EcoEnterprises Fund
EcoE is an example of the type of funds included in the ImpactAssets Global Impact Ventures platform.
Overview
EcoEnterprises Partners II, LP (EcoE II) provides expansion capital to small community-based businesses that encourage the sustainable use of natural resources, support livelihoods, mitigate climate change and protect environmental services. A pioneer in impact investing, EcoE II builds upon the solid track record of EcoEnterprises Fund established more than a decade ago. The Fund’s experience is presented in, “Portfolio for the Planet: Lessons from 10 years of Impact Investing” (Earthscan/Routledge Press). Launched in December 2011, EcoE II offers investors the opportunity to generate financial gains with significant environmental and social returns.
Methodology
EcoE II deploys mezzanine financing otherwise unavailable to growth-stage sustainable ventures in unique business niches. Instruments utilized include quasi-equity, structured royalty streams and warrants, convertible notes and long term debt financing. The Fund targets companies in the organic agriculture, sustainable aquaculture, ecotourism, sustainable forestry, and non-timber forest products sectors. EcoE II strengthens portfolio winners through subsequent financing rounds and in doing so achieves greater scale and results.
Partners
As of June 2012, investors in EcoE II include European Investment Bank, FMO, Hivos-Triodos Fonds, Oikocredit, The Nature Conservancy, Multilateral Investment Fund of the Inter-American Development Bank, family foundations and private accredited investors. In addition, over the past decade, EcoEnterprises Fund has built an extensive network of collaborators including co-financiers, local and international environmental and community organizations and business advisory groups. This enables EcoE II to extend its reach, generate pipeline and provide continuous portfolio monitoring and support.
Outcomes
The first fund invested in 23 sustainable businesses in 10 countries in Latin America that offer a wide range of innovative products: from organic shrimp to organic spices, FSC-certified furniture to biodynamic flowers and acai juice smoothies. Collectively, this portfolio produced 3,513 jobs; benefits for 293 communities and local groups; $281 million in sales; $138 million in additional capital leveraged; and 860,773 hectares of land directly conserved. Impact metrics are collected using the Fund’s tested and rigorous monitoring and evaluation tool.
Example Investment
An EcoE II investment already approved for expansion financing is a dried fruit company which has been an innovator in introducing organic product, developing snack packs and commercializing new native fruits in local and export markets. Replicating its success in Ecuador to Colombia and Mexico, one of the company's objectives is to enable small producers to improve their livelihoods by growing new value-added fruits for sale. The company's efforts provide an alternative to the main commercial activity, conventional flower production, which compromises the region's environmental integrity given the intense use of pesticides.