Frontclear is a development finance company dedicated to improving financial markets with a focus on building stable and inclusive local currency (LCY) money and interbank markets in emerging markets and developing countries (EMDCs). Its investors are largely European development financial institutions and governments.
For investors in agrifood systems, business as usual is no longer viable. Evidence shows that the negative externalities of global agrifood systems outstrip the global market value of agricultural production by a ratio of two to one.
Our food system has become value destroying as measured in climate change, water scarcity, biodiversity loss, dietrelated disease, and erosion of farmer well-being – all of which threaten the resilience of agrifood supply chains. Nutritional concerns place pressure on food producers and distributors to increase the availability of affordable, healthy food, even as changing temperatures and precipitation patterns decrease crop yields. Meanwhile, policymakers are passing regulations to mitigate the negative climate, biodiversity, and health consequences of industrialised food production systems.
On Tuesday April 16, 2024, Ajay Sharma, MD & Head – Commercial Banking, HSBC India, and Bob Assenberg, AGRI3 Board Member signed a Partnership Agreement in the presence of the Consul General of the Netherlands in Mumbai, Mr. Bart de Jong and Hitendra Dave, CEO, HSBC India. Under the Partnership Agreement, AGRI3 will provide partial guarantees to HSBC for transactions that have a positive impact on sustainable agriculture, rural livelihoods, and forest protection. This ceremony took place as part of a roundtable event where Microfinance Institution (MFI) clients of the bank were invited to discuss sustainability challenges and opportunities.
With the first transaction under this new partnership, AGRI3 will provide a partial guarantee for a facility of USD 50 million for the MFI Lending Program, enabling HSBC to provide loans to MFIs whose end borrowers will utilise the financing for agricultural and agri-allied activities.
The program is supported by a technical assistance programme managed by IDH, The Sustainable Trade Initiative and executed by MicroSave Consulting which will support the participating MFIs to explore opportunities and develop products and services that can enhance the environmental sustainability of the agricultural activities of their clients by adopting climate smart agricultural practices, predominantly for women in rural areas.
Following this agreement and the initial transaction, HSBC and AGRI3 will work together to further deepen this relationship to support corporate and NFBC-MFI clients of the bank.
Hitendra Dave, CEO, HSBC India said, “We are pleased to partner with the AGRI3 fund to improve formal credit penetration in India’s agriculture sector. At HSBC, we recognise it’s important for us to work on projects that can drive positive change across communities.”
Bob Assenberg, AGRI3 Board Member stated, “We are excited about this partnership with HSBC India. We see tremendous opportunities in India, due to the close client relationships that the Bank has with MFIs, such as those present during the roundtable. AGRI3 will have the opportunity to expand and enhance the impact that financial institutions can make to promote climate smart production and improved rural livelihoods in the Indian agricultural sector which is predominantly built up of small-holder farmers.”
About HSBC India – The Hongkong and Shanghai Banking Corporation Limited in India offers a full range of banking and financial services through 26 branches across 14 cities. HSBC is one of India’s leading financial services groups, with around 42,000 employees in its banking, investment banking and capital markets, asset management, insurance, software development and global resourcing operations in the country. It is a leading custodian in India. The Bank is at the forefront in arranging deals for Indian companies investing overseas and foreign investments into the country.
About AGRI3 Fund – The AGRI3 Fund was created by the United Nations Environment Programme (UNEP) and Rabobank, together with partners IDH and FMO, the Dutch Entrepreneurial Development Bank, to support the transition to sustainable agriculture. The Ministry of Foreign Affairs of the Netherlands is a donor to AGRI3 Fund and the Global Environment Facility, through Conservation International is a Senior Participant in the Fund. FOUNT and Cardano Development are the Investment Advisors for the Fund.
AGRI3 Fund aims to mobilise additional public and private capital globally and at scale. The Fund works with commercial banks, development finance institutions, impact investors and institutional investors and provides credit enhancement tools and technical assistance to projects which actively prevent deforestation, stimulate reforestation, contribute to efficient sustainable agricultural production and value chains and reduce carbon emissions and improve rural livelihoods.
For further information, please contact:
Maria-Pia Kelly
[email protected]
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The SDG Impact Finance Initiative proudly presents the winners of our recent Product Window call for proposals. These projects stand out for their commitment to advancing the UN Sustainable Development Goals (SDGs) and catalyzing private investments towards these. An overall investment of CHF 5 million in form of first-loss equity will be distributed among these remarkable initiatives, propelling them towards realizing their impact goals.
