Impact-Linked Finance for Gender Equality & Clean Energy (ILF for GCE) with a Goal for systemic change

Private sector engagement (PSE) is key to catalysing more resources for achieving the SDGs. One of the most promising PSE methods is impact-linked finance (ILF), which SDC has successfully introduced and piloted over several years. Scaling Up ILF is a priority for SDC, and the ILF for Gender Equality & Clean Energy (ILF for GCE) project aims to mobilize private sector resources for sustainable development by:
a) working for the first time with a substantial investment fund (Gigaton Fund) of a large asset manager (Mirova SunFunder)
b) working within the clean energy sector, which has a strong poverty reduction dimension and where results can be achieved relatively quickly
c) incentivizing in particular gender equality through outcome payments
d) demonstrating that this is successful at scale to crowd-in more private impact investors for d1) enhanced investments in gender quality and d2) ILF in general.

The Mirova SunFunder Gigaton Fund will be a USD 500M debt fund investing in clean energy and gender equality in low and lower middle-income countries, in particular in Sub-Saharan Africa and Asia Pacific. It aims to “save” one gigaton of CO2 emmissions through its clean energy investments.  

Improved livelihoods of at least 40.000 women (esp. underserved women) through increased access to and improved utilization of clean energy products and services

Systemic change in funding approach towards impact-linked financing for more gender equality (i.e. ILF(-type) projects other than ILF for GCE) 

1. Women have increased access to, improved utilization of, and enhanced benefits from clean energy products and services delivered by enterprises supported and financed through the ILF for GCE
2. Energy Enterprises experience an improved gender balance, representation and inclusion within their own organization, aligned with criteria and certification of industry leader 2X Global
3. Energy Enterprises receive investment from MirovaSunfunder and other funders
4. The ILF for GCE’s gender equality driven approach proves attractive to other funds and funders who either increase their gender-linked funding or even replicate impact-linked funding approaches for more gender equality 

Expected results:  

1. Energy enterprises (EE) agreed on gender incentives
2. EE have accessed non-financial support where necessary
3. EE are gender aware and have a plan how to improve their gender-focused performance and set-up
4. EE implement activities to improve their performance in terms of gender equality
5. The ILF for GCE and its partners have demonstrated viability of investing in gender equality and using the ILF model  

Results from previous phases:  

ILF has produced solid results. Its general effectiveness in different projects has been well documented by SDC and other donors. The potential of ILF has been confirmed by positive, independent evaluations and an SDC internal audit.

Successful examples of IFL projects supported by SDC include the Social Impact Incentives project in Latin America (SIINC LAC), which reached tens of thousands of beneficiaries. The SIINC LAC pilot, involving Root Capital and SDC (with a budget of USD 1M), proved highly successful, prompting its scalability. The ILF approach was scaled-up through a collaboration with Aceli Africa, where an SDC contribution of USD 10M mobilized additional grants of USD 54M which will mobilize private investments of USD about 600M. This initiative extends its outreach to several hundred thousand small farmers across four African countries through Agro-SME finance.

Another noteworthy success is a project in Bangladesh, supporting social and impact enterprises. This initiative has empowered thousands of low-income households.