Zürich, 7 September 2022 - U.S. International Development Finance Corporation (“DFC”), in collaboration with the U.S. Agency for International Development (“USAID”), has provided up to USD 19 million of credit guaranty to a climate-smart food systems fund launched by responsAbility Investments AG (“responsAbility”) earlier this year. This blended finance fund will support long-term investments in food systems transformation, reducing waste and minimizing CO2 emissions. This guaranty increases the credit loss protection for investors within the fund, which is targeting a maximum size of USD 200 million.
Feeding the world within planetary boundaries, as it reaches 10 billion people by 2050, will demand innovative and scalable climate finance solutions. According to estimates, USD 350 billion per year of investments is needed to transform the global food system and unlock USD 4.5 trillion in new business opportunities per year.
To begin to meet this demand, responsAbility, CGIAR and KfW launched a climate-smart food systems fund earlier this year that aims to provide long-term expansion debt to innovative agribusinesses in Asia Pacific, Latin America and Africa with the goal of mitigating climate change, reducing food loss and promoting climate change resilience in their value chains.
The guaranty from DFC is a key part of this blended finance fund, which was designed for catalyzing long-term funding for the envisioned food systems transformation. The guaranty complements the anchor junior funding received from the German Development Bank (KfW) and will insure senior investors against certain credit losses up to a maximum amount of USD 19 million.
Thomas Müller, Co-Head of Products & Structuring at responsAbility: “DFC and responsAbility have been strategic partners for a number of years and this new collaboration, with the combination of a tiered-fund and a guaranty, is unique in its form and helps to mobilize private capital as it provides an interesting risk/return profile to investors.”
About DFC U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights. About responsAbility Investments AG responsAbility Investments AG is a leading impact investor focused on private debt and private equity across emerging markets. Founded in 2003 and headquartered in Zurich, it has invested over USD 12 billion since inception and has a strong performance track record. With over 200 employees, collaborating from seven offices, the company invests across three distinctive themes to directly contribute to the United Nations Sustainable Development Goals (SDGs): Financial Inclusion, to finance the growth of Micro & SMEs; Climate Finance, to contribute to a net zero pathway; and Sustainable Food, to sustainably feed an ever-growing population. responsAbility is part of M&G plc, the international savings and investments business, and contributes to enhancing M&G’s capabilities in impact investing.
About USAID The U.S. Agency for International Development (USAID) is the world's premier international development agency and a catalytic actor driving development results. USAID's work advances U.S. national security and economic prosperity, demonstrates American generosity, and promotes a path to recipient self-reliance and resilience. For more information, please visit www.usaid.gov.
Co-Head of Products & Structuring, responsibility
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