SDG Loan Fund S.C.A SICAV-SIF
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
The SDG Loan Fund (hereafter the Fund) aims to increase institutional investor exposure to SDG-aligned investment opportunities, while delivering appropriate risk-adjusted returns. The Fund will invest in a portfolio of FMO-originated loans, thereby granting senior investors access to FMO’s investment pipeline. Investors in the Fund, including Allianz, FMO and Skandia, are providing capital. Allianz Global Investors is managing the SDG Loan Fund and FMO Investment Management will manage the loan portfolio. The MacArthur Foundation has committed an unfunded guarantee for credit enhancement.
What is our funding objective?
The Fund builds on a growing range of efforts to mobilize capital from private sector investors for investments in emerging and frontier markets towards the Sustainable Development Goals (SDGs). Overall, capital deployed by the Fund will focus on economic growth (SDG 8), reduced inequality (SDG 10) and climate action (SDG 13). The Fund capital will be invested as participations in FMO-originated loans across all of FMO’s sectors: Agribusiness, Food & Water, Energy, and Financial Institutions. Once fully invested in approximately 100 loan participations, the Fund aims for its investments to support close to 60,000 jobs and to avoid approximately 450,000 tCO2eq of greenhouse gasses per annum according to FMO’s historical experience and analysis. The capital structure is as following: - Class A (Preference Shares) – USD 1 billion (Institutional investors), including anchor investment from Allianz SE - Class B (Ordinary Shares) - USD 111 million first loss (FMO), wrapped with a USD 25 million unfunded guarantee from MacArthur Foundation
Why do we fund this investment?
The Fund is designed to address the urgent need for capital to reach the SDGs in developing countries. The total annual funding gap of USD 3.9 trillion has increased by 56 percent after the outbreak of COVID-19. The Fund’s large-scale and multi-sector reach is enabled by the first loss investment from FMO and the unfunded guarantee from MacArthur. Together, these credit enhancements are mobilizing capital from institutional investors who would not customarily be able to finance high-impact loans in emerging and frontier markets. This enables a mobilization ratio of 1:9 (where USD 1 of catalytic capital from FMO mobilizes USD 9 of private sector capital).
What is the Environmental and Social categorization rationale?
The Fund is labelled as C since the fund participates in FMO loans and therefore will follow FMO’s guidelines & procedures. E&S risks will be covered and addressed under each individual FMO loan by FMO.
- Country
- Global
- Sector
- Financial Institutions
- Publication date
- 12/11/2023
- Effective date
- 7/10/2023
- Total FMO financing
- USD 111.11 MLN
- Funding
- FMO NV
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Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - C