Coca-Cola, Bayer back US$4m Green Catalytic Fund to tackle carbon emissions in Latin America and the Caribbean
As Latimpacto's third annual conference opens in Mexico, the Green Catalytic Fund aims to drive “money where the action is needed” by supporting 350 businesses in the region.
Coca-Cola and Bayer Foundation are among four impact investors to back the US$4m Green Catalytic Fund, which will support 350 projects and enterprises in Latin America and the Caribbean to tackle carbon emissions in the region.
A call for funding applications will launch on Wednesday at the Impact Minds conference, the annual gathering of Latimpacto, a network of venture philanthropists in Latin America and the Caribbean, which takes place in Oaxaca, Mexico this week.
The impact fund aims to reduce or avoid about 6.2m tons of carbon emissions and restore 2.5m hectares of land or forest over five years, and expects 40% of funded organisations to be women-led or with women in leadership positions.
The fund is a partnership between Latimpacto and IDB Lab, the innovation and venture capital arm of the Inter-American Development Bank, which itself invested US$1m in the fund.
Coca-Cola and Bayer Foundation have invested US$500,000 each, and the Inter-American Development Bank’s Amazon Unit has provided US$2m.
The Green Catalytic Fund aims to reach at least US$5m in size and is currently seeking an additional two corporate investors.
Funding will be distributed through 11 intermediary organisations – such as impact investors, foundations or accelerator programmes – which will in turn invest in individual companies or projects, most of them at a very early stage, with high impact potential.
“We want the financing to be received by business models that have a capacity to grow and make extensive use of that money,” said Janeth Londoño Becerra (pictured left), coordinator of the Green Catalytic Fund.
The call for applications from intermediaries will open on 13 September at Latimpacto’s annual conference, and is expected to last two months.
The Impact Minds conference will this week host more than 600 impact investors from the corporate, private, public and philanthropic sectors. This edition of the conference will emphasise the importance of diversity, equity and inclusion and how impact investing can help to give vulnerable groups access to social and economic opportunities.
Carolina Suárez Visbal (pictured right), Latimpacto CEO, said: “In Latin America, we are long overdue in terms of social equity and equality; this implies that we must further incorporate vulnerable populations, and that gender and race must cease to be a reason for the lack of opportunities, or for the ways in which we interact as societies.
“At the conference, we will deal with the essential role of financing; we will speak about the concept of systemic change, and about how these actions produce systemic transformations leading to increased inclusiveness and diversity.”
Putting the money where the action is needed
The Green Catalytic Fund will invest in two different ways. Five intermediaries will receive up to $US400,000 each to provide technical assistance to organisations or projects focused on decarbonisation in the the Amazon basin, in particular through nature-based solutions and conservation efforts.
Those could be rural businesses using sustainable farming or agroforestry, or community-led projects working on restoring degraded ecosystems, for example. Technical assistance funding could fund accelerator programmes, be used as seed capital for the most promising enterprises, or as grants to consolidate a business model.
The other six intermediaries will receive up to US$480,000 each to invest in businesses across Latin America and the Caribbean that develop technologies to drive decarbonisation, for example in the fields of the circular economy or access to clean energy.
Those can include early-stage startups with growth potential as well as established enterprises with more consolidated business models. Investments will take a variety of forms, like equity or loans.
The fund is not aiming to retrieve the money, but instead use it to enable impactful organisations to grow to a point where they can receive more investment, Juan David Ferreira (pictured), programme director at Latimpacto, explained.
“We don’t really expect the fund to be self sustainable – we’re channelling these resources, putting the money where the action is needed, and supporting it along the line – and hopefully after the line, being able to connect these promising organisations with potential investors, with potential corporates, or with organisations that can provide support in leaping towards the next stage of their economic development model.”
Corporate backers of the fund would doubly benefit from their investment, Ferreira added, creating a positive impact creation on the one hand, and on the other, building relationships with impactful businesses that they can integrate in their supply chains.
“The solutions that [the corporate investors] are going to support end up having an impact in their own operations as well – it’s super interesting,” he said.
Impact Minds: Beyond Frontiers 2024, Latimpacto’s third annual conference, takes place from 9-12 September in Oaxaca, Mexico. Pioneers Post is a media partner – check back soon for more updates.
Top image: A bunch of avocados grown by a smallholder farmer in Colombia. Credit: CIAT via Wikimedia Commons.
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