Convergence has awarded a proof-of-concept grant under the Asia Climate Solutions Design Grant to [Conservation International](https://www.conservation.org/) to design and launch the Climate Smart Shrimp Fund (CSSF), a US$100M blended finance revolving debt fund that aims to finance sustainable shrimp farming while restoring degraded mangrove ecosystems in Indonesia. Building upon successful pilots in Indonesia and Ecuador, the fund brings together a strong consortium of local implementing partners that collectively bring about proven expertise in sustainable aquaculture, climate finance, and mangrove restoration. 

Mangrove habitats [provide](https://www.sciencedirect.com/science/article/pii/S1385110124000376) one of the most efficient carbon capture and storage opportunities, in addition to providing flood protection, livelihood benefits, and crucial habitat. However, mangroves have also been destroyed at an alarming rate, with conversion to shrimp aquaculture ponds being among the primary drivers of mangrove habitat destruction. Responsible shrimp production is crucial to avoid these adverse impacts on climate change and livelihoods. The CSSF fills a critical financing gap by providing tailored financing solutions for responsible farm modernization, technical training, and mangrove restoration to smallholder farmers that have limited access to formal credit with few opportunities to modernize their farms and adapt responsible practices.

By supporting Indonesian shrimp farmers in transitioning to sustainable practices, the fund aims to restore 1,500 hectares of mangroves, which will contribute to carbon sequestration, improve coastal protection, enhance water quality, and create new revenue potential through ecosystem services. The fund will also support approximately 9,500 shrimp farmers in adopting climate-smart production practices that will triple productivity and incomes while reducing the need for land expansion, thus preventing further deforestation and coastal degradation.

__Design question and learning potential from the market:__ *How can a blended finance vehicle be structured to establish local partnerships and attract investment from local and international investors for sustainable shrimp farming and mangrove restoration?*

The fund will adopt a staged approach targeting concessional capital initially to demonstrate potential before securing commercial investors for the full scale. Local sources of capital are also mobilized by targeting domestic financial institutions that are aligned with Indonesia's blue economy priorities, regional DFIs, and other impact aligned investors. This approach aims to demonstrate the commercial viability of climate-resilient shrimp farming and mangrove restoration that can eventually attract long-term local capital for sustainable aquaculture projects. 

The proof-of-concept grant will be critical for Conservation International in finalizing the partnership with a dedicated fund manager that will support in designing and managing the fund post-launch and also support the vehicle in fundraising. In addition, the fund will be utilized to support Conservation International in developing a due diligence framework incorporating monitoring, reporting and verification criteria for the identification of a pipeline of investable shrimp farms. The grant will also support Conservation International in identifying a pipeline of local implementation partners that can provide capacity building support to farmers on disease management,sustainability certification, and monitoring of mangrove restoration through its Technical Assistance Facility. 

The grant will culminate in the development of an operational roadmap and the finalization of a legal structure for the launch of the vehicle with initial investment commitments secured, along with the formulation of an Environmental and Social Monitoring Framework focused on climate and gender action.

acs logos v2

## Scope of the Design Funding Window

The Asia Climate Solutions (ACS) Design Grant awards grant funding for the design and launch of innovative blended finance solutions that mobilize private capital to sectors critical for climate transition and resilience in developing markets in Asia. The ACS Design Grant aims to demonstrate the potential of funding from family offices, foundations, and donor agencies to catalyze blended finance solutions addressing the climate finance gap, at scale. The anchor donors of this initiative are the Monetary Authority of Singapore, the Department of Foreign Affairs and Trade Australia, Olayan Group, UBS Optimus Foundation, and The Rockefeller Foundation. 

The ACS Design Grant will target critical climate mitigation and adaptation sectors in Asia including nature-based solutions (NbS), clean energy transition, and sustainable cities and infrastructure. It will provide feasibility study and proof of concept grants for innovative solutions using blended capital structures to crowd-in climate-smart investment in the region.

The current cycle will have a thematic focus on sustainable agriculture and/or clean energy solutions with innovative models demonstrating the use of blended finance for mobilizing local sources of public, private, and/or philanthropic capital to support vulnerable local communities in key Southeast Asian markets such as Indonesia, Philippines, and Vietnam. 

__Applicants are invited to apply with solutions that align with the thematic focus or the broader criteria of the program.__

## Types of Funding Available

Applicants can apply for feasibility study or proof-of-concept funding.

### Feasibility Study Grant

Feasibility study applications must be able to 1) present a viable investment thesis, and an initial capital structure and 2) demonstrate early engagement with potential investors and relevant stakeholders.

- Grants range between USD 50,000 to USD 200,000.
- Funding to explore the feasibility of the concept. For example, a combination of the following activities would be eligible:
  - Assessing the investability/bankability of the concept
  - Conducting market scoping and stakeholder consultations
  - Conducting an impact analysis including climate and gender impact potential
  - Designing the capital and legal structure
- Promising feasibility studies funded through this window may be considered for follow-on proof-of-concept funding.

### Proof-of-Concept Grant

Proof-of-concept applications will be expected to present 1) interest and ideally commitment from investors and relevant stakeholders to support the concept, and 2) a financial model.

- Grants and conditionally repayable grants range between USD 200,000 to USD 400,000.
- If a feasibility study (or equivalent) has been completed, then funding would be provided to complete all design and structuring activities to launch. For example, a combination of the following activities would be eligible:
  - Finalizing the capital structure and financial model
  - Fundraising and marketing activities with prospective investors
  - Final selection of implementing partners
  - Finalizing the legal structure and producing key documents needed to launch
  - Development of an impact assessment framework and gender action plan (or equivalent) based on the impact analysis from prior feasibility work.

Note: Both grants and conditionally repayable grants will be awarded to support the design and launch of solutions. Conditionally repayable grants and their repayment terms will be considered for Proof of Concept applications on a case-by-case basis. Repayment is expected only if the solution successfully launches and meets key milestones such as financial close.

## Eligibility Criteria

Proposals must meet the following eligibility criteria:
- Purpose:
  - Proposals articulate a clear need for grant support for the design and/or launch of an innovative blended finance solution.
  - Solutions must target climate change mitigation and/or adaptation.
  - The proposed solution should be implemented through a financial instrument. It can be in the form of a fund, project finance vehicle, private company, bond, results-based financing, facility, or any other type of instrument.
- Geography: Proposals target one or more developing market(s) in Asia. Applicants do not need to be domiciled in a developing market(s) but end beneficiaries and target activities must.
- Sectors: Proposals target one or more of the following sector(s) and sub-sector(s): 
  - Nature-based Solutions (NbS) 
    - Sustainable forestry and climate-smart land use / adaptation
    - Sustainable agriculture and agroforestry
    - Climate-related insurance and disaster resilience
    - Natural resource management, directly linked to preserving and protecting natural assets, such as:
      - Sustainable fisheries and aquaculture
      - Sustainable forestry
      - Forest and blue carbon
      - Coastal protection
      - Eco-tourism
  - Clean Energy Transition
      - Renewable energy generation (on-grid and off-grid)
      - Energy efficiency
      - Energy transmission, storage, and distribution
  - Sustainable Cities & Infrastructure
      - Sustainable infrastructure/housing
      - Low-carbon transportation
      - Waste and wastewater management
      - Urban Nature-based Solutions
- Thematic Focus: The current cycle will also have a dedicated thematic focus on sustainable agriculture and clean energy solutions with innovative models demonstrating the use of mobilizing local sources of capital to support vulnerable local communities in key Southeast Asian markets such as Indonesia, Philippines, and Vietnam. Applicants can apply with solutions that meet this thematic focus or apply under the broader criteria of the program.
- Applicant: Proposals will only be accepted from organizations or consortiums of organizations. For example, eligible organizations could include asset owners, asset managers, advisory firms, foundations, not-for-profit organizations, and private enterprises. The lead organization must be able to provide 1) proof of incorporation, and 2) financial statements for the previous fiscal year.

## Evaluation Criteria

All applications received will be scored on a scale of 0-100 depending on the stage of the solution.

|      | Maximum Available scores     |  | 
| ---------- | ---------- | ---------- | 
| Criteria       | Feasibility Study | Proof of concept |
|__Development impact__<ul><li>How will climate mitigation or adaptation be incorporated into the concept’s design and operations?</li><li>What will be the environmental and socioeconomic impact of the concept?</li><li>How will gender equality be incorporated into the concept’s design and operations?</li><li>What indicators will be used to measure progress and impact outcomes?</li></ul>| 19 | 19 |
|__Scalability and/or replicability__<ul><li>How much private capital does the concept aim to catalyze?</li><li>How much local capital does the concept aim to mobilize?</li><li>If the concept is successful, can other practitioners use a similar approach? Will the concept contribute to creating a pipeline of investable climate finance solutions in emerging markets?</li></ul>| 19 | 19 |
|__Additionality__<ul><li>Does the concept aim to deploy financial instruments that are under-supplied, and will therefore catalyze financing with a high degree of additionality?</li><li>Does the concept have strong potential to address a market failure in the short term, and catalyze broader market financing in the long term?</li><li>To what extent will the design grant be catalytic in achieving the targeted development impact?</li></ul>| 17 | 17 |
|__Innovation & Demonstration Effect__<ul><li>Is the concept testing a never-before-tested design?</li><li>Is the concept replicating an existing approach in a new market?</li><li>Does the concept demonstrate the rationale and business case for using blended finance for climate adaptation and/or mitigation?</li></ul>| 17 | 13 |
|__Likelihood to achieve financial close__<ul><li>Is the structure proposed in the concept bankable/investable?</li><li>Is the concept likely to attract private investors and close within the short or medium term?</li><li>Have investors been actively involved in the design of the concept to date?</li></ul>| 9 | 12 |
| __Track record of applicant__<ul><li>Does the applicant have the relevant expertise, track record, and capacity required to succeed?</li></ul>| 12 | 12 |
| __Stakeholder Support__<ul><li>	Does the concept have the support and buy-in of key stakeholders in the target region/country (e.g., government, prospective investors, partners)?</li></ul>| 7 | 8 |
| __Total__ | 100 | 100 |

## Application Process

*Stage 1: Submission of concept notes*

- Interested applicants can initiate the application process by logging in to [https://designfunding.convergence.finance/en/](https://designfunding.convergence.finance/en/)
- The next application deadline will be announced soon.
- Follow the instructions provided to submit a concept note and supplemental materials (e.g., pitch deck) by the deadline date.
- Applicants may submit one application per funding cycle. 
- Convergence reviews the concept notes and supporting materials to i) screen for eligibility and ii) based on the evaluation criteria, select a longlist of concept notes to proceed to Stage 2.
- Unsuccessful applicants are notified. Due to the high volume of applications expected, we regret that at this stage we are unable to provide feedback on unsuccessful applications.

*Stage 2: Submission of full proposals*

- Longlisted applicants are invited to submit a full proposal for funding consideration.
- Follow the instructions provided to submit a full proposal by the deadline date.
- Convergence reviews full proposals according to the evaluation criteria and shortlists proposals. Convergence may request additional information as necessary.
- Convergence conducts technical due diligence on shortlisted proposals. Shortlisted applicants are asked to respond to due diligence questions from Convergence and are requested to make introductions to key stakeholders for interviews as part of the due diligence process.
- Unsuccessful applicants are notified. Due to the high volume of applications expected, we regret that at this stage we are unable to provide feedback on unsuccessful applications.

*Stage 3: Investment Committee review and approval*

- Shortlisted proposals that pass due diligence are recommended by Convergence to the Investment Committee for approval.
- The Investment Committee is composed of independent experts who recommend proposals to the Convergence Board of Directors for funding.
- Shortlisted applicants that do not pass due diligence are notified. Convergence at its discretion maybe available for a call to provide high-level feedback to a subset of the highest scoring shortlisted proposals.

*Stage 4: Compliance review and Final Approval*

- Proposals approved by the Investment Committee undergo a compliance review led by Convergence’s Chief Financial Officer.
- Following the compliance review, cleared proposals are recommended to either Convergence's Senior Management or Board of Directors for final approval.
- Shortlisted applicants that are not selected for funding at this stage are notified. Convergence at its discretion maybe available for a call to provide high-level feedback to a subset of the highest scoring shortlisted proposals.

*Stage 5: Contracting*

- Following Board approval, Convergence initiates the contracting stage with the selected awardees.
- Convergence will execute contracts with the selected awardees that includes the design activities and key milestones agreed upon with the awardees.

Notes:
- Convergence will only consider one application per organization per funding cycle.
- Convergence is under no obligation to provide feedback on concept notes or proposals.
- Concept notes and proposals must be submitted in English.

The Asia Climate Solutions (ACS) Design Grant will provide early-stage grants for high-impact climate financing solutions in emerging markets in Asia. The Grant aims to mobilize private capital at scale into high-impact target sectors across climate mitigation and adaptation.

Design of blended vehicle to mobilize capital for sustainable shrimp farming in Indonesia

## Overview <br>
Emata is an Agri-fintech headquartered in Kampala, Uganda, specializing in climate-smart agricultural solutions for smallholder farmers. Emata is initially seeking to raise one or more SPVs totaling USD 20 million to provide affordable loans and weather-based insurance to smallholder farmers across East Africa, with an initial focus on Uganda. The vehicle offers loans farmers can use for climate-resilient investments like irrigation systems and improved agricultural inputs, leveraging an innovative tech-driven partnership model tailored to the needs of local agricultural companies and farmer cooperatives.

## Problem <br>
Smallholder farmers are among the most financially excluded groups in Africa, yet they are on the front lines of climate change. Season after season, they work relentlessly to feed their communities, but without access to affordable financing, even the most innovative farmers struggle to invest in climate-resilient solutions like irrigation or improved seeds. Each bout of unpredictable weather threatens not just their crops, but their families’ futures—locking them in a cycle of uncertainty. These farmers have the knowledge and determination to adapt, but until financial barriers are broken, their resilience remains just out of reach.

## Solution <br>
Emata is transforming how smallholder farmers access the financing they need to grow and adapt. Since 2021, the Ugandan fintech has been offering digital financial products to smallholder farmers to promote growth and climate resilience. The platform offers loans for climate-smart investments—such as irrigation systems and improved inputs—alongside weather-based insurance introduced in 2023. Through its automated system, Emata delivers timely, seasonally-aligned financing to help farmers adapt to increasingly unpredictable planting conditions. So far, Emata has disbursed USD 2 million in loans to 7,300 Ugandan farmers and achieved a 94% repayment rate. With CC Facility’s support, Emata plans to scale across East Africa, expand its multi-currency lending capabilities, and establish a dedicated fund to attract a broader mix of investors—enabling more farmers to adopt sustainable practices and build long-term climate and economic resilience.

## CC Facility Support <br>
Support from the CC Facility is pivotal for Emata to scale its climate-smart lending model across East Africa. The funding will enable Emata to establish a robust, multi-country fund structure capable of handling multi-currency lending and attracting a blend of concessional and commercial capital. Hence, the CC Facility will support Emata in refining its vehicle’s structure, financial modeling, and refining its impact framework. Additionally, support for go-to-market strategy and gender strategy development will enable Emata to grow its fund from USD 1.6 million to USD 20 million by 2028, ultimately accelerating financial inclusion and climate resilience for thousands of smallholder farmers across the region.

## Website <br>
Emata - [https://www.emata.ug/](https://www.emata.ug/)

A partnership between Convergence and Climate Policy Initiative (CPI) focused on scaling sustainable climate finance.

CC Facility Logo

The [Catalytic Climate Finance Facility (CC Facility)](https://ccfacility.org) is a partnership between Climate Policy Initiative (CPI) and Convergence focused on scaling sustainable climate finance by providing grant funding and dedicated acceleration services to early-stage and market-ready financial solutions in sectors that are severely under-financed in developing countries.

Emata Special Purpose Vehicle

Design of an agri-fintech to deliver affordable loans and weather-based insurance for smallholder farmers across East Africa

## Overview <br>
Nordic Impact Funds (NIF) is an impact-focused fund manager with offices in Uganda and Denmark. NIF is raising a USD 50M evergreen fund plus a USD 5M impact-linked financing and technical assistance facility (ILF/TA) to deploy equity, equity-like capital (e.g., convertible debt) and impact-linked finance into agri-SMEs in Kenya, Uganda, Tanzania, Ethiopia, Rwanda and Malawi. NIF’s commercial fund is an evergreen vehicle capitalized by investments from private and institutional investors. At the same time, the ILF/TA facility will enhance investors’ impact with regard to adaptation, resilience, gender, and low-income populations.

## Problem <br>
Building climate resilience and adaptation capacity among East Africa’s vulnerable populations is an increasingly urgent priority. The region faces more frequent and severe climate impacts — including prolonged droughts, intense flooding, and erratic weather patterns — that threaten agricultural productivity and, consequently, the livelihoods and food security of millions.

Small and medium-sized enterprises in East Africa that play a critical role in advancing climate resilience and food security for underserved communities face persistent barriers to growth, particularly due to limited access to investment capital and tailored support. As a result, their ability to scale climate-smart solutions, boost agricultural productivity, and enhance livelihoods for vulnerable groups—particularly women, low-income households, and smallholder farmers—remains largely untapped.

## Solution <br>
To address persistent financing and capacity gaps for agri-SMEs in East Africa, NIF has developed a two-part vehicle: a USD 50 million evergreen fund and a complementary USD 5 million Impact-Linked Finance and Technical Assistance Facility.

The Fund provides equity, equity-like capital, and impact-linked finance to SMEs across Kenya, Uganda, Tanzania, Ethiopia, Malawi, and Rwanda—targeting climate-smart agribusinesses, food systems, and digital and financial inclusion. The Facility enhances the Fund’s impact thesis by linking financial incentives, such as interest rate discounts and valuation premiums, to positive gender and climate adaptation outcomes. It also provides tailored technical assistance through value chain analysis, impact measurement, business model optimization, certifications, and investor matchmaking.

By partnering with World Food Program’s IGNITE Innovation Hub, NIF combines investment capital with robust operational support to de-risk investments and help locally founded SMEs scale their reach. Together, the Fund and Facility aim to deliver strong financial returns while catalyzing inclusive, climate-resilient growth across the region.

## CC Facility Support <br>
The CC Facility will enable NIF to scale its support for locally anchored SMEs delivering climate adaptation solutions to underserved populations. The CC Facility will help structure the Impact-Linked Finance mechanism and support the vehicle in enhancing its Impact Measurement and Management framework. Additionally, the CC Facility will strengthen the climate adaptation thesis and support NIF in embedding sector-specific gender-responsive measures within its investment and portfolio management processes.

## Website <br>
NIF - [https://www.nordicimpactfunds.com/](https://www.nordicimpactfunds.com/)

Nordic Impact Funds (NIF)

Design of an impact-linked financing and technical assistance facility (ILF/TA) to deploy equity, equity-like capital and impact-linked finance into agri-SMEs in Kenya, Uganda, Tanzania, Ethiopia, Rwanda and Malawi

## Overview <br>
The Good Fashion Fund 2.0 (GFF2) is envisioned as a USD 60 million impact investment fund that provides mezzanine financing to emerging market textile and apparel suppliers —particularly in India, Bangladesh, and Vietnam—to facilitate their adoption of renewable and energy-efficient technologies. The vehicle also includes a USD 1.5 million TA Facility to support investees in incorporating environmental and social best practices into their operations, achieving regulatory compliance, and maximizing the impact of their green energy investments.

## Problem <br>
The textile and apparel industry contributes up to 3.5% of global carbon emissions annually, up to 80% originating from supply chains concentrated in Asia. In countries like Bangladesh, India, and Vietnam, SME manufacturers have limited access to affordable long-term capital and insufficient technical capacity for decarbonization. The estimated funding gap is USD 20–30 billion annually, but traditional debt is often expensive, short-term, and inflexible, and grants and bonds are inaccessible to smaller, less formal manufacturers. This creates a structural financing barrier that undermines the energy transition and social equity in a sector critical to millions of livelihoods.

## Solution <br>
Partnering with sustainable apparel brands and their suppliers—primarily in India, Bangladesh, and Vietnam—GFF2 will provide non-dilutive risk capital (mezzanine financing), corporate-level engagement, and technical assistance aimed at accelerating decarbonization, renewable energy adoption, and social equity. Building on the track record of Good Fashion Fund 1—which successfully deployed six investments in South Asia, GFF2 will apply both climate and gender lenses to all investments, support long-term brand-supplier relationships through offtake agreements, and promote fair labor conditions, including improvements in living wages. GFF2 aims to mobilize private capital and positions itself as a model for sustainability-led transformation across the global textile and apparel supply chain.

## CC Facility Support <br>
The CC Facility’s funding is critical to advancing GFF2 from concept to launch, enabling it to address systemic challenges in the textile industry through an innovative blended finance approach. The CC Facility will provide essential support for finalizing legal and regulatory structuring, new market entry analysis, development of impact frameworks, and gender strategy. Additionally, the CC Facility will support strategy refinement for GFF2’s Technical Assistance facility.

## Website <br>
Good Fashion Fund - https://goodfashionfund.com/ 

Good Fashion Fund 2.0 (GFF2)

Design of a fund supporting textile suppliers in India, Bangladesh, and Vietnam to adopt renewable and energy-efficient technologies—paired with a TA facility for environmental and social improvements

Gates Foundation Logo

Gates Foundation

Global Affairs Canada Logo

Global Affairs Canada

DFAT Logo Hi-res

Australian Department of Foreign Affairs and Trade

Ricardo Nogueira

Rick Nogueira, Photo, Leadership Page

Member, Green Climate Fund's independent Technical Advisory Panel  

Paul Currie

Advisor, Office of the CEO, Development Bank of Southern Africa

Sergio Gusmão Suchodolski

Executive Vice President VR Investments

Kaylene Alvarez 

cropped head shot K Alvarez

Co-founder, BIDUK Indonesia; Founder & CEO, Athena Global Alliance

Elvira Lefting

Founder at Finance in Motion

Design Funding

Indo-Pacific NGO Blended Finance Accelerator

Supports NGOs with catalytic grant funding and acceleration support to unlock private capital for climate and gender equality initiatives in the Indo-Pacific.

Overview

FAQs

Apply Now

News and Events

Resources

<a id="overview"></a>
<a id="overview"></a>
<h2>Overview</h2>

The [Indo-Pacific NGO Blended Finance Accelerator](https://ministers.dfat.gov.au/minister/pat-conroy/media-release/innovative-indo-pacific-ngo-accelerator-boost-development-projects) is a five-year, AUD 10 million initiative launched by the Australian Department of Foreign Affairs and Trade (DFAT) in partnership with Convergence Blended Finance. The Accelerator supports NGOs to design and scale blended finance solutions that unlock private capital for climate action and gender equality in the Indo-Pacific.