These projects exemplify the power of impact investing to drive sustainable development and climate action. Their approaches—ranging from sustainable land management and conservation to renewable energy solutions—reflect a shared commitment to creating a more sustainable, equitable world.
The SDG Impact Finance Initiative is thrilled to support these transformative projects! Their work not only aligns with our mission to catalyze private sector capital towards impactful solutions but also demonstrates the tangible difference that innovative, sustainability-focused investments can make.
Together, we celebrate the achievements of our winners and look forward to their continued success in making a profound impact on our planet and its people.
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ETG Group (“ETG”, the ‘’Company’’) announced that they have closed a USD 115m Sustainability-Linked Revolving Credit Facility (the “Facility”). The Facility represents a key milestone in the Group’s financing strategy, being the first syndicated and sustainability-linked facility, supported by a syndicate of seven financial institutions.
Sumitomo Mitsui Banking Corporation, DIFC Branch – Dubai acted as Sole Coordinator, Bookrunner, initial MLA and Joint Sustainability Coordinator, with Cooperative Rabobank U.A. as initial MLA and Joint Sustainability Coordinator (their commitment is partially guaranteed by the AGRI3 Fund). Mizuho Bank, Ltd joined as MLA and Bank of China Limited, Geneva Branch, JPMorgan Chase Bank, N.A., London Branch, Société Générale S.A. and The National Bank of Ras Al Khaimah (P.S.C) as Arranger.
The Facility is structured as a Sustainability-Linked Loan in line with the LMA Sustainability-Linked Loan Principles. It includes six Key Performance Indicators (“KPIs”) and Sustainability Performance Targets (“SPTs”) for the KPIs in the fields of decarbonization, reforestation, farmer extension services, and gender empowerment, supporting the Group’s strong commitment to improve the environmental and social impact of its operations and to invest in sustainable commodities and business practices.
ETG aspires to fully transform into a net positive business. To achieve this, the Group has developed a sustainability framework, focusing on three core principles, namely nature, people and business. The Netherlands based ESG research, ratings and data provider, Sustainalytics, provided a positive Second Party Opinion that assessed the materiality and relevance of the KPIs and the ambition of the SPTs.
The transaction generates niche social impact by enhancing food security, with a focus on improving the flow of agricultural commodities between Africa.
Paul van Spaendonk, ETG Chief Treasury Officer, commented: “Creating positive impact in the environment and the communities in which we operate is core to ETG’s vision. This inaugural sustainability-linked loan underlines ETG’s commitment to fully transform into a net positive business and the selected KPIs reflect our commitment to have a positive impact on nature, people and business. We are grateful to the syndicate for their support of this landmark transaction that will set the standard for the Group’s sustainable financing strategy going forward.”
ETG has developed into a global player with a presence in more than 45 countries, spanning 6 continents.
The Group has a diverse portfolio of expertise across various industries, encompassing agricultural inputs, chemicals, logistics, processing, food and food ingredients, energy, metals, technology and supply chain optimization.
Over 7000 employees contribute every day to achieve our vision and purpose, and live our values of Respect, Integrity, Pursuit of Excellence, Leadership and Meritocracy.
ETG’s verticals are structured in a manner to emphasize focus and optimize strategic growth opportunities. We adapt and grow responsibly as a diversified enterprise, creating a sustainable future for all our stakeholders.
It holds a diversified portfolio of lenders including significant DFI support.
For more information:
E-mail: [email protected]
Website: www.etgworld.com
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The AGRI3 Fund is delighted to announce the appointment of Deniz Harut as CEO & Managing Director of the AGRI3 Fund, bringing 19 years of experience in emerging markets and sustainable finance.
Deniz Harut’s extensive background in investment management and sustainable finance garnered through her roles at Pollination Group and Standard Chartered Bank, underscores AGRI3 Fund’s commitment to pioneering transformative impact for mobilising capital at scale towards sustainable agriculture in the developing world.
Recognised for her strategic leadership and innovative financing solutions, Deniz has a proven track record of delivering value for clients and partners alike. Her profound understanding of emerging markets and sustainability further strengthens AGRI3 Fund’s capabilities.
Prior to joining AGRI3, Deniz served as an Executive Director at Pollination Group, leading initiatives to transition portfolios towards net-zero and nature-positive investments. At Standard Chartered Bank, she held various senior positions for over seventeen years. Her last role with the bank was as Head of Sustainable Finance, responsible for building and managing the regional Sustainable Finance team from inception in Europe and the Americas, leading the bank in its 2030 net-zero sector commitments by mobilising capital toward climate solutions and projects.
