Recently, Global impact firm Palladium announced the unveiling of its new investment initiative, the Palladium Impact Fund I following the design of the world’s largest development impact bond.
The USD 40 Mn scheme, USD 35 Mn of which will be raised externally, is being set aside to invest in Small and Medium-sized Enterprises (SMEs) in emerging markets, with a focus on agribusiness value chains and Sub-Saharan off-grid renewable energy.
The fund has already made two significant investments, even before the launch was announced. The first is a woman-owned shea nut harvesting business in Ghana known as Naasakle, and the second is a popular clean energy company called PEG Africa.
While the former, in its fifth year is planning to take operations to the United States, the latter previously has raised USD 50 Mn in total after raising USD 25 Mn in Series C in March 2019. According to an official statement, Palladium has ten more investments under due diligence.
The new fund also has something in store for African women. Applying the gender lens approach, it prioritizes benefits to women via economic empowerment and opportunities.
“For this first fund, we’ve chosen to invest in empowering African women,” explains Andrew Tillery, head of Palladium Impact Investments. “Women perform the majority of agricultural activities, own a third of all firms, and are key to the welfare of their families.”
60 percent of 3,500 full-time jobs created by this impact investment will be for women. This is while it aims to alleviate poverty and economically empower more than 500,000 rural households in Africa.
These figures and goals tell that impact investing has become a strong trend in recent times, especially as the funding gap in most regions seems to not be getting any narrower – a USD 2.5 Tn deficit. Sweden’s Norrsken is one of the newest impact investors in the continent, after launching a hub in Rwanda June this year.
Palladium CEO Christopher Hirst believes that after three years of direct investing, now is the time to channel others’ capital to deliver the same impact – and the same returns.
“We’re ideally placed to use our extensive international development work and global reach to source ideas for potential, credible investment opportunities,” he says. “Ultimately, we want to transform how development is financed, bridging the gap between aid and investing.”
Image Courtesy: World of EWB