WaterEquity, the first-ever impact investment manager with an exclusive focus on ending the global water crisis co-founded in 2017 by social entrepreneur Gary White and actor Matt Damon, has announced the first close of its US $50 million flagship water investment fund.
The outcome of the merger between Gary White’s WaterPartners and the actor’s H2O Africa in 2009, the nonprofit organisation has already completed an $11 million impact investing pilot project.
WaterEquity is the first-ever impact investment manager dedicated to ending the global water crisis, with an exclusive focus on raising and deploying capital to water and sanitation enterprises throughout Asia, Africa, and Latin America.
WaterEquity combines decades of financial and in-market experience to provide investors a unique opportunity to drive positive social and financial impact.
WaterCredit Investment Fund 3 (WCIF3) has closed at US $33 million. Investors include Bank of America, the Overseas Private Investment Corporation (OPIC), Ceniarth LLC, Niagara Bottling, as well as the Conrad N. Hilton, Skoll, and Osprey Foundations. A second-close is projected before year-end.
Tom Light, Managing Director of WaterEquity commented:
“We are inspired by the support we’ve received from both existing and new investors who share our belief that markets can deliver financial returns while solving global challenges.”
Investing in microfinance institutions, micro-utilities, toilet manufacturers, and water purification kiosks throughout India, Indonesia, Cambodia, and the Philippines, WCIF3 targets a 3.5% return and projects reaching 4.6 million people with safe water and/or sanitation over its seven-year term. With a blended capital structure, WCIF3 includes a $5 million first loss guarantee that covers both investment returns and principal.
“Niagara Cares is proud to be a contributing partner and foundational investor in WaterEquity. By supporting the sustainable growth of water and sanitation enterprises in emerging markets, we are accelerating an end to the global water crisis for hundreds of millions of women, children, and men.” Kristen C. Venick, Director of Niagara Cares.
WCIF3 builds on the success of WaterEquity’s inaugural water investment fund— WaterCredit Investment Fund 1 (WCIF1)—which provides loan capital at slightly concessionary rates to high-performing microfinance institutions in India to scale their water and sanitation loan portfolios.
To date, the US $11 million fund has enabled 320,000 people in India to gain access to safe water and/or sanitation and returned capital to owners with a higher-than-expected annual distribution payment of 3.6%. 99% of the individuals directly supported by WCIF1’s investments are women and 77% earn less than $4 a day.
“For investors seeking to align investments with the United Nations Sustainable Development Goals (SDGs), WaterEquity’s funds drive positive impact toward the achievement of all SDGs, in particular the following six—end poverty; good health and well-being; gender equality; water and sanitation; economic growth; and climate change,” said Alix Lebec, Executive Vice President of Investor Relations for WaterEquity.
WaterEquity’s deep knowledge of water and sanitation investment opportunities in emerging markets guide values-based investment strategies that drive sustainable financial returns and social impact.
According to the OECD, 2017 total official finance flows to water and sanitation to developing countries have increased in the last decade, reaching USD $14.3 billion in commitments on average per year in 2014-15.
However, a report on the needs and opportunities for impact investing published by Swiss-based “for-impact organisation” Waterpreneurs in 2018 says that while many private foundations are active, only four major players are spending more than $10 million yearly on WASH projects:
- Bill and Melinda Gates Foundation (~$100M, ~50% for research & development, 100% is pure sanitation)
- Charity:Water (~$18M)
- Conrad N. Hilton Foundation (~$ 12M)
- Stone Family Foundation (~$5-10 M).
According to Waterpreneurs, a study of Accenture for 1001fontaines in 2014 showed that the portion of financing of the WASH sector corresponding to Foundations, private equity or VC funds “remains very low.”
WaterEquity is among a number of Waterpreneurs’ strategic partners and key stakeholders. According to Waterpreneurs, while financial needs are huge investing in the water and sanitation sector is often perceived as risky and complex. It sees WASH thematic impact funds as powerful financial vehicles and is seeking to de-risk and make the sector more attractive for public and private investments by promoting innovative finance mechanisms, including the emergence of Water and Sanitation Impact Investment Funds.
Click here for more information about www.waterequity.org
Click here for more information about www.water.org
Click here to download Waterpreneurs report IMPACT INVESTING FOR WATER INNOVATIVE FINANCE FOR SCALING-UP WASH MARKET-BASED SOLUTIONS