Why Verde Ventures? The challenge

The challenge
Verde
Ventures:
Investing in
Healthy
Sustainable
Economies
•
•
•
•
High rates of habitat loss
Species extinctions
Population growth
Poverty, security
Hari
Balasubramanian
03/01/12
Photo 1
4.2” x 10.31”
Position
x: 4.36”, y: .18”
Photo 2
5.51” x 10.31”
Position
x: 8.53”, y: .18”
Why Verde Ventures?
• Conservation-based
Why Verde Ventures?
employment is essential to
provide economic incentives for
conservation
• The small-medium business
sector is a key partner in the
intersection between human
well being and conservation
•
•
•
Population density and biodiversity value show high correspondence
Grant based solutions are insufficient to address magnitude of challenge
Traditional finance largely miss SME financing needs
The opportunity
Verde Ventures invests in small
businesses that contribute to green
economies in Conservation
International's global priority areas
• Lack of available, affordable
capital is a major constraint to
building green economies
The opportunity
• Mission aligned SME Loans:
US$30,000 to $500,000 for
infrastructure, working capital, trade
finance for business development in
rural communities to advance
mission.
• Technical Assistance: Accounting,
marketing, business plan
development
• Monitoring: Triple-bottom line
monitoring (Environmental, Social
and Financial)
Our Mission
Our Tools and approach
• Long Term:
o Infrastructure, equipment and crop
maintenance
• Short Term/Trade Finance:
o Working capital, harvest finance
•
•
•
•
Sustainable agriculture
Ecotourism
Energy (e.g., charcoal substitution)
Fisheries
*Any triple bottom line enterprise aligned with mission
Current investment allocation by dollar value
• Grant funds:
o Business development support (BDS)
o Technical Assistance
o Monitoring and evaluation
78%
Cocoa
Coffee
Ecotourism
NTFP
Other
• Innovative packages:
o Mezzanine, quasi-equity, other …
Types of Financing
12%
3% 2%
5%
Key sectors
• Transparent screening criteria and due
diligence checklist, includes:
o Environmental screen
o Social screen
o Financial due diligence
• Outlines, demonstrates and tests key
hypotheses: that VV investments
support improved TBL impacts
• Willing to take higher business risk for
increased social / environmental benefit
• Embedded within management
structure
• Review process:
o Conservation committee
o Investment committee
Investment link to mission
• Portfolio-wide monitoring
o All deals
o Basic TBL information that
aggregates across
o Yearly snapshot of TBL progress
• Project specific monitoring
o Subset of portfolio
o Specific TBL conceptual models and
indicators
o Demonstrates key links between
nature and people
o Tailored indicators
VV’s M+E Framework: 2 Levels
• Estimates substantive impacts
• Delivers accurate and timely
reporting
• Transparency measures built in for
accountability
VV M+E Framework
• 3 main investors
• $18,480,820
• 44 entities supported, 99 loans,
13 countries
• 92.8% of repayment rate
• 54,608 direct beneficiaries
• 465,078 hectares directly
impacted
• 16.4 million hectares indirectly
impacted
• 549 Red-listed species
• $48 million in sales generated
by clients
VV Portfolio Results
Summary
December 30th 2011
Socioeconomic
Targets
Environmental
Responses/Strategies
Targets
December 30th 2010
Hypothesis
Percent Invested of Available Funds
35.9%
42.9%
Total Invested to Date
$18,480,820
$16,274,406
Capital Currently Outstanding
$2,303,780
$2,414,714
Principal Repaid to Investors
$3,503,094
$3,291,227
Number of Entities Supported
44
36
Number of Countries
13
13
Number of Loans
99
87
Repayment Rate
92.8%
92.3%
th
Summary Triple Bottom-Line Results
September 30 2011 September 30th 2010
Environmental
453,782
Direct Hectares Impacted
465,078
15,031,687
Indirect Hectares Impacted*
16,498,711
512
IUCN Red-listed Species Impacted
549
Financial
$31,786,841
Sales generated by Businesses Supported
$48,499,071
$3 million
Leveraged Funding
$4.7 million
Social
53,039
Total Direct Beneficiaries
54,608
212,156
Total Indirect Beneficiaries**
252,371
30%
Percentage of Female Direct Beneficiaries
20%
Stresses
Pressures/Threats
Outside of Scope of
Intervention
Stresses
VV Portfolio Results
VV Project Monitoring
indicator
Finca Irlanda
09
10
11
12
n/a n/a n/a 87
06
07
08
83
88
88
80
80
80
10
11
12
Finca Irlanda
Biodiversity
Human well being
Wildlife Works
Biodiversity
Area formally protected by SME (ha)
46
Land sustainably managed by SME (ha)
270
hunting pressure is reduced (zero incidence) n/a n/a n/a b/l
# direct beneficiaries
280
# indirect beneficiaries
433
best practices are followed (i.e., certification n/a n/a n/a b/l
maintained)
% female employees
35%
Area formally protected by SME (ha)
Land sustainably managed by SME (ha)
# direct beneficiaries
# indirect beneficiaries
% female employees
1,434
38,806
346
1,099
(100%)
Biodiversity
Human well
being
diversity of species occur on site (~87)
daily income above average (70 pesos / day) n/a n/a n/a 80
indicator
Human well being
Sample sectors
07
08
09
Increase habitat extent (by 400 ha)
b/l
253 253 253 253 253
Increase estimated population of Taita white 100 94 95 250 240 246
eye (measured in pair)
Decrease poaching (incidents/month)
130 48 38 40 33 30
Decrease timber extraction (bags of
60 54 43 40 38 35
charcoal)
Human well being daily income above average
b/l ?
