The fund’s mission is to catalyze a sustainable, inclusive and green economy by investing in scalable organizations in emerging markets. It aims to help develop a sustainable financial sector supportive of inclusive, sustainable food value chains to benefit small-scale farmers and enable access to clean, affordable and reliable energy for low-income households and SMEs.
Asia, Africa, Latin America, with a prime focus on sub-Saharan Africa and South Asia.
The initial focus of HTF (1994-2010) was on inclusive finance. As microfinance gained global recognition and support, HTF shifted to investing in SMEs. Impact investments in early-stage, value-driven businesses are needed to transition to a sustainable, inclusive and green economy. Why? Long-term impact investments create lasting social and environmental benefits as well as economic returns. And there is a strong correlation between the health of the small business community, economic growth, and poverty alleviation. Moreover, small businesses are the engine of employment, contributing up to 85 percent of new full-time jobs in developing countries.
The fund offers direct investments in SMEs and financial inclusion and indirect investments in SMEs through financial intermediaries. The focus is on SMEs active in sustainable food and agriculture and (off-grid) renewable energy solutions for low-income households. Before 2015, the HTF invested most of its funds in MFIs and financial inclusion, but in 2016 it changed strategy. The ambition for 2016-2020 is to invest 70 percent of its funds in SMEs and 30 percent in MFIs and financial inclusion. The fund provides equity and (subordinated) debt to these enterprises with a long-term horizon and a range from EUR 250,000 to EUR 3 million.
Results so far
Since 1994, HTF has invested over EUR 200 million and helped millions of predominantly rural women access financial services. By end 2018, the fund had EUR 67 million outstanding in investments in 28 companies in 16 emerging markets worldwide, with 56 percent exposure in Africa, benefiting mainly rural, marginalized communities.
One successful investee is M-Kopa Solar, a global leader in “pay-as-you-go” off-grid energy. HTF was its first commercial investor. To date, M-KOPA Solar has connected over 600,000 homes in East Africa to affordable, safe and clean energy that will save some 600,000 metric tons of CO2 over four years.
Another is Norandino, an agri-focused savings and loans cooperative in Peru serving 15,000 smallholder farmers in over 50 local cooperatives. In 2015, HTF helped Norandino renovate certified organic coffee and cocoa plantations with a three-year microfinance loan and a five-year “Finance for Sustainability” loan. These loans contribute to climate adaptation and have helped over 500 farmers renovate their plantations.
Period and budget
The Hivos-Triodos Fund was established in 1994. Fund size is EUR 75 million.
Hivos and Triodos Investment Management