Charm Impact and iGravity are collaborating to launch a blended finance impact bond to unlock capital for early-stage local clean energy entrepreneurs in Africa.
The Charm Impact Bond (CIB) is a $12.5 million blended finance vehicle that aggregates multiple small clean energy companies into a single vehicle and is sponsored and seeded by iGravity through its Impact Investment Index.
This will enable impactful entrepreneurs to access capital that would otherwise be unattainable due to their size and stage.Initial recipients of the bond include; Winock, a locally owned solar business system distributor in Nigeria, Biomassters, a female led and part locally owned pellet cooking company in Rwanda and Powerstove, a locally owned clean cookstove manufacturer in Nigeria.
This investment approach allows for the creation of a financially inclusive instrument, where entrepreneurs will be able to access loans that range from $12,530 – $438,443 for up to 36 months. Companies with a higher impact are rewarded with lower interest rates.
The CEO and co-founder of Charm Impact, Gavriel Landau, said: “we see CIB as a much needed vehicle to crowd in more commercial capital to the earliest stage of the market. Local entrepreneurs in sub-Saharan Africa are financially excluded from scaling their businesses due to a lack of available capital sources to grow their high impact solutions.”
Frédéric Berrney (Head of Products and Risk at iGravity) said: “The blended characteristics of the CIB allow us to make a difference and achieve high impact and returns. Within the structure of the bond, investors benefit from a diversified portfolio of direct loans in a variety of sectors of renewable energy. Diversification criteria, impact, returns and de-risking requirements are set up to meet individual investor needs.”