Blended finance activity is growing in the Indo-Pacific region, yet funding still falls far short of what is needed to meet development goals. A major gap is the lack of investable, high-impact vehicles. NGOs are well-placed to help fill this gap, bringing local knowledge, technical expertise, and trusted community relationships. However, their role in blended finance remains limited, currently NGOs sponsor only about 6% of global blended finance deals. Persistent barriers include:
- Limited understanding of blended finance concepts and structuring approaches
- Limited expertise and resources for financial structuring and navigating regulatory restrictions
- Resource constraints and governance complexity that hinder feasibility studies and vehicle design
- Restricted access to private investors and specialized technical service providers

The Accelerator is designed to address these barriers by providing catalytic grants and dedicated acceleration support to help NGOs design and launch blended finance vehicles. In doing so, it aims to build a pipeline of investable solutions enabling them to take on roles not only as technical assistance providers, but also as impact managers and, where appropriate, fund managers. In doing so, the Accelerator will help mobilize private capital at scale, expand development impact, and set an example for the wider NGO community.

Some examples of NGO’s use of blended finance from our portfolio include Conservation International’s  [Restoration Insurance Service Company (RISCO)](https://www.convergence.finance/accelerator/grant-portfolio/2qXZj3k6t8HSd0dCflCrxs/view), The Nature Conservancy’s [Blue Bond](https://www.convergence.finance/news/53nMkbseHrNo8CBK9Um1U1/view), and Wildlife Conservation Society's [Bukit Barisan Selatan (BBS) Landscape Fund](https://www.convergence.finance/accelerator/grant-portfolio/6gehH2mZZlW0elSbwX5bLM/view).

Watch recording of the virtual information session held on November 13, 2025 at 2:00 PM AEDT / 11:00 AM SGT [here](https://youtu.be/nphHFV67QR0).
<br>

<a id="programme-offerings"></a>
<h2>Programme Offerings</h2>

The Accelerator consists of two core components:
<div>
  <span>
<table id="a4fm-cards-table">
  <thead>
    <tr>
      <th><strong>Catalytic Grant Funding</strong></th>
      <th><strong>Acceleration Support</strong></th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td data-title="Catalytic Grant Funding">
        <strong>Catalytic Grant Funding</strong>
        <div class="tw-flex tw-flex-col">
            <ul class="no-space">
              <li>Eligible NGOs can apply for catalytic grants to support the development of blended finance solutions, from scoping and proof-of-concept to scale-up and expansion to reach their target size.</li>
              <li>These grants will support key design and implementation activities like legal and financial structuring, pipeline development,fundraising, piloting, and setting up impact measurement frameworks</li>
            </ul>
        </div>
        <br><br>
        <a href="/accelerator/dfatngo#type-of-grants"><strong>Type of Grants</strong></a>
      </td>
      <td data-title="Acceleration Support">
        <strong>Acceleration Support</strong>
        <div class="tw-flex tw-flex-col">
            <ul class="no-space">
              <li>Access to trainings, curated data and analytics, and peer-learning opportunities </li>
              <li>Opportunities to connect with Convergence’s network of investors and ecosystem partners  to expand partnerships and mobilize resources for climate action and gender equality in the Indo-Pacific</li>
              <li>Ongoing technical feedback and guidance to refine  investment models and strategies</li>
              <li>Support in navigating the unique requirements of investors active in the Indo-Pacific region.</li>
        <br><br>
        <a href="/resource"><strong>View Resources</strong></a>
      </td>
    </tr>
  </tbody>
</table>
  </span>
</div>
<br>

<a id="type-of-grants"></a>
<h2>Type of Grants</h2>

Applicants can apply for the following types of catalytic grants:
<table border="1" cellpadding="10" cellspacing="0" style="border-collapse: collapse; width: 100%;">
  <thead>
    <tr>
      <th>Grant Types</th>
      <th>Stage 1: Scoping/Feasibility</th>
      <th>Stage 2: Proof-of-Concept/Pilot</th>
      <th>Stage 3: Scale-up/Expansion</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td><strong>Definition and Uses of grant</strong></td>
      <td>
        Funding may be sought to explore the feasibility of a new solution and validate its potential.<br><br>
        Example activities include:<br><br>
1. Scoping and refining design and structure of vehicle (financial and legal).<br>
2. Market scoping, building initial pipeline and stakeholder consultations.<br>
3. Draft impact assessment and governance frameworks.<br>
      </td>
      <td>
        At this stage, funding may be sought to support the design and structuring activities required to prepare for the vehicle’s possible launch.<br><br>
        Example activities include:<br><br>
1. Advancing fundraising and investor outreach.<br>
2. Refining the blended finance vehicle’s design and legal structure.<br>
3. Refining governance, impact frameworks.<br>
4. Investment pipeline development and warehousing or piloting investments to build a track record.
      </td>
      <td>
        After an initial blended finance vehicle pilot or launch, funding may be sought for scale-up and expansion.<br><br>
        Example activities include:<br><br>
1.Setting up/refining the legal structure.<br>
2. Operational funding to identify investment pipeline, and prepare the vehicle for scale-up.<br>
3. Support to secure additional investor commitments to reach target  close.<br>
4. Contribution to GP capital commitments to catalyze additional investors.
      </td>
    </tr>
    <tr>
      <tr>
      <td><strong>Maturity of the Solution and Pre-requisite</strong></td>
      <td>
        The NGO is in the early phase of exploring a blended finance solution and has an initial theory of change and scoping exercise partners identified.
      </td>
      <td>
        The NGO has completed initial feasibility work, developed an initial financial structure and model, secured internal/external buy-in, identified key partners (e.g. fund manager) and received at least 1 hard/soft commitment from an investor.
      </td>
      <td>
The NGO’s role within the vehicle is defined, and the vehicle is either investment-ready or already launched. Secured anchor investment and commitment from key implementation partners.
      </td>
    </tr>
    <tr>
      <tr>
      <td><strong>Amounts</strong></td>
<td>Up to AUD 300,000 (~USD 200,000)</td>
<td colspan="3"> Up to AUD 840,000 (~USD 550,000)</td>
    </tr>
    <tr>
      <td><strong>Type of funding</strong></td>
      <td>Non-repayable grants</td>
      <td colspan="3">Non-repayable or conditionally repayable grants</td>
    </tr>
  </tbody>
</table>

**Amounts will be disbursed in AUD.*
<a id="eligibility-criteria"></a>
<h2>Eligibility Criteria</h2>
  <p><strong>Purpose:</strong> Proposals must articulate a clear need for grant support for the design, proof of concept, pilot, scale-up or expansion of an innovative blended finance vehicle. The proposed solution should be a financial instrument with a blended finance structure. It can be in the form of a fund, project finance vehicle, private company, bond, results-based financing, facility, or any other type of financial instrument. Vehicle must demonstrate potential to drive private investment at scale for development impact in Indo-Pacific.</p>
  <p><strong>Applicant types:</strong> Applications must be from NGOs applying independently or together with consortium partners. NGOs must have a material role in the design and implementation of the financial instrument such as fund manager, investment pipeline origination, technical assistance provider, or any other substantive role. The NGO should have evidence of support from their Board and/or internal management to participate in a blended finance structure prior to being eligible to receive funding.</p> 
  <p><strong>Focus geography:</strong> The applicant can be based in any country (developing or developed market). However, the blended finance vehicle must target one or more countries in the Indo-Pacific region that are eligible to receive Official Development Assistance and are aligned with DFAT’s list of target countries (Eligible Countries), which at the Commencement Date are: Bangladesh, Cambodia, Indonesia, Laos, Mongolia, Myanmar, Nepal, Pacific Islands Nations (Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Nauru, Niue, Papua New Guinea, Republic of Palau, Republic of the Marshall Islands, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu and Vanuatu), Pakistan, Philippines, Timor-Leste, Vietnam and Sri Lanka.    The proposal will be eligible for funding only if 100%* of the target region consists of one or more of the Eligible Countries. <em>*Convergence may consider regional proposals with up-to 20% of the anticipated portfolio exposure to any other ODA eligible country in the Indo-Pacific region not listed above.</em> </p>

  <p><strong>Focus sectors:</strong>  Blended finance vehicles supported by the program must focus on either or both of the following impact themes - </p>

- </p> <strong> Climate Action </strong> - Addressing climate change mitigation, climate change adaptation or both. Must align with at least one of the following: SDG 7 (Clean Energy), SDG 11 (Sustainable Cities), SDG 12 (Responsible Consumption), SDG 13 (Climate Action), SDG 14 (Life Below Water), SDG 15 (Life on Land).</p>
- __Gender Equality__ - Strong gender equality focus. Must significantly contribute to gender outcomes and focus on integration of gender equality into the design, implementation, and operations of vehicles, rather than as a “bolt-on feature” or “nice-to-have”. Must align with SDG 5 (Gender Equality) and can include vehicles which are targeting the nexus of gender equality and other impact themes like health care, education and financial inclusion.</p><br>

  __[Priority Stream for 1st Call for Proposal]: For this cycle, we are prioritizing stage 2 and stage 3 solutions; however, applicants for stage 1 solutions are also eligible to apply.__<br>

<a id="evaluation-criteria"></a>
<h2>Evaluation Criteria</h2>
  <p><strong>Development Impact:</strong> The financial vehicle is designed to deliver inclusive, measurable and significant environmental and social impact especially for underserved groups like women, indigenous people, and people with disabilities, with clear impact indicators and a focus on underserved geographies like Least Developed Countries (LDCs) and frontier markets (e.g., Pacific Island countries)</p>
  <p><strong>Scalability and Replicability:</strong> The vehicle aims to mobilize commercial and private capital at scale and has the potential to be replicable across similar contexts, serving as a model for other NGOs and contributing to a pipeline of investable solutions.</p>
  <p><strong>Additionality and Demonstration:</strong> Addresses climate finance and gender barriers in a new or more efficient way than existing solutions. Demonstrates a clear need for blended finance and grant and acceleration support from the Accelerator to unlock capital for underserved populations.</p>
  <p><strong>Gender Consideration:</strong> The vehicle incorporates gender-related risks and opportunities, and plans to use frameworks like the 2X Criteria to track gender outcomes.</p>
  <p><strong>Likelihood to achieve financial close and financial sustainability:</strong> The vehicle has a bankable/investable structure, is likely to attract private investors in the short to medium term, and demonstrates a clear pathway to long-term commercial viability with minimal or no need for concessionality. It includes a robust governance model, investment strategy, and risk management framework, and investors have been actively involved in the design of the concept to date.</p>
  <p><strong>Internal buy in:</strong> The NGO has internal leadership support, alignment with its mission, a committed team in place, and the legal capacity to develop or participate in the blended finance vehicle.</p>
  <p><strong>Stakeholder support:</strong> The vehicle has identified key financial and implementation partners with strong support from critical stakeholders in the target region(s)</p>
  <p><strong>Track record:</strong> NGOs must demonstrate relevant experience or a clear plan to access technical and financial expertise, understand local barriers in the target sectors and/or geographies, and have established partnerships to support the development and implementation of their blended finance vehicles.</p><br>
  <p>
    <em>Refer to the
  <a href="//assets.ctfassets.net/4cgqlwde6qy0/7p8n9Cl4opNL4ekDisiLUt/eff86a3cafd9cbc33d6f7dc355a838cd/DFAT_Accelerator_Evaluation_Criteria.pdf">
    <strong>document</strong>
  </a>for further details on the evaluation criteria.</em>
</p>


The Indo-Pacific NGO Blended Finance Accelerator supports non-governmental organizations (NGOs) working on transformative development projects and pioneering new approaches to financing sustainable development in the region. 

The Accelerator will provide a.) catalytic grant funding, and b.) acceleration support to qualifying awardees  to scope, develop, and scale high-impact blended finance vehicles that can unlock private capital to advance economic development, inclusive of climate and gender equality, in the Indo-Pacific region.


redd-francisco-XfpSr1OBtio-unsplash

Supporting fund and asset managers to develop and scale blended finance vehicles and mobilize institutional capital into emerging and developing markets.

<a id="overview"></a>
<a id="scope"></a>
<h2>Scope</h2>

Institutional investors manage well over $120 trillion globally, yet only a small fraction flows into emerging and developing economies (EMDEs). These markets represent the fastest-growing regions in the world, with GDP growth projected to outpace developed economies 2–3x over the next decade. From [2000 to 2022](https://blogs.adb.org/blog/larger-capital-markets-are-powering-job-creation-and-investment), capital market financing grew by 400% in middle-income countries and 800% in low-income countries. As a share of GDP, the amount in low- and middle-income countries has doubled.

__EMDEs offer:__
- __Portfolio diversification:__ Reduce overall portfolio risk and offer potential downside protection during downturns in mature economies.
- __Access to higher growth:__ Can deliver superior growth potential due to favorable demographics, urbanization, and low valuations. These dynamics often translate into returns that outperform developed economies.
- __Opportunities in digital infrastructure and frontier sectors__: Provide access to fast-growing, underserved sectors such as digital platforms and critical infrastructure –areas that are often saturated in developed markets.

Despite the opportunity, capital flows remain constrained by risk perceptions, limited track records, and structuring complexity. This is where __blended finance becomes a powerful enabler__ by combining catalytic capital with commercial investment, managers can mitigate risk, align incentives, and make EMDE strategies investable at scale.

__Blended finance transactions__ involving fund and asset managers are among the largest in the market, with a median deal size of ~$175 million. These structures demonstrate the ability of blended finance to mobilize significant volumes of commercial capital around institutional-scale opportunities. Yet despite this potential, mainstream fund and asset managers have participated in only 21% of blended finance deals to date, highlighting a vast untapped opportunity for scalable, replicable vehicles that can bring institutional capital into high-growth EMDE markets.

__The Accelerator for Fund Managers (A4FM)__ is designed to help fund and asset managers capture this opportunity. Whether you are a first-time manager or an established firm entering new markets, A4FM equips you with the tools, expertise, and partnerships to create scalable, bankable investment vehicles. The program supports institutional investors in diversifying portfolios, entering high-growth markets, and gaining early access to frontier opportunities,while building lasting capacity for blended finance.

This program has been made possible through support from Global Affairs Canada.

__A4FM provides:__

<div><span>
<table id="a4fm-cards-table">
  <thead>
    <tr>
      <th><strong>Skill Building</strong></th>
      <th><strong>Catalytic Grants</strong></th>
      <th><strong>Acceleration Support</strong></th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td data-title="Skill Building">
        <strong>Skill Building</strong>
        <div class="tw-flex tw-flex-col">
            <ul class="no-space">
              <li>Virtual and in-person training sessions for Canadian and global fund/asset managers</li>
              <li>Practical insights into blended finance structures and fund archetypes</li>
              <li>Case studies, peer-learning, and real-world examples from the Convergence network</li>
              <li>Access to  Convergence Market Data and global practitioner expertise</li>
            </ul>
        </div>
        <br><br>
        <a href="/accelerator/a4fm/news"><strong>Register now</strong></a>
      </td>
      <td data-title="Catalytic Grants">
        <strong>Catalytic Grants</strong>
        <div class="tw-flex tw-flex-col">
            <ul class="no-space">
              <li>Support the development of blended finance solutions from scoping to proof-of-concept and from launch to reaching target size</li>
              <li>Address barriers such as:
legal and financial structuring, validating the impact thesis, pipeline development, piloting, and impact measurement frameworks</li>
            </ul>
        </div>
        <br><br>
        <a href="/accelerator/a4fm/apply"><strong>Apply now</strong></a>
      </td>
      <td data-title="Acceleration Support">
        <strong>Acceleration Support</strong>
        <div class="tw-flex tw-flex-col">
            <ul class="no-space">
              <li>Training, curated data and analytics, and peer-learning opportunities</li>
              <li>Access to Convergence’s network including catalytic capital providers, ecosystem partners, etc.</li>
              <li>Technical feedback to refine investment models and strategies, and support in navigating through the unique requirements of catalytic capital providers</li>
            </ul>
        </div>
        <br><br>
        <a href="/resource"><strong>Resources</strong></a>
      </td>
    </tr>
  </tbody>
</table>
</span></div>
<br>

<a id="types-of-grants"></a>
<h2>Types of Grants</h2>

<p>Applicants can apply for the following types of catalytic grants:</p>

<table border="1" cellpadding="10" cellspacing="0" style="border-collapse: collapse; width: 100%;">
  <thead>
    <tr>
      <th>Grant Types</th>
      <th>Stage I: Scoping</th>
      <th>Stage 2: Proof-of-concept/Pilot</th>
      <th>Stage 3: Scale-up/Expansion</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td><strong>Definition &amp; Possible Activities Funded</strong></td>
      <td>
        Funding to explore the feasibility of a new solution and validate its potential.<br><br>
        Example activities:<br><br>
        1. Scoping and refining design and structure of vehicle (financial and legal)<br>
        2. Market scoping and stakeholder consultations<br>
        3. Impact analysis and governance
      </td>
      <td>
        Funding to support the design and structuring activities required to prepare for launch.
<br><br>
        Example activities include:<br><br>
        1. Fundraising and investor outreach<br>
        2. Design refinement and preparing legal documents<br>
        3. Investment pipeline development and warehousing or piloting investments to build a track record
      </td>
      <td>
        After an initial blended finance vehicle pilot or launch, applicants may require support for:<br><br>
        1. Operational funding for an expansion, for example a, 2nd, 3rd, or final closes of the fund OR<br>
        2. Operational funding to replicate/improve the successful blended finance solution in new contexts or new geographies. For example, fund II or III
      </td>
    </tr>
 <tr>
      <td><strong>Pre-requisites for this stage</strong></td>
      <td>Developed initial design and structure of the blended finance vehicle, the impact and investment thesis, and early stakeholder engagement</td>
      <td>Refined the financial model, capital structure, impact analysis, and governance with advanced engagement with potential investors</td>
      <td>Vehicle launched, initiated capital deployment, and first close in process,  compelling case and concrete investor interest for expansion</td>
    </tr>
    <tr>
      <td><strong>Maximum available Funding*</strong></td>
      <td>Up-to CAD $260,000 (~USD 190,000)</td>
      <td colspan="3">Up-to CAD $500,000 (~USD 360,000)</td>
    </tr>
    <tr>
      <td><strong>Type of Grant Funding</strong></td>
      <td>Non-repayable grants</td>
      <td colspan="3">Conditionally repayable grants</td>
    </tr>
    <tr>
      <td><strong>Size of the Vehicle</strong></td>
      <td colspan="3">Capacity and potential to scale the financial vehicle to an average target size of at least US$50 million, first close could be less than US$50 million, supported with a roadmap for scaling up vehicle</td>
    </tr>
    <tr>
      <td><strong>Cost-Sharing</strong></td>
      <td colspan="3">Grantees must contribute a minimum of 10% of the total cost (in cash or in-kind) towards the completion of the activities</td>
    </tr>
  </tbody>
</table>
  <p><strong>*Grant funding will be made in Canadian Dollars</strong></p>
<hr>
<a id="eligibility-criteria"></a>
<h2>Eligibility Criteria</h2>

<p><strong>Applicant types:</strong> Eligible applicants include fund managers, asset managers, or investment management/advisory firms working in partnership with a fund or asset manager. Applicants must intend to scope, design, launch, and/or scale a blended finance vehicle in EMDEs. We welcome both emerging adopters of blended finance and experienced practitioners, with grant types tailored to the maturity and needs of the proposed solution.</p>

<p><strong>Focus geography:</strong> Projects must target global emerging and developing markets, as defined in the <a href="https://www.oecd.org/en/topics/sub-issues/oda-eligibility-and-conditions/dac-list-of-oda-recipients.html">OECD-DAC List of ODA Recipients</a>. We highly encourage vehicles that target least developed countries(LDCs) and lower middle income countries (LMICs) to apply.</p>

<p><strong>Focus sectors:</strong> Solutions must deliver a clear development impact (direct or indirect) by addressing one or more <a href="https://sdgs.un.org/goals">sustainability-aligned sectors</a> (e.g., climate, healthcare, education, gender equality, and financial inclusion) and demonstrate a strong link to advancing gender equality.</p>

<p><strong>Mobilization:</strong> Solutions must show the potential to mobilize private capital at scale and demonstrate that the financial structure can be replicated in other markets, contributing to broader market learning and impact.</p>

<p>
  If you have any questions about eligibility, see the
  <a href="/accelerator/a4fm/faqs"><strong>Frequently Asked Questions</strong></a>
  section.
</p>

<a id="evaluation-criteria"></a>
<h2>Evaluation Criteria</h2>

<p>We evaluate eligible applications based on the following criteria:</p>

<p><strong>1. Track Record and Capabilities:</strong></p>
<ul>
  <li>Organization’s relevant experience in designing and managing investment vehicles</li>
  <li>Commitment of the core team</li>
  <li>Local presence or partnerships in target markets</li>
</ul>

<p><strong>2. Market Opportunity and Additionality:</strong></p>
<ul>
  <li>Clear market gap and rationale for using a blended structuring approach</li>
  <li>Potential to drive capital in EMDEs and create new investable opportunities</li>
  <li>Strategic use of A4FM support and applicant’s contribution</li>
</ul>

<p><strong>3. Target Size and Potential to Scale:</strong></p>
<ul>
  <li>Clear capital structure and fundraising strategy</li>
  <li>Level of institutional/private capital participation</li>
  <li>Pathway to scale-up, reach target size, and replicate at scale</li>
</ul>

<p><strong>4. Development Impact:</strong></p>
<ul>
  <li>Clear development impact thesis and value creation lens</li>
  <li>Targets underserved communities, with gender lens</li>
  <li>Clear KPIs and use of global standards for measurement and monitoring</li>
</ul>

<p><strong>5. Commercial Viability and Path to Financial Close:</strong></p>
<ul>
  <li>Bankability of the structure and alignment with investors’ risk–return profiles</li>
  <li>Progress toward reaching a close and clarity on next steps</li>
  <li>Robust risk management and governance framework</li>
</ul>

<p><strong>6. Strategic Partnership and Stakeholder Support:</strong></p>
<ul>
  <li>Support from key internal and external partners</li>
  <li>Well-defined roles and engagement strategy for launch</li>
</ul>

<p>For detailed evaluation criteria and scoring, 
  <a href="https://assets.ctfassets.net/4cgqlwde6qy0/DO5MtjmLZE0GctJki8zXo/93b7ea225c3b17984bc84dfa4e1f197d/a4fm_evaluationcriteria_en.pdf" target="_blank" rel="noopener noreferrer"><strong>Download Evaluation Criteria</strong></a>.
</p>

<a id="overview"></a>
<a id="portée"></a>
<h2>Portée</h2>

Les investisseurs institutionnels gèrent plus de 120 000 milliards de dollars à l'échelle mondiale, mais seule une petite fraction de ces capitaux est investie dans les économies émergentes et en développement (EMDEs). Ces marchés représentent les régions les plus dynamiques au monde, avec une croissance du PIB qui devrait dépasser de 2 à 3 fois celle des économies développées au cours de la prochaine décennie.  De [2000 à 2022](https://blogs.adb.org/blog/larger-capital-markets-are-powering-job-creation-and-investment), le financement des marchés de capitaux a augmenté de 400 % dans les pays à revenu intermédiaire et de 800 % dans les pays à faible revenu. En pourcentage du PIB, le montant dans les pays à faible et moyen revenu a doublé.

