Thursday, October 27, 2011
WASHINGTON, D.C. – Impact investing, a fast-growing industry that is drawing a wide range of private investors with the promise of delivering social and environmental benefits to emerging markets while at the same time generating profits, was given an historic boost today. The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, approved financing for six new investment funds that aim to inject $875 million into the sector.

OPIC will provide financing up to $285 million to equity funds that should raise more than $875 million, representing the largest commitment by the U.S. Government to impact investing in emerging markets to date. The selected equity funds were drawn from a record 88 responses to OPIC’s call for impact investing proposals in March, a response so positive that OPIC expects to announce additional approved facilities in 2012.

“This is a watershed day in the evolution of impact investing,” said OPIC President and CEO Elizabeth Littlefield. “These new funds, and the additional investment facilities we announce in 2012, will help to fill financing gaps and introduce more innovation into the impact investing space, helping it grow and mature.”

The funds approved today are a diverse group of financing vehicles that will invest in emerging market projects that improve lives, create employment, enhance health care, protect forests and address climate change.

“Each of them promises a strong development impact —be it mobile banking for the unbanked, investing in small businesses in the post-conflict countries of Liberia and Sierra Leone, improved health care in Africa, preservation of highly vulnerable forests, or growing small businesses in Mexico. OPIC has a long history of investing for both social and financial returns and we believe impact investing will gain significant traction in the coming years. We are proud to support its development,” Ms. Littlefield said. 

The six funds approved by the Board were:

Investment Fund for Health in Africa II (IFHA II)

This private equity fund will invest in companies that improve the health situation for low and middle-income African citizens, primarily in Africa. It expects to target investments in companies that operate in small and medium-sized hospitals and clinics, healthcare products import, distribution and manufacturing, insurance and supporting industries such as water and sanitation, food and nutrition, education and environmental services.

OPIC selected as fund manager Africa Health Systems Management Company B.V.

OPIC financing: $83 million
Target capitalization: $250 million


Latin Idea

This Fund will provide growth capital to Mexican SMEs within the technology, media, telecommunications and services sectors; SMEs are important engines of employment creation and economic growth but typically face a severe shortage of capital in developing countries.

OPIC selected as fund manager Latin Idea Ventures III LLC.

OPIC financing: $25 million
Target capitalization: $125 million


ManoCap

This fund will invest in SMEs in Sierra Leone and Liberia, as well as other West African countries, with a focus on post-conflict nations. It will invest in a broad range of sectors including agriculture, agro-processing, sustainable fisheries, services, healthcare, sanitation, construction and building materials, tourism, light manufacturing, and financial services. These SMEs are expected to have a direct effect on the standard of living of base-of-the-pyramid communities by providing employment and access to goods and services. 

OPIC selected as fund manager ManoCap LLC.

OPIC financing: $34 million
Target capitalization: $100 million


MPOWER Ventures

This fund will focus on unbanked and the under-banked populations in emerging markets through the provision of prepaid debit cards, or GPR cards, and related alternative financial services.  It will initially focus on Mexico, Brazil, Colombia, Peru and Bolivia.

OPIC selected as fund manager MPOWER Ventures III L.P.

OPIC financing: $15 million
Target capitalization: $50 million


Sarona

This fund-of-funds will invest in 12-18 private equity funds that target market based returns while investing in SMEs in frontier markets, which are expected to contribute employment, wealth creation, and access to goods and services to underserved populations. 

OPIC selected as fund manager Sarona Asset Management, Inc.

OPIC financing: $87.5 million
Target capitalization: $250 million


Terra Bella

This private equity fund will invest in projects that generate carbon credits through the protection and enhancement of forests while simultaneously generating valuable social and environment co-benefits.  Terra Bella will generate returns through the sale of carbon on the growing voluntary, compliance and pre-compliance markets that are emerging in the forest and land-use carbon sector.

OPIC selected as fund manager Terra Global Investment Management LLC.

OPIC financing: $40 million
Target capitalization: $100 million