Leveraging the proceeds from the catalytic funding, Acre Impact Capital will launch a series of private debt impact investment funds focused on infrastructure sectors such as healthcare, education, social housing, transport, renewable power, agriculture, water & sanitation, waste management, climate adaptation and technology / digital infrastructure. By investing alongside long-established export credit agencies (ECAs), the funds will address a key financing gap in the market, unlocking transactions and mobilising up to USD 5.6 of capital for each dollar invested. The funds aim to achieve risk-adjusted market-rate returns, while minimising the risks often associated with developing infrastructure in emerging markets.
By originating transactions which are aligned with PIDG and GuarantCo’s development impact goals, Acre Impact Capital will allow ECAs to operate in support of the UN Sustainable Development Goals, while encouraging trade and job creation in their home countries. ECA finance is mostly arranged by a few international banks. Acre Impact Capital will support the ability of local banks in Africa to operate in the export finance market, partnering and providing hard currency funding where needed. For borrowers seeking to manage foreign exchange risk, Acre Impact Capital will open opportunities for local currency co-finance which will be supported by GuarantCo, including GuarantCo’s tenor extension guarantees.
Lasitha Perera, CEO of GuarantCo, said: “This transaction is a great example of complementary public sector and philanthropic partnership joining forces to work together towards a common goal and where blended finance can mobilise commercial sources of finance to support the SDGs. It demonstrates the strength of the PIDG group working closely together with The Rockefeller Foundation in order to deliver essential infrastructure to drive economic growth and sustainably build a more prosperous future for people in Africa who need it most.”
Maria Kozloski, Senior Vice President of Innovative Finance at The Rockefeller Foundation, said: “We are excited about the potential of Acre Impact Capital’s high impact and innovative strategy, which leverages the ECA market to mobilise largescale capital and address the huge financing gap for emerging market infrastructure.”
Emilio Cattaneo, Director of PIDG Technical Assistance, said: “We are delighted to have been associated with the Acre Impact Capital project since its inception and to have supported the team in the development of such an innovative concept together with our friends at The Rockefeller Foundation. Through the use of PIDG Technical Assistance funding, we are proud to have been able to contribute to the initial capital required to enable Acre Impact Capital to be launched which demonstrates the power of strong partnerships and collaboration in delivering sustainable infrastructure in the countries where we can make a real difference.”
Hussein Sefian, Founding Partner of Acre Impact Capital, said: “We are thrilled to enter into a long-term partnership with aligned investors such as The Rockefeller Foundation and the Private Infrastructure Development Group, through GuarantCo, to advance Acre Impact Capital’s mission to provide access to essential services to underserved communities and contribute to reducing the infrastructure financing gap in Africa which is estimated to be over USD 100 billion a year. Our Export Finance funds will provide institutional and impact investors with exposure to a new asset class – export finance loans – while promoting the financing of sustainable and socially impactful infrastructure.”
This article was originally published on guarantco.com on 12 January 2021.