__Les EMDEs offrent:__
- __Diversification du portefeuille:__ réduction du risque global du portefeuille et protection potentielle contre les baisses en période de ralentissement des économies matures.
- __Accès à une croissance plus élevée:__ potentiel de croissance supérieur grâce à une démographie favorable, à l'urbanisation et à des valorisations faibles. Cette dynamique se traduit souvent par des rendements supérieurs à ceux des économies développées.
- __Des opportunités dans les infrastructures numériques et les secteurs de pointe:__ ils offrent un accès à des secteurs en forte croissance et mal desservis, tels que les plateformes numériques et les infrastructures critiques, qui sont souvent saturés sur les marchés développés.

Malgré ces opportunités, les flux de capitaux restent limités par la perception des risques, les antécédents limités et la complexité de la structuration. C'est là que __le financement mixte devient un puissant catalyseur__: en combinant des capitaux catalytiques avec des investissements commerciaux, les gestionnaires peuvent atténuer les risques, aligner les incitations et rendre les stratégies des EMDE investissables à grande échelle.

__Les transactions de financement mixte__ impliquant des gestionnaires de fonds et d'actifs sont parmi les plus importantes du marché, avec une taille médiane de transaction d'environ 175 millions de dollars. Ces structures démontrent la capacité du financement mixte à mobiliser des volumes importants de capitaux commerciaux autour d'opportunités à l'échelle institutionnelle. Pourtant, malgré ce potentiel, les gestionnaires de fonds et d'actifs traditionnels n'ont participé qu'à 21 % des transactions de financement mixte à ce jour, ce qui met en évidence une vaste opportunité inexploitée pour des véhicules évolutifs et reproductibles capables d'attirer des capitaux institutionnels vers les marchés EMDE à forte croissance.

__L'Accelerator for Fund Managers (A4FM)__ est conçu pour aider les gestionnaires de fonds et d'actifs à saisir cette opportunité. Que vous soyez un gestionnaire débutant ou une entreprise établie qui pénètre de nouveaux marchés, l'A4FM vous fournit les outils, l'expertise et les partenariats nécessaires pour créer des véhicules d'investissement évolutifs et bancables. Le programme aide les investisseurs institutionnels à diversifier leurs portefeuilles, à pénétrer des marchés à forte croissance et à accéder rapidement à des opportunités pionnières, tout en renforçant durablement leurs capacités en matière de financement mixte.

Ce programme a été rendu possible grâce au soutien de Affaires mondiales Canada.

__A4FM offre:__

<div><span>
<table id="a4fm-cards-table">
  <thead>
    <tr>
      <th><strong>Renforcement des Compétences</strong></th>
      <th><strong>Subventions Catalytiques</strong></th>
      <th><strong>Soutien à l'Accélération</strong></th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td data-title="Renforcement des Compétences">
        <strong>Renforcement des Compétences</strong>
        <div class="tw-flex tw-flex-col">
            <ul class="no-space">
              <li>Des sessions de formation virtuelles et en présentiel pour les gestionnaires de fonds/d'actifs canadiens et internationaux</li>
              <li>Des informations pratiques sur les structures de financement mixte et les archétypes de fonds</li>
              <li>Études de cas, apprentissage entre pairs et exemples concrets tirés du réseau Convergence</li>
              <li>Accès aux données de marché Convergence et à l'expertise mondiale des praticiens</li>
            </ul>
        </div>
        <br><br>
        <a href="/accelerator/a4fm/news"><strong>Inscrivez-vous</strong></a>
      </td>
      <td data-title="Subventions Catalytiques">
        <strong>Subventions Catalytiques</strong>
        <div class="tw-flex tw-flex-col">
            <ul class="no-space">
              <li>Soutenez le développement de solutions de financement mixte, de la définition du périmètre à la validation du concept, et du lancement à l'atteinte de la taille cible</li>
              <li>Surmontez les obstacles tels que: la structuration juridique et financière, la validation de la thèse d'impact, le développement du pipeline, le pilotage et les cadres de mesure de l'impact</li>
            </ul>
        </div>
        <br><br>
        <a href="/accelerator/a4fm/apply"><strong>Postulez</strong></a>
      </td>
      <td data-title="Soutien à l'Accélération">
        <strong>Soutien à l'Accélération</strong>
        <div class="tw-flex tw-flex-col">
            <ul class="no-space">
              <li>Formation, données et analyses sélectionnées, et possibilités d'apprentissage entre pairs</li>
              <li>Accès au réseau de Convergence, notamment aux fournisseurs de capitaux catalytiques, aux partenaires de l'écosystème, etc.</li>
              <li>Retour technique pour affiner les modèles et stratégies d'investissement, et aide pour naviguer parmi les exigences uniques des fournisseurs de capital catalytique</li>
            </ul>
        </div>
        <br><br>
        <a href="/resource"><strong>Ressources</strong></a>
      </td>
    </tr>
  </tbody>
</table>
</span></div>
<br>

<a id="types-de-subventions"></a>
<h2>Types de subventions</h2>

<p>Les candidats peuvent solliciter les types de subventions catalytiques suivants:</p>

<table border="1" cellpadding="10" cellspacing="0" style="border-collapse: collapse; width: 100%;">
  <thead>
    <tr>
      <th>Types de subventions</th>
      <th>Étape I: Définition du champ d'application</th>
      <th>Étape 2: Preuve de concept/projet pilote</th>
      <th>Étape 3: Mise à l'échelle/expansion</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td><strong>Définition et activités pouvant être financées</strong></td>
      <td>
        Financement destiné à explorer la faisabilité d'une nouvelle solution et à valider son potentiel.<br><br>
         Exemples d'activités:<br><br>
        1. Définition et affinement de la conception et de la structure du véhicule (financier et juridique)<br>
        2. Définition du marché et consultation des parties prenantes<br>
        3. Analyse d'impact et gouvernance
      </td>
      <td>
         Financement destiné à soutenir les activités de conception et de structuration nécessaires à la préparation du lancement.<br><br>
        Exemples d'activités:<br><br>
        1. Levée de fonds et recherche d'investisseurs<br>
        2. Perfectionnement de la conception et préparation des documents juridiques<br>
        3. Développement d'un pipeline d'investissements et stockage ou pilotage d'investissements afin de constituer un historique
      </td>
      <td>
        Après un projet pilote ou le lancement initial d'un véhicule de financement mixte, les candidats peuvent avoir besoin d'aide pour:<br><br>
        1. Financement opérationnel pour une expansion, par exemple une deuxième, troisième ou dernière clôture du fonds OU<br>
        2. Financement opérationnel pour reproduire/améliorer la solution de financement mixte réussie dans de nouveaux contextes ou de nouvelles zones géographiques. Par exemple, fonds II ou III
      </td>
    </tr>
        </tr>
 <tr>
      <td><strong>Conditions préalables à cette étape</strong></td>
      <td>
        Conception et structure initiales du véhicule de financement mixte, thèse d'impact et d'investissement, et engagement précoce des parties prenantes 
      </td>
      <td>
        Affinement du modèle financier, de la structure du capital, de l'analyse d'impact et de la gouvernance grâce à un engagement avancé avec des investisseurs potentiels
      </td>
      <td>
        Lancement du véhicule, début du déploiement du capital et première clôture en cours,  argumentaire convaincant et intérêt concret des investisseurs pour l'expansion
      </td>
    </tr>
    <tr>
      <td><strong>Financement maximal disponible*</strong></td>
      <td>Jusqu'à 260 000 $ CA (environ 190 000 $ US)</td>
      <td colspan="3">Jusqu'à 500 000 $ CA (environ 360 000 $ US)</td>
    </tr>
    <tr>
      <td><strong>Type de subvention</strong></td>
      <td>Subventions non remboursables</td>
      <td colspan="3">Subventions remboursables sous certaines conditions</td>
    </tr>
    <tr>
      <td><strong>Taille du véhicule</strong></td>
      <td colspan="3">Capacité et potentiel d'augmentation du véhicule financier jusqu'à une taille cible moyenne d'au moins 50 millions de dollars américains, la première clôture pouvant être inférieure à 50 millions de dollars américains, soutenue par une feuille de route pour l'augmentation du véhicule</td>
    </tr>
    <tr>
      <td><strong>Partage des coûts</strong></td>
      <td colspan="3">Les bénéficiaires doivent contribuer à hauteur d'au moins 10 % du coût total (en espèces ou en nature) à la réalisation des activités</td>
    </tr>
  </tbody>
</table>
  <p><strong>*Les subventions seront versées en dollars canadiens.</strong></p>
<hr>
<a id="critères-déligibilité"></a>
<h2>Critères d'éligibilité</h2>

<p><strong>Types de candidats:</strong> Le candidat doit être un gestionnaire de fonds, un gestionnaire d'actifs ou une société de gestion/conseil en investissement (en partenariat avec un gestionnaire d'actifs ou un gestionnaire de fonds) ayant l'intention d'étudier, de concevoir, de lancer et/ou d'étendre un véhicule de financement mixte dans le(s) EMDE(s). Nous cherchons à soutenir à la fois les nouveaux adeptes de la finance mixte et les praticiens expérimentés, avec des types de subventions adaptés à l'étape de la solution.</p>

<p><strong>Zone géographique ciblée:</strong> Marchés émergents et en développement du monde entier, conformément à la  <a href="https://www.oecd.org/en/topics/sub-issues/oda-eligibility-and-conditions/dac-list-of-oda-recipients.html">liste des bénéficiaires de l'aide publique au développement (APD) établie par le Comité d'aide au développement (CAD) de l'OCDE.</a> Nous encourageons vivement les véhicules destinés aux pays les moins avancés (PMA) et aux pays à revenu intermédiaire de la tranche inférieure (PRITI) à postuler.</p>

<p><strong>Secteurs prioritaires:</strong> Les solutions doivent viser un impact sur le développement en ciblant un ou plusieurs <a href="https://sdgs.un.org/goals">secteur aligné sur le développement durable</a> secteurs alignés sur le développement durable.</p>

<p><strong>Mobilisation:</strong> Les solutions doivent démontrer leur potentiel à mobiliser des capitaux privés à grande échelle. Les solutions doivent démontrer la reproductibilité de la structure financière, contribuant ainsi à l'apprentissage du marché.</p>

<p>Si vous avez des questions concernant l'éligibilité, consultez la section <a href="/accelerator/a4fm/faqs"><strong>Foire aux questions.</strong></p>

<a id="critères-dévaluation"></a>
<h2>Critères d'évaluation clés</h2>

<p>Nous évaluons les candidatures éligibles sur la base des critères suivants:</p>

<p><strong>1.	Expérience et capacités: </strong></p>
<ul>
  <li>Expérience pertinente de l'organisation dans la conception et la gestion de véhicules d'investissement</li>
  <li>Engagement de l'équipe principale</li>
  <li>Présence locale ou partenariats sur les marchés cibles</li>
</ul>

<p><strong>2.	Opportunité commerciale et additionnalité:</strong></p>
<ul>
  <li>Lacunes évidentes du marché et justification du recours à une approche de structuration mixte</li>
  <li>Potentiel pour attirer des capitaux dans les économies émergentes et en développement et créer de nouvelles opportunités d'investissement</li>
  <li>Utilisation stratégique du soutien de l'A4FM et contribution du candidat</li>
</ul>

<p><strong>3.	Taille cible et potentiel d'expansion:</strong></p>
<ul>
  <li>Structure du capital et stratégie de levée de fonds claires</li>
  <li>Niveau de participation des capitaux institutionnels/</li>
  <li>Voie à suivre pour passer à l'échelle, atteindre la taille cible et reproduire à grande échelle</li>
</ul>

<p><strong>4.	Impact sur le développement:</strong></p>
<ul>
  <li>Thèse claire sur l'impact sur le développement et perspective de création de valeur</li>
  <li>Cibler les communautés défavorisées, en tenant compte de la dimension de genre</li>
  <li>Indicateurs de performance clés clairs et utilisation de normes mondiales pour la mesure et le suivi</li>
</ul>

<p><strong>5.	Viabilité commerciale et voie vers la clôture financière:</strong></p>
<ul>
  <li>Bancabilité de la structure et alignement sur le profil risque-rendement de l'investisseur</li>
  <li>Progrès vers la conclusion et clarté sur les prochaines étapes</li>
  <li>Cadre solide de gestion des risques et de gouvernance</li>
</ul>

<p><strong>6.	Partenariat stratégique et soutien des parties prenantes :</strong></p>
<ul>
  <li>Soutien des principaux partenaires internes et externes</li>
  <li>Rôles et stratégie d'engagement clairement définis pour le lancement</li>
</ul>

<p>Pour consulter les critères d'évaluation détaillés et le barème de notation, 
  <a href="//assets.ctfassets.net/4cgqlwde6qy0/5MazPkWliU7luX5GqyLmyt/ad3c32ae357915fc617839d85a8e7cb4/a4fm_evaluationcriteria_fr.pdf" target="_blank" rel="noopener noreferrer"><strong>téléchargez le document ici</strong></a>.
</p>

Emerging and developing economies (EMDEs) provide compelling opportunities for Canadian as well as globally-based fund and asset managers with the potential for increased growth, portfolio diversification, access to an array of asset classes, and scaling-up new investment strategies. Blended finance uses catalytic capital to reduce risk exposure in such investments, enabling private institutional investors to enter these markets.<br><br>
Whether you are a first-time manager or an established firm entering new EMDE markets, A4FM equips you with the support needed to scope, structure, and launch scalable blended finance vehicles. Through catalytic grants, skill-building, market insights, and on-going acceleration support, the program helps fund and asset managers to:<br>
-Build blended finance capacity and equip teams to structure blended vehicles<br>
-Diversify market reach and portfolio exposure of blended vehicles<br>
-Enter high-growth, high-impact markets by reducing risk exposure<br>
-Gain early access to untapped, frontier opportunities while supporting sustainability

Les économies émergentes et en développement (EMDEs) offrent des opportunités intéressantes aux gestionnaires de fonds et d'actifs canadiens et internationaux, avec un potentiel de croissance accru, de diversification des portefeuilles, d'accès à une gamme d'actifs et de développement de nouvelles stratégies d'investissement. La finance mixte utilise des capitaux catalytiques pour réduire l'exposition au risque dans ces investissements, permettant ainsi aux investisseurs institutionnels privés d'entrer sur ces marchés.<br><br>
Que vous soyez un gestionnaire débutant ou une société établie qui pénètre de nouveaux marchés EMDE, A4FM vous apporte le soutien nécessaire pour définir, structurer et lancer des véhicules de financement mixte évolutifs. Grâce à des subventions catalytiques, au renforcement des compétences, à la connaissance du marché et à un soutien continu à l'accélération, le programme aide les gestionnaires de fonds et d'actifs à:<br>
-Développer les capacités de financement mixte et équiper les équipes pour structurer des véhicules mixtes<br>
-De diversifier la portée du marché et l'exposition du portefeuille des véhicules mixtes<br>
-Pénétrer des marchés à forte croissance et à fort impact en réduisant l'exposition au risque<br>
-Accéder rapidement à des opportunités inexploitées et pionnières tout en soutenant la durabilité

RSgroup

RS Group

*The application deadline for the Window is September 30, 2022.* 

The Asia Natural Capital Design Funding Window provides grant funding for the design and launch of catalytic blended finance solutions focused on natural capital in Asia. This Window is funded by the [RS Group](http://www.rsgroup.asia/ "RS Group Website"), a family office based in Hong Kong.

This Window will support blended finance solutions that find new ways to enhance and protect the world's stock of natural assets, including water, land, soil, air, plants and animals, by attracting private investment at scale. For example, solutions could be aimed at:

- Protecting biodiversity
- Reducing ecosystem degradation (e.g. deforestation)
- Mitigating and adapting to climate change
- Reducing unsustainable use of land and oceans 
- Restoring and rehabilitating impaired terrestrial, coastal and aquatic ecosystems

...while providing a fair and sustainable living to local communities.

Please refer to the [Factsheet](https://assets.ctfassets.net/4cgqlwde6qy0/2fAif1fxOzJ0yszbFQIdTR/8f9bba93376aa10588434cbd4f614f1d/Asia_Natural_Capital_Design_Funding_Factsheet.pdf) on the Asia Natural Capital Design Funding Window for more information

---

## Types of Applications
Practitioners can apply for feasibility study or proof of concept funding:

- __Feasibility study:__ Funding to explore the feasibility of the vehicle. For example, assessing the investability/bankability of the transaction, conducting market scoping and developing the vehicle structure.  Convergence will award __grants__ between $50,000 and $200,000 for feasibility studies. Promising feasibility studies funded through the Design Funding Window will be considered for follow-on proof of concept funding.
- __Proof of concept:__ If a feasibility study (or equivalent) has been completed, funding to complete all design and structuring activities to launch the vehicle. For example, finalizing the capital structure and financial model, establishing the legal structure, and producing key documents.  Convergence will award __repayable grants__ between $200,000 and $500,000 for proof of concept work. Determination of whether a grant is repayable will be made on a case-by-case basis.
---

## Eligibility Criteria
To be eligible for consideration for the Asia Natural Capital Design Funding Window, proposals must meet the following criteria:

- The proposal must be for a __blended finance vehicle__. The vehicle must aim to use catalytic capital from public or philanthropic sources to attract private sector investment to the identified development challenge.
- The vehicle must __focus on the natural capital sector__.
- The __target region__ for the blended finance vehicle must be in __Asia__. Preference would be given to proposals targeting Southeast Asia. Practitioners should have on the ground presence or partnerships in Asia.
- Practitioners __can only use the awarded grant funding for the design and launch of the blended finance vehicle__ – not for investment capital or to fund operational activities of an already established vehicle. See [grant portfolio](https://www.convergence.finance/design-funding/grant-portfolio "Grant Portfolio") for examples of previous grants made by Convergence.
- The __proposal must adhere to the applicable proposal template__, detailing the development challenge, proposed blended finance vehicle, key risks and mitigation strategies, design activities and costs, and the applicant's relevant experience.
  - [__Feasibility study proposals__](https://assets.ctfassets.net/4cgqlwde6qy0/21d74dIpc0SttdLxJ32REl/0bd2dd841c2da2c5b0af9d918bbfde4d/Convergence_Template_Feasibility_Study_Asia_Natural_Capital_Window__Final_.docx) must 1) include an initial vehicle structure and investment thesis, and 2) have initiated engagement with potential funders and relevant stakeholders.
  - [__Proof of concept proposals__](https://assets.ctfassets.net/4cgqlwde6qy0/6SgUlDodejwJgMwUGlh951/5868c953a70ebbf0e775531a30486705/Convergence_Template_Proof_of_Concept_Asia_Natural_Capital_Window__Final_.docx) must 1) detail interest and ideally commitment to participate, from funders and relevant stakeholders, and 2) include an initial financial model.
- Convergence aims to select the strongest proposals based on the eligibility and evaluation criteria. __Convergence does not prioritize repayable grants and selection of proposals will not be based on whether a grant is repayable or not__. If a grant is structured as repayable, the terms of repayment will be determined on a case-by-case basis with the grantee. Repayment is often contingent upon the launch of the proposed blended finance solution.
- Proposals are only accepted from __organizations or consortiums of organizations__. The lead organization must be able to provide 1) proof of incorporation, and 2) financial statements for the previous fiscal year.
- Practitioners awarded funding are expected to __regularly report key challenges, learnings, and results__. This will be synthesized into a case study or learning brief and published to support market-wide learning.

---

## Evaluation Criteria
Proposals will be evaluated on the following criteria:

- __Scalability and/or replicability:__ How much private capital does the vehicle aim to catalyze? If the vehicle is successful, can other practitioners use a similar approach? Will the vehicle contribute to creating a pipeline of investable deals/projects in natural capital in Asia?
- __Demonstration effect:__ Is the vehicle testing a new design? Is the vehicle replicating an existing approach in a new market? Is the vehicle attracting partners that have not participated in the blended finance space before?
- __Impact:__ Does the vehicle propose to drive a significant amount of natural capital impact? Will the vehicle have a measurable impact on an ecosystem? How will environmental impact and risk be measured and will it have a scientific basis? Are there other social, economic, or environmental impacts of the vehicle? 
- __Additionality:__ Does the vehicle aim to deploy financial instruments that are under-supplied and will therefore catalyze financing with a high degree of additionality? Does the vehicle have strong potential to address a market failure in the short term, and catalyze broader market financing in the long term?
- __Stakeholder support:__ Does the vehicle have the support of key stakeholders in the target region / country (e.g., government)?
- __Likelihood to achieve financial close:__ Is the vehicle likely to attract investors and close within the short or medium term?
- __Contributions to portfolio and development risk-return:__ Does the vehicle represent a strong development risk-return (i.e., high risk vehicles should have the potential to achieve significant natural capital impact)?
- __Field Building:__ Does the vehicle contribute to field building? Does is it contribute to building local capacity and strengthening breadth and depth of local markets and communities? Does the applicant have a strong local presence in Asia? 

---

## Application Process

Our application process has three distinct stages:
- Stage 1: Application questionnaire, proposal submission, and initial shortlisting
- Stage 2: Detailed due diligence to shortlist proposals for Funding Committee review
- Stage 3: Compliance review and approval by Convergence’s Board of Directors

__Further details are provided below.__ 

Stage 1: Proposal Submission and Shortlisting
- Applicants are required to submit a proposal to the Asia Natural Capital Design Funding Window using either the [feasibility study](https://assets.ctfassets.net/4cgqlwde6qy0/21d74dIpc0SttdLxJ32REl/0bd2dd841c2da2c5b0af9d918bbfde4d/Convergence_Template_Feasibility_Study_Asia_Natural_Capital_Window__Final_.docx "Convergence Feasibility Study Template") or [proof of concept](https://assets.ctfassets.net/4cgqlwde6qy0/6SgUlDodejwJgMwUGlh951/5868c953a70ebbf0e775531a30486705/Convergence_Template_Proof_of_Concept_Asia_Natural_Capital_Window__Final_.docx "Convergence Proof of Concept Template") template. Convergence reviews proposals according to eligibility and evaluation criteria and shortlists the most promising proposals.

