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Introducing the eco.business fund

CIFOR-ICRAF
Dec. 15, 2015
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Introducing the eco.business fund

  1. Insert picture 12/15/15 1 Introducing the eco.business Fund Mainstreaming Green Finance
  2. 12/15/15 2 Mission The eco.business Fund’s mission is to promote business practices that contribute to biodiversity conservation and the sustainable use of natural resources through the provision of dedicated financing and technical assistance.
  3. 3 Geographic and Sector Focus Initial countries of focus Additional eligible countries Agriculture and agri-processing Fishery and aquaculture Forestry Eco-tourism
  4. 12/15/15 4 Who is behind eco.business? A Group of Like-Minded Stakeholders Committed to a Green Economy Initiator, concept development, implementation First loss protection, TA sponsoring First loss protection, TA sponsoring Environment specialists, experience with green finance Professional impact fund management services Early private sector investor
  5. 12/15/15 5 How Does it Work? An Efficient Vehicle for Developing Green Finance Funding Private Investors Private Investors IFIs/DFIs Donors Developmen t FacilitySponsoring Technical Assistance Dedicated financing Direct investments Target GroupLocal Partner Institutions
  6. Risk cushion provided by subordinated tranches 70% 20% 40% 12/15/15 6 How Can You Participate? The Fund Issues Different Capital Tranches for Each Investor’s Profile Junior Shares Senior Shares Senior Notes SubordinationWaterfall IncomeWaterfall Private Investors Development finance institutions Donors Sub-Notes Loan
  7. 12/15/15 7 I. Mobilize private capital for conservation matters II. Leverage local partner networks (e.g. local financial institutions) III. Leverage existing certification standards for sustainable production and connect them with the financial sector IV. Invest in high-impact projects/businesses to spur innovation and generate spill-over effects V. Deepen the impact of investments through technical assistance Scale (5x leverage of donor resources) Systemic change Innovation and greater impact What are the Expected Benefits?
  8. 12/15/15 8 What are the Hurdles for Attracting Private Investors? …And how to address them! • Significant first-loss cushion from donors and IFIs • Premium public investors • Best practices of good corporate governance • Manager’s track-record Risk Perception of “unknown” asset class • Fixed-income Senior Notes • Implicit subsidy through below market priced Junior Shares Level of Returns • No daily liquidity • Platform structure facilitates early exit solutions Liquidity and early exit options • Regulatory classification of the Fund’s financial instruments may represent a challenge in some jurisdictions and for certain institutional investors Regulatory classification
  9. Launch MediumTerm LongTerm Private IFI Public Funding: 12/15/15 9 Fund Development Tranches Structure is Ideal for Phasing Public/Private Investors over Time Risk Track Record Granularity Economies of Scale
  10. 12/15/15 10 About Finance in Motion EFSE SANAD GGF eco.business Arbaro (in pre- marketing) Topic Microfinance MSME finance Green Energy Green finance Sustainable forestry Geography Southeast Europe, Caucasus Turkey Middle-east and north-Africa Southeast Europe, Caucasus Turkey Latin America and the Caribbean Latin America and Sub-Saharan Africa Committed capital EUR 1,023 m USD 129 m EUR 359 m USD 28 m n.a. Initiators and donors Initiated by KfW, anchor donors include EU, BMZ Initiated by KfW, anchor donors include EU, BMZ Initiated by KfW, EIB, anchor donors include EU, BMZ Initiated by KfW, FiM and CI. Anchor donors are EU, BMZ Anchor investor EIB Instruments Refinancing banks, MFIs, NBFIs with debt and hybrid capital Refinancing banks, MFIs, NBFIs with debt, hybrid capital, local currency. Equity investments. Refinancing banks for EE/RE. Project financing as debt/mezzanine. Refinancing banks, MFIs, NBFIs for sustainable businesses. Direct financing for sustainable businesses/projects Equity Over the past 10 years, 553.2 m EUR mobilized from private investors
  11. 12/15/15 11 Thank you for your attention! Sylvia Wisniwski Managing Director at Finance in Motion Phone: +49 69 271035150 E-Mail: s.wisniwski@finance-in-motion.com

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