Fund receives $67 million from BMZ and KfW to support sustainable practices in sub-Saharan Africa and Latin America
15-03-2023 08:17:48 | by: Bob Koigi | hits: 4529 | Tags:

The Fund has received investments for an aggregate amount of USD 67 million from its strategic partners, the German Federal Ministry of Economic Cooperation and Development (BMZ), acting through KfW Development Bank (KfW), and KfW on its own behalf.

The BMZ via KfW contributed Junior Shares in the amount of USD 16.0 million to the sub-fund for Latin America and the Caribbean, USD 24.4 million to the sub-fund for sub-Saharan Africa, and a donation of USD 2.1 million to fund’s Development Facility in Latin America and the Caribbean. KfW invested Senior Shares to the sub-fund for Latin America and the Caribbean in the amount of USD 25.0 million.

The BMZ, the KfW and Fund have joined forces for positive environmental impact since the fund’s establishment in 2014. The fund employs a blended finance structure to mobilize private investments for sustainable development by leveraging capital from impact-oriented public entities such as the BMZ and KfW.

The new investments will contribute to the fund’s delivery on its mission of promoting business and consumption practices that contribute to biodiversity conservation, to the sustainable use of natural resources and to mitigate climate change and adapt to its impacts, in Latin America, the Caribbean, and in sub-Saharan Africa. The contribution from the BMZ for the fund’s Development Facility in Latin America will further augment the impact of the fund’s investments through technical assistance.

In 2022, the Fund had assets under management of around USD 745 million across both sub-funds. It reported a contribution of over 1.020.000 hectares of farmland under sustainable management, and 36 million tons of CO2 stored by agroforestry activities as of 30th June 2022. 

The Latin American and the Caribbean sub-fund has generated positive environmental impact in the region for more than eight years, while the sub-Saharan Africa sub-fund has put into practice since more than 3 years a special focus on investments in forest and landscape restoration projects that boost ecosystem function while supporting sustainable agricultural value chains.

Michael Evers, Chairperson of the Board of Directors of the Fund, stated: “We are honored by this renewed investment in the Fund, and grateful for the long-term partnership with BMZ and KFW. The continuous support is a testament to the fund’s track record of conserving biodiversity and protecting ecosystems against climate change in Latin America, the Caribbean and in sub-Saharan Africa. This latest capital boost will support business and consumption practices that contribute to biodiversity conservation.”

Alexandra Albin, Head of Division Equity and Regional Funds in KfW stated: “The Fund makes a major contribution to alleviating the pressure on nature and containing the consequences of intensive agriculture, deforestation and uncontrolled fishing. The innovative fund structure also leverages private capital for sustainable production practices.