The Overseas Private Investment Corporation, the U.S. government's development finance institution, has announced a commitment of up to $285 million for six new investment funds that aim to catalyze impact investing in emerging markets.
The funds represent a diverse group of financing vehicles committed to investing in companies and projects that are working to improve lives, create employment, enhance health care, protect forests, and address climate change. The selected funds, which hope to raise more than $875 million with the help of the OPIC commitment, were drawn from a record eighty-eight responses to OPIC's call for impact investing proposals in March — a response so positive that the agency expects to announce additional approved facilities in 2012.
The six funds selected to receive an infusion of capital are the Investment Fund for Health in Africa II ($83 million), which will use its funds to invest in companies working to improve the health of low- and middle-income individuals, primarily in Africa; Latin Idea Ventures ($25 million), which will provide growth capital to Mexican small and midsize enterprises (SMEs) within the technology, media, telecommunications, and services sectors; ManoCap ($34 million), which will invest in SMEs in Sierra Leone, Liberia, and other West African countries working in a broad range of sectors; MPower Ventures ($15 million), which will focus on unbanked and under-banked populations in emerging markets in Mexico, Brazil, Colombia, Peru, and Bolivia; Sarona ($87.5 million), which will invest in up to eighteen private equity funds that target market-based returns while investing in SMEs; and Terra Bella ($40 million), which will invest in projects that generate carbon credits through the protection and enhancement of forests while simultaneously generating valuable social and environment co-benefits.
"Each of [these funds] promises a strong development impact — be it mobile banking for the unbanked, investing in small businesses in the post-conflict countries of Liberia and Sierra Leone, improved health care in Africa, preservation of highly vulnerable forests, or growing small businesses in Mexico," said OPIC president and CEO Elizabeth Littlefield. "OPIC has a long history of investing for both social and financial returns, and we believe impact investing will gain significant traction in the coming years."