New frontier for eco.business Fund as it expands to sub-Saharan Africa
The eco.business Fund has launched a sub-fund, targeting sub-Saharan Africa. The new sub-fund has received initial funding of EUR 18 million from the German Federal Ministry for Economic Cooperation and Development (BMZ) via KfW.
Backed by a positive market study identifying strong potential in the region for the fund’s approach to biodiversity protection and given the great success of the first sub-fund in Latin America, the fund will now expand into sub-Saharan Africa with investments and technical assistance. The sub-fund will actively contribute to the conservation of key biodiversity hotspots of which eight of the world’s 36 are in sub-Saharan Africa.
The sub-Saharan Africa sub-fund will continue to invest in the four priority sectors of the eco.business Fund: agriculture, fishery (including aquaculture), tourism and forestry. There will also be a special focus on investments in forest and landscape restoration projects that boost ecosystem function while supporting sustainable agricultural value chains.
Target partner institutions will be those committed to the fund’s mission. This will include local financial institutions that have the capacity to reach the fund’s target group, as well as eligible companies including producers themselves. The new sub-fund will also engage with real sector intermediaries, such as commodity buyers, that are looking to enhance the sustainability of their supply chains. The sub-fund will support them by delivering finance to their partner producers and businesses seeking financing for green investments.
Alongside the new sub-fund, a new development facility will also be launched in sub-Saharan Africa. The development facility will not only support businesses directly, but also provide specialist support to financial sector and real sector partner intermediaries and their customers in order to increase the impact of the fund's investments. This is done, for example, by raising awareness on practices that conserve nature and foster biodiversity.
Dr. Jens Mackensen, Chairperson of the Board of Directors of the eco.business Fund, stated: “We are excited about the expansion into sub-Saharan Africa. It is a great opportunity to engage more deeply with the private sector and build scalable solutions that lower the risk to biodiversity in the region.”
Prof. Dr. Joachim Nagel, member of the Executive Board of KfW Bankengruppe, stated: “Africa faces multiple challenges as the continent must reconcile economic growth, food security and ecological sustainability. This can only happen through a ‘green economy’ in which the financial sector plays a key role in financing the ecological restructuring of central economic sectors such as agriculture, forestry, and eco-tourism. The innovative approach of the eco.business Fund is therefore of great importance.”
About the eco.business Fund
The eco.business Fund aims to promote business and consumption practices that contribute to biodiversity conservation, to the sustainable use of natural resources, and to mitigate climate change and adapt to its impacts in Latin America, the Caribbean, and sub-Saharan Africa. By providing financing for business practices that conserve nature and foster biodiversity, the fund seeks investments with both environmental and financial returns. The eco.business Fund provides financing through three avenues: local financial institutions that are committed to the fund’s mission and which have the capacity to reach its target group; directly to its target group (i.e. companies and producers); and in the case of sub-Saharan Africa, to real sector intermediaries. The fund supports sustainable operations in the sectors of agriculture, fishery (including aquaculture), forestry and tourism. Target beneficiaries are those that hold an eligible sustainability certification or those taking out a loan to make eligible sustainable investments in their operations
An impact investment fund advised by Finance in Motion, the eco.business Fund was initiated by Germany’s KfW Development Bank and Conservation International with financial support from the German Federal Ministry for Economic Cooperation and Development (BMZ). The sub-fund for Latin America and the Caribbean has received further support from the European Commission. The sub-fund’s additional investor base comprises IDB Invest, a member of the Inter-American Development Bank (IDB) Group, the U.K. government’s Department for Environment, Food and Rural Affairs, Dutch development bank FMO, Austrian development bank OeEB, and institutional investors such as sustainable banking institution ASN Bank, German ethical bank GLS Bank, Calvert Impact Capital, and Raiffeisen Bank International. Finance in Motion, a leading impact investing company, is also an investor.
Operating together with each of the two sub-funds, are two development facilities that provide high-impact technical assistance to investment partners and final borrowers.
For more information please visit www.ecobusiness.fund and follow us on Twitter @ecobusinessfund.