January 22, 2020

By Lynda Kiernan

A  coalition of both public and private partners, including the UN Capital Development Fund, the International Trade Centre, the International Fund for Agricultural Development (IFAD), CARE, Smart Africa, Stop TB Partnership, and Bamboo Capital Partners, has launched SDG500 – a first-of-its-kind $500 million investment platform with the goal of mobilizing investments to achieve the UN’s Sustainable Development Goals (SDGs).

Announced at the World Economic Forum in Davos, Switzerland, the SDG500 will be managed by Luxembourg-based private equity firm Bamboo Capital Partners. It will use debt and equity to make hundreds of Seed, Series A, and Series B investments in the agriculture, finance, energy, education, and healthcare sectors of  emerging and frontier markets.

Under the umbrella of the SDG500 Fund will be six underlying funds:

The ABC Fund – an impact investment fund targeting smallholder farmers and SMEs in developing countries. This fund recently made its maiden investment in Socak Katana, a cocoa cooperative in Côte d’Ivoire.

BUILD – a fixed income fund targeting early stage enterprises in the Least Developed Countries

CARE SheTrades Fund – a gender-lens fund which will use debt and equity for investments throughout Asia. 

BLOC SmartAfrica and BLOC Latin America – two venture capital funds targeting investment opportunities in tech enterprises in Africa, Latin America, and the Caribbean. 

And HEAL – a venture capital fund investing in health-focused businesses in emerging and frontier markets. 

Each of these funds will include a catalytic first loss layer designed to protect and encourage senior tranches of funding. The first sponsors of the catalytic layers of the SDG500 include the EU; the Alliance for a Green Revolution in Africa; the African, Caribbean, and Pacific Group of States; the Governments of Luxembourg, which have committed funding to the first loss layer of the ABC Fund; and the governments of Togo and Tunisia, which have committed to the first loss layer of the BLOC SmartAfrica Fund; and CARE, which has committed to the first loss layer of the CARE SheTrade Fund.

This funding allocated through these vehicles, which will be allocated to regions worst affected by climate change, has an underlying mandate to make investments that will address the “missing middle” financing gap equal to US$2.5 trillion per year affecting entrepreneurs across Africa, Asia, Latin America, and the Caribbean and Pacific regions, where this lack of follow-on financing hinders growth and advancement, as has been outlined in a report from the UN in October 2019.

“The launch of SDG500 is a unique milestone for the impact investing industry,” said Jean-Philippe de Schrevel, founder and managing partner at Bamboo Capital. “ We have never seen a coalition from the private and public sector come together to achieve the SDGs on this scale before. 

“The missing middle financing gap is real, and it is suffocating early-stage enterprises which have the potential to transform some of the world’s poorest and most underdeveloped regions,” continued de Schrevel. “We believe that by working together to finance and scale these businesses, we can achieve the SDGs and take another step closer to a better, more sustainable future for all.”

What has also been missing from SDG support has been private capital, which has been slow to be allocated and often pigeon-holed into low risk ventures, despite evidence of the benefits outlined by the International trade Centre.

Image: OECD

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.