German development bank Kreditanstalt für Wiederaufbau (KfW) recently funded the InsuResilience Investment Fund Private Equity II (IIF PE II) to invest in firms helping people in Africa, Asia and Latin America to manage climate risks. In particular, the fund targets “companies that are able to disrupt, scale and improve the resilience of populations and small businesses in emerging markets to extreme weather events and natural catastrophes.” The investment by KfW serves to de-risk private investments into IIF PE II, of which several are pending. The fund has a target size of USD 100 million and is managed by BlueOrchard Finance, a member of UK-based Schroders Group. Like IIF PE I, its successor will provide technical assistance as well as liquidity to its investees.
IIF PE I, which launched in 2017 and closed in 2020, completed its nine disbursements – totaling USD 80 million in public and private investment – in early 2022. Both funds are initiatives of the G20 InsuResilience Global Partnership (IGP), an alliance focused on protecting individuals in “developing countries against the impacts of climate change.”
KfW was founded in 1948 and is owned by the federal and local governments of Germany. As of December 2020, KfW held EUR 546 billion (USD 615 billion) in total assets and EUR 424 billion (USD 477 billion) in net loans and advances.
Founded in 2001, BlueOrchard’s goal is “generating lasting positive impact for communities and the environment, while aiming at providing attractive returns to investors.” As of March 2022, BlueOrchard has disbursed USD 8 billion in private debt. Of the clients served by BlueOrchard’s investees, 80 percent are women, two thirds live in rural areas and 130,000 are students and educational institutions.
Founded in 1804, UK-based asset manager Schroders is a publicly traded firm with operations in 32 countries. As of 2021, it reports assets valued at GBP 732 billion (USD 991 billion).
By Nithin Naren, Research Associate
Sources and Additional Resources
BlueOrchard press release
https://www.blueorchard.com/kfw-and-blueorchard-expand-climate-insurance-partnership-launch-insuresilience-investment-fund-private-equity-ii/
InsuResilience Investment Fund homepage
https://www.insuresilienceinvestment.fund
KfW homepage
https://www.kfw-entwicklungsbank.de
IGP homepage
https://www.insuresilience.org/
Schroeder homepage
https://www.schroders.com/
Previous MicroCapital article on KfW
https://www.microcapital.org/microcapital-brief-verdant-capital-hybrid-fund-closes-with-34m-from-kfw-to-invest-in-microfinance-sme-lenders-in-africa/
Previous MicroCapital article on BlueOrchard
https://www.microcapital.org/microcapital-brief-blueorchard-launches-2nd-private-equity-fund-seeking-to-invest-300m-in-financial-inclusion-of-30m-poor-households-msmes/
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