“In traditional investment, risk and return go hand-in-hand, but what I like …specifically about blended finance, is that there is a third element, which is impact.”Hann Verheijen, Managing Director, Cordaid Investment Management
Financing for social impact projects or projects geared toward achieving the United Nations’ Sustainable Development Goals (SDGs) is typically provided through a combination of government and donor funds. The elevated risk and low potential for immediate return on investment make such undertakings unattractive for the risk-averse private sector, particularly in regions like West Africa where economic and social conditions can be unpredictable.
However, private sector involvement is crucial to bridge the $3 trillion financial shortfalls the UN estimates for SDG funding. To tackle this issue, governments and donors are employing innovative financial approaches to attract private sector players. One such approach is blended finance, the use of catalytic capital from public or philanthropic sources to de-risk private sector investment in sustainable development.
On June 23rd, the USAID West Africa Trade & Investment Hub (Trade Hub) and Cordaid Investment Management (CIM) co-hosted “Blended finance for catalyzing investments in underserved African markets,” to present and discuss the blended finance approach and its proven success in mobilizing private capital investment in West Africa. The webinar included more than 100 participants from across West Africa, East Africa, Europe, and the United States, and centered on the blended finance model of Cordaid’s West Africa Bright Future Fund (supported by the Trade Hub), its proven success in mobilizing private capital investment in the region, and its potential replicability in East Africa.
The time kicked off with a welcome address from Charles Polet, Public Private Partnership Manager with the Trade Hub, who was followed by Kafui Djonou, a Senior Project Management Specialist with USAID West Africa. Djonou shared some of the reasons USAID chose to engage in this partnership with CIM. Sjoerd Melsert, a Senior Investment Manager with CIM, then provided a description of the West Africa Bright Future Fund (WABFF) and its strategic use of the blended finance model. Next, Miriam Niangado, Investment Manager (Mali) with CIM, presented case studies of small and medium-sized enterprise (SME) financing made possible by the WABFF.
These presentations were followed by a panel discussion moderated by Hann Verheijen, Cordaid’s Managing Director. The panelists included: Heather Bateman, Director of Investments (West Africa), U.S. Development Finance Corp (DFC); Lorisa Canillas, Senior Investment Manager (Sierra Leone), CIM; and Josephine Ragni, Social Investment Manager, Netri Foundation. The panelists spoke on the unique structure of the WABFF and the viability of replicating the model across the continent. Webinar participants were encouraged to continue to learn more and to get involved in changing the landscape for investors, donors, and citizens in their respective regions through this impactful model.
Closing the informative and energizing time, Verheijen shared his and Cordaid’s inspiring belief that “every human being on earth is entitled to a bright future and we’re determined, together with our partners, to work towards this aspiration.”
Watch the webinar recording and continue the discussion on any of our social media platforms: Blended Finance Webinar June 23,2022 1