IFC and Aureos launch $3m environmental and social fund(2)

The International Finance Corporation, the private sector arm of the World Bank, and emerging market buyout firm Aureos Capital have set up a fund to improve the environmental and social performance of small companies in emerging markets.

Emerging market specialist Aureos Capital and the International Finance Corporation, the private sector arm of the World Bank, have launched a fund to improve the environmental and social performance of SME companies in emerging markets.

The SME Sustainable Opportunities Initiative has around $3 million (£1.5 million, €2 million) to invest, according to a company spokesman.  The vehicle provides selected Aureos-backed companies with financial backing from the IFC and other donors.

The funding is intended to help companies with projects like reducing carbon emissions, improving energy and water efficiency and HIV/AIDS programmes.

The money is provided through loans, with some grant financing, while some participating companies will make in-kind contributions.
 
Noah Beckwith, partner of London-based Aureos, said: “This is not about hand-outs. This is about companies that recognise the business case for environmental and social leadership in their day-to-day operations, and which require interim financing to facilitate improvements in these areas.”

Over half the projects will be in sub-Saharan Africa. The initiative will also target other areas where Aureos has backed SMEs, including Asia and Latin America.
 
Projects being considered for the initiative include a Kenyan steel manufacturer, a Tanzanian pharmaceuticals company, a paint manufacturer in Nigeria and an aluminium producer in Panama. The company spokesperson said the steel manufacturer is likely to be the first beneficiary of the fund.