There are all kinds of solutions out there, proven ways to help the environment and strengthen local economies. So why aren’t we putting more of them into action?
Often the reason is simple: a lack of financing. Social entrepreneurs can be delivering effective projects at a smaller scale, but ramping up their impact takes resources. New staff may need to be trained, equipment purchased, and systems developed. Some companies get caught in this so-called “pioneer gap”, where the ability to pioneer proven sustainable development approaches in new areas or at larger scales is thwarted by a lack of working capital in the growth stage.
Nexus is aiming to fill this gap with a new financial tool we are calling the Pioneer Facility.
Through a blend of recoverable grants and impact financing, Nexus is aiming to raise 6 million USD in support of at least 20 social enterprises over the next four years.It is this blend of finance that will enable the Facility to fill the pioneer gap by mitigating risks and providing affordable debt to the pioneers. The Facility has already attracted 1.5 million USD in first loss capital from the French Facility for Global Environment.
The Facility will invest in social businesses working in clean energy and water technologies that benefit low-income populations in Asia and Africa. In addition to financing, Nexus will support the funded businesses in developing their own monitoring and evaluation system, increasing their chances of securing further funding from impact investors.
Investors who support the Pioneer Facility will have a seat on the investment committee, helping to shape its strategy while gaining access to an ecosystem of impact development projects. At the forefront of these projects’ evolution, investors will have privileged access to future investment opportunities.
Nexus is excited to offer another innovative financial tool that can help scale up low-carbon development projects. Contact Nexus for more information on how to get involved with the Pioneer Facility as an investor or social business.
Photo credit: Asia Development Bank