ImpactAlpha, 15 Mar 2018: https://goo.gl/Xua1Q3
Convergence design grants help fund managers mobilise private capital with public and philanthropic funding
To get to the trillions needed to bridge the gap in funding for the Sustainable Development Goals, you first need to get to the billions. Early efforts to do just that are showing promise.
A tally last year put total funds mobilised by 187 blended finance deals since the early eighties at $51 billion. New innovative finance schemes are also notching impressive tallies.
Last month, the Tropical Landscapes Financing Facility, designed originally by ADM Capital and the ADM Capital Foundation, closed $95 million from institutional investors to finance the sustainable production of rubber in Indonesia.
The grant for the design of TLFF came from Convergence, the Toronto-based blended finance platform, which has provided $5 million in funding for the design of 15 such blended finance vehicles. Three of the projects have now raised a total of $116 million. The goal of each is to drive large-scale private capital toward the global goals by leveraging public and philanthropic funding.
Palladium, which also received a Convergence design grant, raised $9 million for its Utkrisht impact bond, which will provide maternal and newborn health interventions for 600,000 women over three years in Rajasthan, India.
Alina Vision, another Convergence grantee, raised $12 million in equity and grant funds from Australian-based Fred Hollows Foundation and Japanese pharmaceuticals company Rohto to build a network of 60 affordable eye care hospitals. Funding for the Convergence design grants comes from the Canadian government.
A recent commitment from the Green Climate Fund for the expansion of Energy Savings Insurance in Latin America pushed capital mobilised by the 25 climate-action investment vehicles launched by the Climate Finance Lab past the $1 billion mark.
Initiative 20x20, a country-led effort to restore 20 million hectares of land in Latin America and the Caribbean by 2020, has secured more than $2 billion in private investor commitments.
The Rockefeller Foundation, through its “Zero Gap” portfolio, is on the hunt for SDG unicorns, innovative financial structures that can mobilise at least $1 billion each for sectors key to meeting the Sustainable Development Goals. It has funded the design and testing, as well as the sharing, of more than 30 new financial structures, including the Extreme Climate Facility and Land Degradation Neutrality Fund, which have each mobilised more than $300 million climate solutions.