Greetings Agents of Impact!

In today’s Brief:

• Trump administration moves to shut down US ‘green bank’ 
• ‘Shark tank’ for humanitarian aid
• BII’s solar exit in India
• Seeking product-impact fit

Featured: Deploy!

Trump’s EPA takes aim at Climate United and the Greenhouse Gas Reduction Fund. For the Greenhouse Gas Reduction Fund, the other shoe has dropped. The US Environmental Protection Agency is seeking to claw back some $20 billion in funding that was awarded last year to nonprofit lenders and green banks that are making loans for community infrastructure projects. The GGRF, the largest direct outlay of the Biden-era Inflation Reduction Act, sought to establish a nationwide network of lenders to underwrite loans for electric school buses and trucks, school solar projects, energy efficiency retrofits and other green community infrastructure projects. The GGRF was designed to leverage at least seven times the amount of public funding in private commercial capital. New loans were being funded as recently as Wednesday. Now, the Trump administration appears hell-bent on shutting the effort down, even as the remaining funds already are sitting in commercial accounts at Citibank. 

• Clawing back. Citi is the financial agent for the $20 billion in GGRF funds that were awarded via two programs, the National Clean Investment Fund and the Clean Communities Investment Accelerator. In a video posted to social media, EPA Administrator Lee Zeldin declared, “The financial agent agreement with the bank needs to be instantly terminated, and the bank must immediately return all of the gold bars that the Biden administration tossed off the Titanic.” The reference is to a clandestine video recording of a former EPA employee who, at a loud party, used the “gold bars” phrase while discussing efforts to get funding out the door in the waning days of the Biden administration. The money was placed with Citi before the election in what was widely seen as an effort to protect the distributed “green bank” from political reversals (see, “Architecting a green bank for the US”). “There is no lawful way to get the money back, and any attempt to get the money back would be a violation of the Fifth Amendment of the Constitution as a takings,” Reed Hundt, founder of the Coalition for Green Capital, which was awarded $5 billion in GGRF funds, told ImpactAlpha before the November election.
  
• Naming names. Zeldin specifically called out Climate United, the coalition of Calvert Impact, Community Preservation Corp., and Self-Help, the North Carolina-based community development lender. Climate United was awarded $7 billion from the GGRF, the largest single award (see, “Beth Bafford on Climate United’s $7 billion strategy to mainstream green lending”). Elon Musk’s Department of Government Efficiency, or DOGE, also has turned its attention to the EPA, reviewing contracts and payments via the agency’s EPA Acquisition System, E&E News reported. In a memo reviewed by ImpactAlpha, the EPA’s Chad McIntosh directed the agency to review all grants and awards suspected of being “fraudulent, abusive, duplicative, or implemented in a way that failed to safeguard Agency dollars,” and to refer violations for possible prosecution. Separately, John Sneed, the new head of the Department of Energy’s $400 billion Loan Programs Office, is reviewing loans and guarantees already approved for a broad range of battery factories, electric vehicle manufacturing, advanced materials and other projects.
  
• Keep reading, “Trump’s EPA takes aim at Climate United and the Greenhouse Gas Reduction Fund,” by David Bank and Amy Cortese on ImpactAlpha. 

Dealflow: Innovative Finance

Kois and MzN seek to match investors with humanitarian projects to bridge USAID funding gaps. Flows of humanitarian aid to address natural and human-made disasters were inadequate before the Trump administration gutted USAID and its $40 billion annual budget (see, “US development financing freeze puts private investments in Africa in peril“). Belgian impact investment firm KOIS and social enterprise MzN International are partnering on Human Planet, a pitch-style accelerator program to match humanitarian organizations and projects with foundations, development finance institutions, family offices and other private investors. “Private and impact investors are seeking meaningful ways to allocate capital toward sustainable development, but doing so in piecemeal fashion is not fast enough,” said MtZ’s Christian Meyer zu Natrup. “We’re bringing these two sectors together – social impact and private finance – so projects can scale up without being solely dependent on traditional donors and grants.”

• ‘Shark tank’ for good. Human Planet aims to “accelerate the financial sustainability of humanitarian and climate projects – ensuring life-changing initiatives become investable, scalable and impact-driven,” the partners said in a statement. It will provide organizations with technical assistance and sustainable finance design support for their humanitarian projects, and connect those projects to investors in a Shark Tank / Dragon’s Den-style pitch event. The partners are hosting a webinar about the program, Tuesday, Feb. 25 at 8am ET / 1pm London.
  
• Beyond aid. As global aid funding shrinks, other humanitarian organizations have been experimenting with investment tools designed to move projects and communities beyond donor dependency. The International Rescue Committee launched its Airbel Impact Lab, an innovative finance division, in 2019 to test blended finance, offtake contracts and even debt swaps to help stabilize communities and local economies affected by long-term conflicts (see, “New tools for humanitarian relief in crisis zones“). Mercy Corps runs multiple accelerator programs and a venture fund for startups supporting climate adaptation, financial inclusion and other positive social outcomes. Save the Children and UNICEF both have venture funds that put a “child lens” on startup and social enterprise investing.
  
