WaterEquity, a WaterCredit Investment Fund 3 (WCIF3), with $50 million social impact investment fund, has been created by Water.Org to invest in enterprises serving water and sanitation needs among the world’s poor.
WCIF3 will raise and deploy the investment capital to scale Water.org and its WaterCredit solution that is projected to help at least 4.6 million people in South and Southeast Asia with access to safe water and toilets. This new fund builds on the success of WCIF1, WaterEquity’s inaugural $11 million Fund, which has helped over 100,000 people, said a statement from Water.Org.
“At Water.org and WaterEquity, we think about the billions of people who are living and dying for water and sanitation access a bit differently than a traditional charity – we see them as customers with financial power, rights, and the energy to design their own futures. We see them as catalysts for change,” said Hollywood actor and co-founder of Water.Org Matt Damon.
“WaterEquity demonstrates the profound impact we can all have by leveling the playing field for the world’s poor to gain access to affordable financing to meet their water and sanitation needs,” said Gary White, CEO of WaterEquity and Water.org. Bank of America is supporting WCIF3 with a $5 million zero interest loan.
“Our investment in WaterEquity is an example of how Bank of America is able to deploy capital to support innovative, scalable solutions that address global challenges," said Anne M. Finucane, vice chairman of Bank of America.
Research has identified $12 billion in demand among families at the Base of the Economic Pyramid (BOP) for access to affordable financing, such as small loans, to meet their water and sanitation needs. This represents at least 565 million people who are waiting for the market to reach them. Building on WaterCredit’s progress and impact, WaterEquity’s social impact investment funds will strive to respond to this market demand.
For nearly 15 years, Water.org has implemented its WaterCredit solution, which brings microfinance to the world’s poor to help them meet their water and sanitation needs. Water.org has partnered with 65 local microfinance institutions (MFIs) across nine countries, providing $17 million in smart subsidies to help them develop WaterCredit loan portfolios.
The result are evident as MFIs have attracted $280 million in local investment capital to provide more than one million WaterCredit loans, empowering more than five million people at the BOP to pay for the construction of a water connection and/or toilet at home. Globally, WaterCredit loans have a 99% repayment rate, and every repaid loan empowers another family with access to safe water, said Water.org.
Introducing WaterCredit Investment Fund 3 (WCIF3) launched in the first quarter of 2017 offers investors a target pre-tax financial return of 3.5% and its size is US$50 million. It is providing debt capital to microfinance institutions which provide access to household water supply and sanitation solutions in India, Indonesia, Cambodia and the Philippines.