Beyond her professional achievements, Deniz is an avid plant-based chef with a deep interest in food systems and their link to health.
Commenting on the appointment, Joost Zuidberg, AGRI3 Fund Board Member stated: “we are thrilled to welcome Deniz to the team. With her proven track record of strategic leadership and unwavering commitment to excellence, we are confident that Deniz will steer the Fund towards continued success and growth.”
Bob Assenberg, AGRI3 Board Member added: “As a board, we look forward to working closely with Deniz to realise our collective vision and drive innovation to finance more projects and businesses which protect forests, engage in sustainable agriculture and support rural livelihoods.”
Deniz added “I am excited to be joining AGRI3 at a pivotal moment to scale its impact towards transforming agricultural systems. How we farm is at the core of the climate and nature crisis but also plays an important part in the solution. The ability to move the much-needed capital is not just an opportunity of a lifetime – it’s a privilege and a responsibility.”
About AGRI3 Fund – AGRI3 Fund, created by UNEP and Rabobank, along with partners IDH and FMO, aims to support the transition to sustainable agriculture. Supported by the Ministry of Foreign Affairs of the Netherlands and the Global Environment Fund (GEF) through Conservation International, AGRI3 Fund mobilizes public and private capital globally. FOUNT and Cardano Development are the Investment Advisors for the Fund which provides credit enhancement tools and technical assistance to projects that actively prevent deforestation, stimulate reforestation, and contribute to efficient sustainable value chains while reducing carbon emissions and improving rural livelihoods.
For further information, please contact:
Maria-Pia Kelly
[email protected]
GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a two-thirds on-demand credit guarantee to Axis Bank, one of the largest and most prominent private sector banks in India, to enable an INR 1 billion (c. USD 12.1 million), loan for over four years to Everest Fleet for the purchase of electric cars to be deployed as green taxis in India. The partial guarantee is provided under the USD 200 million INR equivalent framework guarantee agreement that GuarantCo and Axis bank signed in May 2022, which allows mobilisation of funds between USD 300 and 400 million in INR equivalent to finance the e-mobility ecosystem in India.
This is the second transaction closed in 2023 under the framework agreement after the INR 2.5 billion (c. USD 30 million) three-year loan to Vivriti Capital, an impact focused non-bank financial institution, earlier this month to support the company’s strategy to expand its portfolio through lending to companies operating in the e-mobility ecosystem in India.
Everest Fleet is India’s largest independent fleet management provider for the ride hailing platforms operating in the country. The transaction supports the company’s strategy to accelerate the use of electric vehicles, currently accounting for less than 1 percent of total vehicle sales in the country, to reduce emissions.
Through this transaction at least 1,000 drivers are expected to benefit which makes a direct contribution to SDG 11.2 (Provide access to safe, affordable, accessible and sustainable transport systems for all), SDG 11.6 (Reduce the adverse per capita environmental impact of cities) and SDG 13 (Take urgent action to combat climate change and its impacts).
Layth Al-Falaki, CEO at GuarantCo, said: “We are delighted to have closed the transaction with Everest Fleet under the framework guarantee agreement that we signed with Axis Bank in May 2022. This is the second transaction that we have closed under the Axis Bank agreement. It is expected to have a market transformation effect that we hope will help catalyse deployment of more electric vehicles by green ride hailing companies in India. We will continue to utilise the climate mitigation guarantee with Axis Bank to further the e-mobility ecosystem in India and to deliver against our climate action aims aligned with the PIDG 2030 strategy.”
Rajiv Anand, Deputy Managing Director at Axis Bank said: “Axis Bank is committed to driving the e-mobility revolution in India. By collaborating with GuarantCo, we aim to empower companies that are working towards fostering sustainable transportation solutions to combat climate change. Through this blended finance transaction, we have supported a service model and mobilised development capital. We are consistently striving not only to encourage communities to adopt electric vehicles but also catalysing progress towards a greener, cleaner future for all, echoing our commitment to the UN Sustainable Development Goals.”
Siddharth Ladsariya, Founder and CEO at Everest Fleet said, “As we embark on this transformative journey toward a greener future, Everest Fleet draws inspiration and motivation from the unwavering commitment and instrumental support provided by GuarantCo. We would like to thank Axis Bank for their support to form this long-term partnership with us, right from ideating, structuring to executing the transaction in a timely manner. Their strategic funding marks a pivotal moment in our mission to accelerate the adoption of electric vehicles in India’s ride-hailing landscape. This transaction not only fuels Everest Fleet’s growth but signifies a collective commitment to reducing emissions, fostering innovation, and pioneering positive change in the Indian mobility sector.”
