BlueOrchard Finance - Green Finance Initiatives

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1 BlueOrchard Finance - Green Finance Initiatives Hoa Le 18 November 2016, Luxembourg

2 Founded in 2001, BlueOrchard has disbursed in excess of 3bn dollars, reaching more than 25m people in more than 60 countries 2

3 15 Years of Impact Investing at BlueOrchard Microfinance Agriculture Education Green Finance & Climate Insurance Women Empowerment 3

4 The Impact Investing Value Chain: connecting Capital Markets to Entrepreneurs Investors BlueOrchard Funds Investees (e.g.mfis 1) ) Micro-entrepreneurs/SMEs Investor protection regulations Public Investors Private Investors +% Investment fund regulations +% Supervision by local regulator/ central bank +% Credit Bureaus mitigate over indebted-ness risk Public Investors: e.g. sovereign wealth funds or development banks Private Investors: e.g. PFs, foundations, banks, insurance companies Funds as efficient vehicles to pool investments & scale-up financing activities Thematic Funding Country & MFI selection and allocation Financial Intermediaries (e.g. MFIs, banks, NGOs, cooperatives) as a point of sale for different services and products(e.g. green and climate products) Beneficiaries: Microenterprises SMEs Individuals Solidarity Groups 1) Microfinance institution 4

5 BlueOrchard: Local presence for Global outreach 60+ people & 20+ nationalities Geneva, Zurich Switzerland Luxembourg Tbilisi Georgia Active in 60 countries Phnom Penh Cambodia Lima Peru Nairobi Kenya 5

6 2001 BlueOrchard Track-record: 12 Funds over 15 Years BlueOrchard Microfinance Fund (former Dexia 2004 Micro-Credit Fund) Senior debt, fully hedged Senior debt, 6 years BlueOrchard Microfinance Securities 1 (BOMSI) 2005 Saint-Honoré Microfinance Fund Senior debt, hard currency (merged with BOMF/DMCF 2011) 2006 BBVA Codespa Microfinanzas Senior debt, Latam, some LCY (closed in 2011) 2009 Microfinance Enhancement Facility (MEF) Sr. Debt liquidity fund, co-managed 2006 BlueOrchard Loans for Development 2006 (BOLD 2006) CDO Senior debt, 5 years 2010 Microfinance Growth Fund (MiGroF) The Obama fund for Latam 2007 BlueOrchard Loans for Development 2007 (BOLD 2007) CDO Senior debt, 5 years, FT award 2013 Microfinance Initiative for Asia (MIFA) Debt Fund Fund for Asia 2014 Regional Education Finance Fund for Africa (REFFA) Fund for Africa 2015 Climate Insurance Fund (CIF) Climate fund 2016 Japan ASEAN Women Empowerment Fund (JAWEF) Fund for Women in Asia 6

7 BlueOrchard Green Finance Initiatives Climate Insurance Fund (CIF): The Fund sponsored by BMZ and KFW works with financial intermediaries, insurance companies and insurance brokers to develop dedicated climate insurance products for micro and SME clients at the base of the pyramid globally. CIF instruments are debt (senior and sub-debt) and equity. The Fund is a G7 initiative and has an outstanding portfolio of USD 37 Million and a target fund size of USD 300 Million. The Fund is accompanied by a dedicated TA Facility managed by CelsiusPro, a specialised weather derivative company. A premium subsidy allocation is also available for strategic initiatives. 7

8 BlueOrchard Green Finance Initiatives Microfinance Initiative for Asia Debt Fund (MIFA): The Fund sponsors have undertaken to assign specific additional funding to financing MFIs that are already active in lending to renewable energy/energy efficiency (RE/EE) projects borne by micro-borrowers in Asia. The RE/EE component includes: BMZ investment in the C tranche for EUR 9 Mil equivalent and BMZ technical assistance funding (EUR 1 Mil). A long-term technical expert Econoler from Canada- accompanying the development of the RE/EE portfolio has been selected. The long-term expert will assist BlueOrchard over a 3 year period in the revision of the MIFA Investment Guidelines, the definition of the specific eligibility criteria for RE/EE investees, and reporting/monitoring templates for MFIs. Econoler will also manage with BlueOrchard the RE/EE TA project with MFIs. 8

9 BlueOrchard Green Finance Initiatives Microfinance Growth Fund 2 (MiGroF 2): The Fund sponsors (IADB, CAF, etc.) are in the process of developing a follow-up fund to MiGroF (the Obama Fund) dedicated to Latin America and the Caribbean. MiGroF 2 has a dedicated component of the Fund to finance financial intermediaries (MFIs, banks and other MSME lenders) that are already active in lending to renewable energy/energy efficiency (RE/EE) projects borne by micro-borrowers and SMEs. Financial intermediaries that don t have these products and want to develop them are also in scope. BlueOrchard will work together with Ecomicro team to develop a dedicated software and monitoring system to measure environmental returns and track funding provided for green finance. 9

10 Other initiatives: A partnership with myclimate building on myclimate TA management services and impact monitoring and reporting system in 2017.