Stage 2: Due Diligence & Funding Committee
- If shortlisted, applicants will be asked to respond to due diligence questions from Convergence, and if required, provide additional information. Based on the proposals and supplementary information provided, Convergence selects the strongest proposals to present to Convergence’s Funding Committee. The Funding Committee, composed of independent experts, assesses shortlisted proposals and recommends proposals for funding. 

Stage 3: Compliance & Board Approval
- Following a recommendation from the Funding Committee, selected applicants will undergo a compliance review. Following this review, proposals are presented to Convergence’s Board of Directors for final approval.

---

## Application Submission Instructions

__Please read through the following steps carefully before submitting an application:__

-	__Step 1:__  To start an application, fill out our questionnaire and submit a concept note in the [Application Portal](https://designfunding.convergence.finance/en/ "Convergence Design Funding Portal").

-	__Step 2 (Optional):__ Submit the draft application atleast two weeks before the application deadline, if you would like feedback from the Convergence team.

-	__Step 3:__ Submit the final proposal by the deadline.**

All proposals will follow the [feasibility study](https://assets.ctfassets.net/4cgqlwde6qy0/21d74dIpc0SttdLxJ32REl/0bd2dd841c2da2c5b0af9d918bbfde4d/Convergence_Template_Feasibility_Study_Asia_Natural_Capital_Window__Final_.docx "Convergence Feasibility Study Template") or [proof of concept](https://assets.ctfassets.net/4cgqlwde6qy0/6SgUlDodejwJgMwUGlh951/5868c953a70ebbf0e775531a30486705/Convergence_Template_Proof_of_Concept_Asia_Natural_Capital_Window__Final_.docx "Convergence Proof of Concept Template") template provided, unique to each Design Funding Window.

* Convergence staff may reach out to your team for a brief call to ensure alignment with the window if necesssary.

** An applicant can directly submit the final proposal without completing Step 2.

Please note that Convergence will only consider one application per organization per round. Convergence is unable to provide detailed feedback on applications that are not shortlisted for funding.

---

## Application Submission Deadlines
Applications to the Asia Natural Capital Design Funding Window will be considered on a rolling basis. The next application deadline is September 30, 2022. 


Convergence Template Feasibility Study Asia Natural Capital Window

application/vnd.openxmlformats-officedocument.wordprocessingml.document

Convergence Template Proof of Concept Asia Natural Capital Window

The Asia Natural Capital Design Funding Window provided grant funding for the design and launch of catalytic blended finance solutions focused on natural capital in Asia. This Window was funded thanks to the support of the RS Group, a family office based in Asia. It is closed and no longer accepting applications.

MAS Monetary Authority of Singapore.svg

Monetary Authority of Singapore

UBS optimus colour

UBS Optimus Foundation

Olayan-logo transparent

Olayan Group

RF logo screen green

The Rockefeller Foundation

Flora Ji

Global Vice President, Nature Based Solutions, Shell

Geoffrey Seeto

Head of Emerging Markets, New Forests Asia (Singapore) PTE LTD.

Jesse Ang

Independent Director, BPI/ACEN

Karen Tsang-Hounsell

KarenTsangHounsell hs cropped

Head of Business Development, InfraCo Asia

*This Window is closed and no longer accepting applications.*

The Indo-Pacific Design Funding Window provides grant funding for the design and launch of catalytic blended finance solutions in certain countries in the Indo-Pacific region, focused on any of the following:

1) __Climate Finance__ - Addressing climate change mitigation, climate change   adaptation or both. Blended finance solutions with co-benefits of climate   action are encouraged.

Must align with at least one of the following: SDG 7 (Clean Energy), SDG    11 (Sustainable Cities), SDG 12 (Responsible Consumption), SDG 13 (Climate Action), SDG 14 (Life Below Water), SDG 15 (Life on Land).

2) __Gender Equality__ -  Aim to make a significant contribution to gender     equality outcomes.

Must align with SDG 5 (Gender Equality).

3) Blended finance solutions that also lead to climate action co-benefits like job creation are encouraged.

This Window is funded by the Australian Government. 

For the upcoming deadline, we will give preference to -

- Proof of concept stage applications that can attract private sector capital at scale and launch within 12 months of receiving the design funding grant. 

- For applications focused on climate finance, those focused on sustainable and resilient infrastructure, climate-smart agriculture and climate insurance. 

Each application will be evaluated in context of the geographic and sectoral focus of the proposed financial structure. 

---

## Types of Applications
Practitioners can apply for feasibility study or proof of concept funding:

- __Proof of concept:__ If a feasibility study (or equivalent) has been completed, funding to complete all design and structuring activities to launch the vehicle. For example, finalizing the capital structure and financial model, establishing the legal structure, and producing key documents. Convergence will award repayable __grants up to $350,000__ for proof of concept work. Determination of whether a grant is repayable will be made on a case-by-case basis.

- __Feasibility study:__ Funding to explore the feasibility of the vehicle. For example, assessing the investability/bankability of the transaction, conducting market scoping and developing the vehicle structure. Convergence will award __grants up to $200,000__ for feasibility studies. Promising feasibility studies funded through the Design Funding Window will be considered for follow-on proof of concept funding.

---

## Eligibility Criteria
To be eligible for consideration for the Indo-Pacific Design Funding Window, proposals must meet the following criteria:

- __Focus__ - The proposal must be for a blended finance vehicle. The vehicle must aim to use catalytic capital from public or philanthropic sources to attract private sector investment to the identified development challenge. The vehicle must have a primary focus on at least one of the following: 1) climate finance 2) gender equality 
- __Geographic Eligibility__ - The target region for the blended finance vehicle must be one or more of the following "Eligible Countries" in the Indo-Pacific region:  Afghanistan, Bangladesh, Cambodia, Indonesia, Laos, Mongolia, Myanmar, Nepal, Pacific Nations (Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Nauru, Niue, Papua New Guinea, Republic of Palau, Republic of the Marshall Islands, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu and Vanuatu), Pakistan, Philippines, Timor-Leste, Vietnam and Sri Lanka. The proposal will be eligible for funding only if at least 80% of the target region consists of one or more of the Eligible Countries. 
- __Use of Funds__ - Practitioners can only use the awarded grant funding for the design and launch of the blended finance vehicle – not for investment capital or to fund operational activities of an already established vehicle. See [grant portfolio](https://www.convergence.finance/design-funding/grant-portfolio "Grant Portfolio") for examples of previous grants made by Convergence.
- __Proposal Format__ - The proposal _must adhere to the applicable proposal template_, detailing the development challenge, proposed blended finance vehicle, key risks and mitigation strategies, design activities and costs, and the applicant's relevant experience.
  - [__Feasibility study proposals__](https://assets.ctfassets.net/4cgqlwde6qy0/48ki0G6M9IW7vba6HHRG59/5b1b364a2c3df2289e95c53a9a09fd77/Proposal_Template_for_Feasibility_Study_Indo-Pacific_Design_Funding_Window.docx) must 1) include an initial vehicle structure and investment thesis, and 2) have initiated engagement with potential funders and relevant stakeholders.
  - [__Proof of concept proposals__](https://assets.ctfassets.net/4cgqlwde6qy0/6ZL3iznvTeheT35yD7iseK/498b7fea3c31932191df90cd74a8f580/Proposal_Template_for_Proof_of_Concept_Indo-Pacific_Design_Funding_Window.docx) must 1) detail interest and ideally commitment to participate, from funders and relevant stakeholders, and 2) include an initial financial model.
- __Type of Grant__ - Convergence aims to select the strongest proposals based on the eligibility and evaluation criteria. _Convergence does not prioritize repayable grants and selection of proposals will not be based on whether a grant is repayable or not_. If a grant is structured as repayable, the terms of repayment will be determined on a case-by-case basis with the grantee. Repayment is often contingent upon the launch of the proposed blended finance solution.
- __Application Requirements__ - Proposals are only accepted from organizations or consortiums of organizations. The lead organization must be able to provide 1) proof of incorporation, and 2) financial statements for the previous fiscal year.
- __Reporting__ - Practitioners awarded funding are expected to regularly report key challenges, learnings, and results. This will be synthesized into a [case study](https://www.convergence.finance/resource/2Pj91GkMpWc9hdmqWSxwm3/view) or learning brief and published to support market-wide learning.

---

## Evaluation Criteria
Proposals will be evaluated on the following criteria:

- __Scalability and/or replicability:__ How much private capital does the vehicle aim to catalyze? If the vehicle is successful, can other practitioners use a similar approach?
- __Demonstration effect:__ Is the vehicle testing a never-before-tested design? Is the vehicle replicating an existing approach in a new market? Has the need for using a blended finance vehicle been demonstrated? Is the vehicle attracting partners such as institutional investors that have not participated in the blended finance space before?
- __Development Impact:__ What is the intended social, economic, or environmental impact of the vehicle? Who will be the ultimate beneficiaries of the vehicle and how will they benefit?
- __Gender considerations:__ How will gender considerations be incorporated into the vehicle’s design and operations? What will be the gender impact of the vehicle? 
- __Additionality:__ Does the vehicle aim to deploy financial instruments that are under-supplied and will therefore catalyze financing with a high degree of additionality? Does the vehicle have strong potential to address a market failure in the short term, and catalyze broader market financing in the long term?
- __Stakeholder support:__ Does the vehicle have the support of key stakeholders in the target region / country (e.g., government)? 
- __Likelihood to achieve financial close:__ Is the structure of the vehicle bankable/investable? Is the vehicle likely to attract investors and close within the short or medium term? Have investors been actively involved in the design of the vehicle? 
- __Response to Covid-19:__ How does the vehicle respond to Covid-19? How does the vehicle address economic reconstruction & resiliency in the medium term?

---

## Application Process

Our application process has three distinct stages:
- Stage 1: Application questionnaire, proposal submission, and initial shortlisting
- Stage 2: Detailed due diligence to shortlist proposals for Funding Committee review
- Stage 3: Compliance review and approval by Convergence’s Board of Directors

__Further details are provided below.__ 

Stage 1: Proposal Submission and Shortlisting
- Applicants are required to submit a proposal to the Indo-Pacific Design Funding Window using either the [feasibility study](https://assets.ctfassets.net/4cgqlwde6qy0/48ki0G6M9IW7vba6HHRG59/5b1b364a2c3df2289e95c53a9a09fd77/Proposal_Template_for_Feasibility_Study_Indo-Pacific_Design_Funding_Window.docx "Convergence Feasibility Study Template") or [proof of concept](https://assets.ctfassets.net/4cgqlwde6qy0/6ZL3iznvTeheT35yD7iseK/498b7fea3c31932191df90cd74a8f580/Proposal_Template_for_Proof_of_Concept_Indo-Pacific_Design_Funding_Window.docx "Convergence Proof of Concept Template") template. Convergence reviews proposals according to eligibility and evaluation criteria and shortlists the most promising proposals.

Stage 2: Due Diligence & Funding Committee
- If shortlisted, applicants will be asked to respond to due diligence questions from Convergence, and if required, provide additional information. Based on the proposals and supplementary information provided, Convergence selects the strongest proposals to present to Convergence’s Funding Committee. The Funding Committee, composed of independent experts, assesses shortlisted proposals and recommends proposals for funding. 

Stage 3: Compliance & Board Approval
- Following a recommendation from the Funding Committee, selected applicants will undergo a compliance review. Following this review, proposals are presented to Convergence’s Board of Directors for final approval.

---

## Application Submission Instructions

__Please read through the following steps carefully before submitting an application:__

-	__Step 1:__  Before drafting an application, fill out the [design funding questionnaire](https://www.convergence.finance/design-funding/open-window/application "Design Funding Questionnaire") on our website.

-	__Step 2:__ Following submission of a questionnaire, email [design.funding@convergence.finance](mailto:design.funding@convergence.finance "Design Funding Email") to schedule a brief call with the Convergence team to ensure alignment of objectives and mission. If available, please attach a concept note or presentation to the email. 

-	__Step 3:__ After speaking to the Convergence team, applicants are encouraged to send a draft proposal to [design.funding@convergence.finance](mailto:design.funding@convergence.finance "Design Funding Email") at least 2 weeks before the application submission deadline. Feedback will be provided within 7 business days. Draft proposals must use the standard [feasibility study](https://assets.ctfassets.net/4cgqlwde6qy0/48ki0G6M9IW7vba6HHRG59/5b1b364a2c3df2289e95c53a9a09fd77/Proposal_Template_for_Feasibility_Study_Indo-Pacific_Design_Funding_Window.docx "Convergence Feasibility Study Template") or [proof of concept](https://assets.ctfassets.net/4cgqlwde6qy0/6ZL3iznvTeheT35yD7iseK/498b7fea3c31932191df90cd74a8f580/Proposal_Template_for_Proof_of_Concept_Indo-Pacific_Design_Funding_Window.docx "Convergence Proof of Concept Template") template provided, unique to each Design Funding Window.

-	__Step 4:__ Submit the final proposal by following the link provided to you via email.

Please note that Convergence will only consider one application per organization per round. Convergence is unable to provide detailed feedback on applications that are not shortlisted for funding.

---

## Application Submission Deadlines
Applications to the Indo-Pacific Design Funding Window will be considered on a rolling basis.

*The next submission deadline is to be confirmed. Please visit this page for updates. *


Proposal Template for Feasibility Study Indo-Pacific Design Funding Window

Proposal Template for Proof of Concept Indo-Pacific Design Funding Window

The Indo-Pacific Design Funding Window provided grant funding for the design and launch of catalytic blended finance solutions focused on climate finance and gender equality in certain countries in the Indo-Pacific region. This Window was funded by the Australian Government. It is closed and is not accepting applications.

SIFI logo

SDG Impact Finance Initiative

### KEY TERMS FOR THE THIRD CALL FOR DESIGN FUNDING PROPOSALS
*Originally posted on the [SDG Impact Finance Initiative’s website](https://www.sdgimpactfinance.org/)*

__Start Your Application__ [__here__](https://designfunding.convergence.finance/en/).

__Read the FAQs [here](https://assets.ctfassets.net/4cgqlwde6qy0/uplC1vQwZtNEWk2uU1VEP/d02fb6916966830f5a0de3009b93d4db/SIFI_Cycle_3_FAQ.docx.pdf).__

We held two info sessions, which included insights on the application process, evaluation criteria, advice on submitting a successful application, and more.
- General information session: February 27, 2024, at 11AM – 12PM EST / 5PM – 6PM CET ([view recording](https://youtu.be/E8Q6GAPGObI))
- Targeted Information session : February 29, 2024 at 11AM – 12PM EST / 5PM – 6PM CET ([view recording](https://youtu.be/LZR4OfhtSjQ))

## Background

Following the success of the first and second calls for proposals, the [SDG Impact Finance Initiative](https://www.sdgimpactfinance.org/) (“the Initiative”) has announced a third call for proposals targeting a new set of UN Sustainable Development Goals (SDGs). The SDG Impact Finance Initiative’s Innovation Window awards grants for innovative impact finance solutions that will mobilize private capital for sustainable development in emerging and frontier markets. The Initiative is funded by the [State Secretariat for Economic Affairs](https://www.seco-cooperation.admin.ch/) (SECO), the [Swiss Development Cooperation Agency](https://www.eda.admin.ch/) (SDC), the [UBS Optimus Foundation](https://www.ubs.com/global/en/ubs-society/philanthropy/optimus-foundation.html), and the [Grandy Duchy of Luxembourg.](https://mfin.gouvernement.lu/en.html)

The SDG Impact Finance Initiative aims to accelerate advancements in the impact investing market by supporting the launch of innovative solutions that address market failures, deploy financial products that are under-supplied or supplied at insufficient volumes, and mobilize funding into new sectors and regions.

It aims to achieve three key objectives:
- Support the design and development of innovative impact finance solutions;
- Scale impact investing solutions by mobilizing private capital at scale; and
- Strengthen the impact investing ecosystem, improve overall frameworks, and promote quality impact management practices to enhance impact investment flows. 

Under this third call for proposals, with support from Convergence, the Initiative will award grant funding for feasibility studies, proof of concept activities and expansion of existing solutions. Proposed solutions should target one or more of __SDG 3 (Good Health & Well-Being), SDG 13 (Climate Action) and SDG 16 (Peace, Justice and Strong Institutions)__. Convergence supports the Initiative in the pre-selection of applications and the engagement with the applicants during the selection process.

# Key highlights of the call for proposals

- __Application period & available funding__: Concept notes will be accepted until March 15, 2024. Full proposals (invite-only) will be due on April 22, 2024. Up to USD 2 million in total will be awarded to support up to 5 solutions. Winners are expected to be finalized and announced by early September 2024.

- __Funding types__: Both grants and conditionally repayable grants will be awarded to support the design, launch or scaling of solutions. Conditionally repayable grants and their repayment terms will be considered for Proof of Concept and Expansion applications on a case-by-case basis. Repayment is expected only if the solution successfully launches and meets key milestones such as financial close. See “Which type of grant should I apply for?” for additional details. 

- __Thematic focus__: This third call for proposals is seeking solutions targeting any one of the below SDGs. No preference will be given to solutions that target multiple SDGs.
  - [SDG 3 (Good Health & Well Being)](https://sdgs.un.org/goals/goal3#overview): *Ensure healthy lives and promote well-being for all at all ages*
    - Solutions can target any areas aligned with SDG 3, including but not limited to:
       - Maternal and Child Health Support;
       - Accessible healthcare services including medicines, vaccines and health coverage;
       - Mental health and well-being;
       - Improvement in Health infrastructure.

 - [SDG 13 (Climate Action)](https://sdgs.un.org/goals/goal13): *Take urgent action to combat climate change and its impacts*
    - Solutions can target any areas aligned with SDG 13, including but not limited to:
       - Strengthen climate resilience and adaptive capacity to climate-related hazards and natural disasters;
       - Supporting climate change mitigation, adaptation and impact reduction with a focus on marginalized groups;
       - Fostering inclusive climate action. 

 - [SDG 16 (Peace, Justice and Strong Institutions)](https://sdgs.un.org/goals/goal16): *Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels*
    - Solutions can target any areas aligned with SDG 16, including but not limited to:
       - Fostering global peace by prioritizing efforts to reduce violence and protect vulnerable populations; 
       - Advance justice and the rule of law;
       - Enhance global governance by strengthening relevant national and international institutions.

- __Geographical focus__: Solutions can target any developing country or countries eligible to receive official development assistance (ODA) according to the OECD-DAC List of ODA Recipients. We highly encourage solutions that target low-income and least-developed countries. 

- __Demonstrated potential to benefit predominantly children__: We highly encourage applications that can demonstrate direct benefits to children and adolescents. 

- __Developing country applicants and partnerships__: We highly encourage applications that fall into any of these categories:
  - Applications from __local__ organizations based in developing countries
  - Applications from a __consortium__ of organizations from both developing and developed countries
  - Applications that strongly focus on __building long-term partnerships__ with developing country actors

# Which type of grant should I apply for?
Applicants can apply for Feasibility, Proof of Concept, or Expansion funding depending on the stage of the proposed solution. 

|   Pre-launch   |     | Post-launch (operational) | 
| ---------- | ---------- | ---------- |
| Feasibility study     | Proof of concept     | Expansion     |
|<ul><li>Grants up to USD 200,000.</li><li>Funding to explore the feasibility of a new solution and validate:</li><ul><li>Its ability to attract private investors through market testing</li><li>Its likelihood of delivering the anticipated development impact</li><li>Its initial design, capital structure and financial model</li></ul><li>Early stakeholder engagement and an initial design of the capital structure should have already been completed before applying.</li></ul> |<ul><li> Grants and conditionally repayable grants up to USD 500,000.</li><li>If feasibility stage (or equivalent) has been achieved, funding to complete all design and structuring activities required to launch the solution. For example:</li><ul><li>Finalizing the capital structure and financial model</li><li>Produce key legal and marketing documents</li><li>Fundraising activities to secure potential anchor investor(s)</li><li>Develop an investment pipeline</li></ul></ul>|<ul><li>Grants and conditionally repayable grants up to USD 300,000.</li><li>If a solution has already launched but requires operational funding support to scale and reach a financially viable size. For example:</li><ul><li>Fundraising/marketing to reach capital raising targets</li><li>Produce key legal documents</li><li>Due diligence on initial pipeline and capital deployment</li><li>Hiring of key personnel</li></ul></ul>|

# Evaluation criteria
All applications received will be scored on a scale of __0-100__ depending on the stage of the solution. We regret that we are unable to provide feedback on applications.

|      | Maximum available scores     |
| ---------- | ---------- |

|  Criteria    |   Feasibility study   |  Proof-of-concept    | Expansion     |
| ---------- | ---------- | ---------- | ---------- |
|__Development impact__<ul><li>__Impact__: Potential social, economic, or environmental impact of the solution</li><li>__Measurement__: Does the proposal identify robust metrics and impact measurement practices to measure the potential development impact?</li><li>Does the concept demonstrate the rationale and business case for using blended finance for climate adaptation and/or mitigation?</li></ul>| 18 | 18 | 18 | 
|__Additionality__<ul><li>__Initiative’s funding__: To what extent will the funding be catalytic in achieving the targeted development impact?</li><li>__Target developing countries__: To what extent will the funding be catalytic in achieving the targeted development impact?</li></ul>| 17 | 17 | 17 | 
|__Scale of private capital mobilization__<ul><li>__Direct (high priority)__: How much private capital is expected to be mobilized directly through the solution?</li><li>__Indirect__: How much private capital is expected to be mobilized indirectly through the solution?</li><li>__Leverage ratio__: For every $1 of the Initiative’s funding, how much private capital is expected to be mobilized by the solution?</li></ul>| 14 | 14 | 14 | 
|__Pioneering innovation__<ul><li>__Relative to alternatives__: Why is the solution unique relative to existing alternatives in the market?</li><li>__Replicability__: If successful, can the model be applied in different contexts? What valuable learnings can the solution offer to the broader ecosystem?</li></ul>| 18 | 15 | 13 | 
|__Developing country partnerships__<ul><li>__Engagement__: What levels of engagement have been completed to date with potential stakeholders and local partners in developing countries, and with whom?</li><li>__Strategy__: How well thought out is the engagement strategy?</li></ul>| 8 | 9 | 10 | 
|__Likelihood of successful fundraise__<ul><li>__Capital raise__: How likely is the solution expected to attract sufficient funding to launch and meet its fundraising targets?</li><li>__Investors__: What type of investors has the solution attracted to date (private, public, philanthropic)?</li></ul>| 10 | 12 | 13 | 
|__Track record of applicant__<ul><li>Does the applicant have the relevant expertise, track record, and capacity required to succeed?</li></ul>| 10 | 10 | 10 | 
|__Financial sustainability__<ul><li>Does the solution demonstrate a pathway to commercial viability over the long-term without the need for concessionality?</li></ul>| 5 | 5 | 5 | 
|__Total__<ul><li>Does the solution demonstrate a pathway to commercial viability over the long-term without the need for concessionality?</li></ul>| 100 | 100 | 100 | 

# Application and review process
__Stage 1: Concept note (accepting until March 15, 2024)__
- Interested applicants can start their application on Convergence’s portal. Stage 1 includes the completion of screening questions and the submission of an online application. 
- All concept notes will be screened against the eligibility criteria (see below), and those that are eligible will then be reviewed against the evaluation criteria. Convergence will only contact applicants selected to submit a full proposal (Stage 2).

