Nepal-based Dolma Fund Management has announced the first close of its second impact fund at $40 million.
The Dolma Impact Fund II — a private equity fund investing primarily in renewable energy, healthcare, and technology in Nepal — was backed by investors including Dutch lender FMO, the UK’s development finance institution CDC Group, Swedish development finance institution Swedfund, and the World Bank Group’s IFC, according to an announcement.
Tim Gocher, CEO, founder, and director at Dolma Fund Management told DealStreetAsia that the PE firm is now targeting a $75 million final close of the fund by May 2022.
While the fund’s current ticket size is $1-6 million, the upper range will be extended to over $10 million if it raises the full $75 million at final close, Gocher added.
“The immediate need is for COVID-related healthcare and technologies such as fintech and logistics platforms that facilitate a socially-distanced world. But this is a 10-year fund, with a five-year investment period, so with any investment, we will take a long-term view. We see COVID as a catalyst to invest in technology and infrastructure that will help Nepal both immediately and in the long term,” he emphasised.
DealStreetAsia had first reported in 2019 that Dolma Fund Management was on the road to raise as much as $75 million for the Dolma Impact Fund II.
The second fund is a successor to Dolma Impact Fund I, which was closed at $36.6 million in 2018. The first fund invested in as many as nine companies with operations in Nepal across renewables, tech/AI, and healthcare sectors, which together have generated over 5,000 direct jobs in the country.
Dolma I’s portfolio includes almost 50 MW of renewable energy, some of the country’s leading AI and e-commerce firms, and much-needed pharmaceutical manufacturing and medical care.
“As an anchor investor in Dolma Impact Fund I, we’re excited to invest in Dolma Fund Management’s second fund. Not only does this support our ambitions towards accelerating climate action, financial inclusion, and reducing inequalities, it also focuses on improving environmental and social conditions for many Nepalese workers and businesses. We are proud to support Dolma Fund Management as it will invest in the emerging tech sector and much-needed healthcare services and jobs in Nepal,” said Jaap Reinking, director private equity, FMO, in the announcement.
“Dolma is our second investment in this sector, and we hope that this will have a demonstration effect, beyond the financial returns, and attract more investments. This market will continue to grow if also supported by additional enabling reforms,” said Babacar S. Faye, resident representative, IFC.
In April, IFC proposed an investment of up to $10 million in Dolma Impact Fund II. Dutch development bank FMO last year also proposed to invest $10 million in the fund.
Since 2014, Dolma Fund Management has built the largest private equity portfolio in Nepal and has set international standards for governance, investment management, and reporting at fund manager, and portfolio level.
Dolma Impact Fund I was the first international private equity fund focusing on Nepal. Dolma Impact Fund II provides a clear pathway for making highly impactful investments in critical sectors in Nepal, framed by the sustainable development goals.
Pre-COVID, Nepal was one of the world’s fastest-growing economies, achieving GDP growth rates of between 6.7% and 8.2% in 2017-19, according to the World Bank.