Greetings Agents of Impact!
In today’s Brief:
- Cities stack capital to keep climate projects on track
- Working capital for emerging managers in Africa
- Greening wastewater treatment
- How wealth advisors help clients move from intention to implementation
Featured: Muni Impact
How local governments are financing climate action without federal funding. Just a couple of years ago, municipalities and local project developers were putting together plans to leverage once-in-a-lifetime federal funding for green projects, including community solar, energy retrofits, electric bus fleets, and waste-to-energy plants. Now, they are scrambling to patch together stacks of public and private capital to keep such projects alive and maintain momentum for an inclusive energy transition. This month, cities, tribes and nonprofits that received grants to install solar energy systems in low and middle income neighborhoods through the $7 billion Solar for All program received termination notices from the Environmental Protection Agency and found their bank accounts frozen. Solar for All was part of the $27 billion Greenhouse Gas Reduction Fund, which was repealed by the Republican tax and spending bill, along with many of the tax incentives for the landmark Inflation Reduction Act. The total cost to the US economy from lost projects already stands at more than $2 billion, with $766 million in lost worker income, according to the Clean Energy Innovation Funding Freeze Ticker. A legal battle continues over the rest of the Greenhouse Gas Reduction Funds that had been approved by Congress and are contractually obligated. But the $20 billion originally at risk is down to $17 billion. As ImpactAlpha reported, some $2.7 billion was successfully transferred by the Coalition for Green Capital to private equity firms, including Apollo Global, Brookfield and Energy Capital Partners.
- Capital stacks. Private capital and public-private partnerships are increasingly important to keep climate projects alive, writes HIP Investor’s Nick Gower in a guest post. City planners, financial managers, council members and mayors, Gower argues, must “think like portfolio managers,” blending equity, preferred equity, private credit, debt and lines of credit in their mix of funding sources, much like businesses do. HIP Investor, which has worked with over 50 local governments, has a catalog of more than 100 financing vehicles that have been implemented in at least one city or community and can be applied to other localities. A public-private partnership in Fremont, Calif., for example, established a microgrid system to power three fire stations on or off the grid. The local cleantech firm Gridscape will own, operate and maintain the system for 10 years, saving the city $250,000 and reducing emissions by 71 tons annually. “The federal climate funding environment will likely remain volatile and complex for the foreseeable future,” says Gower. “A combination of financing pathways can mobilize private capital and partnerships at a greater scale and accelerate the transition towards a low-carbon economy.”
- Keep reading, “How local governments are financing climate action in the face of federal funding cuts,” by HIP Investor’s Nick Gower. Robert Wood Johnson provides support for ImpactAlpha’s “Muni Impact” coverage.
Dealflow: Catalytic Capital
Small Foundation backs FrontEnd Ventures through working capital facility for emerging African GPs. Fund managers across Africa are rolling out innovative strategies to support local small businesses and startup founders. It’s not unusual for them to take three years or more to reach a first close. Ireland-based Small Foundation is working to support Africa’s ecosystem of emerging fund managers with a $2.5 million long-term working capital facility to cover operational expenses for new funds raising less than $20 million. Its first check from the six-month-old initiative has gone to Kenya-based FrontEnd Ventures, an early-stage venture fund that bets on local Kenyan founders.
- Emerging managers. There’s a small but growing movement to mobilize capital and resources for new fund managers and investment vehicles. In the US, Mission Driven Finance last year rolled out its Capital Partners group to help emerging managers with bridge financing, working capital advances, deal warehousing and capital for co-investments. Last week it launched a capital call line of credit to help managers close deals. In addition to Small Foundation’s Working Capital Facility, the foundation is backing a working capital facility for funds over $20 million and a deal warehousing facility for first-time female fund managers. It supports the African fund manager network, the Collaborative for Frontier Finance, and is a member of the Growth Firms Alliance, a philanthropic network focused on bolstering resources available to emerging market small businesses. Small also recently joined the Catalytic Capital Consortium to “elevate African voices, build local investment capacity, and increase the volume of catalytic capital flowing to African intermediaries and entrepreneurs.”
- Inclusive markets. FrontEnd Ventures is looking to raise $8.5 million for its first fund. It has already made 10 investments, including BuuPass, which helps commuters plan, book and pay for public transit rides. Power is a fintech venture offering workers access to their earned wages and financial planning and savings tools. Mawu is an online marketplace for handmade jewelry, clothing and crafts. FrontEnd “exemplifies the kind of fund we set out to support with our GP Working Capital Facility,” Small Foundation’s Karina Wong said in a statement. “Locally led and ecosystem-focused, they’re not just deploying capital – they’re actively reshaping Kenya’s venture landscape to unlock local capital.”