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British International Investment exits Ayana, its renewable energy company in India. The UK development finance institution launched Ayana Renewable Power in 2018 with a $100 million investment in order to develop solar projects in energy-poor parts of India, as well as Bangladesh, Nepal, Sri Lanka and Myanmar. BII and Ayana’s other shareholders have sold their stakes in Ayana to ONGPL, a joint-venture between an Indian government-owned oil and gas producer and a government-owned power company. The deal gives ONGPL 100% ownership of Ayana and its four gigawatt portfolio of renewable power assets, and values Ayana at $2.3 billion.

• Catalyzing the green transition. India is heavily dependent on fossil fuels, especially coal, to meet its power needs. The world’s third-largest carbon emitter is on a renewables development tear to reach its target of 500 gigawatts of renewable generating capacity by 2030. It has surpassed 200 gigawatts, having brought almost 30 gigawatts of clean power generation online last year. BII launched Ayana “to play a catalytic role in accelerating the adoption of renewable power in India,” said BII’s Srini Nagarajan. Investments in Ayana and its projects have mobilized “well over $1 billion in capital for the business over the last eight years.” Anaya’s largest shareholder prior to ONGPL’s acquisition was the government-backed National Investment and Infrastructure Fund, a $4.4 billion alternative asset manager. One of Ayana’s new owners, the government owned oil and gas company ONGC, is investing heavily in renewables to reach its net-zero goal by 2038.
  
• Check it out. 

Dealflow overflow. Investment news crossing our desks:

• Ulu Ventures, a Latina woman-led venture capital firm, raised $208 million for its fourth fund from the MacArthur, Ford and Marguerite Casey foundations, a California pension fund, Illumen Capital, Pivotal Ventures, Citi Impact Fund, MassMutual and many others. In the face of political backlash, the firm is doubling down on diversity and inclusion as an investment strategy. (Ulu Ventures)
  
• The Russell Family Foundation signed off on $19.3 million in investments to Breckinridge, Terra Alpha and Xponance from its Catalytic Climate Finance facility. It also provided 10 organizations, including As You Sow, Confluence Philanthropy and VC Include, with a collective $275,000 in grants. (TRFF)
  
• Seattle-based Mast Reforestation closed $25 million in Series B financing to develop a biomass-based carbon removal and forest restoration project in Montana. (Mast Reforestation)
  
• New York-based Coatue raised $249 million for its second climate tech fund, according to an SEC filing. (Coatue)

Impact Voices: Impact Management

Why early-stage social ventures are embracing ‘product-impact’ fit. Ev Williams, founder of Obvious Ventures, once eschewed impact measurement for the firm’s portfolio companies. “We have to believe they have a positive impact,” Williams said of Obvious’ portfolio companies. But, he added, “trying to measure that is a complexity that is burdensome for a company.” In a guest post on ImpactAlpha, 60 Decibels’ Ellie Turner and Tom Adams, and Malika Anand of Catalyst Fund turn that argument on its head. “Monitoring impact is an important part of building a business and reaching the holy grail for any startup: product-market fit,” write the authors, who have partnered to understand the impact of Catalyst Fund’s portfolio of startups from its earliest days. In the post, the partners outline “product-impact fit” as an approach to impact measurement, including what types of metrics and growth areas founders and investors should consider as ventures grow from ideation to traction to growth.

• Growth mindset. Five steps of product-market fit include: 1) problem insight; 2) problem/solution fit; 3) product iterations; 4) product-market fit; and 5) scale. To determine problem/solution fit, for example, an impact study can reveal how users are experiencing a prototype, whether they have good alternatives and if their life is improved by using the product. MazaoHub, a Catalyst Fund investor that provides agronomic support to farmers, found that 83% of its farmers had no good alternative offering. A similar portion reported reduced expenditures on inputs and chemical fertilizers, which indicates a potential for impact on net earnings and resilience at later stages. “These findings gave us confidence that MazaoHub had achieved problem/solution fit,” conclude the authors.
  
• Impact baseline. Once founders have developed a solution that users like, they can kick off a series of product iterations with the objective of achieving traction. Impact studies at this point can help founders attract impact investors by illustrating a commitment to impact, and establishing a “baseline” from which to build. Agro Supply, which helps Ugandan farmers finance productive inputs, found that nine in 10 farmers reported improved quality of life, production, and earnings. Write Turner, Adams, and Anand, “Such studies make our due diligence process much richer, more evidence-based, and more focused on users, instead of just product and team.”

• Keep reading, “Why early-stage social ventures are embracing ‘product-impact’ fit,” Ellie Turner, Tom Adams, and Malika Anand on ImpactAlpha.

Agents of Impact: Follow the Talent

Vanina Farber of the International Institute for Management Development joins the Global Future Council on Innovative Financing for Nature and Climate… Sustainable Capital Advisors welcomes four research and analyst fellows: Georgetown University’s Manon Fuchs, Arizona State University’s Cody Miller, Duke University’s Keanu Valibia, and Alessandra Pelliccia of the University of Pennsylvania’s Wharton School of Business.

Mission Driven Finance is recruiting a vice president of fund management… Morgan Stanley’s Investing with Impact team seeks an analyst/associate in New York… Baltimore Community Foundation is hiring a program officer… Partners for the Common Good is looking for a manager of impact and research in Washington, DC… Confluence Philanthropy’s annual practitioners gathering takes place March 11-13 in San Francisco.

The Collaborative for Frontier Finance is surveying local fund managers and other small business finance organizations about the impact of the US government’s freeze on funding from USAID, the International Development Finance Corp. and other agencies. Take the five-minute survey.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Feb. 13, 2025