By Sarah Marchand, Private Sector Economic Development Specialist, CDC Group
In late 2012, the UK’s Department for International Development (DFID) launched the Impact Programme, an initiative aimed at developing new ways to foster the market for impact investment in Africa and South Asia. There are two investment vehicles under the programme: the Impact Fund (IF) and the Impact Accelerator (IA).
The Impact Programme’s Technical Assistance (TA) Facility provides support to pipeline and portfolio companies of both the Impact Fund and Impact Accelerator. Both of these vehicles, and the associated TA Facility are managed by CDC Group, the UK’s Development Finance Institution. The programme has a coordination and learning unit which is run by PricewaterhouseCoopers LLP who helped CDC to capture the insights contained in this note. More detail is provided below and on the Impact Programme site.
Through working with these two investment vehicles the Impact Programme TA Facility supports a wide range of companies across many geographies, sectors and business maturity levels. At the time of writing, this TA is available to more than 30 companies and this number will grow as both IA and IF make more investments. Given the breadth and scale of the facility, it’s important that it is set up in an efficient way. It is also critical that the interventions it funds are impactful and high quality, and that market distortions are minimised. The policies and procedures of the TA Facility have been refined over time to enhance its effectiveness, and several lessons have been learnt:
About The Impact Programme
The Impact Programme was launched by the UK Department for International Development (DFID) in 2012 and aims to transform the market for social impact investment in South Asia and Sub-Saharan Africa. CDC Group, the UK’s DFI manages the programme’s two investment vehicles.
The Impact Fund (IF) invests in funds and other intermediaries that cannot yet attract commercial capital and have the potential to achieve significant development impact through investments in financially sustainable, scalable private sector enterprises.
The Impact Accelerator (IA) makes direct investments in highly developmental opportunities that have the potential to be commercially sustainable, but where the risk is too high and/or the financial return is too low for purely commercial investors. In terms of impact, both seek to generate economic opportunities (e.g. good jobs and access to markets) and access to basic goods and services for underserved groups or in remote, fragile or otherwise challenging geographies.
The Impact Programme’s market-building activities, managed by PricewaterhouseCoopers LLP, seek to reduce the constraints in the impact investing value chain and make the practice of impact investing as effective, as efficient and as attractive as possible to investors, intermediaries and enterprises.
This article first appeared on The Practitioner Hub for Inclusive Business and is reproduced with permission.
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