The Brief turns one, farmers’ climate insurance, private wealth for 2030 development debt



Greetings, ImpactAlpha readers!

#Featured: Editor’s note

The Brief turns one. The Brief is forever joined in history with the Women’s March and the Trump administration — each of us have just turned one year old. In the last year, ImpactAlpha has brought you 236 daily issues of The Brief, delivered piping hot (if not bright and early) to your inbox. We are looking ahead to an exciting year of growth and impact (you can look back at the past year in Inclusive Economy, Women Rising, Impact Tech, 2030 Finance and Impact Investing). But on our birthday, we most want to say, “Thank you.”

Thank you, investors and entrepreneurs, who have done hundreds of deals, big and small, demonstrating the breadth and vibrancy of the impact investing marketplace. Thank you, practitioners, leaders and other Impact Voices, who have shared your thoughts and experiences in dozens of guest posts, building a respectful conversation and shared base of knowledge. Thank you, journalists and writers, who have filed from Africa, Asia, Latin America, Europe and across the U.S. Thank you, small but mighty ImpactAlpha team, for persistently building each day’s lineup, and to our families, for putting up with us. And, thank you, thank you, thank you, tens of thousands of you, who read The Brief (almost) every day and are not afraid to let us know what you think about it.

Media outlets these days strive to be “platforms,” and we are building ImpactAlpha to be an even more valuable platform for all of those stakeholders. But the foundation of that platform is community. We are proud to be part of the rough (and sometimes tumble) collection of Agents of Impact, who are working across geographies and sectors and asset classes and stages to turn capital toward an inclusive, regenerative and healthy future. Your impact is our impact; let us know how we can help you have more.

— David Bank, editor and CEO

Six ways to connect with ImpactAlpha: Subscribe to The Brief. Follow us on Medium: News.ImpactAlpha.com. Join the conversation on Facebook, Twitteror LinkedIn. Dig into ImpactSpace. Subscribe to the Returns on Investment podcast: iTunes, Stitcher, and SoundCloud. Reach out at thebrief@impactalpha.com.

#Dealflow: Follow the Money

Indonesia’s SayurBox gets backing from Patamar. SayurBox offers an organic produce delivery service. “They empower farmer partners, farmer communities and local producers to get better access to market,” Patamar’s Dondi Hananto told DealStreetAsia. “A lot of those involved in the farmer communities are women.” Patamar Capital — formerly Unitus Impact — made the investment from its Investing in Women fund, which is backed by the Australian government. The size of the investment was not disclosed. The fund is set up to seed women-focused and women-run companies in Indonesia, Vietnam and the Philippines with $200,000 to $300,000. SayurBox is the fund’s first investment. Insignia Ventures also backed the company’s seed round.

Adobe Capital invests in workforce training and education venture IPETH. IPETH trains low- and middle-income Mexicans to become physical therapists, while offering inexpensive physical therapy services to the poor. To date IPETH has trained 8,500 students and treated 15,000 patients in the Mexican states of Puebla, Tlalnepantla and Tlalpan. The investment size was undisclosed. It is the first investment from the second mezzanine fund of Adobe Capital, New Ventures’ venture capital arm. In October, the fund reached a $21 million first close towards a $40 million target to back growth-stage companies delivering healthcare, education, affordable housing and energy services to low and middle income Mexicans. Auria Capital, a Monterrey-based family office and investor in both Adobe funds, invested alongside Adobe.

Climate shock insurance launches for small farmers. The $10 million African and Asian Resilience in Disaster Insurance Scheme (ARDIS) is a credit program to support low-income small farmers when their farms are hit by natural disasters. Funds will be used to boost microfinance institutions’ reserves so they are able to respond quickly with short-term loans for farmers when extreme weather hits. The program is a partnership between WorldVision’s microfinance arm VisionFund International and climate risk analytics venture Global Parametrics; funding is provided by InsuResilience Investment Fund. It is being rolled out in VisionFund countries: Kenya, Malawi, Mali, Zambia, Cambodia and Myanmar. Eighty percent of VisionFund’s small farmer clients in these countries are women.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to thebrief@impactalpha.com.

#Event: The Economist’s Investing for Impact

Meet with impact investors, policymakers, academics and philanthropists at The Economist’s Investing for Impact: Risk, return and the future of the worldconference on February 15 in New York City. Explore how to put capital to work in a world where the outlook for risk and return is changing every day. Use discount code IA15 when you register for a 15 percent discount.

#Signals: Ahead of the Curve

Climate finance: adapt or mitigate. The world’s richest countries have pledged to mobilize $100 billion per year by 2020 to help less wealthy, less developed countries fight and prepare for climate change. And, while they’re still far short of that amount, they agreed that half the money should go to adapt to climate change and half should go to fight it. But these days the actual ratio is closer to 75% mitigation, 25% adaptation because there’s more private money at work than government funding, reports CarbonBrief, which tracks climate policy and environmental science developments. Adaptation projects are often considered riskier, because unlike mitigation projects such as reforestation or carbon offsets, they involve technology experimentation, policy making, and systems change. CarbonBrief’s analysis suggests that multilateral funds struggle to bring more capital into adaptation. The Clean Technology Fund for instance, the largest multilateral climate fund, only backs mitigation projects, while others, like the Green Climate Fund, have a 50/50 mandate, but still fall short on adaptation. Its analysis also suggests more political leadership will be required to get the balance right. That’s likely to come more from the E.U., Norway and Japan after the U.S. pledged to pull out of several multilateral climate funds. For other insights on what multilateral climate funds are doing, check out CarbonBrief’s cool interactive map.

#2030: Long-termism

Leveraging private wealth for 2030 development debt. The phrase “multilateral development banks,” or MDBs, may make your eyes glaze over. But institutions like the European Investment Bank, the Inter-American Development Bank, the African Development Bank and, of course, the World Bank, are key to financing clean energy, urban infrastructure, education and other areas crucial to meeting the Sustainable Development Goals. The debt issues of such development banks are often as highly rated as corporate or government bonds, but typically attract little capital from private wealth managers. With global household wealth estimated at $280 trillion, an additional allocation of 1% to the top 10 emerging-market development banks could more than triple their outstanding bonds from $1.1 trillion to $3.9 trillion, according to UBS, the giant Swiss bank.

“MDBs commonly seek to generate positive social and environmental returns that conventional government debt does not,” UBS argues in a new report. UBS is working with the World Bank on two pooled funds to allow investors to switch from government to development-bank debt. To overcome institutional objections, the bank is also helping develop a benchmark for such debt, with risk-return targets similar to conventional benchmarks.

The sustainability reporting in the new benchmarks also are intended to guard against “greenwashing” in bonds marketed as “sustainable.” The UBS report cites a green bond issued by a Chinese power producer last year that financed coal-fired plants, and a Moody’s report last year that found that 10 of 17 green bond issues insufficiently reported and disclosed their green commitments.

Onward! Please send news and comments to TheBrief@impactalpha.com

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