IDB Invest has approved an anchor investment of up to 25% of the capital commitments in the DIC Latin American Fund IV, L.P., the first private credit climate finance fund in Latin America and the Caribbean (LAC), managed by Darby International Capital.
Photo: IDB Invest
With a $400 million target fund size, IDB Invest’s contribution – capped at $50 million – will support the mobilization of investors to increase the provision of tailored long-term growth financing solutions to underserved Mid-Market Enterprises (MMEs) for climate investments to mitigate and adapt to climate change impacts across LAC. The Fund will be able to support companies’ sustainable growth, contributing to increased productivity, job creation, and expand sales or operations on a regional basis.
Climate investment opportunities are evident considering it is estimated that, approximately, 13 billion euros worth of global investment in clean energy will be needed by 2040 to meet the 1.5° goal set by the Paris Agreement. For LAC, climate investment opportunities are expected to reach $5 billion by 2030, in the urban sector alone.
In this context, the project will help close the access to sustainable finance gap to Mid-Market Enterprises and support LAC’s sustainable economic growth recovery in the challenging aftermath of the COVID-19 crisis. IDB Invest will also provide technical assistance, disseminating best climate finance practices and thus, positively influence the fund industry in LAC. IDB Invest will also participate in the Fund’s Technical Committee, the sounding board for climate Finance matters, and will also have a seat in the Fund’s LPAC influencing strategic non-investment Fund decisions. Additionally, the Fund will also incorporate all IDB Invest Environmental & Social (“E&S”), Integrity and Policy Requirements.
The deal is aligned with the following Sustainable Development Goals (“SDGs”) set out by the United Nations General Assembly: Decent Work and Economic Growth (SDG 8), Climate Action (SDG 13), and Partnerships for the Goals (SDG 17).
Invest IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $15.3 billion in asset management and 375 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Darby International Capital LLC
Darby International Capital is a leading emerging markets private debt investor with a focus on Latin America and has offices in Washington, DC, Bogotá, Colombia, and São Paulo, Brazil. The firm was created after the team spun off from its previous firm, Darby Overseas Investments, Ltd. (a subsidiary of Franklin Resources, Inc.).
Darby International is not affiliated with Darby Overseas Investments, Ltd., Darby Overseas Partners, L.P., Franklin Resources, Inc. (NYSE: BEN) or any of their affiliates.
This article was originally published by IDB Invest