__Stage 2: Full proposal (by invitation only - due April 22, 2024)__
- Competitive concept notes will be invited to submit a full proposal. Those advancing to this stage receive instructions on how to submit a proposal. Final proposals must be submitted by the deadline in order to be considered. No exceptions will be made.

__Stage 3: Initial review and shortlisting__
- All full proposals will be reviewed and assessed against the evaluation criteria by Convergence. Shortlisted proposals will be recommended by Convergence to the funding partners of the SDG Impact Finance Initiative for further consideration and due diligence.

__Stage 4: Due diligence__
- Shortlisted proposals will undergo two types of due diligence in parallel:
  - *Proposal-level*: Convergence will request responses to detailed questions on the proposal, and introductions to key stakeholders for interviews.
  - *Applicant-level*: Applicants will undergo a compliance review led by Convergence’s Chief Financial Officer.

__Stage 5: Investment Committee__
- Shortlisted proposals that satisfactorily clear due diligence will be recommended by Convergence to the Investment Committee.
- The Investment Committee is composed of independent experts and the CEO of the SDG Impact Finance Initiative who will recommend proposals to the Initiative Executive Board for final approval.

__Stage 6: SDG Impact Finance Initiative Executive Board__
- Proposals recommended by the Investment Committee will be reviewed for final approval by the SDG Impact Finance Initiative Executive Board.

__Stage 7: Contracting__
- Following final approval from the SDG Impact Finance Initiative Executive Board, the contracting stage is initiated with the selected awardees.

# Eligibility criteria

| Criteria     | Description     |
| ---------- | ---------- |
|Developing countries| <ul><li>Solutions must target activities that benefit ODA-eligible countries as defined by the OECD Development Assistance Committee.</li><li>Solutions must target activities that benefit ODA-eligible countries as defined by the OECD Development Assistance Committee.</li><li>The Initiative will not fund solutions targeting any countries subject to financial sanctions.</li></ul> | 
|SDGs| <ul><li>Solutions must clearly and directly address [SDG 3 (Good Health & Well-Being)](https://sdgs.un.org/goals/goal3#overview), [SDG 13 (Climate Action)](https://sdgs.un.org/goals/goal13) and [SDG 16 (Peace, Justice and Strong Institutions)](https://sdgs.un.org/goals/goal16)</li><li>No preference will be given to solutions that target multiple SDGs.</li></ul> | 
|Impact Finance solution| <ul><li>Feasibility Study and Proof of Concept applications must focus on the design and structuring of new impact finance solutions that have not yet launched.</li><li>Expansion applications must focus on the scaling of existing impact finance solutions that have already launched. </li><li>*Examples*: bonds, facilities, funds, capital markets instruments, private companies, project finance structures, results-based financing instruments etc.</li></ul> | 
|Minimum Progress | <ul><li>Proof of early stakeholder engagement (Example: draft or signed MoU, partnership agreement, EOI etc.) and an initial design of the capital structure should have been completed for all application types.</li></ul> | 
|End beneficiaries in developing countries | <ul><li>Impact finance solutions must clearly and directly benefit end beneficiaries in targeted developing countries.</li></ul> | 
|Private Capital mobilization| <ul><li>Solutions must show strong potential for private capital mobilization on a direct and/or indirect level. Direct private capital mobilization is preferred.</li></ul> | 
|Type of applicants| <ul><li>Applications will only be accepted by organizations or consortia of organizations. Organizations must have proof of incorporation and audited financial statements from the most recent fiscal year.</li><li>Ineligible applicants<ul><li>Individuals</li><li>The Initiative will not fund solutions targeting any countries subject to financial sanctions.</li></ul><li>Applicants can be based anywhere in the world. We highly encourage locally-based institutions in developing countries to apply.</li></ul> | 
|Target size | <ul><li>Solutions must demonstrate a credible plan to scale to a size of at least USD 25 million over the medium to long term.</li></ul> |
|Budget and ‘skin in the game’ | <ul><li>At least 50% of the project’s total budget should be covered by a source other than the SDG Impact Finance Initiative. This can be either financial and/or in-kind support.</li></ul>
|International ESG practices | <ul><li>All applications should adhere to international practices regarding environmental, social and governance (ESG) standards.</li></ul>

# Additional notes
- Multiple applications from the same organization are accepted if the proposed solutions are different.
- At this time, proposals must be submitted in English.
- Applicants can access frequently asked questions [here](https://www.convergence.finance/frequently-asked-questions) and submit additional questions to design.funding@convergence.finance. The SDG Impact Finance Initiative and Convergence will update the FAQ regularly to address recurring questions from applicants.


SDG Impact Finance Initiative - Design Funding - Expansion Template (FINAL)

SDG Impact Finance Initiative - Design Funding - Proof of Concept Template (FINAL)

SDG Impact Finance Initiative - Design Funding - Feasibility Study Template (FINAL)

The <a href="https://www.sdgimpactfinance.org/" target="_blank">SDG Impact Finance Initiative’s</a> Innovation Window awards grants for innovative impact finance solutions to mobilize private capital for sustainable development in emerging and frontier markets. The Initiative is funded by the State Secretariat for Economic Affairs (SECO), the Swiss Development Cooperation Agency (SDC), the UBS Optimus Foundation, and the Grand Duchy of Luxembourg. From 2022 to 2024, Convergence supported the design, set-up, launch, and management of the Innovation Window as the strategic implementing partner for the Window’s first three funding cycles,  awarding USD 4.6 million to 19 solutions ranging in maturity from feasibility studies to proof of concepts and expansion stage grants across multiple SDGs and the Global South. [Review the grant portfolio](https://www.convergence.finance/design-funding/grant-portfolio#grant-portfolio) to learn more.

The Global Emerging Markets Design Funding Window provided grant funding for the design and launch of catalytic blended finance solutions across emerging markets. This Window was funded by Global Affairs Canada. It is closed and no longer accepting applications.

This competition aimed to identify and award successful existing student financing solutions to: 1.) help more young people enter tertiary education, 2.) drive improved education outcomes, and 3.) increase youth employment. | (French) Ce concours a identifié les solutions de financement d’études existantes qui peuvent aider davantage de jeunes à entrer dans l’enseignement supérieur et ainsi améliorer les résultats en matière d’éducation ainsi que l’augmentation de l’emploi des jeunes. | (Spanish) Este premio identifié soluciones exitosas de financiamión de estudiantes existentes que pueden ayudar a más jóvenes a ingresar a la educación terciaria y, por lo tanto, impulsar mejores resultados educativos, así como un mayor empleo juvenil. 

Jennifer Buckley

Founder and Managing Director, Sweef Capital

Vipul Bhagat

Vipul Bhagat- hs

Senior Advisor, Castalia

English Application Template - Feasibility Study - Gender-Responsive Climate Finance Design Funding Window

English Application Template - Proof-of-Concept - Gender-Responsive Climate Finance Design Funding Window

French Application Template - Feasibility Study - Gender-Responsive Climate Finance Design Funding Window

French Application Template - Proof-of-Concept - Gender-Responsive Climate Finance Design Funding Window

The Gender-Responsive Climate Finance Design Funding Window will award early-stage grant funding for the design and launch of innovative blended finance vehicles focused on the intersection of climate change and gender equality in emerging markets globally. This Window is funded by the Government of Canada.

Le Guichet de financement de la conception du financement climatique sensible au genre va accorder des subventions de démarrage pour la conception et le lancement de véhicules de financement mixte innovants axés sur l’intersection des problématiques de changement climatique et d’égalité des genres dans les marchés émergents du monde entier. Ce guichet est financé par le gouvernement du Canada. 

logo-joint-sdgfund-2020-horizontal-colour

Joint SDG Fund

The UN Joint SDG Fund (the Fund) aims to close the financing gap to achieve the Sustainable Development Goals (SDGs) in developing countries through systemic action by the UN system. Component 2 of the Fund provides grant funding, preparatory and catalytic grants to initiatives that can deliver a demonstration of concept and leverage investment at scale. Between April 2020 and February 2021, Convergence led an independent evaluation process to evaluate and select initiatives for the First Call on SDG Financing for Component 2 of the Fund. 

Earlier this year, Convergence hosted a peer-to-peer learning session for [Blended Finance Accelerator](https://www.convergence.finance/accelerator) grantees focused on fundraising for blended finance solutions at the nexus of climate and gender. This session offered Convergence grantees the opportunity to discuss challenges they faced and lessons learned while designing and investing in catalytic blended finance vehicles in the space. With funding support from Global Affairs Canada, this closed-door learning session brought together grantees, investors, and donors to explore the various aspects of fundraising for blended finance.

Key takeaways from the session:

__What funders look for in blended finance opportunities differs by mandate__ <br>
Grant funders and catalytic investors were represented in the session. For grant funders, development impact remains central to their decision making. They value clear communication of impact indicators, particularly those that are evidence-based, measurable, and comparable. Grant funders also have a preference for projects that use minimum concessionality to achieve high levels of development impact while aligning with policy priorities and providing transparency in how public funds are used.

Catalytic investors typically have flexible capital and can take different positions in blended finance structures, depending on their internal risk return impact analysis. For them, alignment with social outcomes is vital and usually the first point of decision making. They look for credible financial models, experienced fund managers, robust impact measurement systems, and blended structures that effectively catalyze other investors while remaining efficient and focused. Team track record and the ability to adapt and learn are also key factors in investment decisions.

__Design for complexity and communicate with simplicity__ <br>
Participants were in consensus that blended finance structures often require sophisticated layering of capital: grants, equity, subordinated capital, senior debt, and guarantees. Investors emphasized the importance of speaking directly to each capital provider to understand their expectations, whether they are concessional, commercial, or philanthropic, rather than utilizing a one-size-fits-all approach.

__Aggregation as a strategy to unlock capital for the missing middle__ <br>
One fund manager shared how aggregation is being used as a strategic tool to mobilize capital for community-driven, nature-based enterprises that typically fall in the “missing middle”; too small for traditional institutional capital, yet too large for microfinance. By pooling investments into a single facility investors can participate pari passu across a diversified portfolio of enterprises, operating in new and often higher-risk sectors such as ecotourism, sustainable fisheries, and regenerative aquaculture. This approach allows for diversification across geographies and business models, making it more attractive to commercial and impact investors alike. 

__Catalytic capital must be patient and purpose-driven__ <br>
Multiple participants emphasized the importance of concessional capital that is long-term, impact-first, and flexible. In markets where cash flows are uncertain and outcomes can take years to materialize, like forest restoration or climate-smart agriculture for example, long tenors are often needed. One grantee shared that while some commercial investors cap their exposures, that is where patient concessional capital can come in and help extend fund maturities. This is often necessary for long-term climate investments in emerging markets in sectors such as agriculture. This capital also provides the flexibility to respond to external shocks, evolving risks, and the adaptive nature of blended finance structures in frontier markets. As one participant noted, “patient capital is not just a nice-to-have, it is a requirement when you're working with communities, nature, and governments.”

__Fundraising is nonlinear, expect setbacks and build redundancy__ <br>
Several participants shared that they faced a variety of setbacks, including unforeseen regulatory issues, shifting interest rate environments, and fiscal policy changes that disrupted fundraising plans, even after soft commitments and board approvals. Participants also noted that various exogenous factors, such as budget deadlines, can be used as alignment tools to accelerate closing timelines. A broad and diverse investor pipeline was recognized as essential for risk mitigation. One participant shared that “what [they] thought would be the hardest part, long tenors, actually was not. The real challenge was synchronizing investor timelines and managing shifting macro conditions.”

__Convert impact into investment language__ <br>
A common hurdle, especially for grantees coming from the conservation or development space, was translating impact narratives into investor-oriented language. Creating a compelling investment pitch, with financial projections, risk management strategies, and clear pipeline visibility is critical to build credibility with commercial capital providers.

__The climate-gender nexus is gaining traction__ <br>
Participants acknowledged that climate metrics are no longer enough on their own. Increasingly, gender outcomes are being demanded not just as side benefits but as integral to a fund’s theory of change. Many funds now incorporate gender metrics at both the fund and investee level. Most actors apply basic gender standards, such as the 2X Challenge, across all investments. There is growing interest in embedding gender equity into pipeline sourcing, governance, and performance metrics. One participant noted that “standardized impact metrics, particularly for gender, are becoming essential,” driving transparency and supporting comparisons between deals.

__Direct vs. fund-level investing__ <br>
For many impact investors, especially those without a local presence, fund-level investments offer better access to emerging market pipelines in sectors like regenerative agriculture or the blue economy, where due diligence, local knowledge, and deal flow aggregation are critical. Direct investing on the other hand, is often reserved for shorter-tenor working capital structures where the investor has a trusted relationship with the enterprise. For donor investors, funds offer a scalable route to reach qualified investees.

__Partnerships must be purposeful__ <br>
While strategic partnerships can enhance a fund’s credibility or technical capacity, fundraising partnerships rarely move the needle unless they come with concrete introductions and influence. Impact measurement, pipeline development, and technical assistance delivery are meaningful areas where partnerships can add operational value.

__Closing reflections__ <br>
As the blended finance space evolves, fund managers are increasingly being asked to demonstrate strategic clarity, impact rigor, and financial discipline while operating in increasingly complex markets. Despite growing investor interest, participants reiterated the importance of staying grounded in the end goal: building viable, high-impact solutions that mobilize capital for climate resilience and gender equity at scale.

The session served as a valuable reminder that while structures matter, the real measure of success is the ability to deploy capital into meaningful outcomes, supporting communities, protecting ecosystems, and building climate resilience with gender equity at the core. 
Convergence’s Blended Finance Accelerator has awarded $24 million in grant funding to over 79 solutions to date across seven initiatives. The program supports solutions across various levels of maturity including early design, proof-of-concept, and expansion. In addition to catalytic grant funding Convergence also provides acceleration support market intelligence, networking opportunities, and produces thought leadership that collectively benefits the entire ecosystem of blended finance practitioners. 

Learn more about the [Blended Finance Accelerator](https://www.convergence.finance/accelerator).

Learn about the key takeaways from our peer-to-peer learning session for Blended Finance Accelerator grantees focused on fundraising for blended finance solutions at the nexus of climate and gender.

Takeaways from Convergence’s Learning Session for Grantees

Key Takeaways from Convergence’s Learning Session for Grantees

Between 2020 and 2021, Convergence collaborated with the Swiss State Secretariat for Economic Affairs (SECO) to address the estimated $4 trillion annual SDG financing gap in developing countries.  As part of this collaboration, Convergence provided advisory support on the development of an initial grant-making mechanism (Innovation Window) aimed at providing catalytic funding to innovative financing solutions that align with the Sustainable Development Goals (SDGs) and attract greater private impact investment.

Drawing from its experience in managing its [Blended Finance Accelerator](https://www.convergence.finance/accelerator), Convergence collaborated with SECO and the initiative’s founding members to co-develop and lead the creation of the design funding window of the SDG Impact Finance Initiative (SIFI) in 2021. This initiative, dubbed the Innovation Window, provides catalytic design grants to support the early-stage development and structuring of innovative impact investment solutions. The Innovation Window complements the SIFI investment component, which provides patient, risk-tolerant capital to help crowd in private investment. Now global in scope, this original consultation process led by Swiss actors included both public and private sector partners: SECO, their intra-governmental partner the Swiss Agency for Development and Cooperation (SDC), UBS Optimus Foundation, and Credit Suisse Foundation. A consensus among the founding members was that this association should reach beyond the Swiss and position itself as a multi-donor platform. The partner association was formally [launched](https://www.seco.admin.ch/seco/en/home/seco/nsb-news/medienmitteilungen-2021.msg-id-86208.html) at the Building Bridges event in December 2021, and the collaboration with Convergence continued when it was announced as the key partner to lead the initiative’s initial launch and first call for proposals for the Innovation Window. This event marked a significant milestone in catalytic impact finance, bringing together various government entities and foundations to pool resources supporting private capital mobilization and closing the SDG funding gap.

In partnership with SIFI, Convergence launched the 1st call for proposals in March 2022 for the Innovation Window. That same year, an independent board was established by SIFI to guide the association’s decisions. As the Implementation Partner for the pilot, Convergence worked closely with SECO and other stakeholders to co-design the inaugural cycle of the Innovation Window. This involved defining the window’s objectives, eligibility criteria, grant types, and evaluation framework and ensuring the thematic focus aligned with SIFI’s vision and donor priorities for an SDG-agnostic entity.

Specifically, Convergence helped develop the use of funds and additionality criteria for each grant type, drawing on its experience with feasibility studies and proof of concept grants. Additionally, a new grant category, called expansion stage grants, was introduced to support scaling up already launched solutions. SIFI’s members and Convergence jointly promoted the first call for proposals, attracting a high-quality pool of applications during the pilot phase. Convergence also played a key role in recruiting Investment Committee members to assess and select proposals.

The inaugural Innovation Window cycle resulted in seven awards to innovators across multiple SDGs. Following this pilot phase, SIFI members recruited a local team, and in 2023 Guillaume Bonnel was appointed as the association’s first CEO.  Today, the platform has reached an international scale, with Luxembourg’s Ministry of Finance becoming the first European donor to join in 2024, followed by the Korea International Cooperation Agency (KOICA) in 2025 and the Ursimone Wietlisbach Foundation as a private foundation member.

Given Convergence’s active role in co-creating and designing the window, the association collaborated with Convergence to manage the second and third cycles. From 2022 to 2024, Convergence implemented three cycles that awarded a total of $4.6 million in grants to [19 solutions](https://www.convergence.finance/design-funding/grant-portfolio#grant-portfolio) at various stages of development.

The Innovation Window is unique in that it addresses a wide range of SDGs through its targeted approach, with each call for proposal specifying three to four SDGs as its thematic priorities. In total, nine out of the 17 SDGs were covered as thematic priorities. Notably, the Window prioritized SDGs traditionally receiving less private sector attention, such as SDG 14 (Life Below Water) and SDG 16 (Peace, Justice, and Strong Institutions).
- Cycle 1 attracted 76 proposals, resulting in 7 grant awards totalling $1.5 Million to solutions focused on SDG 4, 8, 12 and 13
- Cycle 2 attracted 259 proposals, resulting in 7 grant awards totalling $1.8 Million to solutions focused on SDG 5, 14 and 15
- Cycle 3 attracted 266 proposals, resulting in 5 grant awards totalling $1.3 Million to solutions focused on SDG 3, 13 and 16 <br>
<br>

These solutions spanned several impact themes and targeted diverse developing countries and emerging markets:
- __Gender__: four [Girls First Finance](https://www.convergence.finance/accelerator/grant-portfolio/4xDz9vDVzkL28FQSbSX7Me/view), [Aqua Farms Organization](https://www.convergence.finance/accelerator/grant-portfolio/6LZu6pQcimRWMpfcdA3wlR/view), [Chancen International](https://www.convergence.finance/accelerator/grant-portfolio/HzyuDSCEFF43k0Ln6e6Fi/view), [Reall](https://www.convergence.finance/accelerator/grant-portfolio/7L5FMKLvxp9Zc6rdPdqFWN/view)) out of the 19 solutions aim for a direct impact on gender equality through increasing access to finance, education, and housing. Additionally, 12 out of the 19 solutions have women-led teams
- __Emerging market focus__: 58% of the solutions target Sub-Saharan Africa, followed by those with a Global and Latin America focus.
- __Diverse impact themes:__ <br>
  a) 5 focus on agriculture, aquaculture, and fishing <br>
  b) 5 target conservation, restoration, and afforestation <br>
  c) 4 address access to health and education <br>
  d) The remaining solutions are either sector-agnostic or focus on peacebuilding, renewable energy,  education, or affordable housing
- __Strong partnerships__: Strong and synergistic partnerships are a key enabler of success for grantees. Six out of 19 solutions awarded through the Innovation window are being designed or implemented in the form of partnerships between multiple entity types. This approach worked particularly well for NGOs with practical experience but limited financial structuring expertise. They partnered with specialists to fill these gaps. For example, [Global Schools Forum ](https://www.convergence.finance/accelerator/grant-portfolio/63QNGIzrKEir6Wv5wj0r6z/view)teamed up with Kaizenvest and others to create an education financing initiative (Generation Empowerment Fund) using financial institutions and impact-linked incentives. Similarly, [Ground Up](https://www.convergence.finance/accelerator/grant-portfolio/6FinFPcXlIiEOVdL8mOGdN/view) partnered with Stanbic Investment Management Services (SIMS) to manage a Fund of Funds for SMEs in Ghana, boosting its appeal to local investors through SIMS’ market presence. <br>
<br>

In addition to acting as the implementation partner managing the call for proposals and awarding design grants, Convergence continues to support the active portfolio solutions by monitoring progress against milestones and reviewing deliverables to unlock grant funding, offering capacity building opportunities, providing feedback on solution design, and additional support through access to trainings, knowledge products, and a network of blended finance practitioners.

SIFI’s awardees will, if successful, generate pipeline for investors seeking opportunities to place capital in SDG-aligned businesses. SIFI’s flexible, highly responsive funding mechanism enables it to continually adjust the calls for proposals to direct capital toward solutions that address often undercapitalized SDGs. With additional members joining SIFI recently, the initiative is on track to take the form of a broad-spectrum partnership.