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Dubai, United Arab Emirates: On the dedicated Finance Day of COP28, the Right Honourable Andrew Mitchell MP, Minister of State of the United Kingdom for Development and Africa, joined Kenyan government and stakeholder representatives in the UK Pavilion to celebrate progress on the newly incorporated Dhamana Guarantee Company Limited (Dhamana). The new guarantee company has been created to unlock local capital for sustainable infrastructure and projects that will advance climate change mitigation and adaptation efforts across East Africa.
Dhamana was established in Nairobi, Kenya, by InfraCo Africa, part of the Private Infrastructure Development Group (PIDG), and Cardano Development with support from FSD Africa. The company draws on the success of other PIDG-supported credit enhancement facilities, InfraCredit Nigeria and InfraZamin Pakistan, and recently received significant funding commitments from the African Development Bank (AfDB) and CPF Financial Services (CPF), who were represented alongside PIDG at the meeting with Mr Mitchell today in Dubai.
Mr Mitchell said, “As our recent white paper set out, the UK is committed to supporting countries that want to draw on their own resources to tackle climate change. This investment will provide the guarantees needed to enable Kenyan pension funds to fund climate resilient infrastructure in Kenya. It is fantastic to see that PIDG, Cardano Development and FSD Africa are collaborating with the Africa Development Bank and a Kenyan pension fund to deliver this new approach and demonstrate how African resources can be used to fund African development.”
Dhamana’s initial focus of operations will be in Kenya, a country which holds significant wealth in pension,[i] life insurance and private wealth funds. However, in Kenya, as for much of East Africa, cash-flow based investments and infrastructure projects are largely reliant on US dollar denominated bank loans. Such loans seldom have sufficient tenor length to ensure project success, and can expose borrowers to currency exchange risk, challenges which Dhamana’s local currency guarantees will serve to mitigate.
Dhamana CEO, Christopher Olobo, said, “The focus of COP28 is around the need to unite, act and deliver for climate action. Dhamana epitomises this ethos by bringing partners together to facilitate a step-change in how we finance East Africa’s development, accelerate access to climate-resilient infrastructure and achieve the UN SDGs. With the backing of our shareholders, Dhamana will strengthen local capital markets, connecting bankable projects with untapped pools of domestic institutional capital and ensuring that investors have the comfort they need to use their funds for positive change.”
InfraCo Africa’s CEO, Gilles Vaes, said, “We are extremely proud of the work undertaken by all parties to establish Dhamana, and to attract significant funding commitments which will enable it to deliver on its vision.”
Emphasising the significance of Dhamana for climate action, PIDG CEO, Philippe Valahu, said, “As part of the wider PIDG suite of credit enhancement facilities, Dhamana’s local currency guarantees will support the growth of local capital markets, unlocking domestic capital to underpin a thriving ecosystem for climate-resilient infrastructure and project development across East Africa.”
Joost Zuidberg, CEO Cardano Development enthusiastically stated, “The power of Dhamana lies in its ability to catalyse substantial investments from East Africa’s institutional capital, fortifying the bedrock for the sustained financing of the region’s burgeoning economic landscape. At the heart of Cardano Development lies our incubation and management of guarantee solutions for emerging and frontier markets, we are delighted to work alongside AfDB, County Pension Fund, InfraCo Africa, PIDG and FSDA on this innovation and together empower Dhamana with the essential support and capital required to realise this pivotal mission.”
Mark Napier, CEO FSD Africa said, “FSD Africa is committed to supporting local currency bond markets in Africa as well as local currency credit enhancement facilities as they play an important de-risking role. This role is pivotal in the mobilisation of climate finance from both local and international owners of capital to African economies that require different sources of capital to fund their green growth. FSD Africa is particularly pleased to provide seed funding for Dhamana Guarantee Company Limited’s Technical Assistance Facility which will provide project preparation and transaction support to potential issuers of innovative climate financing debt instruments, thereby increasing the pool of bankable climate-resilient projects in East Africa.”
Following the recent announcement of the African Development Bank’s Board approval for a US$10m equity investment into Dhamana, AfDB Vice President for Private Sector, Solomon Quaynor, said, “Dhamana’s credit enhancement offering aligns well with several of AfDB’s strategic objectives, including our commitment to stimulating local currency debt markets as a route to unlocking new sources of green and sustainable finance for the real sector and infrastructure development across East Africa.”
