22.12.2014 – 10:27
KfW: green light for the first biodiversity fund in Latin America
- EUR 17 million seed capital for investments in the preservation of the biodiversity - New structure enables the mobilisation of private and public investors
KfW, the US non-governmental organisation Conservation International (CI) and the German fund manager Finance in Motion together founded the eco.business fund. The fund enables companies and cooperatives to make investments in Latin America that contribute towards preserving biodiversity and the sustainable use of natural resources - for example, in agriculture, forestry and fishing, as well as in eco-tourism.
The Federal Ministry for Economic Cooperation and Development (BMZ) provides seed capital of EUR 17 million that KfW incorporates in the fund. CI together with Finance in Motion will also invest in the fund at the start of 2015. The eco.business fund is launched as a public-private partnership (PPP) and allows the various investors to invest in capital tranches with a diversified risk-return profile. With this structure, public as well as private funds can be mobilised for protecting biodiversity.
"Latin America is one of the regions with the most abundant wealth of biodiversity. However, these valuable resources are seriously threatened by human activities. Linking the preservation of biodiversity with an economic approach is new territory for Latin America and the right approach in view of the great challenge and considerable financial requirement", commented Dr Norbert Kloppenburg, Member of the Executive Board of KfW Group.
These companies are funded either directly through the fund or with the help of financial intermediaries.
"The continent finds itself in a prolonged phase of economic growth and stability. One of the roles of the eco.business fund is to strengthen the role of local financial intermediaries in promoting environmentally-friendly manufacturing processes. In the long term, the application of such methods will be essential for securing sustainable economic growth and prosperity", explained Sylvia Wisniwski, Managing Director of Finance in Motion.
"Conservation International (CI) has long been committed to supporting environmentally responsible businesses that provide jobs and help secure human well-being," said Jennifer Morris, chief operating officer of Conservation International. "eco.business builds on this experience. Targeting small and medium-sized businesses that deliver environmental, socioeconomic and financial benefits is vital to the reduction of poverty and development of healthy, sustainable communities."
Besides the fund, a development facility is also created, which will provide specialist support to the financial intermediaries and their customers. This should secure the sustainable implementation of the fund's investment. The Federal Ministry for Economic Cooperation and Development plans up to EUR 3 million for this purpose. Both the fund as well as the development facility are open to further investors to participate in the development policy direction of "eco business".
Further information about the fund is available under www.finance-in-motion.de www.conservation.org
Original content of: KfW, transmitted by news aktuell