The Brief | June 12, 2023

The Brief: Local climate partnerships, Just Climate’s impact-linked carry, EVs in India, digital health in Nigeria

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Greetings, Agents of Impact!

👋 Join Wednesday’s Call. At Heron Foundation, Preeti Bhattacharji tested strategies to boost the impact of municipal bonds. As head of sustainable investing at J.P. Morgan’s US Private Bank, Bhattacharji is taking those strategies to scale with more than 3,500 high net worth and institutional clients. On “How asset allocators are driving racial equity in municipal bonds,” Bhattacharji will join Renaye Manley of the Service Employees International Union, Harvard’s David Wood, and Heron’s Barbara VanScoy, Wednesday, June 14, at 10am PT / 1pm ET / 6pm London. RSVP today.

Featured: Community Resilience

Community-based climate partnerships poised for funding from new ‘green bank.’ The scramble is (almost) on. The Biden administration is readying guidance for a $27 billion “green bank” created by the Inflation Reduction Act. The bank – or more accurately, a network of non-profit lenders that will be selected via a competitive grant process – will leverage private capital to catalyze building energy retrofits, community solar, and other green projects in disadvantaged communities (see, “Green Bank in climate bill to provide catalytic capital for renewable energy and community resilience“). The Greenhouse Gas Reduction Fund, as it is officially called, could mobilize more than 12 times the public investment over 10 years, according to McKinsey. “Building long-term climate resilience requires a comprehensive, multi-sector, place-based approach,” write Maggie Super Church and John Moon of the Lincoln Institute of Land Policy’s Center for Community Investment in a guest post on ImpactAlpha

  • Place-based. Many communities across the US are getting a leg up. In Chicago, climate justice nonprofit Elevate Energy is demonstrating the economic and health benefits of decarbonizing homes. In Buffalo, NY, the Sewer Authority worked with public, private and nonprofit partners to create a water equity roadmap and issue the nation’s largest environmental impact bond for green stormwater infrastructure. In eastern Kentucky, Invest Appalachia is providing catalytic capital for long-term flood recovery and climate resilience (see, “Appalachia emerges as a climate refuge – and its community infrastructure feels the strain”).
  • Priorities and pipelines. With an imminent “notice of funding opportunity” for the green bank, “now is the time to forge and strengthen partnerships between government, community leaders and frontline organizations,” urge Church and Moon. The program will prioritize meaningful engagement with vulnerable communities, they say. “Communities that have done the work to define shared priorities and develop a pipeline of projects will be best positioned to access these funds.”
  • ICYMI. The Coalition For Green Capital is soliciting proposals for potential projects that would benefit from green bank financing. The Environmental Protection Agency is hiring a director to run the Greenhouse Gas Reduction Fund.
  • Keep reading, “Community-based climate partnerships poised to gain from new “green bank” funding,” by the Lincoln Institute of Land Policy’s Center for Community Investment’s Maggie Super Church and John Moon.

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Dealflow: Climate Finance

Generation clinches $1.5 billion for climate fund with impact incentives. Just Climate, the climate-dedicated asset manager launched a year and a half ago by Al Gore’s Generation Investment Management, has completed a $1.5 billion fundraise – a third more than it targeted. New investors include the CalSTRS, Canada’s PSP Investments, industrial maintenance company AP4, Colonial First State Investments, Builders Asset Management, and Swedish pension fund AP2. Just Climate is focused on industrial climate solutions. Its first three investments include H2 Green Steel, biogas producer Meva Energy in Sweden, and Swiss EV charging company ABB E-Mobility.

