Triodos Investment Management and AlphaMundi Group Ltd will launch a new Sh2.3 billion impact investing fund targeting agriculture and renewable energy sector firms.
The AlphaJiri Investment Fund LP impact fund will incorporate both debt and equity investments for small and medium-sized enterprises, with interest rate ranging from nine to about 15 per cent.
“There’s a lot of small and medium-sized enterprises and businesses that cannot get a loan from local financial markets because they are still at too early a stage to cater to collateral requirements from local banks or strict requirements from private equity banks,” said Mehboob Madhavji, co-founder of AlphaMundi, during the announcement.
AlphaJiri will include a Sh300 million grant from development agencies, including from Sweden, the US and Germany for a technical assistance facility. This facility will support the companies in measuring and reporting social impact and researching on new products.
The two partners have in recent past invested in Twiga foods, M-Kopa and Ugandan household solar Fenix.
They hope through co-investors to grow the fund to Sh8.3 billion by 2025.
“If possible we would like to do it with local investors but many banks are quite conservative in the funding of social businesses in the region and it is our job to make these social business attractive to local investors,” said Mr Madhavji.