals: Ahead of the Curve

Investors make a pledge toward tobacco-free portfolios. Tobacco is responsible for more than seven million deaths – and rising – each year. The nonprofit Tobacco Free Portfolios, which advocates for tobacco-free finance policies across lending, investment and insurance, launched a tobacco-free pledge at the U.N. last week. Organizers say the pledge already has support from 130 institutions representing $6.82 trillion in assets. The pledge is personal to Her Royal Highness Princess Dina Mired of Jordan, the nonprofit’s global ambassador, as the mother of a cancer survivor. “Many of the CEOs of the finance industry are lovely people. They have kids and families,” she told ImpactAlpha. “It’s just that the conversation wasn’t there. That’s the beauty of this initiative.”

  • Financial leadership. The pledge is intended to highlight financial institutions with tobacco-free finance policies and to “prioritize tobacco on the corporate agenda as a product and industry distinct from any other with no safe level of use and no opportunity for effective engagement.” Tobacco Free Portfolios developed the pledge in a partnership with U.N. agencies and financial institutions AXA, BNP Paribas, AMP Capital and Natixis.
  • Ensuring healthy lives. Organizers have tied the pledge to Sustainable Development Goal No. 3 and are seeking to “de-normalize financial and corporate associations with tobacco companies.”

Tobacco Free Portfolios CEO Dr. Bronwyn King said, “This initiative exemplifies the action required to achieve the Sustainable Development Goals, and brings us closer to a tobacco-free world.” Share this post.

Agents of Impact: Follow the Talent

ISF Advisors launched a portal tracking more than 100 funds closing the gap in global smallholder farmer finance… Netherlands-based Goodwell Investments made Preqin’s list of top-performing VC fund managers… Mercy Corps is hiring to bolster its response to the Ebola outbreak in the Democratic Republic of Congo.

October 4, 2018.

 

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