Key solution to scale-up the sustainable food sector

DFC provides USD 19 million credit guaranty to support food systems investments at responsAbility

September 20223 min readSustainable Food, Climate Finance

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.

Contacts

Mauricio Benitez
Food Systems Lead, responsAbility
+41 44 403 2127
mauricio.benitez@responsability.com

Thomas Müller
Co-Head of Products & Structuring, responsibility
+41 44 403 2161
thomas.muller@responsability.com

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This information was produced by responsAbility Investments AG together with its partners to the best of its knowledge and belief. However, responsAbility Investments AG provides no guarantee with regards to its content and completeness and does not accept any liability for losses which might arise from making use of this information. The opinions expressed in this information material are those of responsAbility Investments AG at the time of writing and are subject to change at any time without notice. If nothing is indicated to the contrary, all figures are unaudited. This material is provided for information purposes only. It does not constitute an offer or a recommendation to buy or sell financial instruments or services and does not release the recipient from exercising his/her own judgment. It is expressly not intended for persons who, due to their nationality or place of residence, are not permitted access to such information under local law.

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