?
?
n/a n/a
Project Specific
VV Project Monitoring
Indicators that roll up to portfolio
VV Project Monitoring
Sustainable Tourism –
VV has continued to invest in priority
ecotourism enterprises in Africa and in
Central and South America. Sustainable,
responsible tourism continues to be an
important component of many
sustainable economies and is an
effective mechanism to secure both
critical habitats and provide alternative
economic opportunities to local
communities in many parts
of the world.
06
Wildlife Works
Biodiversity
Name of Investment
Playa Viva LLC
Sector/Country
Tourism / Mexico
Amount
Conservation/Social
Impact
200,000 USD
Playa Viva is within CI’s Mesoamerican Hotspot and directly
involved in supporting a turtle sanctuary with high egg counts of 510 nests of leatherback turtles (Red List CR), about the same
number of green turtle nests (RL EN), and >2,000 nests of Olive
Ridley turtles (RL VU) and low hatch rates. In addition, the
developer has demonstrated a commitment to tackle habitat
restoration and ecosystem function. As the only formal employer on
the beach, they play an important part in providing alternative
incomes and capacity building to the rural community. This presents
a unique opportunity to maintain a conservation presence on an
otherwise unmonitored stretch of tens of kilometers of beach.
The initiative has been reviewed by the Conservation Committee,
and approved on Dec 2, 2009.
VV Deals – Playa Viva
• Efficient processes – due diligence,
screening, legal, TA, etc
• Justified proxies (e.g., certification)
• Directionality between meeting
criteria and achieving impact
• Demand assessment for
sustainability
• Client access to market
• Consistent packaging of tools (loan
agreement, due diligence, TA, M+E)
• Managing risk of diluting mission
focus
• GIIRS Pioneer Fund
• Aligned with IRIS, FAST, ANDE
• Active at SOCAP, SVN,
Investors Circle, etc
Challenges for scaling
Impact investing linkages
• Develop and Implement an
Innovative Financial Mechanism for
lasting ecosystem conservation
“Verde Ventures
responsibly provides
access to finance to
sustainable
businesses that
contribute to healthy
ecosystems around
the world.”
• Attract Private Sector Capital to
ecosystem conservation
• Build a critical mass of triple bottom
line investments supporting healthy,
sustainable economies
Proposed new fund mission
Marketplace
Building
Capturing the Value
of the
Marketplace
Why scale up?
Maturity
Uncoordinated
Innovation
SME
Conservation
Finance
Microfinance
(today)
“Marketplace Building” involves:
• Building efficient intermediation to unlock
latent supply of capital
• Building enabling infrastructure for the
industry
• Developing absorptive capacity for
investment capital
Further behind today than microfinance was in 1999,
and is perhaps 10 years behind
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International Finance Corporation (IFC)
l’Agence française de développement (AFD)
Fonds français pour l'environnement mondial (FFEM)
United Nations Foundation (UNF)
Daiwa Securities
Global Environment Facility (GEF)
KfW Entwicklungsbank (KfW)
Overseas Private Investment Corporation (OPIC)
Starbucks Coffee Company
Key Partners
Please visit
www.conservation.org/verdeventures
Thank you!