The Althelia Biodiversity Fund and SITAWI’s Crowdlending Platform, both members of the Partnership Platform for the Amazon (PPA), have won prizes in the specialized media Environmental Finance IMPACT 2020 Awards. Althelia Biodiversity Fund received the Fund of the Year award in the multi-asset category, while SITAWI received the Impact Initiative of the Year - Latin America and Caribbean.
In its first edition, the awards seek to recognize and reward the work of impact investors everywhere and highlight emerging pockets of best practice, across all asset classes and the world. There are a total of 42 categories, with winners chosen by a panel of 12 judges based on information from April 1st 2019 to May 31st 2020.
“I would like to congratulate both Althelia and SITAWI for their IMPACT Awards. We are very proud and honored to have supported these initiatives, and it is telling that they are both proposals that focus on the Amazon and showcase the excellent work that has been done and supported by USAID,” said Anna Toness, USAID Brazil Environment Director.
Fund of the Year
Launched in 2019, the Althelia Biodiversity Fund (ABF) is an impact investment fund (Fundo de Investimento em Participações - FIP), with Mirova Natural Capital as the investment advisor operating under its brand name, Althelia Funds, and Vox Capital as the fund administrator. The term of the fund is 11 years, with the first five years as the investing period. ABF Brazil intends to raise $100 million, largely in private capital. The fund manager has already structured three investments and the other 10 are in development.
The fund was co-designed by USAID Brazil, Alliance of Bioversity-CIAT, and other PPA partners. During co-design, USAID provided recommendations on the fund’s environmental, social, and governance policies, and its impact approach, which is aligned with USAID’s Biodiversity Policy.
Using its Development Credit Authority, USAID provided a 50 percent loan guarantee, helping reduce risk for the fund. In addition, USAID provided a $15 million grant to CIAT to further biodiversity conservation and sustainable development goals in the Brazilian Amazon and learn from innovative blended-finance models. Given the closely aligned goals of the fund, CIAT invested $15 million in ABF, becoming its cornerstone investor.
The fund intends to address inherent financial challenges by providing flexible, long-term, patient capital for sustainable businesses that seek transformational, positive impact on Amazon biodiversity and communities. ABF has already offered letters of interest to invest in sustainable startups that are or have been accelerated by PPA’s Acceleration Program.
SITAWI’s Crowdlending Platform won in the Impact Initiative category. So far, they have conducted three rounds of crowdlending that have mobilized $5.6 million Brazilian real from 326 individuals that have invested in 12 businesses with positive impact. The initiative aims to foster private capital investment in organizations in line with the United Nations Sustainable Development Goals.
It combines collective loans from individual investors with larger, traditional co-investor. It is a first of its kind initiative in Brazil, and allows individuals to invest their own capital, starting at R$1,000 and receive an estimated 7.15 percent in return on that investment during the third round, as well as the knowledge that their investment is making social and environmental impacts in Brazil.
The second round, conducted in the beginning of 2020, focused on the Brazilian Amazon, partnered with the PPA and selected businesses from the PPA Acceleration Program. The PPA also invested in the second round, with the backing of USAID Brazil, the Alliance of Bioversity-CIAT and Humanize Institute.
Over R$3.3 million was mobilized for five sustainable businesses in the Amazon that generate income for indigenous, quilombola and other traditional communities. While the first round took 58 days to mobilize R$1.5 million amount, the Amazon round mobillized all of its targeted financing in 48 hours. The third round mobilized its target financing in under two hours, and both of these rounds had waiting lists for individual investors, demonstrating the success of this innovative model.
This story originally appeared on the Partnership for the Conservation of Amazon Biodiversity hub.