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Green Steel Environmental clinches $1.7 million to replace harmful additives in wastewater treatment. Researchers from the University of Colorado launched Green Steel in 2023 to develop a cheaper and environmentally-friendly replacement for ferric chloride, ferric sulfate and aluminum sulfate – hazardous chemicals used to treat wastewater. Green Steel PSR, made from steel slag, a byproduct of steel manufacturing, sequesters harmful nutrients like phosphate and sulfide during the treatment process.
- Green capital. Wastewater treatment facilities in the US process roughly 34 billion gallons of wastewater each day. The cost to treat a million gallons of wastewater can reach $12 million. Green Steel’s new financing round was led by the Central Texas Angel Network, with backing from Cowtown Angels and others. Green Steel is looking to patent a biogas treatment product that converts hydrogen sulfide and other co-contaminants into renewable natural gas.
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Dealflow overflow. Investment news crossing our desks:
- Two years after filing for bankruptcy, vertical farming company AeroFarms has refinanced its debt and has secured a new slug of equity to ready development of its second farm. (AeroFarms)
- Geothermal energy developer Fervo Energy secured $206 million for its planned mega-plant in Utah, the first phase of which is slated to come on line next year. (TechCrunch)
- Sweden’s Aira Group raised €150 million ($174 million) from Altor Equity Partners, Kinnevik, Temasek and other investors to ramp up production and R&D of its household heat pumps. (Bloomberg)
- Flox, also in Sweden, secured seed funding in a round led by Unconventional Ventures for its wilderness-roving robots that emit noises to safely deter wildlife from the path of construction sites, railways, airports and other types of infrastructure. (Tech.EU)
- Brazil-based Radix Florestal raised 10 million reais ($1.9 million) from Germany-based Ecosia to replant degraded forestland in the Amazon and deploy drones to monitor its projects. (Startupi)
Advisors’ Corner: Getting Started
From intention to implementation: Making your portfolio a force for good. ImpactAlpha and CapShift last month launched Advisors’ Corner, a hub of practical resources to help advisors integrate impact into their strategies for families, foundations and institutions. In the latest entry, CapShift’s Liz Sessler guides financial advisors on moving clients from values-based conversations to concrete portfolio action. Too often, she writes, “well-intentioned portfolios fall short of their impact potential simply because the next step – implementation – feels too murky.”
- Demystifying impact. Sessler shares strategies across asset classes for wealth advisors to explore with their clients. For public markets investments, she suggests advisors move beyond negative screens by investing in ESG-integrated funds and by using shareholder advocacy to push for improvements in climate, labor and diversity. In private markets, advisors can direct capital to mission-driven companies and funds. The cash portion of a portfolio can be placed in CDFIs and mission-driven banks to channel cash reserves to underserved communities, small businesses and affordable housing.
- Keep reading, “From intention to implementation: Making your portfolio a force for good,” by CapShift’s Liz Sessler. Explore Advisors’ Corner. Have useful resources to add? Shoot us a note.
Agents of Impact: Follow the Talent
Among this year’s Echoing Green fellows is Ashlee Wisdom of Health in her HUE, a Black women’s health-focused app; Salah El Sadi of Blue Filter, a Palestine-focused water purification organization; and Kwamane Liddell of ThriveLink, which has built a voice-based and AI-powered tool for people with low levels of literacy to apply for healthcare and essential social services.
IDB Invest is looking for senior associates and investment officers to join its equity and mezzanine division… CREO seeks a chief of staff to the CEO in New York… Also in New York, Bloomberg is looking for a sustainability specialist… Green Climate Fund has an opening for a head of strategy in South Korea… Kiva is recruiting a South and Southeast Asia investment manager, based in Thailand.
Camelback Ventures is accepting applications for its Camelback Fellowship, which offers $40,000 in capital and coaching to impact founders in underresourced communities… This year’s Canadian Employee Ownership Conference, hosted by Employee Ownership Canada, will take place Sept. 10-12 in Alberta… Enable Ventures, in partnership with Strada Education Foundation and SmartJob, will host the 2025 Disability Innovation Forum on Thursday, Sept. 18 in Washington, DC.
👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.
Thank you for your impact!
– Aug. 13, 2025