  • Impact-linked compensation. Just Climate’s performance fee blends financial performance metrics with “the delivery of ambitious greenhouse gas abatement goals,” the firm says. Less than a third of impact fund managers use some form of impact-linked compensation, according to BlueMark. “Well-designed and implemented impact-linked compensation structures could be an effective motivation tool to hold fund managers accountable to their stated impact goals, argues Aunnie Patton-Power, who is spearheading a research initiative to uncover evidence of its effectiveness and potential (see “Why don’t more impact fund managers tie compensation to impact? Let’s find out”).
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India’s River and RevFin score investor backing to accelerate EV adoption. The big electric vehicle opportunity in India is two-wheel scooters and motorcycles and three-wheel autorickshaws, which make up 80% of vehicles on the nation’s roadways. India’s government is dangling incentives for consumers and domestic manufacturers in order to get 80 million electric vehicles on the road by 2030 (see, “Investors rally behind India’s EV startups”). River has raised $15 million from Lowercarbon Capital, Toyota Ventures, Dubai-based Al Futtaim Group and others to launch its first e-scooter, slated to hit the market in August. Its scooters are priced at about $1,500 before government subsidies.

  • Vehicle financing. Delhi-based RevFin has raised $5 million in debt from the US International Development Finance Agency to provide EV financing to small-city, rural and underbanked drivers. More than 80% of its borrowers are financially excluded. The company partners with commercial fleet operators, manufacturers like Hero Electric, dealers and financial institutions.
  • Climate finance. Venture funding in India remains slow, but climate tech is a top investment theme. Electric vehicle and renewable energy startups claim the lion’s share of India’s climate VC. A growth driver: the Indian government’s decision to pause new coal power plants and focus on renewable power generation.
  • Check it out.

Dealflow overflow. Other news crossing our desks:

  • Helium Health, which is helping Nigeria’s healthcare providers and pharmacies go digital, scored $30 million to expand inventory lending. (Disrupt Africa)
  • Oman’s Sharakah invested in Dubai-based Beehive to increase peer-to-peer lending to Omani small businesses. (Wamda)
  • Nori, a Seattle-based carbon credit venture that works with regenerative farms, raised $6.3 million from M13, Toyota Ventures, Cargill and others. (VCBay)
  • Brazil’s Sami raised $18 million to offer affordable insurance and telehealth services as an alternative to expensive private insurance plans and an overstretched public health system. (LatamList)
  • Yield Lab Latam secured an investment from Nestlé to back agrifood startups. The venture firm has raised more than $20 million for its third fund. (AFN)
  • Milestones: Rwandan electric motorbike manufacturer Ampersand has put more than 1,000 bikes on the road (for context, read about the company’s investment news, and see, “Ghana’s Kofa raises seed round for multi-purpose EV batteries”).
  • Milestones: Newark, N.J.-based vertical farming venture AeroFarms filed for Chapter 11 bankruptcy. The news follows the company’s failed bid to go public last year via a special purpose acquisition company (read, “Vertical farming companies bring in the big bucks despite sustainability issues“).

Agents of Impact: Follow the Talent

MacArthur Foundation’s John Palfrey will succeed Ford Foundation’s Darren Walker as advisory board chair of the US Impact Investing Alliance. Walker will continue to serve on the Alliance’s advisory board… Common Future promotes Lauren Paul to vice president of strategic alliances… Lafayette Square’s Antony Bugg-Levine will step into an additional role as president of Lafayette Square Foundation. 

The California Endowment seeks an impact investing officer for program-related investments in Fresno… SJF Ventures is hiring an impact director in New York… Also in New York, BerlinRosen is looking for a social impact and investing vice president… FMO is recruiting a senior portfolio analyst in The Hague, Netherlands… ICF is on the hunt for a sustainable finance managing consultant in Brussels.

Jamie Beck Alexander of Project Drawdown is hosting a webinar on capitalism vs. climate change, Wednesday, June 21… The Aspen Institute’s 2023 class of finance leaders fellows includes 1803 Fund’s Rukaiyah Adams, Temasek’s Kyung-Ah Park, Include Ventures’ Bahiyah Yasmeen Robinson, and Accel Partners’ Jonathan Turner

Thank you for your impact.

– June 12, 2023