TORONTO, 7 September 2017 – Convergence is working with IFC, a member of the World Bank Group, in the development of a new platform for blended finance for investment in health and education businesses in developing countries serving the base of the pyramid (BoP) – the 4.5 billion poorest people who live on less than USD 8 per day.
Convergence and IFC will together fund the platform design, including product offering, with potential for raising as much as USD 500 million for investment and advisory support. This work is part of Convergence’s efforts to support catalytic blended finance vehicles, with funding provided by the Government of Canada.
This envisioned platform would look to ‘crowd-in’ sustainable private sector investment in the lowest-income countries and post-conflict and fragile areas and will also mobilize private capital for inclusive health and education businesses in middle-income countries through other sources. The goal is to mobilize a diversified set of investors to provide capital, advisory support, and capacity building to a wide range of health and education investment opportunities in emerging markets.
“Expanding access to health and education services is essential for eliminating poverty and reducing inequality. This innovative financing platform will enable us and other investors to support riskier projects with potential for expanding access to quality, affordable health and education services for all income groups, especially underserved people living in the poorest countries,” said Elena Sterlin, IFC Global Manager for Health and Education.
Joan Larrea, CEO of Convergence said: “We are excited to partner with IFC given the organization's extensive geographical reach, expertise, and execution power to achieve impact and mobilize private capital at scale into sustainable development. The Platform will be one of the most significant developments in this space and an important tool to achieving the health and education related Sustainable Development Goals,” said Joan Larrea.
The private sector delivers a significant share of health and education services for low-income people in developing countries. Most of these providers are small and struggle to get the credit they need to expand and serve more people, because local banks perceive them as risky. Markets are fragmented, limiting potential for rapid financial returns. The new investment platform would target health and education businesses serving the BoP that have a clear pathway for scalability and financial sustainability in the medium- to long-term, as well as established businesses already serving or aspiring to serve the BoP in a more meaningful way.
ABOUT CONVERGENCE </br> Convergence is an institution that connects, educates, and supports investors to execute blended finance transactions that increase private sector investment in emerging markets. Convergence offers feasibility study and proof of concept grant funding for practitioners to design catalytic blended finance vehicles that aim to attract private capital to global development at scale. Visit www.convergence.finance to learn more.
ABOUT IFC </br> IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it’s needed most. In FY17, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
MEDIA CONTACTS </br> Sijia Yi</br> Communications Lead</br> Tel.: 647-573-5993</br> [email protected]</br>
Elizabeth Price</br> Senior Communication Officer</br> Tel: +1 (202) 458-0387</br> [email protected]