SDG Impact Finance Initiative with the support of Convergence has awarded a proof-of-concept grant of USD 350,000 under its Innovation Window to Treevive to design the Amazon Forest Landscape Restoration Fund (AFLR Fund), aimed at addressing large-scale deforestation and environmental degradation in the Peruvian Amazon. Through reforestation, agroforestry, and sustainable timber production, the AFLR Fund aims to restore degraded forest landscapes while generating both social and environmental benefits. This innovative initiative leverages carbon credits and timber revenues to create a scalable, impactful, and financially sustainable model for carbon dioxide removal (CDR).

The Ucayali region in Peru faces severe deforestation, with an annual loss of 32,884 hectares, driven by illegal logging, unsustainable agricultural practices, and cattle ranching. This degradation has led to biodiversity loss, soil erosion, and increased carbon emissions, making large-scale intervention critical. The AFLR Fund is designed to tackle these challenges by blending concessional and commercial capital, de-risking private investment through results-based financing (RBF) and carbon offtake agreements. AFLR Fund targets the restoration of 13,000 hectares consisting of nucleus estates with mixed native tree plantations and natural forest restoration, and of smallholder farmers in an outgrower program. Smallholders will benefit from technical support, market access, and revenue-sharing mechanisms, ensuring alignment with community needs and project goals.

__Design Question:__ *How can a fund be structured to provide scalable upfront capital for large-scale afforestation and reforestation projects in the CDR space?*

The AFLR Fund illustrates a robust model for structuring a blended green financing facility that addresses the scale challenge in afforestation and reforestation projects. At its core, the dual-revenue model of carbon credits and timber production ensures financial sustainability and mitigates risks for investors. By generating high-quality carbon credits certified under globally recognized standards such as Gold Standard or Verra, the Fund secures a stable revenue stream, particularly through partnerships with NGOs, public and institutional investors . These carbon credits, which are tied to rigorous verification and monitoring methodologies, appeal to buyers seeking reliable offsets for compliance and voluntary commitments. Simultaneously, timber revenues diversify income streams, adding resilience against fluctuations in carbon markets. The establishment of a timber processing facility will ensure value addition and market demand, particularly for high-value products like Balsa wood, widely used in wind energy, and Cumaru, used in high end solid wood applications.

By combining environmental restoration with community benefits and investor returns, the AFLR Fund represents a replicable framework for addressing global deforestation and advancing climate goals. The project also received support from UKAID’s Partnership for Forests program in the form of GBP 780K of grant funding for feasibility studies and setting up the local operations in Peru, as well as a EUR 0.9 Million investment from Treevive.


SIFI logo

### 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.

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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.

Design of Amazon Forest Landscape Restoration in Peru

SDG Impact Finance Initiative, supported by Convergence, has awarded KOIS and Interpeace’s Finance for Peace Initiative a USD 190,000 feasibility study grant to design a USD 100 Million Humanitarian-Development-Peace (HDP) Outcomes Fund. This fund aims to address the critical challenges faced by over 50 million displaced individuals in Sub-Saharan Africa by fostering sustainable livelihoods, expanding safe access to essential services and mobilizing private sector investment in displacement-affected settings.

__The Challenge:__ 
Sub-Saharan Africa (SSA) hosts approximately 50 million displaced individuals, including 33 million internally displaced people (IDPs) and 8 million refugees. Displacement in the region is driven by protracted crises natural disasters and recurring conflicts which continuously add to the caseload of displaced populations. Current responses typically rely on short-term humanitarian aid and grants, which do not adequately promote long-term development or integration of displaced populations with their host communities. Meanwhile, the potential for private sector engagement remains untapped, with few investments targeting displacement affected communities (DACs) to generate economic benefits and provide critical services.