Dr. Hosea Kili, CEO of CPF concluded, saying, “CPF Financial Services is excited to be part of the investors in Dhamana, a new guarantee company to serve the East African region. Dhamana is envisioned to unlock local currency debt from untapped pools of capital in Kenya and the Easy Africa region, providing guarantees for local currency bonds invested in by East African pension funds, insurers, and other financial institutions. This guarantee fund will enable infrastructure and other sectors to raise more money locally in KES, without the borrowers suffering from KES-to-USD devaluation.”
[i] https://www.oecd.org/pensions/Pension-Funds-in-Figures-2020.pdf
AGRI3 has provided a 50% pari passu guarantee to Old Mutual Investment Group Limited in Malawi, in order to support a Malawi Kwacha 19.5bln (USD 12mln), 10 year loan for Gala Agriculture Co Ltd (GalaMacs). The loan will be used to support the company’s operations and expansion, supporting sustainable agricultural production, improved livelihoods and forest conservation on the farm. This represents the first transaction the fund has closed in Africa.
AGRI3 Fund and Old Mutual Investment Group Limited, a leading asset management business in Malawi with Asset Under Management of just under a billion dollars, this week closed a USD12mln deal to fund GalaMAcs, an export focused macadamia business in Malawi. The deal demonstrates that funding towards the agriculture sector can accelerate commercialisation at a large scale in Malawi and the right partnerships can adequately de-risk large scale sustainable farm expansion.
Malawi, located in the Southern African region, is heavily dependent on agriculture and is particularly vulnerable to climate related shocks. The agricultural sector employs 60% of the population and accounts for 30% of the GDP. The predominance of agriculture means the country is particularly vulnerable to commodity prices and agri-market volatility. Recent decline in tobacco sales and low cotton prices have seen a reduction in foreign exchange leading to shortages of other good such as oil and gas and imported foodstuffs. The country is also prone to droughts and other natural disasters (such as cyclones), which can affect crops and harvests.
The macadamia industry is relatively young in Malawi and developing at a rapid pace on the back of a growing global market, as well as being the preferred crop in migrating from tobacco production. It is primarily an export crop, which has growing global demand due to a number of lifestyle trends. The agriculture sector in Malawi is characterised by subsistence farming and therefore low productivity and limited cases of commercial scale and sustainable agriculture. Supporting sustainable agricultural production at a large commercial scale, with an export focus, will impact the economy through much needed foreign currency generation, the agriculture sector in advancing commercialised farming and the community with a web of activities that benefit surrounding communities, uplifting livelihoods. The impact demonstrates how the proposed investment amplifies activities at Gala beyond regular farming practices in Malawi.
GalaMacs is on course to become one of the leading farming operations in the region with 2,050ha of planted macadamia trees, offering significant economic and environmental benefits for the population. The loan from Old Mutual Investment Group (Malawi), supported by AGRI3, will be utilised to continue to support the expansion and ongoing operations of the existing farm. This includes restoring degraded land, which was previously used for tobacco, and supporting the scale up of sustainable production operations on the 2,050 ha of farm area using precision irrigation (1,400ha) and application of liquid fertilizers. The company is also trialling a range of innovative Integrated pest management and yield enhancement practices. The company will meet Global Gap certification for export and will also explore different sustainable certification schemes. The company further aims to restore and maintain a significant area, up to 3,000ha, of the land under native vegetation, with the potential to generate significant biodiversity and carbon mitigation benefits.
Critically for the country, the farm is expected to generate significant positive impact on rural livelihoods by providing employment and training support to workers on the farm. In addition, GalaMacs is in the process of developing a smallholder scheme, to provide farming opportunities for local communities, adding additional benefits for livelihoods and incomes.
“AGRI3 is very excited by the potential impact of this project. GalaMacs’ strong commitment to sustainability aligns well with AGRI3’s impact objectives and strategy. The transaction will not only allow AGRI3 to make its first investment in Africa, but also support a professional farm, which is not only aiming to improve productivity and create local jobs, but also implement a range of sustainability and livelihoods measures which will improve soil health, sequester carbon and benefit the local community.” Casper Havinga, AGRI3 investment Director
“GalaMacs, partnering with AGRI3 and Old Mutual Investment Group, has successfully concluded a long-term financing facility, that will have far reaching achievements for its operations, both now and in the future. This will contribute to the national economy by earning valuable foreign exchange and at the same time creating a high standard workplace for employees, whilst impacting the surrounding communities through responsible social governance.