*See all the SDG Impact Finance Initiative Innovation Window solutions [here](https://www.convergence.finance/accelerator/grant-portfolio?filters=eyJkZXNpZ25GdW5kaW5nV2luZG93IjpbIlNERyBJbXBhY3QgRmluYW5jZSBJbml0aWF0aXZlIERlc2lnbiBGdW5kaW5nIFdpbmRvdyJdLCJkZXNpZ25BY3Rpdml0eSI6W10sInNlY3RvcnMiOltdLCJyZWdpb25zIjpbXSwiaW1wYWN0VGhlbWVzIjpbXX0%3D).*

A behind the scenes look at the design and founding of a multi-party entity to scale innovative finance: SDG Impact Finance Initiative

Reflections on the SDG Impact Finance Initiative

A behind the scenes look at supporting the early development of a multi-party entity to scale innovative finance: SDG Impact Finance Initiative

According to the [*2025 Macroeconomic Performance and Outlook Report*](https://www.afdb.org/en/documents/publications/africas-macro-economic-performance-and-outlook-report) released by the African Development Bank (AFDB), East Africa is projected to be the fastest-growing region in Africa, with GDP growth expected to rise from 4.4% in 2024 to 5.3% in 2025 and further increase to 6.1% by 2026. However, the underserved investment market in East Africa is immense. In response, new business models are emerging to address the barriers to financial inclusion in the form of mobile banking, digital lending, and other fintech innovations. Achieving success in reaching the underserved with appropriate services tailored to their needs includes focusing on enterprising individuals plus small and growing businesses.

## adOpes Microleasing Fund
In 2023, the SDG Impact Finance Initiative, with the support of Convergence, awarded a $200,000 expansion grant to adOpes under the Innovation Window. The Design Funding was specifically used to support expansion of the adOpes Microleasing Fund, which provides 9 to 18-month lease-to-own contracts to facilitate the acquisition of productive use assets by smallholder farmers. The Fund was launched in May 2023 and has deployed capital in Kenya, Tanzania, and Uganda, providing financing to Savings and Credit Cooperatives (SACCOs) and Microfinance institutions (MFIs) for microleasing to smallholder farmers, who would otherwise remain excluded from asset finance. In addition, the fund offers capacity-building and technical assistance, with the support of local technical partners  to the investees and farmers.

## Impact To-Date
As of December 2024, the adOpes Microleasing Fund's investments in partner SACCOs and MFIs have provided financing for lease-to-own contracts for __16,424 productive assets__ (microleases) for farmers in the region, with __68% of the total assets leased by women farmers__. These microleases are expected to increase the income of smallholder farmers by approximately __$4.8 million over the next three years__. Additionally, the Fund's investments have had an indirect mobilization or crowding in effect, with __SACCO and MFI partners leveraging about 50% of additional capital__ to help to co-finance these leases. The activity through the Microleasing Fund also led to the __creation of 57 formal jobs__ at the SACCO and MFI levels. 

Since May 2023, farmers have acquired a diverse range of assets, including farm tools, small transport, land leases, and climate-smart equipment such as solar and biogas-powered assets. By acquiring __climate-smart assets__, smallholder farmers are also contributing to SDG 13 (Climate Action) through the reduction of CO2 emissions as well as SDG 7 (Affordable and Clean Energy), by promoting the use of energy-efficient and environmentally friendly technologies. As of December 2024, the Microleasing Fund has financed __444 climate smart assets__, resulting in an estimated __775 tCO2 emission reductions__.

Through these initiatives, farmers like [Vicky Cherono](https://adopes.com/news/celebrating-vicky-cherono-empowering-women-in-agriculture/) and [Margaret Wanja](https://adopes.com/news/our-shujaa-the-inspiring-success-story-of-margaret-wanja/) have been able to transform their farms and homes, significantly changing their lives. Microleases are structured to transfer ownership to the farmers upon payment of the assets. This enables women and youth to overcome the collateral barrier of traditional lending.
![adOpes Microleasing Fund](//images.ctfassets.net/4cgqlwde6qy0/2FTlih0dIkSf2IzMY1Rr1q/48117a9ee2d51c3602b25d2092cfef6a/adOpes2.jpg)

## adOpes’ unique approach 
Within just 18 months of operations, adOpes has successfully achieved two key milestones; __non-performing loans of only 1% and successful recycling of capital__ through repaid principal and interest. Several factors contribute to the Microleasing Fund experiencing comparatively low losses. First, the Fund exclusively finances microleases for assets that can be sold in secondary markets in case of defaults. The ability to retain the asset while making payments and benefiting from its use provides a strong incentive for farmers to stay on track with payments. Second, the demand for asset finance tailored to the needs of farmers in East Africa exceeds the available capital. Thousands of SACCOs and MFIs across Kenya, Rwanda, Tanzania, and Uganda are looking to fund assets for their farmers, allowing for a rigorous screening and accreditation process to ensure requisite experience, vintage, balance sheet size, and current portfolio performance. Currently, the Fund’s indicative pipeline stands at 96 SACCOs/MFIs seeking to fund $48 million in assets for farmers. Additionally, having an external investment committee with extensive regional and sectoral knowledge and experience and a rigorous risk management framework ensures good governance. Finally, the microleasing portfolio is diversified by asset classes, countries, and currencies, mitigating geographical concentration risk.

## How to enhance and sustain impact in the microleasing and agrifinance sector?
From a market systems development perspective, adOpes’ investment approach extends beyond directly benefiting agriculture and agriculture finance supply chains. It also engages and catalyzes enterprises in supporting functions of the agriculture market system, including asset/equipment suppliers, micro-insurance providers, training providers, and input suppliers. By addressing a key constraint in agrifinance, a single investment can lead to growth in economic activity, job creation, and higher incomes, delivering significantly higher value for money compared to direct investments in each function separately.

SACCOs and MFIs, along with digital solutions and banking agents, have built a strong network in rural areas that link the financial sector with farmers. However, their services are often limited to deposits, savings, and small loans rather than productive loans to facilitate growth in the sector. Many SACCOs and MFIs remain unable to meet the capital needs of the vast numbers of farmers. Therefore, investments to scale high-performing SACCOs and MFIs are a critical component to driving growth and an untapped opportunity for the financial services market from both commercial and impact perspectives.

Additionally, capacity building plays a crucial role in empowering farmers. Financial literacy, entrepreneurship training, and agricultural best practices help both farmers and SACCOs and MFIs unlock their full potential while further de-risking the Fund’s portfolio. Availing capital for productive agricultural assets will also accelerate the distribution and uptake of climate-smart and green technology in the region.

## Key positive trends in the microleasing and agrifinance space
Agriculture is more vital than ever before. The global population is [expected to reach 10 billion by 2050](https://www.wri.org/insights/how-sustainably-feed-10-billion-people-2050-21-charts), leading to higher food consumption. Currently,[ family farms produce 80% of the world’s food supply](https://www.fao.org/newsroom/detail/Small-family-farmers-produce-a-third-of-the-world-s-food/en). Agriculture continues to be a crucial sector for Africa's socio-economic development. Smallholder farming alone supports over 60% of the continent's population and contributes around 23% to Africa's GDP. Access to inputs, financing, and availability of water are [essential for agricultural productivity and ensuring food security](https://www.nepad.org/blog/improving-food-security-africa-through-water-harvesting-technologies). These factors present both significant challenges and opportunities for the agricultural sector.

adOpes has observed a significant increase in awareness of agriculture’s importance, particularly the role of farmers in primary crop and livestock production  in East Africa. Farmers not only supply food for consumption but also provide inputs for value-added agriSMEs across the region.

Agriculture is increasingly important in providing livelihoods and income generation, especially for women and the growing youth population. Over the past three to five years, the agriculture sector has gained more recognition, leading to increased capital investment in agriSMEs. However, investing in primary agri-value chain production at the smallholder farmer level and their related activities remains a challenge. Farmers face multiple risks, including reliance on rain-fed agriculture, climate change impacts, and fluctuating input and selling prices for their produce.

As investors seek solutions to address these challenges, agrifinance players have a growing opportunity to innovate and provide tailored financial products for rural farmers.

## How Design Funding advanced the solution, and what’s next for adOpes?  
The Design Funding award helped to further propel adOpes and its Microleasing Fund by increasing visibility and attracting increased investor interest. In addition, the upfront rigorous and competitive application process allowed adOpes to further consider, refine, and align its offerings. The award supporting key design and expansion activities, combined with adOpes’ demonstrated impact so far, has further strengthened confidence in its forward-leaning and inclusive financing model. The grant has also supported deal structuring efforts in Kenya, Tanzania, and Uganda, further advancing the Fund’s mission. 

Looking forward, adOpes and the Microleasing Fund aim to fund the demand pipeline and continue to grow a quality portfolio that will take them into profitability. adOpes also plans to expand and deploy capital in Rwanda later in 2025. Together with partners in the areas of technology, insurance, capacity building, asset companies, agriSME,s and Ministries of Agriculture, adOpes aspires to build a platform that supports farmers in East Africa beyond capital alone.


Impact Story: adOpes - a microleasing platform offering productive assets to smallholder farmers and micro enterprises

adOpes - a microleasing platform

Latin America faces formidable challenges in maintaining access to capital against the backdrop of climate change and ecosystem degradation. Nearly $107 billion in additional investment is required per year in the region to support nature-based solutions (NbS) and align with the Rio Convention Targets<sup>1</sup>. Nature-based solutions play a vital role in maximizing the impact of capital invested in Latin America’s infrastructure and have high potential to contribute to the Sustainable Development Goals (SDGs).

AMPLO Impact Investing (Amplo)’s Blooming Roots Fund is designed to invest in gender inclusive NbS-aligned sectors in Latin America. Amplo is working with Grassroots Business Fund (GBF) and Andes Impact Partners (AIP), a spin-off of GBF, to design and operate the fund. 

## Feasibility study grant for the Blooming Roots Fund 

Convergence [awarded](https://www.convergence.finance/design-funding/grant-portfolio/3wYP2QawPGpubU3phuxxup/view) a feasibility study grant to Amplo under the [Gender-Responsive Climate Finance Window](https://www.convergence.finance/design-funding/open-window/gender-responsive-climate-finance-window) funded by Global Affairs Canada, for the design of the Blooming Roots Fund—a $50 million, blended fund that aims to invest in a diverse portfolio of for-profit NbS enterprises (NbSEs) focused on sustainable agriculture, sustainable tourism, health and personal care bio-products as well as nature-tech businesses that allow the scaling of portfolio companies in Latin America. The fund will invest in NbS-aligned sectors across Colombia, Peru, and Central America supporting gender-inclusive businesses that foster sustainable use of natural resources. 

The Blooming Roots Fund employs a blended finance strategy that combines innovative and flexible financing and technical assistance (TA). The fund aims to utilize investment capital to make direct investment into NbSEs and offer first-loss capital along with a guarantee to reduce investment risk. TA will support investees to gain new skills and improve their financial performance and capacity to generate impact. 

## Targeting climate and gender 

The Blooming Roots Fund aims to contribute to the development of NbSEs as a viable and long-term solution for addressing climate adaptation and mitigation and to bridge rural and gender gaps. The fund focuses on rehabilitating and strengthening the entrepreneurial ecosystem, targeting rural populations living in areas where economic activity relies on land use or exploitation.

TA will include opportunities to strengthen businesses’ environmental management, including the provision of necessary  tools for implementing sustainable practices and enabling appropriately delivered NbS, such as support for carbon certification and payment for ecosystem services structuring. Additionally, investees will receive gender-focused TA allowing them to develop gender-inclusive company policies that will foster female leadership and skills development to close information, financial, and digital literacy gaps.

Through the fund, over 400 community members will gain access to increased income and improved knowledge tools with 50% expected to be women. The NbSEs supported through the fund aim to restore natural habitats, protect the ecosystems of 1,000 ha of land, and capture 27,855 tons of CO2 through carbon sequestration.

## Challenges during the design process

In its original design, the fund aimed to primarily support smaller businesses, however managing many small investments proved costly and inefficient. To address this challenge the fund has developed a diversified investment strategy to pool resources from larger investments to support smaller ones. The fund uses a variety of long-term performance-based instruments, including revenue-based finance and mezzanine debt, and convertible debt or pure equity instruments for ecosystem enablers (innovation and tech-based businesses supporting NbSEs). Each investment is evaluated on a case-by-case basis to meet the investee’s needs.

Investors often perceive NbSEs and SMEs as high-risk investments. To mitigate this perceived risk, the Blooming Roots Fund has implemented risk reduction measures, including utilizing self-liquidating instruments, offering guarantees, and providing first-loss capital funded by grants. These mechanisms help reassure investors and make investment opportunities more attractive. 

Data availability for benchmarking purposes can be limited, especially in the context of supporting NbSEs and SMEs. To meet this challenge, the fund developed their own benchmarking system leveraging data drawn from previous advisory work and a comprehensive baseline study conducted on the ground. Using this data they have gained valuable insights into how to effectively support target businesses, particularly with a gender-smart approach.

![bloomingrootsfund update](//images.ctfassets.net/4cgqlwde6qy0/25uLZ4R1sc51LrS89jqrj2/1b818e8e7700dfd61f1c8905d07c37da/bloomingrootsfund_update.png)

## How Design Funding has helped to advance the solution

Convergence's Design Funding support to the Blooming Roots Fund has significantly advanced the fund’s efforts on multiple fronts. Design Funding has empowered Amplo to allocate more resources towards refining their structure and strengthened their fundraising endeavors by financially supporting their team's commitment. Feedback from Convergence has helped them enhance their investment thesis and refine their materials. Convergence’s support has also served as a compelling marketing asset for the fund, enhancing its credibility and appeal in the market.

## The importance of blended finance

Creating a robust pipeline of NbSEs is key to the fund achieving its mission of driving long-term, positive social, environmental, and economic change. To this end, the Blooming Roots Fund’s blended structure is essential. Utilizing grant capital for investment readiness ensures that NbSEs are adequately prepared to meet the fund's investment criteria, leading to pipeline development, derisking, and proper implementation of sustainable business models within the realm of NbSEs. This proactive approach to pipeline development increases the likelihood of identifying viable investment opportunities and contributes to the fund's overall impact objectives.

The fund's blended structure derisks the typical challenges sustainable business models often face including market volatility, regulatory uncertainties, and limited access to capital. Guarantees and first-loss grants encourage private investors to participate while instilling confidence in NbSEs, enabling them to pursue innovative solutions without fear of failure.

Proper implementation of sustainable business models is equally as important as investment. The fund's TA equips NBSEs with the knowledge, skills, and resources needed to empower them to execute their business strategies while maximizing social, environmental, and financial impact. This approach fosters resilience and adaptability within NBSEs allowing them to navigate challenges and capitalize on opportunities in a rapidly evolving market landscape.

## The way forward

Building on learnings from its initial pilot, conducted in the Providencia and Santa Catalina islands in Colombia, Amplo designed the Blooming Roots fund with the aim to expand its reach by implementing scalable and replicable strategies and further refine its investment approach to optimize the use of resources in the target areas for higher potential impact. The fund is currently completing its design and structuring activities and conducting stakeholder consultations.

The fund is also actively seeking alliances with organizations that share a commitment to sustainable development and have a proven track record of success in complementary sectors. They are currently exploring partnerships with organizations like [Cacao for Development](https://www.partners.net/program/cacao-for-development/#:~:text=C4D%20is%20a%20US%2425,complementary%20supply%20chains%20in%20Colombia), whose technical assistance program in the cacao and complementary crops value chain has garnered positive results in the region. Through collaboration with similar organizations the fund aims to leverage their expertise, networks, and resources to amplify impact, expand reach, and drive meaningful change in target communities and sectors.

*1. [State of Finance for Nature 2023, United Nations Environment Program](https://www.unep.org/resources/state-finance-nature-2023).*

---

*Have a blended finance solution at the intersection of climate change and gender equality? Apply for funding from our [Gender-Responsive Climate Finance Design Funding Window](https://www.convergence.finance/design-funding/open-window/gender-responsive-climate-finance-window), which awards early-stage grant funding for the design and launch of innovative blended finance vehicles focused on climate change and gender equality in emerging markets globally.*

*To see what Convergence has supported to date, review our Design Funding grantee portfolio [here](https://www.convergence.finance/design-funding/grant-portfolio).*

Learn how funding from Convergence has supported the Blooming Roots Fund, challenges they've faced, and what's next.

Grantee Profile: AMPLO Impact Investment

Grantee Profile: AMPLO Impact Investment - Advancing gender focused nature-based solutions

At COP28, Convergence announced the [award](https://www.convergence.finance/news-and-events/news/3uRpJsgsS4MpWN1427ezyP/view) of a proof-of-concept grant to NBSV Worldwide (sister entity of Fairventures Social Forestry) from the Asia Climate Solutions Design Grant to design a blended finance structure to support regenerative agroforestry and social forestry projects at scale in Indonesia.

Convergence’s Design Funding and Market Acceleration (DFMA) Manager, Krishna Malhotra, spoke with Paul Schüller, CEO of Fairventures Social Forestry and NBSV Worldwide, about what the organization aims to accomplish in designing their blended finance vehicle and their experience as a two-time Convergence grantee.

*Conversation has been edited and condensed. Find the recording of the full interview [here](https://youtu.be/AKcRitr3fXo).*

__Tell us about Fairventures Social Forestry’s story. Can you talk about the blended finance vehicle you are designing and the development challenge you are looking to address?__

Very happy to tell a bit about our business and how we have experienced the whole process of this very exciting window. 

I want to kick it off by sharing a bit about Fairventures. We are a developer of agroforestry projects active in Indonesia. The total team is around 40 people, of which 35 are based in Indonesia, with a relatively small team working from Europe. And that also shows our philosophy—that we really believe that in order to succeed as a project developer in Indonesia you really need to build and develop a local team which has the expertise and the skills to be successful as a developer in the mid to long run. 

We started our business at the end of 2018, with a pilot project in Central Kalimantan. We are now in an exciting phase, because we are about to commence work on two new projects, one located in Eastern Java and another in Jambi.

As an agroforestry developer in Indonesia, we actually focus on the social forestry program. The social forestry program is a very ambitious program from the government of Indonesia. In order to issue long-term 35 year land leases to local communities who live on or nearby forest lands. Around 90% of the forest land is held by the state in Indonesia.

Up until now, 6.4 million hectares have been issued under this social forestry program, and it's a target to double towards 30 million by 2030. So it's quite a big area of potential—social forestry. 12 to 30 million [hectares] is about one-third the size of Germany, so you can imagine that it's significant.

Social forestry—how it works is that local communities or smallholders can set up an entity, and become a member of that entity. It could be a farmer group or it could be a cooperative, that entity applies for the social forestry permit, allowing its members to utilize the land that is owned by the state.

We have been active in social forestry permits since the end of 2018. We have also carefully followed the sector over the years, and explored empirical research related to social forestry, identifying some areas for improvement. For example, some entities holding these social forestry permits are quite weak in terms of governance. There's not a clear management structure within these entities. As a result, quite often the [local community] members are not selling [agroforestry products] to the entity, but they are just selling it themselves to middlemen. Also, there's often no clear allocation of tasks and responsibilities within those entities. 

Some other observations relate to the fact that public sales are quite unstable. In Indonesia, there is a multilayer middleman structure. If you analyze the supply chain, the first one to two layers of middlemen quite often act extremely opportunistically, which means that the small holders get certain indications regarding species and quantities that the middlemen are looking to buy, but then, a year or two later, the picture suddenly looks quite different. That is very harmful to the smallholders because they are really eager to have a long-term stable offtaker for their products. 

Another observation relates to the reforestation obligations. According to Indonesian law, at least 50% of a permit area needs to consist of forests. However, in practice, that's only 10% up to 20% maximum, because, as you can imagine, if you plant timber seedlings, it takes a long time before income is generated. So instead of planting timber, the members often plant crops, or non-timber forest products, which generate faster revenues, but in the end they don't comply with the legislation around social forestry.

We believe with our model that we have found a way to tackle some of these challenges. The key to our approach is that we support the co-ops or the entities holding the social forestry permits to strengthen their governance. We cooperate with local NGOs in order to achieve that strengthening and we operate as a long-term offtaker of the products. That also quite often includes a pre-financing element because we have good connections to process or end offtakers of certain products. In that way, we can better predict what the mid to long-term demands will look like out of the private markets.

By pre-financing seedlings and all the inputs, we can achieve a better match between the production by the smallholders and the demands out of the markets. So in the end, we are simplifying and professionalizing the supply chain. A very important note is that you cannot try to completely leave out the middleman in this structure, because the first two-layers of middlemen often have an important function in their communities as well. You need to make them part of the solution. That can be done by actively involving them at the co-op or at the farmer group level. I hope that gives a bit of an idea regarding our business.

A bit about our pilot project, we have 3,000 hectares in Central Kalimantan under a social forestry permit. There we closed a 30 year corporation contract with the co-op holding that social forestry permit, and we are active on around 1,600 hectares, with a combination of timber species, but also crops on around 450 hectares. We are also now actively rolling out contract farming on the rubber jungle part of that area. Regarding the rubber parts, we also help the farmers to professionalize their ways of working. For example the way they tap the trees and the equipment they use for tapping.

We have closed a carbon off-taking contract with Stihl in the past, a German multinational known from the gardening equipment they produce. That contract is based on a corporate social responsibility (CSR) program of Stihl’s, so there are no credits involved there. We have also closed an impact loan with the UBS Optimus Foundation where the interest rates are linked to certain target impact key performance indicators (KPIs), such as local employment, gender equality and carbon sequestration. We are also in the process of closing a contract with a German offtaker for the rubber parts.

I hope that gives a bit of an idea of what our business model is. This is our showcase project in Central Kalimantan. We are now about to start our new projects one and East Java, a social forestry permit, around 850 hectares and another similar permit in Jambi.

__Can you tell us about your experience and learnings as a recipient of both a feasibility study grant and a proof-of-concept grant through Convergence’s Design Funding program.__

I think what is extremely important not to do is make it too complicated in the beginning. I remember when I started designing the blended finance structure for our business, there was always a tendency to over design or over engineer at the beginning, with sophisticated fund ideas in mind. In the end, I think what's extremely important to keep in mind, and to acknowledge, is that investors have a certain preferred way of potentially investing into your business. 

