Impact Investing Advisory

7/28/2019 Impact Investing Advisory

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James K. Addo

July 2012


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Definition

Impact Investment represents an emerging and fast evolving

sector that that blends traditional development and risk capitalinvestment. SNV has practiced impact investment advisory work

for over 4 years mainly in Africa but across Asia and Latin America

as well. More recently we ramped up the strategy to incorporate a

newly articulated integrated value proposition. IIAS targets both

the buy side, where we originate and present opportunities toasset holders of blended-mission risk capital, and on the sell side

of the investment matrix, where we engage in make-ready

capability development of eligible small holders and

entrepreneurs. Our primary focus is and has been to delivery of

capability and relevant patient investment capital to our core

constituency small holders, SME and entrepreneurs along thewhole value chain.

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Our Objectives

1. Promote resilient livelihoods and shared

prosperity for BoP through capabilitydevelopment and job creation

2. Prepare (graduate) SMEs to make them

investment-ready

3. Execute investment facilitation through

partnerships

4. Capture best practice to maintain knowledge

leadership


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4-year historyThree phases starting 2008

I. Preliminary Exploration 2-year Duration (ESA

Pilot)

I. Assessment/Re-strategizing 1-year Duration

II. Integrated Strategy In progress

Our History


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SNV Advisory work focuses on:

Pre-investment services:

Supply-side sourcing, Due diligence and Coordination

Capability Development

Management, Operational and Group Cohesion

Post-investment services:

Demand-side advisory & Technical Assistance Support

What We Offer


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ExecuteInvestment

FacilitationService

Provide pre-investment

make-readyservices toenterprises

Map outpotential

eligibleenterprises

Negotiate &Sign MOUs forto provide TA

services &facilitation*

DevelopRelationships

with fundmanagers

Target eligible

funds

Who We Work With: Partnerships

Investment Advisory Practice: Investment Facilitation


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Who We Work With: - Clients

InvestmentAdvisory Practice Graduation & Capability Development

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Impact

Investing

Opportunity

Mapping

Needs

Assessment

CapabilityDevelopment

Deal

Structuring

Quality

Assurance

Impact

Measurement

Identify and analyze via region and market,

specific opportunities, based on investing partner

risk profile and social impact requirements.

Analyze, propose mitigation and hedging of

identified potential risks via provision core

technical assistance to SME Clients

Advice on the optimal investment approach and

structure to optimize financial and social returns

for client and partner

Support enterprises to maximize growth and

accelerate social impact while minimizing risksand improving quality

Develop objective, evidence-based social andfinancial impact assessments of projects and

entire program

Conduct SME client needs assessment based to

determine potential impact on client and members

as well as investing partners return criteria


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Total Partnership $: US$910MM

Partnerships and Capital Raise Mandates to date

Africa US$460

Latin America US$450

Sustainability

Optimized upfront fee structure

Long term value-driven compensation (typically 3-5 years)

Leverage of multiple services across SNV offerings

What is our Record


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What Have we Learnt

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Utilization of local capability trainers and consultants:

Highly trained, local professionals are not always present

Availability of regional expertise essential

Standardization of investment criteria challenge

Matching SMEs to investor preferences: e.g. size of (agriculture )

businesses suitable for funding are often smaller than the threshold

of most fund managers and investors

Facilitation of investment alone is not enough

Need for concurrent provision of capability development services

Scaling-up

In fragmented sub-sectors such as honey, innovation is needed to

achieve scale


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1. RENEWABLE ENERGY:

Waste-to-Energy

Mini Hydro Projects

Bio Gas Retrofitting &

Carbon Capture

2. AGRICULTURE

Agro processing

Livestock Processing

Viticulture/Horticulture

Collaboration options: Support for SMEs in Strategic Sectors


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CASE STUDIES

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Case Study: Graduation of Honey Company The company

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Mozambique Honey Company

Processing, packing and marketing of honey

Created from a partnership between V&M Grain (agro-

processing) and Eco-MICAIA (social enterprise)

Supports capacity building of small holder beekeepers(technical training, technology, access to markets)

Beekeepers organized to shareholders

Sustainability:

environmental impact through modernization (end of

burning of grass)


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Case Study: Graduation of Honey SNV Support

TA & Business Support by SNV in 2009

SNV member of steering committee Intervention in the middle of the value chain:

Business plan development (won 2010 national Bid Network

Nature challenge)

Finance brokering

Value chain analysis

Producer group strengthening

Support to PR and marketing

Trust building between partners

Facilitating a fair model for producer relations

Engaging LCBs to train Bee Promoters

Building capacity of associations and supporting their legalization


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Case Study: Graduation of Honey Investment

US$ 250,000 through Beira Agriculture Development

Corridor Equity

Aim: modernize equipment

Challenges:

High cost of procuring to assure quality control: hard to scale

To maintain quality producers need training: requires grant

funding

Expected Impact:

Expected outreach from 3,000 to 10,000 small holders in 3 years


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More Information

See SNV ESA Handbook

https://intranet.snvworld.org/Library/Knowledge%20Library/IIAS%

20guidebook%20Toolkit%20B5.pdf

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https://intranet.snvworld.org/Library/Knowledge%20Library/IIAS%20guidebook%20Toolkit%20B5.pdfhttps://intranet.snvworld.org/Library/Knowledge%20Library/IIAS%20guidebook%20Toolkit%20B5.pdfhttps://intranet.snvworld.org/Library/Knowledge%20Library/IIAS%20guidebook%20Toolkit%20B5.pdfhttps://intranet.snvworld.org/Library/Knowledge%20Library/IIAS%20guidebook%20Toolkit%20B5.pdf


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Thank you

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Impact Investing Advisory

Documents

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