GalaMacs through its vision, implemented strategies and practices in macadamia production, using modern agronomic techniques, by farming in a sustainable manner, protecting its fauna, flora and water resources through standards of environmental governance, has probably achieved the status of being the largest single macadamia operation in Africa. AGRI3 has played a pivotal role in assisting GalaMacs formulate its international profile. “ Chris Skordis, Chief Financial Officer GalaMacs
“This deal demonstrates how we can allocate capital towards projects that have a significant impact on key economic drivers such as agriculture, while speeding up the journey to commercialised farming. This project at Gala showcases that with the right partners we can diversify our export base while delivering solid returns to our customers and positively impacting the communities we operate in. As a responsible business, partnering with AGRI3 Fund has facilitated not only de-risking of the project but support towards sustainable farming, aligning with our responsible investment philosophy which is at the heart of how we operate” Mark Mikwamba, Managing Director Old Mutual Investment Group Malawi
About AGRI3 Fund
The AGRI3 Fund was created by the United Nations Environment Programme (UNEP) and Rabobank, together with partners IDH and FMO, the Dutch Entrepreneurial Development Bank, to support the transition to sustainable agriculture. The Ministry of Foreign Affairs of the Netherlands is a donor to AGRI3 Fund. FOUNT and Cardano Development are the Investment Advisors for the Fund. AGRI3 Fund aims to mobilise additional public and private capital globally and at scale. The Fund works with commercial banks, development finance institutions (DFIs), impact investors and institutional investors and provides credit enhancement tools and technical assistance to projects which actively prevent deforestation, stimulate reforestation, contribute to efficient sustainable agricultural production and value chains and reduce carbon emissions and improve rural livelihoods.
About Gala Agricultural Company Ltd
Gala is an agricultural entity focused on the production of macadamia nuts on 12 estates in the Namitete area, Lilongwe, Malawi. With over 2,050ha of planted orchards, Gala is on track to become the largest single macadamia company in Africa. The company has made considerable progress towards building a state-of-the-art, export-driven macadamia operation which is already delivering significant social, environmental and community benefits and contributing to the national economy through its foreign currency earnings. In 2021, Gala attracted equity funding from the Old Mutual Ulimi Trust Fund (Ulimi) to support Gala’s development path as a sustainable and responsible agribusiness. Ulimi is an agri-fund launched and managed by Old Mutual Investment Group and SIGNATURE Agri Investments which is dedicated to the development of sustainable agri and food value chains in Malawi.
About Old Mutual Investment Group Ltd Malawi
Old Mutual Investment Group (OMIG) is the leading fund manager in Malawi with assets under management sitting over USD1 billion as at October 2023. OMIG offers a wide range of investment solutions for both institutions as well as individuals. OMIG manages a comprehensive spread of investments across listed equity, interest bearing assets, property and alternative investments. It’s investment capabilities are managed by specialists in each field, who focus purely on delivering on their client mandates. OMIG is committed to growing customers wealth by delivering consistent strong returns. Investing responsibly for the long term, delivering strong returns while also contributing to the greater good is at the heart of OMIG’s strategy.
Today at COP28 the U.S. government, including USAID and the U.S. Presidential initiative Prosper Africa, announced its investment in a public-private partnership to create the Green Guarantee Company (GGC), the first ever privately run guarantee company devoted to catalyzing green bonds and loans in partner countries, focusing on Africa, Asia, and Latin America.
Subject to final documentation, the United States – through USAID, the State Department, and Prosper Africa – alongside the UK’s Foreign Commonwealth and Development Office, the Green Climate Fund, Norfund, and the Nigerian Sovereign Investment Authority, intend to contribute to GGC’s initial balance sheet of $100 million. With that $100 million balance sheet, the Green Guarantee Company will unlock an estimated $1 billion in new mainstream private capital for climate finance by 2024.
The United States provided $5 million in technical assistance through USAID’s EDGE Fund, $3 million in seed funding from Prosper Africa, and $2 million from the State Department, to help establish the world’s first credit guarantor dedicated to climate solutions in developing countries. The GGC will assume the financial risk associated with green bonds and loans to systematically de-risk and effectively catalyze scale-level private investments in climate solutions. By taking a blended finance approach – combining donor funding and private capital – the U.S. government is delivering innovative approaches to mobilizing and localizing greater private investments to fund climate projects.
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Source: www.usaid.gov
