London, 2nd October 2024 – Water Unite is delighted to announce a US$7.5 million commitment to Water Unite Impact (WUI) from the U.S. International Development Finance Corporation (DFC). This strategic investment will create a stronger and more climate-resilient water sector by providing catalytic growth finance to emerging market companies in this space.
"We are thrilled to have DFC’s support as we work to scale our efforts to build out this essential and exciting sector. Wellers Impact has a strong investment management ethos, focusing on in-depth analysis of circular economy and highly effective technology opportunities in the sector. DFC’s investment is a real endorsement to that professional approach." said Neil Sandy, CEO of Wellers Impact.
WUI is an investment vehicle developed in partnership between nonprofit Water Unite and Wellers Impact, an FCA regulated impact investment manager with offices in London and Nairobi. WUI combines catalytic donations from Water Unite’s corporate partners with senior capital to leverage funds for investment into private sector water SMEs in the global south.
Current corporate donors include Co-op Group, who have been supporting Water Unite Impact since its inception.
“Co-op's vision is firmly rooted in co-operating for a fairer world - one that is fairer to people, and fairer to the planet. Water Unite Impact (WUI) provides an innovative platform for Co-op colleagues, members and customers to protect our most precious resource; water. We’re delighted that the US International Development Finance Corporation (DFC) shares our vision and will be leveraging our funding. Their commitment provides significant validation to the early success and scalability of the WUI model.” said Co-op’s CEO, Shirine Khoury-Haq.
771 million people still don't have clean water close to home and 1.7 billion people lack access to a toilet. Due to the impact of climate change, 52% of the world's population will live in water-stressed regions by 2050.
“Water scarcity poses a significant risk that transcends individual sectors and affects the entire economy. As we approach 2030, a radical new approach to address this issue is required. Alongside our corporate partners, we believe that leveraging philanthropic funds to support impact investing has the potential to magnify their impact, making philanthropy more efficient and transformative. We’re calling on more corporates to join forces and unite around this cause.” said Water Unite Chair, Lord Malcolm Bruce
The sector experiences a significant ‘missing middle’, the funding gap in parts of the finance landscape not met through charitable foundations, microfinance institutions, commercial banks and/or formal capital markets.
DFC’s funding will accelerate Water Unite’s mission to connect ground-breaking companies with capital, expertise and networks for substantial growth. This commitment follows the successful completion of WUI’s pilot phase, which resulted in a strong portfolio of five investments across Africa and Asia and a strengthened management approach and investment thesis.
Investments have been made into Jibu, Sanivation, GREE Energy, Mr Green Africa and Seabex, covering the five key pillars of Water Unite’s “Water+” investment thesis:
A. Access to clean water
B. Access to sanitation/toilets
C. Wastewater circularity
D. Solid/plastic waste circularity
E. Water preservation
“DFC is pleased to be supporting such innovative and impactful work with Water Unite Impact in alignment with our priority of catalysing private investment into small businesses operating in the climate space,” said Justin Andrews, DFC's Acting Vice President of Small Business & Financial Services. “This is a highly significant transaction that will provide vital financing to support small businesses that are addressing the challenges of water, sanitation and plastic waste in emerging markets.”
The fund uses an innovative blended finance strategy to leverage and de-risk private sector finance. This consists of a catalytic First Loss Tranche, primarily funded by Water Unite’s corporate donors, and Senior Capital, sourced from private impact investors including Family Offices, High Net Worth Individuals (HNWIs) and Development Finance Institutions (DFIs).
DFC’s investment forms part of ongoing fundraising efforts for the fund’s close of up to $60m, which is anticipated to be the end of this year. Wellers Impact is now actively inviting new Limited Partners (LPs) to join forces in tackling water insecurity.