Blended Finance

Beth Collins, Managing Director, Impact Investing Catholic Relief Services FaithInvest: Impactful Cooperation January 17, 2020

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Transformational Change at Scale

In over 110 Countries / 7,000

Staff / 1,500 Partners

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CRS Impact Investing Goals

Provide Overall Guidance, Technical Advice and Capacity Building for CRS Staff on Private Sector Engagement

Grow % of Reserve Invested in Impact Funds

Influence through advocacy and partnerships, Vatican engagement

Lead expansion of investment vehicles, program-aligned investments and deployment of innovative financing mechanisms

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Blended finance is defined "as the strategic use of development finance and philanthropic funds to

mobilize impact investing / private capital to emerging and frontier markets", resulting in positive results for

both investors and communities

Needs are Huge – Private Capital is Essential

The UN estimates that $5-7 trillion is needed annually to achieve the Sustainable Development

Goals (SDGs) by 2030.

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Approximately $145 billion of official development assistance (ODA) was provided in 2017.

Reaching the SDGS will require new capital and mechanisms to help close the gap.

Local Businesses Provide Essential Resources to Communities

• Every nine out of ten jobs in the developing world are created by the

private sector, especially, micro- and small businesses

• Local businesses continue functioning after donor-funded programs end

• Increasingly, private capital is available to support business growth

– 70% of global output growth came from developing economies in 2010-15

– Consumer spending growth estimated to be 3x faster than developed markets until 2030

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Goods / products Services Markets Incomes / jobs

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Integrated Solutions are Essential

Humanity is faced not “with two separate

crises, one environmental and the other

social, but rather one complex crisis which

is both social and environmental.

Strategies for a solution demand an

integrated approach to combating poverty,

restoring dignity to the excluded, and at

the same time protecting nature.”

– Laudato Si, Section 139

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Climate Impact on People

The way climate change affects the various aspects of food security (food availability,

access, utilization and stability) are complex.

increase in the frequency and intensity of extreme climatic events such as

heatwaves, droughts, storms, cyclones, hurricanes and floods;

decrease in the availability of freshwater resources;

impacts of temperature increase and water scarcity on plant or animal physiology;

rise in sea-level and flooding of coastal lands, leading to salinization and/or

contamination of water, agricultural lands and food;

water and food hygiene and sanitation problems;

changes in plant and livestock diseases and pest species and

damage to forestry, livestock, fisheries & aquaculture

Source: CGIAR Big Facts on Climate Change, Agriculture & Food Security (CCAFS)

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Video

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Provide a reliable supply of safe water and sanitation services to under-served urban and rural households in Latin America (and beyond)

MISSION

Mobilize technical support and financial capital for Water Service Providers to upgrade and expand water and sanitation services in under-served communities

VALUE PROPOSITION

A SOCIAL ENTERPRISE MODEL TO DELIVER SUSTAINABLE WATER AND SANITATION SERVICES

Technical services help unlock financial capital and enable WSPs to effectively manage water and sanitation services

Blended Finance Solution Led by CRS

ATS - Philanthropy

ASC - Investment

Blended Finance

– impact!

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Azure

CRSBIDLab

LocalFinancial

Institutions

TOTAL

ImpactInvestors

OPIC

LocalTAProviders

(Azure S.A.)

CRS Established in 1943, reaching

over 130 million people across

110 countries and deploying

nearly $1B annually, with 60

years experience in Latin

America and the Caribbean.

IDB Lab IDB Group is the leading source

of development finance for

Latin America and the

Caribbean having worked in the

region for 60 years across 26

countries.

TOTAL Impact investment firm focused

on bringing to market high

quality investment products

that address basic human

needs.

OPIC The United States

government’s

Development Finance

Institution with more than

45 years experience in the

region.

Calvert Impact Capital

Mercy Investment

Services

Azure Partnerships Leverage

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New Loans

Interest & Principal

Profit Sharing

Step 1:

ATS partners assess water and sanitation systems,

develops investment plans and provides long-term

technical support to WSPs

Step 2:

Investors finance loans through ASC and FIs;

receive repayments from successful portfolio of

projects

Step 3:

Investments result in greater WSP cash flow, enabling payments of

debt service and further capacity enhancements

Step 4:

WSPs repay loans from ASC, allowing

repayments to investors, more loans to WSPs, and

further funding of ATS

Azure Source Capital: Flow of Funds

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Impact Investing & Social Enterprise Working Group

21st General Assembly – Rome 23-28 May 2019

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Third Vatican Conference on Impact Investing

Scaling Investment in Service of Integral Human

Development

Strategic Platform 3: Pathway out of Poverty

Thank you!

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