The eco.business Fund was established in 2014 by KfW Development Bank on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) of Germany together with Conservation International and Finance in Motion.
The fund aims to promote 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 sub-Saharan Africa. The eco.business Fund targets investments in agriculture and agri-processing, fishing and aquaculture, forestry, and sustainable tourism.
The eco.business Fund leverages the power of blended finance to amplify its impact and outreach via two separate sub-funds in i) Latin America, and the Caribbean, and ii) sub-Saharan Africa. In other words, the fund draws its capital from various layers: an initial base of public investors and donors provides a risk cushion to unleash the financial clout of private institutional investors. The fund then invests this money either via intermediaries committed to promoting green finance or directly in businesses that pursue sustainable production and consumption.
In addition, fund beneficiaries – whether intermediaries or directly funded businesses – can access technical assistance provided by the respective eco.business Development Facility. In all cases, the fund provides debt financing.
Operating alongside the fund’s investment activities are the eco.business Development Facility for Latin America and the Caribbean and the Development Facility for sub-Saharan Africa. Both Facilities work to maximize and deepen the impact of the fund in their respective regions. They support financial partner institutions, companies and producers through a broad array of tailored technical assistance projects designed to promote the adoption of sustainable business practices.
Financing Instrument: Loans, Bonds and Technical Assistance
Recipient countries regions/country groups: Countries and territories in Latin America, the Caribbean, sub-Saharan Africa on the DAC list eligible to receive official development assistance (ODA).
Recipient categories: Businesses and financial institutions
The eco.business Fund provides financing through three avenues:
- It invests in local financial institutions that are committed to the fund’s mission and which have the capacity to reach its target group. Acting through these local financial intermediaries has systemic benefits, such as creating larger scale and efficiency through the use of local finance infrastructure. It also helps make biodiversity finance a mainstream product by facilitating access to green finance for end borrowers through local financial institutions.
- The eco.business Fund also lends resources directly to its target group – that is, businesses that implement sustainable practices and are aligned with the fund’s mission. These investments can have a demonstrative effect on the entire sector so that financed measures are more likely to be implemented in the future by other players in the sector.
- In the case of sub-Saharan Africa, the sub-fund also provides financing to real-sector intermediaries, such as commodity buyers or aggregators that have made credible sustainable sourcing commitments.
Investees receiving eco.business Fund financing must:
- hold an eligible sustainability standard or
- implement either one of the practices outlined in the “Green List” or
- support a practice fully aligned with the fund’s mission.
In its role as Advisor to the eco.business Fund, Finance in Motion provides investment management services to the eco.business Fund’s Board of Directors and Investment Committees. The task of these bodies is to direct the fund’s investment decisions, objectives and policies. Finance in Motion furthermore supplies risk management, technical assistance, impact management, transaction management, reporting, and other fund services to the eco.business Fund. For general inquiries, contact email@example.com
Last updated: 30 August 2023