Inclusive Business for a Sustainable Future

FinDev Canada, Canada’s development finance institution that supports the private sector in developing countries, was successfully launched in 2018.

During this foundational year, FinDev Canada conducted extensive consultations with stakeholders and took their comments into consideration to define its strategy and objectives.

The following report highlights the key milestones of 2018, including our first two investments.

Photo still of Mairead Lavery video

Mairead Lavery Chair of the FinDev Canada Board of Directors and CEO of Export Development Canada

Paul Lamontagne Managing Director

Photo still of Paul Lamontagne video

Our Foundational Year

During 2018, FinDev Canada started hiring talented individuals to conduct our business, growing to a team of nearly 20 people. We also put in place policies, procedures and systems for Canada’s new development finance institution (DFI), including a Development Impact Framework anchored around a gender lens, and named an Advisory Council and a Board of Directors composed of experts in international development, business and development finance to guide their actions.

We established partnerships with peers through the signature of Memoranda of Understanding with other DFIs, international finance institutions (IFIs) and multilateral development banks (MDBs) such as FMO, CDC, Finnfund and the African Development Bank. FinDev Canada also played a leading role in the launch of the 2X Challenge: Financing for Women, a commitment of the G7 DFIs to mobilize USD 3 billion toward projects that benefit women.

Finally, we signed two transactions in 2018, focused on green growth and women’s economic empowerment. Below, you can see the steps that led to these achievements:

Group photo of FinDev employees
January–December 2018
Hiring staff and directors

During 2018, FinDev Canada grew to a team of almost 20 experts ready to tackle the multiple challenges behind investing with impact.

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February 2, 2018
Launch of the FinDev Canada brand, hiring of Managing Director

Development Finance Institute Canada announced on this date that Paul Lamontagne had been appointed managing director of the newly branded “FinDev Canada.”

FinDev Canada logo

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March 13, 2018
First transaction: USD 10 million investment in M-KOPA Solar

M-KOPA offers good-quality jobs for local workers and for women, with 52% of its 800-plus workforce of permanent employees coming from East Africa and 44% of its commissioned sales agents being women. M-KOPA helps avoid approximately 140,000 tonnes of carbon emissions each year.

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Stakeholder engaement session in Montreal
March 16, 2018
Stakeholder engagement session in Montreal

FinDev Canada and the Canadian International Development Platform (CIDP) hosted a daylong conference with a wide range of development practitioners, development finance experts and other key stakeholders to discuss and deliberate key themes of interest for FinDev Canada and our stakeholders.

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May 18, 2018
First meeting of the Advisory Council
Advisory council

The Council guides and advises FinDev Canada in such areas as priority sectors and regions of activity, opportunities for innovative approaches to development finance, monitoring and evaluation, transparency, and in achieving its development impact goals.

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June 2018
Virtual stakeholder engagement for public commentary on Development Impact Framework

FinDev Canada’s Development Impact Framework was open for stakeholder comments in May and June 2018, receiving more than 145 comments from over 30 different organizations and individuals. The organizations represented a range of stakeholder types, including non-governmental organizations/civil society, development finance institutions (DFIs) and impact investors, the private sector, academic and research institutions, and multilateral and government agencies.

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June 9, 2018
Announcement of the 2X Challenge at the G7 Summit

FinDev Canada, along with DFIs from other G7 countries – the United Kingdom (CDC), the United States (Overseas Private Investment Corporation – OPIC), Italy (Cassa depositi e prestiti – CDP), France (Proparco) and Japan (JBIC and JICA), with support from Germany (DEG) – committed to mobilize USD 3 billion by 2020 for investment in business activities that will benefit women.

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September 18, 2018
Official launch event

FinDev Canada hosted an international conference entitled “What could women do with USD 3 billion? Change the World.”

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November 5, 2018
FinDev Canada joins the Gender Finance Collaborative

The Collaborative shares best practices and data focused on women’s economic empowerment.

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November 7, 2018
Signature of MoU with the African Development Bank

Leaders of the two institutions signed an MoU at the first Africa Investment Forum.

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November 30, 2018
Signature of MoU with CDC

The institutions committed to share best practices and knowledge and seek joint investment opportunities.

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December 4, 2018
Second transaction: USD 20 million investment in Climate Investor One

The investment will have a positive impact on climate change mitigation by avoiding 1.2 million tonnes of CO2 emissions.

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October 1, 2018
Signature of Memorandum of Understanding (MoU) with FMO

The MoU covers co-operation in best practices, joint engagement opportunities and other means to contribute to the Sustainable Development Goals (SDGs).

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October 16, 2018
Signature of MoU with Finnfund

The DFIs seek joint engagement opportunities and collaboration on best practices to contribute to the SDGs.

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December 4, 2018
Second transaction: USD 20 million investment in Climate Investor One

The investment will have a positive impact on climate change mitigation by avoiding 1.2 million tonnes of CO2 emissions.

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Young FinDev employee smiles in the workplace

Investments & Impact Reporting

FinDev Canada successfully signed two transactions in 2018: a USD 10 million investment in the Kenya-based solar energy provider M-KOPA, and a USD 20 million investment in Climate Investor One, an innovative blended finance platform that will bring renewable energy solutions to developing countries.

