Swiss impact investment manager BlueOrchard has attracted a total commitment of $29.5 million from British International Investment (BII) and the Nordic Development Fund (NDF) for its second climate insurance private equity fund, per an announcement.
BII has committed $15 million, while NDF’s contribution is at $13.5 million and another $1 million as a grant for the fund’s technical assistance facility.
With this, the total committed capital for the vehicle, InsuResilience Investment Fund Private Equity II, has reached over $90 million, close to its target size of $100 million.
The final closing of the fund will take place in the second half of 2024, BlueOrchard added.
BII and NDF join other limited partners such as German development bank KfW, and Schroders – the majority owner of BlueOrchard.
While BII has supported two other BlueOrchard funds, including an education finance fund for Africa and a COVID-19 recovery fund for MSMEs in emerging markets, this is a new partnership between NDF and BlueOrchard.
The InsuResilience Investment Fund Private Equity II is a joint initiative between BlueOrchard and KfW under the InsuResilience Global Partnership. The Swiss firm said the fund’s primary objective is to help vulnerable people and microentrepreneurs build climate resilience in emerging markets in Africa, South and Southeast Asia, and Latin America.
Similar to the first vehicle, the fund makes direct investments in business models at the forefront of providing climate insurance solutions to underserved communities, with a particular emphasis on parametric climate insurance and insurtech.
It has invested in Singapore-based insurtech startup Igloo, Indian cash flow financing solutions provider FinAGG and Pula, an agricultural insurance and technology company in Sub-Saharan Africa.
In total, both funds have invested in 13 companies, reaching over 70 million climate insurance beneficiaries in emerging markets as of December 2023.
“Every year, natural disasters and climate-related events are impairing thousands of businesses and pushing millions of people into poverty. With climate change on the rise, this is a historic opportunity to develop and distribute relevant insurance solutions to those affected,” said Felix Hermes, Head of Private Equity and Sustainable Infrastructure and Member of the Executive Management at BlueOrchard.
Founded in 2001, BlueOrchard has invested over $11 billion across more than 100 countries. Its other Asian portfolio companies include Indian electric vehicle charging startup CHARGE+ZONE, non-banking finance company Dvara KGFS, and Vietnamese lender Nam A Bank, among others.
Its existing limited partner, BII, has backed climate funds in Asia by managers such as Singapore’s Circulate Capital and Wavemaker Impact, India’s GEF Capital Partners, and Switzerland’s SUSI Partners.
Last year, BII told DealStreetAsia that the development finance institution had earmarked over $600 million for climate-related investments in Southeast Asia.
“Four out of five businesses in emerging economies have been impacted by the climate emergency, according to our annual Emerging Economies Climate Report this year. Climate insurance products should provide essential protection and enhance climate resilience of the most vulnerable and underserved groups of people and businesses,” Jo Fry, Investment Director and Head of Intermediated Financial Services at BII, said in the BlueOrchard investment announcement.
“Climate insurance can provide concrete solutions to the disastrous consequences of climate change and the people and businesses affected by it,” added Satu Santala, Managing Director of NDF.
In addition to sponsoring impact programmes in Asia, NDF has also invested in ADB Ventures’s first fund. ADB Ventures is seeking to raise as much as $200 million for a new climate-focused vehicle.
Meanwhile, other Switzerland-based impact investors – responsAbility and Blue Earth Capital – are also raising climate funds. responsAbility is targeting to raise $500 million for its Asia Climate Fund, while Blue Earth Capital has raised $378 million for its climate strategy, DealStreetAsia reported earlier this year.