__The Opportunity__ 
The HDP Outcomes Fund leverages KOIS’s expertise in humanitarian and results-based financing and Interpeace’s extensive peacebuilding experience and local networks in fragile states. This fund is envisioned as a scalable vehicle that will: 
- Reduce transaction costs by pooling funding
- Promote coordinated approaches to building an enabling environment and centralize evidence building around the triple nexus
- Mobilize private capital to finance sustainable solutions for DACs
 

__Design Question:__ *How can an outcomes-based structure address humanitarian, development, and peace goals in a scalable, effective manner?* 
__The Fund__ 
The USD 100 Million HDP Outcomes Fund will deploy financing through two main windows: 
1. The “payment-by-results window” will fund multiple impact bonds, wherein outcome funders pay for pre-defined humanitarian, development and peace outcomes when achieved, providing capital repayment and a premium to investors who prefinance the interventions. Additionally, this window will create conducive conditions for private investments in displacement settings by developing robust results-oriented programmes that strengthen the enabling environment for social businesses to operate and grow. 
2. The “impact-linked finance window” will target social businesses, deploying instruments that provide a financial reward for social impact, such as social success notes, social impact incentives or impact-linked loans. The window provides patient capital that will enable social businesses to scale and deliver better services, goods and jobs to DACs.

__Technical Assistance Facility__ 
The fund also includes a dedicated Technical Assistance (TA) facility to build the project pipeline, provide targeted support to service providers and businesses, and facilitate knowledge sharing. Moreover, the TA facility will commission independent evaluations to determine whether funded interventions have been delivered according to the pre-agreed outcomes to trigger outcome payments.

__Scalability and Diversification__ 
The fund will be sector agnostic and aims to target multiple displacement-affected countries within the SSA region across multiple outcomes. Through a pooled fund, The HDP Outcomes Fund aims to blend different capital types and catalyze larger scale financing for sustainable interventions addressing the tripe nexus – humanitarian, development and peace outcomes – in fragile contexts.

__Next Steps:__ 
As part of the feasibility study, KOIS and Interpeace will:
- Select a shortlist of pilot countries using a robust assessment framework.
- Design the funds financial and impact strategies and structures, aligning with stakeholder priorities.
- Engage public and private investors to assess interest and refine the Fund’s design.

Design of a Blended Finance Outcomes Fund to Finance Humanitarian, Development and Peacebuilding Projects in Sub-Saharan Africa

SDG Impact Finance Initiative, with the support of Convergence has awarded a $200,000 feasibility study grant to iGravity and HELVETAS under its Innovation Window to design the Green Bond for Sustainable Rice Production in Africa. This innovative financing solution aims to address systemic challenges in the rice value chain in Sub-Saharan Africa (SSA) by improving access to finance for smallholder farmers and farmer-allied intermediaries (FAIs) through financial intermediaries. The initiative seeks to promote food security, climate-smart agricultural practices, and gender equality, starting with a pilot phase targeting 2–4 countries. The grant will support the design and launch of the Green Rice Bond, a USD 50 million blended finance vehicle that combines debt financing with a grant-funded Technical Assistance (TA) facility.

Rice is a staple crop in SSA, with demand growing rapidly due to population growth, urbanization, and shifting dietary preferences. However, the region’s dependence on imports persists as local production fails to meet rising demand. Despite a 40% increase in the area under rice cultivation in the past decade, productivity remains stagnant due to challenges such as inadequate inputs, climate change, and a lack of access to finance for agricultural stakeholders. The financing gap for smallholder farmers and agri-SMEs is exacerbated by perceptions of rice as a low-value crop and the absence of targeted support from local financial institutions and government programs.

Women make up a significant portion of the agricultural workforce in SSA but face unique barriers, including limited access to land, credit, and decision-making opportunities. These challenges reinforce gender disparities in productivity and income within the rice value chain. The Green Rice Bond aims to address these issues by channeling funds to FAIs and financial institutions (FIs) that engage with smallholder (women) farmers and initiatives.

The Green Rice Bond will provide tailored financing and technical support to strengthen the rice value chain across SSA. The initiative is expected to benefit 1.5 million smallholder farmers by enhancing productivity, increasing income, and improving resilience to climate change. Additionally, it will contribute to regional food security by promoting local production, reducing imports, and fostering sustainability through the adoption of climate-smart practices.

__Design Question:__ *How can a single-commodity financial structure be designed to address financing gaps, food security, and climate-related outcomes in SSA’s rice value chain?* 
The Green Rice Bond will deploy USD 50 million through a tiered structure of senior, concessional, and subordinated tranches, alongside a grant-funded TA facility. At the fund level, grants will finance capacity-building activities for stakeholders, while concessional debt will de-risk investments by providing first-loss protection for private investors. The senior tranche will attract commercial investors with emerging bond market-aligned returns. The bond will raise capital from both public and private sources, including DFIs, foundations, and commercial banks, leveraging blended finance to mitigate risks and enhance investor confidence.