FinDev team members meet with M-KOPA employees and community members in Nairobi, Kenya

M-KOPA Solar

M-KOPA, headquartered in Nairobi, Kenya, is a supplier of “pay-as-you-go” (PAYG) off-grid solar home systems and consumer products for low-income households in Africa that were previously without access to electricity. The company’s goal is to bring affordable solar energy and lighting to rural households for less than the daily cost of kerosene while providing customers with a credit history and a pathway to finance additional household products such as TVs, refrigerators, cooking stoves and smartphones.

Having impact in Kenya, Uganda and Tanzania
Contributing to Green growth
We provided USD 10 million in equity
This represents 6.25% paid-in capital* *At time of investment

The Impact Thesis

Environment and climate solutions
M-KOPA offers a renewable energy and lighting solution to over 600,000 rural families that previously relied on kerosene or other polluting fuels, and plans to expand its reach to over 1.5 million households by 2022.

Surveys of M-KOPA customers – approximately half of whom are women – show many follow-on benefits from this new access, including improved ability of children to study in the evening (96% of users), providing a power source for income-generating activities (23% of users), and avoiding harmful carbon dioxide emissions through the switch to solar power (1.5 million tonnes of CO2 equivalent emissions displaced to date).

Women’s economic empowerment and market development
M-KOPA contributes to good-quality employment opportunities in East Africa, including for women, who represent 48% of all M-KOPA staff.

FinDev team members meet with M-KOPA employees and community members in Nairobi, Kenya

2018 Achievements

M-KOPA connected 105,000 additional households with access to solar power and light in 2018. Based on an average family size, this means that over 400,000 people gained improved energy access. All together, over 695,000 households and 2.8 million people today have improved energy access thanks to M-KOPA’s products, of whom 80% are in Kenya and 20% are in Uganda.

M-KOPA also introduced a new product in 2018. The M-KOPA 6000 solar system is bundled with a 32-inch TV and provides customers with longer viewing hours. Ninety-eight per cent of Kenya customers report that since owning a TV they have increased access to critical information provided by the news and other business-related programming.

M-KOPA Staff as at 31/12/2018

The company also contributes to the local economy through payments of salaries and sales agent commissions, and payments to domestic suppliers and local maintenance providers.

Climate Investor One

Climate Investor One (CIO) is a 20-year investment fund launched in 2017 that focuses exclusively on renewable energy projects in emerging markets across Africa, Asia and Latin America. CIO will finance an estimated 20 small to mid-size onshore wind, solar PV, and run-of-river hydroelectric energy projects, each of which will typically range in size from 25–100 megawatts of power. CIO is managed by Climate Fund Managers (CFM), a Netherlands-based fund manager.

Climate Investor 1 logo

A first-of-its-kind blended finance approach for renewable energy, the unique structure enables CIO to bring renewable energy projects from the initial development stage through to construction and operations, and serves to mobilize a wide variety of funders including philanthropic agencies and multilateral donors, development finance institutions and commercial investors.

Having impact in 76 eligible countries in Africa, Asia and Latin America At least 70% of the Fund’s investments will be in low-income and lower-middle income countries.
Contributing to Green growth
We provided USD 20 million in equity to the Construction Equity Fund of CIO

The Impact Thesis

Environment and climate solutions
CIO’s primary sustainable development contribution is to bring more renewable energy capacity to developing markets in a responsible and inclusive way. CIO’s projects will install an estimated 1,100 megawatts of new power generation capacity, which will lead to ~3.2 gigawatt hours of additional renewable energy production per year by 2035. This new renewable energy production will contribute up to 1.2 million tonnes of avoided CO2 equivalent GHG emissions in emerging markets by 2035.

Women’s economic empowerment and market development
CIO’s inclusive and responsible approach to investment includes implementing a Gender and Social Inclusion Policy and associated Action Plan that will position the facility to incorporate best practices for gender equality at all levels of its operations, from the fund manager through to portfolio companies. This is expected to generate economic empowerment outcomes for women in areas such as governance, leadership and employment, and bolster their status as community members. The Fund’s activities will also generate construction and operational jobs and economic value-add through salaries, taxes and profits, each of which will be tracked throughout the life of the investments.

2018 Achievements

In 2018, CIO successfully began its investment operations: in September, the Fund invested in Cleantech Solar Asia Pte Ltd., a leading Pan-Asian rooftop solar developer, owner and operator offering full-service solutions to corporate clients. The CIO investment will be used to finance the construction of an additional 60 megawatts of new off-grid Corporate and Industrial (C&I) solar generation. CIO’s participation will also enable Cleantech to build out its pipeline of future projects across the region. Over the lifetime of the investment, CFM estimates that Cleantech will produce ~636 gigawatts of energy, avoid ~475,000 tonnes of CO2 equivalent emissions, and serve more than 500,000 people with clean energy.

The facility also advanced its active roster of renewable energy projects, with 10 projects receiving approval to move to the development phase of financing. The 10 approved projects total over 500 megawatts of installed power, nearly 80% of which is approved for countries in Africa.

Financial Reporting

FinDev Canada is committed to transparency about its operations, strategies and policies. Below you can find FinDev Canada’s 2018 Financial Statements.