• Nersan Naidoo, CEO of Sanlam Investments

Sanlam invests for climate change, bolsters vulnerable communities

The Hague: The Dutch government has announced that the consortium of Dutch development bank FMO, SNV Netherlands Development Organisation (SNV), World Wide Fund for Nature (WWF-NL) and Climate Fund Managers has won the tender to manage the €160 million Dutch Fund for Climate and Development (DFCD). This pioneering partnership of NGOs and financiers aims to help developing countries build climate resilient economies.

Climate Fund Managers (CFM) is a joint venture between Sanlam InfraWorks and the Dutch Development Bank and invests in climate-related projects in emerging markets. CFM operates with the purpose to mitigate climate change, to establish greater gender equality, and to create jobs. ‘Sustainable development and climate change are core issues that need to be addressed on a global scale through innovative investment,’ commented Nersan Naidoo, CEO of Sanlam Investments. ‘Through Sanlam InfraWorks we are able to deliver long-term returns to investors and, concomitantly, promote positive environmental change.’

Investments made by the consortium parties will seek to improve the wellbeing, economic prospects, and livelihoods of vulnerable groups – particularly women and youth – and, enhance the health of critical ecosystems, from river basins to tropical rainforests, marshland, and mangroves. The consortium’s activities will also help protect communities and cities from the increasing frequency of extreme weather events and benefit weakening biodiversity in areas that provide people with water, food, medicine, and economic opportunity.

Climate-resilient economic growth

In the period up to 2030, an estimated $3.5 trillion is required for developing countries to implement the Paris climate pledges to prevent potentially catastrophic and irreversible effects of climate change. Therefore, the FMO-led consortium will use the full €160 million of DFCD funding to accelerate the flow of institutional and commercial capital into climate-resilient investments. The consortium provides the Dutch government with a vehicle for climate impact and promotes broad-based actions to the global challenge of climate change.

Unique partnership and fund structure

It is revolutionary that a development finance institution, a private sector investment manager, a conservation NGO, and a development NGO work together on a fund of such scale, within the scope of climate finance. The partners aim to establish a fund that can serve as a global example for attracting and deploying public and private capital in well-designed and impactful climate-relevant projects, in particular for climate adaptation. The fund will be focusing on several high impact investment themes, including climate-resilient water systems and freshwater ecosystems, forestry, climate-smart agriculture, and restoration of ecosystems to protect the environment.

The DFCD will be structured with three separate but operationally linked facilities, each with a unique role across the project lifecycle; each with a unique thematic sub-sector focus. The consortium will connect the long-standing project development expertise of SNV and WWF to the mobilizing and investment power of FMO and CFM. This will allow projects to graduate from idea to full implementation using lifecycle financing for every stage of a project. Furthermore, the consortium will adopt a ‘landscape’ strategy for deal origination and execution. This strategy allows consortium parties to actively source and develop investment opportunities for other consortium parties in-and-around, as well as downstream, the vicinity of their own investment activities.

Peter van Mierlo, CEO of FMO: ‘Climate change is real and requires urgent action. It will affect us all and developing countries even more. We are very proud to have been entrusted with this initiative by the Dutch government. It allows us to improve climate resilience of landscapes and their vulnerable inhabitants in developing countries. We welcome the collaboration between NGOs and (development) finance institutions and look forward to making progress in adapting to the consequences of climate change.’

Meike van Ginneken, CEO of SNV: ‘Poor communities are the most vulnerable to the devastating effects of climate change. Improving their climate resilience requires financing and expertise, as well as market-based approaches to ensure sustainability in development impact. We are delighted to team up with the Netherlands Government, FMO, CFM and WWF on the DFCD.’

Kirsten Schuijt, CEO of WWF-NL: ‘To effectively combat climate change we need to fundamentally change our attitude to the matter. This partnership consisting of financial institutions and NGOs is a case in point. Together we will make investing in healthy ecosystems as a key strategy to enhance the climate resilien