Proceeds from the bond will provide loans to FIs and FAIs, enabling them to serve smallholder farmers, cooperatives, and rice processors. FIs will channel loans to FAIs for working capital and capital expenditures, while the TA facility will provide technical support to ensure the adoption of climate-smart practices. These measures will improve productivity, reduce post-harvest losses, and enhance product quality, creating economic incentives for smallholders and strengthening the entire value chain.

The bond also emphasizes gender inclusion, with a focus on women-led enterprises and equitable access to resources and leadership opportunities. For example, FAIs supported by the bond will prioritize the hiring of female extension workers and the integration of women into decision-making roles in the rice value chain. By aligning investments with social and environmental outcomes, the Green Rice Bond seeks to deliver both financial returns and measurable impact, positioning itself as a replicable model for other commodity value chains in SSA and beyond.

Design of a Green Bond for Sustainable Rice Production in Africa

SDG Impact Finance Initiative, with the support of Convergence, awarded Tree Global SA a USD 350,000 grant to design the Africa Reforestation Green Bond. The solution aims to launch a series of green bonds to finance a portfolio of Iarge-scale reforestation and conservation projects in Sub-Saharan Africa.

Reaching net zero requires removing 5-10 Gt CO2 emissions by year by 2050. Forests are the only proven and scalable feasible removal technology. Existing projects are few and small, and often ignore local communities or lack technical know-how. High-quality, large-scale forests require capital that is sizeable upfront to fund the development costs and patient in its nature for return distributions, given the long-term nature of reforestation projects.

Tree Global is  addressing this market challenge by designing a scalable financing solution to finance large-scale reforestation projects. Tree Global’s native-only large-scale reforestation projects generate high quality carbon dioxide removal (CDR) credits, enhance biodiversity and ensure equitable distribution of carbon revenues to governments and local communities, supporting sustainable development in the region.

Tree Global draws on 13 years of experience in designing and managing nursery operations across Asia, Africa, and the Middle East. This extensive expertise, coupled with its deep partnerships with host governments and local communities from the outset, ensures that projects are both financially viable and aligned with local environmental and social objectives.

__Design Question:__ *How can a blended finance funding structure support the goals of a large-scale reforestation project?*

The goal is to develop an innovative green bond structure to finance reforestation projects in countries such as the Democratic Republic of the Congo (DRC), Ghana, Republic of the Congo, Cameroon, Zambia and Tanzania. However, Tree Global recognizes that achieving this vision requires more than green bonds. The organization uses a blended finance approach, combining grants, debt, and equity, to reduce risks during the project development and implementation phases and make the projects more attractive to commercial investors as they scale.

Tree Global has secured critical funding from the SDG Impact Finance Initiative and the Good Energies Foundation. The Good Energies Foundation grant is focused on refining community engagement and ensuring equitable benefit-sharing, key components that help mitigate risks and lay the foundation for sustainable growth.

The SDG Impact Finance Initiative grant supports the creation of a long-term funding mechanism for the projects, potentially through green bonds. The structure may include guarantees and insurance to further reduce operational and credit risks. As the projects gain traction and a proven track record, the green bond financing mechanism will be introduced at the scale-up stage.


Design of a Green Bond for Scalable Financing Afforestation, Reforestation and Revegetation (ARR) projects in Africa

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

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

The Catalytic Climate Finance Facility (CC Facility) 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.

Design Funding

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

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## 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.
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## 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

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

## 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.

*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.

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. 

SDG Impact Finance Initiative

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. 

The Blended Finance Accelerator for Fund and Asset Managers (A4FM) supports the development and scale-up of blended finance solutions that are designed by fund and asset managers and aligned with the Sustainable Development Goals (SDGs) in emerging markets. The Accelerator aims to fill critical gaps across the development lifecycle of a blended finance solution—from early scoping to proof-of-concept and scale-up.

A4FM will provide three integrated forms of support: skill-building through curated __training__ to build fund and asset managers’ structuring expertise, catalytic __grant funding__ to overcome design and implementation barriers, and tailored __technical assistance__ to boost capacity and accelerate the deployment of impactful, gender-inclusive finance solutions in developing markets.

*Stay tuned for more details as we prepare to launch this innovative program in summer 2025.*

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

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 Targets1. 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).*

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*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

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

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.

Grant Portfolio