The German development bank Kreditanstalt für Wiederaufbau (KfW) recently financed the investment fund InsuResilience Private Equity II (IIF PE II) to invest in companies helping people in Africa, Asia and Latin America to manage climate risks. In particular, the target fund “companies capable of disrupting, scaling and improving the resilience of people and small businesses in emerging markets to extreme weather events and natural disasters.” The KfW investment serves to de-risk private investments in the IIF PE II, several of which are on hold. The fund has a target size of $100 million and is managed by BlueOrchard Finance, a member of the UK-based Schroders group. Like IIF PE I, its successor will provide technical assistance as well as cash to its beneficiaries.

IIF PE I, which was launched in 2017 and closed in 2020, completed its nine installments – totaling USD 80 million in public and private investments – in early 2022. Both funds are initiatives of the G20 InsuResilience Global Partnership (IGP ), an alliance focused on protecting people in “developing countries from the impacts of climate change”.

KfW was founded in 1948 and is owned by the federal and local governments of Germany. As of December 2020, KfW held €546 billion ($615 billion) in total assets and €424 billion ($477 billion) in net loans and advances.

Founded in 2001, BlueOrchard’s goal is to “generate lasting positive impact for communities and the environment, while aiming to provide attractive returns to investors”. By March 2022, BlueOrchard had disbursed $8 billion in private debt. Of the customers served by BlueOrchard-owned businesses, 80% are women, two-thirds live in rural areas, and 130,000 are students and educational institutions.

Founded in 1804, UK-based asset manager Schroders is a publicly listed company with operations in 32 countries. In 2021, it reports assets valued at £732 billion ($991 billion).

By Nithin Naren, Research Associate

Sources and additional resources

BlueOrchard press release
https://www.blueorchard.com/kfw-and-blueorchard-expand-climate-insurance-partnership-launch-insuresilience-investment-fund-private-equity-ii/

InsuResilience Investment Fund Homepage
https://www.insuresilienceinvestment.fund

KfW homepage
https://www.kfw-entwicklungsbank.de

IGP homepage
https://www.assuresilience.org/

Schroeder’s homepage
https://www.schroders.com/

Previous MicroCapital article on KfW
https://www.microcapital.org/microcapital-brief-verdant-capital-hybrid-fund-closes-with-34m-from-kfw-to-invest-in-microfinance-sme-lenders-in-africa/

Previous article by MicroCapital on BlueOrchard
https://www.microcapital.org/microcapital-brief-blueorchard-launches-2nd-private-equity-fund-seeking-to-invest-300m-in-financial-inclusion-of-30m-poor-households-msmes/

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