Zurich, 25 July 2023
- The BlueOrchard Additionality Hub will pool grant funds from donors to provide tailored non-financial support such as technical assistance as well as impact and value creation initiatives to portfolio companies.
- The provision of technical advice and training with the aim to further strengthen professional and operational capacity will accelerate both impact and value creation.
- Korea International Cooperation Agency first donor to the BlueOrchard Additionality Hub
BlueOrchard’s Additionality Hub
BlueOrchard has extensive experience in setting up various successful technical assistance facilities, closely linked to the funds it manages. The firm has designed and managed more than 135 technical assistance projects in Asia, Africa, and Latin America. A total of USD 36 million in grant funding has been raised from a range of a variety of sources, including bilateral and multilateral donors, development finance institutions, and private donors and foundations. The support provided ranges from capacity building, market development, training and coaching to impact measurement support, and is provided both before and after investment.
Philipp Mueller, BlueOrchard’s CEO, said: “BlueOrchard has been driving innovation in impact investing for over two decades. The launch of our new Additionality Hub is further evidence of our commitment to innovating the sector and is an important step in delivering additional positive outcomes for beneficiaries and our portfolio companies and creating value for our investors. I am very proud of the dedicated BlueOrchard team who are leading and delivering this important initiative.
We are very honoured to establish our relationship with the Korea International Cooperation Agency, a leading governmental organisation in Asia, and look forward to working together to achieve a positive social and environmental impact.”
BlueOrchard’s new Additionality Hub will create an overarching structure by pooling grant funds from various donors and providing technical assistance to funds for which such additional offer was previously not available. This will enable BlueOrchard to provide additional non-financial resources to a greater number of investees across sectors, asset classes, themes, and types of investees, thereby increasing the positive outcomes overall.
The first donor to the Hub is the Korea International Cooperation Agency (KOICA), a governmental organisation established by the Ministry of Foreign Affairs of South Korea. The grant funding from KOICA will be critical to BlueOrchard’s sustainable infrastructure investments. It will be used to implement international good practices to analyse and manage environmental and social risks associated with sustainable infrastructure projects.
Hong Seok-hwa, KOICA’s Vice President, said: “KOICA, a Korean foreign aid agency, is working with various innovative partners at the global level through the Innovative Partnership Solution (IPS) Program. KOICA firmly believes that blended finance is an innovative and effective tool to strengthen the enabling environments and achieve the SDGs. In addition, we expect this project to contribute to creating local jobs as well as producing renewable energy and reducing Greenhouse Gas emission by mobilizing investment for sustainable infrastructure projects in developing countries.
We are very grateful to start our partnership with BlueOrchard, a leading impact investment firm in the world and wish to strengthen cooperation to support climate actions.”
What is additionality and why is it important?
In impact investing, the term ‘additionality’ refers to the positive difference an impact investment can make for the investee company, its clients, and/or the environment. To achieve this additionality, two instruments can be utilised and combined: Firstly, capital itself can come with certain characteristics, such as taking higher risks or accepting lower returns. Secondly, a suite of non-financial value propositions can be offered alongside the investment, such as technical and strategic advice, access to networks and market intelligence, or training to further strengthen professional and operational capacities. These measures help ensure that the investment has the desired impact and supports the company in making a positive contribution to society and the environment.
For further information, please contact:
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BlueOrchard is a leading global impact investment manager and member of the Schroders Group. As a pioneering impact investor, the firm is dedicated to generating lasting positive impact for communities and the environment, while aiming at providing attractive returns to investors. BlueOrchard was founded in 2001, by initiative of the UN, as the first commercial manager of microfinance debt investments worldwide. Today, the firm offers impact investment solutions across asset classes, connecting millions of entrepreneurs in emerging and frontier markets with investors with the aim to make impact investment solutions accessible to all and to advance the conscious use of capital. Being a professional investment manager and expert in innovative blended finance mandates, BlueOrchard has a sophisticated international investor base and is a trusted partner of leading global development finance institutions. To date, BlueOrchard has invested over USD 10 billion across more than 100 countries. Over 280 million underserved people and MSMEs in emerging and frontier markets received access to financial and related services with the support of BlueOrchard as of December 2022. For additional information, please visit: www.blueorchard.com
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