What kind of structure can you develop where you still have the most flexibility to serve those investors in an efficient way? At the same time you want to set next steps with your business, and with the funds that are available, make progress, because progress is also extremely important to show to the outside world. I think it's finding that balance, not making it overly complicated, keeping it efficient, low cost, and lean. At the same time you have it set up in such a way that hopefully, when you are able to secure big ticket [investments], you have the flexibility in the structure to accommodate that. I think that's extremely important. 

What we did as well is read through the very interesting materials on the Convergence website regarding studies that were done by Convergence in the past. To give you an example, what you quite often see with blended finance vehicles is that the domestic investment market is not very involved in terms of investing into the structure. How we took that into account is including what you see as PT WLI in our structure, that's a 100% Indonesian holding entity. That entity opens the door for Indonesian investors to invest into our business, because Indonesian investors are not so eager to invest through Singapore, they would rather invest through an Indonesian holding entity with regulation and legislation they are familiar with. I would also advise that applicants look into the studies [on the Convergence website], and see how they could use them in their own situations.

__Reflecting on your past success, what are some critical aspects that prospective grantees should be mindful of when applying to Convergence’s Design Funding program?__

An obvious one is very good and sharp planning. You don't want to have to hurry and work day and night in the last few days before the deadline comes. I think the basis is very good planning. 

What I also appreciated was involving different colleagues with different skills, so they can either contribute to the drafting process, do a bit of research or be involved in proofreading the notes. Really make it a team effort internally, I think that's also extremely important. Some other points that I noted from the process relate to due diligence interviews with externals. If you get to that stage it’s important to be extremely proactive and not wait too long, just start updating people about the interview process, and also make sure you have backups if someone cannot facilitate that interview for any reason, make sure you always have backups. I think that's also important. 

Another one I would like to emphasize relates to Q&A with the Convergence team. I would say try to keep a good speed in that process, because the Convergence team, Krishna, and others are presenting your case internally, so the better, more convincing information you can share in the fastest way possible, the more it helps the team get to a very good understanding of the of the idea, and then be able to present it to the different decision making bodies.

So teamwork, a team approach, and then regarding the due diligence interviews with externals, be very strict and sharp on that. And then at the Q&A, keep a good speed in that process. That would be my three main points.

__In the earlier stage of the process when developing your application, were there any elements that you focused on? Any insights from that stage you can share with prospective applicants?__

I would like to highlight two points. For us we have been active since the end of 2018, five years of implementation experience. What have been our learnings during those five years? How does that influence our business model going forward? Any questions about the business model that need to be bought into by external investors. Key learnings, how does it impact your business model? That's one. A second one would be to show that you have had interaction with investors, so you can show that you’re continuing to talk to investors and discussing ideas. It's extremely important that you get input from the potential investors. To give you an example, maybe an investor is saying, first, we want to see you ticking off milestones, ABC, for example, because for them, that’s a sign that you have de-risked the business model sufficiently. That kind of information, showing that you are talking to investors, and that you take that information with you, and that you try to get closer to the needs from the market. That's also extremely important, because in the end it needs to become investable and bankable. Those would be my two key points for applicants in the early stage.

Learn from Asia Climate Solutions Design Grantee NBSV Worldwide's application experience

Grantee Insights: NBSV Worldwide

During COP28, Convergence [announced](https://www.convergence.finance/news-and-events/news/3uRpJsgsS4MpWN1427ezyP/view) Powertrust as among the grantees awarded an Asia Climate Solutions Design Grant for designing a blended finance facility to address climate energy transition across South & South-east Asia. 

Convergence’s Design Funding and Market Acceleration (DFMA) Manager, Krishna Malhotra, spoke with Powertrust’s Head of Product, Joseph Armah, about what they aim to accomplish in designing their blended finance vehicle and their experience as a Convergence grantee.

*Conversation has been edited and condensed. Find the recording of the full interview [here](https://youtu.be/oob6-znKhjQ).*

__Tell us about Powertrust. What is the blended finance vehicle you are designing and the development challenge you are looking to address?__

Powertrust is a managed marketplace and what we do is enable multinationals who have stated net zero emission targets to procure energy attribute certificates from renewable energy developers across the global South. 

The way we do it initially is through bilateral agreements. You might wonder why we have this objective. If you think about it, these multinationals have stated renewable energy targets in terms of emissions and they want to be able to deploy capital to do that. At the same time, we also have developers, normally distributed across the global South, who would also like to have some capital, which would be a nice slice of the capital structure. But they are unable to do that and we have very small capacity. We're talking solar lanterns with three or four megawatt capacity. 

One way to do this is to aggregate all these projects and present them in a way they can be financed. That is what Powertrust does at its core: bring multinational organizations together in order to acquire these projects with respect to their specific energy attributes and be able to get these transactions done. We act in this space of creating a marketplace.
This cannot easily be achieved with the current model. There are a couple of reasons, the first is that developers want capital upfront and because they want capital upfront, it's not possible to wait until projects are developed in order for them to get the capital. The multinationals, on the other hand, want to pay after the renewable energy certificates (RECs) or energy attributes are delivered. So you have a conundrum where you have one entity wanting the capital deployed after the RECs are received and the other entity wanting to have capital in order to develop the projects. 
What we have put together is a blended finance prepayment model that allows this action to happen. Developers get their capital upfront to develop their projects. The multinationals are able to get renewable energy credits that can show there is additionality that has already been achieved. In addition, the developers will have a revenue stream that is denominated in USD, they will have cash flow that is certain and they will have the capital upfront. 
This allows them to de-risk their projects and bring other investors on board. When we think about what this blended finance prepayment model can do, we can walk through some of the attributes. The multinationals can pay upfront for multiple years of RECs. The mechanism allows upfront payment to these developers so they can have capital upfront. That also creates a new tranche in the capital structure, so they can talk about their debt and equity and this new tranche that is coming in.

So, the question is, why blended finance? The idea of blended finance, as most of you are reading about and thinking through it, really allows us to reduce the cost of capital, because you're thinking about capital coming from different tranches.

Also, some of these projects will be riskier than usual. You want to be able to attack these riskier projects. But you want to do it in such a way that your weighted cost of capital is done, and this project can easily be financed, and you can think about first loss positions and guarantee positions.

This also enables corporate participation. One of the biggest developments that we’ve seen is that all these corporations are now really focused on their emission targets, and deploying capital. And this has happened in the US, in Europe and other places where corporates have been very active. Allowing these corporates to take part in this type of project in the global South is very important.

The last thing is the development finance institutions (DFIs). They see the ability to mobilize capital. They are more incentivized to invest in these projects. In terms of the stakeholder, what are the stakeholder impacts? So the developer gets more capital upfront. The investor? They have a return on their investment, and the corporate will get a return on investment as well via renewable energy credits. So the idea for us was, how do you come up with a way to mobilize funds to solve two key questions: provide capital upfront, aggregate this project to scale and be able to finance them?

__Can you talk about how design funding fits in with the blended finance vehicle that Powertrust is designing? What are some of the goals you’re looking to achieve as part of the feasibility study?__ 

When you really think about it, it is a lot of work to put together a facility or a financial vehicle. Often those who are coming from the development side, or maybe from the position of having worked on these projects before, they actually have deep domain expertise in that area. In our case, we had deep domain expertise in putting together bilateral contracts with multinationals on one side with us on the other side, and also had contracts with developers as well. 

What becomes clear pretty quickly is when you're trying to put together a financial vehicle, there is a different set of work that needs to be done to prove that the concept is viable, sustainable, can be financed and is bankable—and that investors will get their return. The whole process of getting that done requires detailed explanation and analysis, and testing, and putting together the structures. 

__How do you expect this grant will support you in designing the proposed vehicle?__ 

One of the key things and the benefits of having a facility like this and support from Convergence is that we can pay for the work that we have to do in terms of designing the vehicle before asking investors to put money into it. Some of the things that we're doing with respect to having this ability is pay for our legal fees, to design the structure, to travel, to go to conferences—really, everything that has to do with putting the structure in place, testing it and making sure that it's bankable and can be leveraged to achieve the goals that have to be achieved.

__Based on your experience, what should prospective applicants focus on when applying to the Asia Climate Solutions Design Grant?__

I think there are quite a few things to look at. The first is to understand that the application process is quite rigorous and detailed. The concept note must be succinct and carry across the message you want to convey such that you know the team can understand what you are trying to put together. 

Second, you have to devote resources to getting the application in hand and if you are called upon to answer questions at any step of the process, even during due diligence, make sure you have the resources to do that. 
The third part is your team's breadth and depth. I think one of the things that made us successful was that we had a very deep bench. We had breadth, depth, and experience on the ground. This really helped us articulate what we were trying to achieve. 

I also think that the questions that you are asked, there’s a reason why they’re asked, and you cannot blow them off. You have to take time to answer 
the questions in a very thorough manner. 

The last part I'll add to this is the element of passion. If you're truly passionate about doing something new, you're always going to hear that this is not gonna happen, or this is not possible, and that comes through in your application. So when there's doubt or confusion, you know the person who is evaluating will understand. I think one of the things that we were able to bring to the table is to have folks who actually believe in what we're trying to do, and have the passion to achieve their goals, despite naysayers. 

We had deep breadth, deep domain expertise, and we actually got the grant in the end. So all these factors are critical when applying for the grant.

__What advice would you give prospective applicants applying to the Asia Climate Solutions Design Grant?__

The first is understanding what exactly you are trying to address. So for us, we wanted to get into mitigation, we wanted to know that this was a new vehicle that had not been done before and we wanted to understand the structure. We wanted to understand whether, if we wait, if we were to put one and two together and ask people to invest in, would they actually invest? I think one of the challenges that most people face is they can put together a facility or a vehicle, but they think it is just an extension of the work they are doing without having thought about the fact that even though you might have deep domain expertise in one area, this is a whole new thing and you have to really understand the process. 

We've worked really hard on our project. At the time, we thought we were at the proof-of-concept stage. This is funny because I just wanted to add, as one of the things that I learned from this process, and as we were going through the back and forth of the [Design Funding] questioning, we realized that we are more at the feasibility stage, but not yet at proof-of-concept. 

The back-and-forth with Convergence was really key for us. So you really have to understand where you are in your process, because sometimes you might think you are done until you start answering questions and realize, “oh, no, you are not there yet.” 

So I'd say, be mindful of where you are in your trajectory of moving from feasibility all the way to full funding.

Learn from Asia Climate Solutions Design Grantee Powertrust's application experience

Grantee Insights: Powertrust

During COP28, Convergence [announced](https://www.convergence.finance/news-and-events/news/3uRpJsgsS4MpWN1427ezyP/view) Lestari Capital as among the grantees awarded an Asia Climate Solutions Design Grant for designing a blended finance facility to invest in conservation and restoration projects in South-east Asia. 

Convergence’s Design Funding and Market Acceleration (DFMA) Manager, Krishna Malhotra, spoke with Lestari Capital’s CEO, Michal Zrust, about how Lestari Capital aims to design their blended finance vehicle and their advice to prospective grantees.

*Conversation has been edited and condensed. Find the recording of the full interview [here](https://youtu.be/3_SsOiBg_b8).*

__Tell us about Lestari Capital’s story. What you do, where you work, and what drives your mission?__

Lestari Capital started about six years ago in 2017, but actually the idea for Lestari Capital started much earlier than that.

We work in nature markets, innovating around structuring the market, working very closely with clients to build the mechanisms and the business cases for them to invest in nature- and climate-based solutions. One of our flagship programs, the Rimba Collective, really started as an idea.

Just to give you an example of how this works, we started with the idea that “the palm oil industry has really difficult challenges around sustainability.” A lot of those challenges are becoming more clear and they focus around the fact that the industry is heavily dependent on land use.

So you have challenges around deforestation, you have challenges around Scope 3 emissions, you have challenges around protecting sites, protecting the supply chains, not cutting out suppliers, working with suppliers to transform the supply chain towards sustainability. A lot of these challenges can be responded to through financing, supporting nature-based solutions on the ground, and that can take many different forms.

We worked with our four founding partners within the Rimba Collective to better understand what the business case is in terms of what they need, what the outcomes are, and what the impacts are that they need. Then we structured the mechanism around that to raise financing from the demand side, manage the financing and then deploy the financing to portfolios of projects.

We also work on those portfolios of projects—they are third-party projects that we finance, but we build the portfolios, we work on the due diligence, we originate the projects, we onboard those projects into the project portfolio. We provide measurement, reporting and verification (MRV) services, we're financing these projects in a portfolio in an aggregated way to effectively source the impacts that they generate. The impacts are numerous—whether it's biodiversity or conservation or restoration or livelihood impacts or climate focused impacts—and those impacts are then verified, put into a registry, and go towards the fulfillment of the corporate sustainability commitments that they have. Those could be quite varied in terms of how the impacts are utilized.

You could say that what we do is build nature credit mechanisms that are able to actually source and deliver nature credits to support the fulfillment of corporate sustainability commitments on the ground. 

We do this in a number of ways. We as a company are actually innovating now around sourcing Scope 3 emission outcomes. We work on carbon credits as well.

We support certain companies and compliance with simple, specific standards. There is a wide variety that we do, but one of the most exciting things is innovating new mechanisms and trying to build the market, and that will then support conservation and restoration into the future.

__Can you tell us about the blended finance vehicle you are designing and the development challenge you are looking to address?__

What we're looking to do is really build on the experience that we have from the Rimba Collective working with the palm oil sector and bring this solution to the fashion industry, specifically the garment sector.

There are many similarities between any sector that is dependent on land intensive commodities. They are all facing multiple demands—some of them are still emerging, but some already exist and those could be both from voluntary commitments such as science based targets for nature or science based targets around climate, there could be no deforestation commitments and so on. More importantly there are emerging regulatory demands on these companies and those could be things like the EU developments under the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive, under these [directives] companies will have to identify what their footprint is and report it publicly. Of course, companies will then be saying, “what can we actually do about this? How can we go through that journey where we identify what the impact is, but we avoid future impact? We minimize the existing impact. We rehabilitate.” There will always be a residual in there, so how do we address that remaining footprint?

There are effectively two buckets of inserting and offsetting and I firmly believe that nature credits can play a really important part in supporting companies in being able to credibly demonstrate that they are achieving or that they can achieve, the targets that they have committed to or that they will be forced to commit to at a later stage. What a lot of these commitments have in common is there is a focus around the need for intervention on the ground.

You’re required to finance interventions, whether they are removing or mitigating carbon emissions or they are actually supporting projects that avoid further deforestation in high deforestation risk areas in your sourcing regions. You proactively protect your supply chain—rather than be reactive, which is really no longer acceptable. But then, how do you positively contribute to the world? And that is, I think, where we see no net loss and no net positive kind of gains.

Nature positive: there's a lot of terminology around it, but what this means is how does the corporate world actually contribute towards conservation, restoration and livelihoods in a positive way?

This mechanism that we hope to conceptualize, that we're doing the feasibility study for under this grant, is really focused on that. The fashion industry is fascinating, they are at a much earlier stage than many other industries. They have similar issues that they need to address, but in many ways there are also different challenges, for example, around traceability to the field, certain commitments and the level of commitments that they have, biodiversity, pollution impacts and so on. What we're going to be doing here is not only identifying what the industry actually needs, but how it can achieve those needs and targets.

__Can you shed more light just on the importance of having a blended finance mechanism here? Why is it important? How can blended finance help to mobilize these corporate commitments and support projects on the ground to create major credits and achieve the intended impact outcomes?__

To make an impact, develop a new market and also work within a new sector, it is important that you know many traditional investors, different financiers probably would not support such early stage market development—and that is where blended finance plays a key role.

[Blended finance] catalyzes movement towards structuring the market better, being able to demonstrate that there is viability within the sector, that the mechanisms can function and that they can deliver the impacts that you need.

It also signals to corporates that not only is there interest from potential investors, but that there is a general consensus on the direction that the sector should be taking.

I think that's really important because there is a lot of fragmentation. There are a lot of different initiatives which work around this sort of biodiversity credit, nature credit and even carbon credits space. The corporates start to see that this can be a pathway to achieve their goals and sustainability credibly. We can demonstrate that and our actions are going to be taken in a way which is positive rather than being accused of greenwashing, which unfortunately is an issue.

Blended finance provides that catalyst towards the market maturing and structuring. It also provides the finance that then allows other investors to come into this space and say “this can actually work. This is an investable model.”

__How will this grant funding support you in designing the proposed vehicle? What are some of the key elements that you’re looking to achieve with this structure?__

This is really my favorite part because you're effectively starting with an idea or concept, with slight apprehension: “Are we too early? Are we not too early? What are the opportunities? What are the challenges? What are the risks that we're going to be facing?” Blended finance is the catalyst towards being able to explore some of these things.

We're starting with a general concept of what we would like to achieve, which is a sort of replication of the model of collective action and collective aggregated sourcing at scale of nature outcomes that then go on to fulfill the corporate sustainability commitments.

Under [the ACS Design Grant Window], we're going to be number one looking at what is the level of demand and what type of demand? What are the outcomes that the corporates within this sector require in order to achieve their sector-specific goals? 

Of course given the difference and the complexity of the supply chains within the fashion sector, those types of issues are going to be different and the challenges are going to be different.

Once we identify that, we will be looking at what projects apply, what types of projects are actually out there that can then address that need, the sustainability commitments, and the demand, and can they do so credibly? Is there enough scale and how are these projects going to be sourced? Also what stage of development are these projects in?

Is there going to be further financing needed to springboard or catalyze that part of the industry? So we're going to be scoping our pipeline of projects moving forward depending on what the type of demand is.

We believe that the pipeline does exist and early assessments have shown us that. We have good experience already in Southeast Asia to show that the scale is there, but different projects obviously have different challenges.

Then we will be looking at the shape of the mechanism, how can you link those two aspects—the demand and the supply. What does the mechanism actually look like that can then deliver the financing to the ground and then source the outcomes that result from those projects and that will require looking at legal structuring, financial structuring, governance and operational structuring, MRV systems and so on. It is really exciting, effectively starting a new market for the fashion industry.

__What advice would you give prospective applicants applying to the Asia Climate Solutions Design Grant?__ 

I'm a very firm believer in having open and honest discussions. In the journey that [Convergence and Lestari Capital] took together, which lasted a fair few months, we had a good chance to actually get to know each other. Be very open and honest about exactly what you feel the challenges are and working through those with Convergence.

In this kind of early stage work in an evolving market, there are challenges, there are unknowns, there are risks, but there are also fantastic opportunities. And I think that level of excitement is what really helped us in the design of the grant proposal.

My advice to any prospective grantees would be to talk about the risks and the challenges that you foresee as well as the opportunities. We all see the opportunities, but the sector doesn't tend to learn from its mistakes as well. I think that's almost as important as being able to see the opportunities. Coming to the table and very openly discussing the challenges allows us to design the study and the work and the year ahead much better, because we understand each other's expectations, we understand where the challenges might arise and we understand what is and isn't feasible in the window. I think that is what makes for a really good application.

__What do you think contributed to making Lestari Capital stand out as a strong applicant?__

I believe one of the important things that made us stand out was the fact that we've done this before, we have gone from the conceptualization to the design to the building to the operationalizing of these vehicles in the past.

I understand that might not always be the same for all applicants. Some might not be presenting something to be replicated, but I think it is important to be able to actually demonstrate that these models can work and to know if they have tried and if they failed to understand why.

I think being able to talk about that and being able to say, “this is how we would address these risks,” would be really helpful.

I think also, we're very lucky to have almost 40 people now within Lestari Capital and we have a very multidisciplinary team: we have a legal team, we have a finance team, we have a very experienced project team, and that, I think, makes us stand out. 

There are a lot of companies outside of the field level that have good ideas. But unfortunately, unless you actually have the field-level experience of what it takes to be able to deliver these projects on the ground, deliver the conservation and the restoration on the ground, it's a much higher risk proposition, so having that expertise in the team really counts for something. That is also why our corporate clients trust us, because we go into the field, we understand the challenges to deliver conservation and restoration and so on.

I think it comes down to being able to identify what the challenges are and talk about the risks, and be thoughtful about how you plan to address those. Not every risk can be mitigated. That's just a fact of early stage developments. But you can show that you're at least thinking about it smartly.

Learn from Asia Climate Solutions Design Grantee Lestari Capital's application experience

Grantee Insights: Lestari Capital

Today, more than 770m people lack energy access in the world<sup>1</sup> – mostly in Africa (600m) and developing Asia (130m) – and the energy crisis makes solving energy precarity even more challenging as 70m people who recently gained energy access may not be able to afford it<sup>2</sup>.

This means that millions of families lack the foundation for social and economic development, and remain reliant on toxic and dangerous kerosene for lighting. Meanwhile, local businesses experience frequent power cuts and are unable to expand; and farmers cannot grow their yields or improve their climate resilience, despite solar energy & storage becoming one of the cheapest energy sources.

In many developing countries, women carry the primary household and family responsibilities day-to-day and are disproportionately affected by energy precarity. Impacts of the Mirova Gigaton Fund<sup>3</sup> benefit women disproportionately vulnerable to the effects of climate change and poor basic services. 

## Proof of concept grant for the Gigaton strategy 

Convergence awarded a proof-of-concept grant to [Mirova](https://www.mirova.com/en) [SunFunder Inc](https://www.sunfunder.com/) for the design of the Mirova Gigaton Fund — a target USD 500m blended finance vehicle that aims to accelerate the clean energy transition and improve energy access by providing medium-long debt financing for clean energy projects and companies in Sub-Saharan Africa, Asia-Pacific, Middle East & North Africa and Latin America. The Fund was launched by Mirova, an affiliate of Natixis Investment Managers dedicated to sustainable investment, supported by Mirova SunFunder East Africa Ltd as Investment Advisor, a wholly-owned subsidiary based in Nairobi. The strategy is 2X Challenge-qualified, supports women’s economic empowerment and access to energy, and has an investment strategy that applies a gender-lens across the firm, investment lifecycle, investees, and in its supply chain.

Gigaton investments are expected to directly offset 13.4m tonnes of CO2eq<sup>4</sup>, support 2.2m jobs and provide new or improved energy access to 10m people<sup>5</sup> through 100 transactions to more than 50 borrowers (75% SMEs)<sup>6</sup> in Solar Home Systems, Agri-solar, Commercial & Industrial solarization, telco ESCO, Mini-grids and other (e.g. e-mobility, storage, cooling) sectors in Africa, Asia & Latin America. 

## Current status of the Mirova Gigaton Fund 

[The Mirova Gigaton Fund announced its first close on March 2023 totaling USD 192m commitments](https://www.mirova.com/en/news/mirova-announces-first-closing-mirova-gigaton-fund)<sup>7</sup> from DFC, Swedfund, Nordic Development Fund, Visa Foundation, Shell Foundation and Global Affairs Canada, in addition to a USD 50m guarantee from SIDA. Since then, Gigaton has attracted additional investors, from development finance institutions to impact-focused private institutions. A second closing is targeted before the end of the year<sup>8</sup>.

