A new impact investing fund taking care of our natural resources for future generations!
Dec 27, 2016
This month, the MIF Donors Committee approved an investment of an investment of US$5 MM to Ecoenterprise Biodiversity Fund. Through this project, the MIF intends to support the Nagoya Protocol, a key element to the United Nations Convention on Biological Diversity. The intended result of the project is to provide growth financing to up to 18 sustainable and biodiversity-focused companies by helping them to grow, consolidate their business, and scale their operations and impact results.
EcoEnterprises Biodiversity, the first fund in this niche, targeted to be an US$80mm investment fund, will offer tailored growth capital to compelling innovative business models whose success relies on: (i) creating long-term livelihoods by increasing productivity and facilitating resilience in rural communities, while encouraging sustainable use and conservation of natural resources; (ii) preserving vulnerable ecosystems and biodiverse working landscapes, and (iii) mitigating climate risks with special attention to fair economic benefits to local value chains.
The Fund will target biodiversity-focused companies with an initial capital requirement between US$2mm and US$6mm, established revenue streams, a market-validated product offering, and a proven business model. The Fund will help those companies scale, offering flexible growth capital tailored to their specific needs, using the following instruments: Mezzanine structures with quasi‐equity upsides (royalty streams, warrants, convertible notes), equity and senior, subordinated and/or other tailored debt.
The businesses will be in countries in the region that have identified Access and Benefit Sharing (ABS) on genetic resources related to biodiversity as a national priority. The Project will help to preserve natural resources and to create the conditions necessary for sustainable and inclusive economic growth and prosperity. The target sectors include: sustainable agriculture (including apiculture, aquaculture and water), agroforestry and wild-harvested products, sustainable forestry, ecotourism, and emerging opportunities, such as those that monetize environmental benefits and/or utilize technology for impact, and/or capitalize on emerging demand for sustainable products.
The projects’ objectives not only align with the MIF’s Climate-Smart Agriculture (CSA) Pillar, but also with the broader set of Sustainable Development Goals that are designed to protect our planet for future generations. The Sustainable Development Goal that best reflects the need to enhance activities like those reached by this proposed Project is Goal 2 to end hunger, achieve food security and improved nutrition and promote sustainable agriculture by improving agricultural productivity and incomes of small-scale food producers, and by implementing resilient agricultural practices that help maintain ecosystems, adapt to the effects of climate change and progressively improve land and soil quality.
Finally, EcoEnterprise Biodiveristy Fund is advised to launch a support program aimed at the identification and implementation of climate change adaptation measures for the small growers that supply raw materials to portfolio companies in the agroindustry sector. We are pleased to see soon the social and environmental impact of this fund.