## Challenges to raising capital

While Gigaton’s unique positioning generally attracts private institutional investors with an impact pocket, the rising interest rates and their designed pricing make raising capital a challenge. As Gigaton invests in frontier markets, investees are in an environment that is decorrelated from interest rate fluctuations and the yield of the portfolio has only partly increased.  Moreover, these investors normally request a rating of the Super Senior tranche, from big three rating agencies. Nowadays, most agencies do not have methodologies to rate blended finance structures and/or in emerging markets, and for the ones who could there is no certainty on obtaining a rating that satisfies investors’ appetite.

## How Design Funding has helped to advance the solution

The Design Funding from Convergence has been essential to develop Gigaton’s gender-lens approach, its Technical Assistance Facility, as well as fundraising (with the consideration of a potential rating of the Super Senior tranche), and pushing Gigaton's expansion in Asia. Convergence team has also been essential to connect with some key investors.

## The way forward

At this stage, the main objective for the Mirova Gigaton Fund is to continue aiming to reach deployment targets in the coming years, including some transactions in Asia. Future deployments would add to their existing  USD 18.3m total investment<sup>(7)</sup>, directed to Sub-Saharan companies in the Solar Home System, Agri-solar, and Commercial & Industrial sectors. Their pipeline includes USD 107m in investments<sup>(7)</sup>, which would expand their investments to Asia, and to the Mini-grid, Telecom solarization and e mobility sectors.

The team dedicated to the Mirova Gigaton Fund continues to fundraise for its Catalytic Junior tranche (first loss shares) and its Super Senior tranche, welcoming well-informed investors from North America, Europe and Asia.

*1. Source: IEA, World Energy Outlook 2021. <br>
2. Source: IEA, World Energy Outlook 2022. <br>
3. MIROVA GIGATON FUND is structured in the form of a SICAV RAIF (Société d’Investissement à Capital Variable, Reserved Alternative Investment Fund) under Luxembourg law, open to subscription to eligible investors as defined in the regulatory documents. Mirova is the management company and Mirova SunFunder East Africa Ltd acts as Investment Advisor to Mirova. The supervisory authority approval is not required for this fund. The investment in this fund is exposed to risk of capital loss. The fund regulation is the source of information as it contains important information about its investment objectives, its strategies to achieve those objectives, and the main risks associated with any investment in that fund. It also contains information on fees and commissions, and other fees of the fund. Access to the products presented here may be restricted to some persons or in some countries. <br>
4. Estimates based on I-Care assessment as of Q3 2023. <br>
5. Impact estimates based on Mirova SunFunder’s assessment as of May 2022. <br>
6. Source: Mirova SunFunder as of September 2023. <br>
7. Source: Press release “Mirova announces the first closing of the Mirova Gigaton Fund.” <br>
8. Source: Mirova as of September 2023. <br>*

*By Karolyn Xie, Interim Head of Communications*

Learn how funding from Convergence has supported the Mirova Gigaton Fund, challenges they've faced and what's next.

Grantee Profile: Mirova

Grantee Profile: Mirova SunFunder - Accelerating the clean energy transition

Convergence has consistently observed that [adaptation climate finance (projects that help in the process of adjusting to the current and future effects of climate change), as a focus within climate blended finance is underdeveloped compared to mitigation transactions](https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/Full-report-Global-Landscape-of-Climate-Finance-2021.pdf) — both in terms of deal flow and deal value. With global climate finance flows currently well below target to meet the goals of the Paris Agreement, one pathway to close the climate financing gap is to ramp up investment in climate change adaptation and resilience. Although investment in adaptation has increased slightly over the years, the sector is still very much an under looked opportunity for investment. Specifically, most [adaptation investments are funded by the public sector](https://www.convergence.finance/resource/state-of-blended-finance-2022/view), but the private sector has potential to unlock financing to help close the climate financing gap. 

To do this, we must address reasons for private sector hesitancy to allocate resources to adaptation-focused projects. Unlike mitigation projects, these projects tend to have less established revenue models and are not typically linked to clear cash flow-generating activities. This makes adaptation projects less attractive to private sector investors in terms of commercial viability. 

Another barrier to unlocking private capital for adaptation projects is limited private sector exposure to these projects. The limited understanding and knowledge about adaptation transactions reduces the likelihood for private investment. Additionally, there are few adaptation projects in general and pipeline that exist have smaller investment opportunities compared to mitigation projects. 

For these reasons, building a strong business case around investment in adaptation is difficult, but growth is on the horizon. Convergence’s Design Funding Program has awarded grants in the adaptation space since 2016 and this flexible funding can be strategically used to expand and accelerate investment in climate change adaptation.
### Testing the feasibility of innovative adaptation projects
Design stage funding allows blended finance practitioners to test the feasibility and proof of concept of innovative adaptation projects and concepts, helping to build an evidence base for successful adaptation projects using private sector funding. In addition to exploring feasible vehicle structures, design funding grants give practitioners the opportunity to engage in strategic partnerships and test models that can improve risk-return profiles, showcasing what works, what doesn’t work, and what can or cannot be replicated.

Another factor that can prevent investments from scaling is the availability of reliable impact metrics for adaptation projects. However, we see some impact frameworks and models emerge (for climate risk insurance and resilient agriculture, for instance) from design funding proposals we receive and from deals captured in Convergence's deals database. Our [Design Funding Program](https://www.convergence.finance/design-funding) develops and refines existing impact frameworks to accelerate innovative blended finance solutions. 
### Building knowledge and exposure for private sector players in adaptation projects
Design funding engages private sector stakeholders in the early design stage consultation and in relationship building, opening pathways for later-stage private sector investment. Through design funding, practitioners designing adaptation projects can capture private sector perspectives, concerns, and expectations, which can then be addressed through the vehicle’s design. 

Each new adaptation blended finance vehicle designed and launched adds to the knowledge base of successful adaptation projects. Proven examples of projects that have been tested or have shown positive results can then encourage private sector actors to invest in future adaptation projects.
### Increasing the supply of bankable investment opportunities in climate change adaptation
Another barrier to scaling private sector investments (and investments in general) in the adaptation space is the dearth of bankable investment opportunities. Design funding grants can be a valuable resource in this case as they provide the necessary support for blended finance practitioners to design and launch adaptation blended finance projects, thereby increasing the overall supply of bankable investment opportunities in adaptation.

To date, climate finance flows have been heavily dominated by investment in mitigation projects. Even through Convergence’s design funding windows, we have seen more applications for mitigation projects than adaptation. Scaling investment in adaptation projects is crucial to meet the climate change financing gap. The role of the private sector is critical in supplementing the efforts made by the public sector in adaptation financing. Design Funding can be an important and effective tool for providing the necessary runway for blended finance practitioners, thereby helping expand and accelerate investment in climate change adaptation. 

*Have a blended finance solution at the intersection of climate change and gender equality? You can apply for funding from [our Gender-Responsive Climate Finance Design Funding Window](https://www.convergence.finance/design-funding/open-window/gender-responsive-climate-finance-window), which awards early-stage grant funding for the design and launch of innovative blended finance vehicles focused on climate change and gender equality in emerging markets globally.*

*The Window accepts concept notes on a rolling basis. We are currently accepting concept notes for review in the Fall Cycle until __November 15, 2023__. For more information, visit our website [here](https://www.convergence.finance/design-funding/open-window/gender-responsive-climate-finance-window) or register for the upcoming informational webinar [here](https://www.convergence.finance/news-and-events/events/3ZExUirkNHFJCotJfPbaoB/view).*

*To see what Convergence has supported to date, review our Design Funding grantee portfolio [here](https://www.convergence.finance/design-funding/grant-portfolio).*

 With global climate finance flows currently well below target to meet the goals of the Paris Agreement, one pathway to close the climate financing gap is to ramp up investment in climate change adaptation and resilience. 

Climate change adaptation through design funding

Accelerating investment in climate change adaptation through design funding

[https://prod-convergence-public.s3.amazonaws.com/webinars//fsf_video_v5.mp4](https://prod-convergence-public.s3.amazonaws.com/webinars//fsf_video_v5.mp4)
*Video profiling Fairventures Social Forestry (FSF), with interviews with local FSF stakeholders.*

Indonesia occupies less than 1% of land on earth but is home to the world’s third-largest expanse of tropical forest. These forests are home to around [10-15%](https://www.un-redd.org/news/indonesias-investment-social-forestry-conserves-forests-and-fights-climate-change) of all animal and plant species on the planet and also act as a massive carbon sink, absorbing CO2 from the atmosphere as they grow. Despite the value these forests provide to the environment and local communities, Indonesia’s forests are under threat from deforestation, with key drivers being extensive mining, logging, and the conversion of forest land to agricultural plantations. Since the 1960s, Indonesia has lost half of its forest cover to [deforestation](https://www.theguardian.com/world/2021/nov/05/indonesia-says-cop26-zero-deforestation-pledge-it-signed-unfair) and has been among the world's top five countries for forest loss for the past two decades. 

There is huge climate change mitigation potential in protecting existing Indonesian forests and restoring degraded areas, which also has the potential to provide livelihoods for close to 40 million rural and indigenous people. 

As a result, the Indonesian Government has implemented a program to grant forest-dependent communities’ access to forest land through long-term social forestry permits. However, the concrete economic benefits for households and communities remain largely absent, as many of them lack the technical skills and have limited access to capital for sustainable forestry or agriculture practices. Therefore, there is a need for project developers to support local communities by utilizing the social forestry program to create attractive economic benefits for these communities alongside natural resource protection.

__How Fairventures Social Forestry is helping to address these challenges__

Convergence grantee Fairventures Social Forestry (FSF) is a project developer and investment manager looking to showcase a viable model for forest landscape restoration and conservation in emerging markets by partnering with local communities on lands issued through these social forestry permits. 

Convergence awarded FSF a [feasibility study grant ](https://www.convergence.finance/design-funding/grant-portfolio/1ebYnaL8Mpi5lwy31tTYcl/view) through the Asia Natural Capital Window, funded by [RS Group](https://www.rsgroup.asia/), to help them design a blended finance vehicle, which invests in projects focused on restoring degraded land for sustainable agroforestry and conservation of existing forests in Indonesia.

It can be challenging for such long-term forestry projects in emerging markets to attract investment at scale due to long project development timelines and the higher perceived risk associated with developing countries. However, blended finance can be instrumental in making these projects investable. FSF intends to utilize grants to fund the initial development activities and de-risk projects, making it attractive for impact equity investors and lenders to invest at a later stage. 

Through this blended finance vehicle, FSF aims to sustainably manage 100,000+ hectares of forest land by financing projects involving sustainable agroforestry on restored degraded land through the intercropping of timber with cash crops and conservation of existing forests, resulting in improved local biodiversity and carbon sequestration.

![FSF Nursery 8-Ginger](//images.ctfassets.net/4cgqlwde6qy0/5ZJCmv7RndnEBKLAGM3fw1/7b73d67766a05b66261495b4206516cf/FSF_Nursery_8-Ginger.jpg)
*Nursery for crops like ginger and cocoa being considered by FSF to be planted along with timber*

Through this blended finance vehicle, FSF intends to also create a significant impact for local communities and views them as key partners in the implementation of projects supported by the vehicle. The vehicle will look to provide local communities with new employment opportunities generated by funded projects and in turn, the communities will also receive a share of the profits from these projects. In the long term, the vehicle has the potential to extend and sustainably manage 100,000 hectares of forest land, which could result in more than 6 million tons of carbon emissions avoided, sustainable income for around 4,000 households, livelihood impact for more than 20,000 residents, and development of over 100 local communities.

![Indonesian field worker](//images.ctfassets.net/4cgqlwde6qy0/rgpOCWltZMW2HQF06vqDy/81a2a8b80bef99ffe83187fa93780d44/20221008_130114.jpg)
*Sri Pornia, Field Work Team Leader, FSF*

__The progress to date__

FSF has launched a 3,000-hectare pilot project in Central Kalimantan, Indonesia, for agroforestry and conservation activities with the support of the local community. 

![Timber Nursery](//images.ctfassets.net/4cgqlwde6qy0/4SuxnwGNFhoneHyrgSp2BV/7203c03f7edbb85680cbed887a8d6e58/Timber_Nursery.jpg)
*Nursery where timber plants are grown until they are ready to be planted in the field.*

*“The social forestry program from the government, in cooperation with FSF, helped us support the community to manage the forest in a sustainable way. Previously, the mindset of the people [local community] was too focused on how to harvest the forest, not how to manage it… Through this social forestry permit, the community and the farmers can manage the forest by themselves and have access to long-term income, and with the help of FSF, make it sustainable.”* - Miko Luiter, Head of Forest Management Unit, Central Kalimantan.

![FSF Project Site Timber Plantation 2](//images.ctfassets.net/4cgqlwde6qy0/60FZcqvILclMy1bjsLbewc/91e1fcd9c46a72bfa7eaa15fa1aeb9a5/FSF_Project_Site_Timber_Plantation_2.jpg)
*Timber trees already planted at the pilot site in Central Kalimantan*

FSF is underway to reforest 450 hectares of degraded land and has identified around 550 hectares of forest area for conservation. One of the biggest challenges for the pilot has been gathering support from the local communities. FSF has a long-term cooperation agreement with the local community organization for the pilot site, HKm Batu Bulan. FSF, with support from HKm Batu Bulan, has spent time educating community members about the details of the project and its intended positive impact on the environment and their community. As a result, the pilot has already seen participation from 130 field workers (of which the majority are women) from the local community, in addition to the 50-member team that FSF has in Indonesia. 

*“Before the existence of FSF and this cooperation (with HKm Batu Bulan), the local people had unsustainable jobs, such as illegal mining/logging. It is hard to make a living out of these activities. After the partnership has been established, the local communities see the opportunity/difference and directly want to be part of the project, and as a result most of them are no longer working in the illegal logging/mining activities.”* - Suterman A. Djohan, Head of Hkm Batu Bulan, the local community organization for the pilot project site.

For this pilot, FSF has received technical assistance from IDH and funding support from Good Energies Foundation and UBS Optimus Foundation. FSF also recently won the [Liveability Challenge](https://www.theliveabilitychallenge.org/), which is organized by Temasek Foundation annually. As the winners of the challenge, FSF received SGD1 million in funding from Temasek Foundation, which will help them develop their next projects in Indonesia. 

__The way forward__

FSF’s goal is to launch the blended finance vehicle described above, which pools different types of capital like grants, equity, and impact loans, that can attract capital at scale to finance a portfolio of agroforestry projects. As the vehicle scales, it will also look to include other types of projects in the portfolio, like forestry concessions. The funding from Convergence is supporting FSF to build upon their existing stakeholder engagements and further develop a pipeline of investable projects for the vehicle. FSF is also using the feasibility study grant for creating a comprehensive financial model and identifying the appropriate legal structure of the vehicle.  


Convergence grantee Fairventures Social Forestry (FSF) is a project developer and investment manager looking to showcase a viable model for forest landscape restoration and conservation in emerging markets by partnering with local communities.

Forest restoration and conservation in Indonesia 

Grantee Profile: Fairventures Social Forestry -  Forest restoration and conservation with local communities in Indonesia

Following the success of its [first call for proposals](https://www.convergence.finance/news-and-events/news/3929YYiPLvRT1RzW9zB51Z/view), the SDG Impact Finance Initiative is pleased to announce a second call for proposals targeting a new set of SDGs. 

The SDG Impact Finance Initiative awards grants for innovative impact finance solutions that will mobilize private capital for sustainable development in emerging and frontier markets. The Initiative is funded by the State Secretariat for Economic Affairs SECO, the Swiss Development Cooperation Agency SDC, the UBS Optimus Foundation, and the Credit Suisse Foundation.

This second call for proposals will focus on solutions that target SDG 5 (Gender Equality), SDG 14 (Life Below Water), and/or SDG 15 (Life on Land). Through its grant funding, the Initiative aims to accelerate advancements in the impact investing market by supporting the launch of innovative solutions that address market failures, deploy financial products that are under-supplied or supplied at insufficient volumes, and mobilize funding into new sectors and geographies.

With support from Convergence, the global network for blended finance, the SDG Impact Finance Initiative will award grant funding for feasibility studies, proof of concept, or expansion of existing solutions. 

[Learn more and apply](https://www.convergence.finance/design-funding/open-window/sdg-impact-finance-initiative-design-funding-window) 

Concept notes must be submitted by __May 1, 2023__.

The SDG Impact Finance Initiative and Convergence will host a webinar on __March 15, 2023 at 4-5 pm CET / 11-12 am EDT__ to share more details about the application process, evaluation criteria, how to submit a successful application, and more. Register [here](https://www.convergence.finance/news-and-events/events/4GN9guFDA4MEhVugANJSUQ/view).

An additional webinar with a focus on SDG 14 (Life Below Water) and SDG 15 (Life on Land) will be held on __April 19, 2023 at 4-5 pm CET / 10-11 am EDT__. Register [here](https://www.convergence.finance/news-and-events/events/6lUdpse3SWV8D1RIBcHEo2/view).

The SDG Impact Finance Initiative has announced its second call for proposals, targeting SDG 5 (Gender Equality), SDG 14 (Life Below Water), and/or SDG 15 (Life on Land)

SDG Impact Finance Initiative announces second call

The SDG Impact Finance Initiative announces its second call for proposals

Many Pacific Island Nations have set ambitious renewable energy targets but are still heavily reliant on imported diesel for energy production and have among the highest costs of electricity in the world. New financing solutions that attract private capital for renewable energy projects and complement grant funding in the region are needed.

## Camco 

Convergence is currently supporting [Camco](https://www.camco.fm/), a grantee from our Indo-Pacific [Design Funding](https://www.convergence.finance/design-funding) Window, funded by the Australian Government, to design Transforming Island Development through Electrification and Sustainability (TIDES). This $100 million finance platform uses a blended finance structure comprised of three tranches:

- 20% concessional first loss
- 65% senior debt
- 15% equity, targeting private impact investors

TIDES uses an aggregation approach to fund renewable energy projects ranging from rural electrification to commercial and industrial (C&I) and utility-scale projects with local developers across the Pacific. TIDES also requires investees to target gender-focused metrics, such as the number of jobs created for women, the percentage of women in senior positions, and the percentage of female-owned businesses supported. The platform is based on a developer-centric funding model to strengthen local companies and accelerate due diligence. It consists of three market capacity building facilities managed by Camco:

- Results-based finance (RBF): A $18 million facility to mitigate key risks and support rural electrification through mini-grids with affordable tariffs
- Technical assistance (TA): A $5 million TA facility to support local developers and governments
- Development loan facility: A $7 million facility to support early-stage project development

TIDES is designed to catalyze private investment in renewables in the Pacific and thereby supports the efforts of donor funding in assisting the region’s clean energy transition.

## Challenges to financing renewable energy projects in the Pacific 

One of the biggest challenges facing not just TIDES but the sector as a whole is the level of developer capability. Because few developers in the Pacific can bring projects to financial close without either TA or development capital assistance or both, TIDES has deliberately been designed with market capacity building in mind. 

Engaging with impact investors unfamiliar with the Pacific context is another challenge. As the platform is the first investment vehicle of its type aimed at renewables in the region, the team has prioritized educating potential investors about renewables investment and the market in the Pacific. Specifically, TIDES seeks to address the perception that the Pacific region has limited deal size and deployment potential and allay the perceived political risk often associated with the region. 

Finally, as Pacific Island Nations are still working to develop clear and concise regulatory environments, they must overcome the challenge of still uncertain investment conditions. As the countries are formulating and adopting regulations at pace, there is a risk that some of the regulations under which investments are made may later be reversed or changed, which may impact expected returns for investors. TIDES’ TA program aims to assist local regulators in ensuring a stable and transparent regulatory environment is developed and maintained.

## How Design Funding has helped to advance the solution

Convergence's Design Funding to TIDES has enabled the team to engage with all market stakeholders to ensure they have a platform design that reflects the need of the market. Overall, the funding will support Camco to launch TIDES and establish an on-the-ground presence in the Pacific, enabling them to work closely with local developers and provide the necessary flexible financing to build the region's clean energy sector and unlock its economic potential. In addition to the funding, the milestone reporting structure offered by Convergence also enabled Camco to receive critical analysis and insight regularly from the Convergence team. Finally, the Convergence resources that are made available to grantees, such as the fundraising deal platform, [knowledge products](https://www.convergence.finance/resource) (e.g., data briefs and case studies), and regular [blended finance trainings](https://www.convergence.finance/training), provided the team with a useful source of additional information as well as valuable lessons learned.

## Gender lens

Camco has a twin-track gender strategy. Firstly, it mainstreams gender equality in its management and operations. Secondly, it works with donors and investors to ensure that gender equality is mainstreamed into the design,implementation, monitoring, and assessment of all renewable energy initiatives managed by Camco. TIDES will help drive growth in the number of female-owned and led businesses supported, and in employment opportunities for women in the Pacific. Investments will be consistent with the 2X Challenge for Gender Lens Investing to support women entrepreneurs, leaders, employees, and consumers to increase gender equity, reduce poverty and promote more inclusive and robust economic growth. TIDES aims to create 1,680 jobs, with a minimum of 30% going to female employees. Finally, the platform has a set target to channel 30% of funds to 2X-aligned businesses in the Pacific.

## The way forward

TIDES is currently in due diligence with a number of potential first loss providers and are reaching out to Impact Investors in the region.

*Convergence’s Design Funding Program operates as a market acceleration tool providing early-stage capital to support blended finance solutions in frontier markets and nascent sectors to accelerate the number of investible transactions in market targeting SDGs. Our [Gender-Responsive Climate Finance Window](https://www.convergence.finance/design-funding/open-window/gender-responsive-climate-finance-window), which focuses on the intersection of climate change and gender equality in emerging markets globally is currently accepting applications. Go to our [Design Funding page](https://www.convergence.finance/design-funding) to apply and explore our other open Windows.*

Learn how funding from Convergence helped Camco design Transforming Island Development through Electrification and Sustainability (TIDES), challenges they've faced and what's next.

Blended Finance Accelerator(formerly the Design Funding program)

Supporting early-stage blended finance practitioners with design grants, acceleration support, and market intelligence to scope, structure, and launch new blended finance solutions that unlock commercial investment to accelerate sustainable development in emerging markets.

Impact Stories