NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, September 19, 2017

Editor’s note: Learn more about WaterEquity in this NextBillion post by two managers at the fund. 

WaterEquity, an innovation of Water.org, today announced it has received a commitment for a $20 million loan from the Overseas Private Investment Corporation. OPIC, a self-sustaining U.S. government agency that helps American businesses invest in emerging markets, is supporting WaterEquity’s WaterCredit Investment Fund 3 (WCIF3), a $50 million social impact investment Fund that will invest in enterprises serving water and sanitation needs among the world’s poor.

“Access to safe water and sanitation is vital for security, stability, and moving the global economy forward,” said Ray Washburne, president and chief executive officer of OPIC. “We’re proud to finance WaterEquity’s innovative and scalable financial approach to solving the global water crisis and look forward to making a tangible impact together.”

“OPIC’s $20 million investment in WCIF3 will enable WaterEquity to invest in a robust portfolio of viable and bankable deals in the water and sanitation sector that will respond to a $12 billion demand at the base of the economic pyramid,” said Gary White, co-founder and CEO of Water.org and WaterEquity. “We are grateful for OPIC’s transformative leadership which will unlock higher levels of social impact investments needed to end the water crisis.”

WaterEquity will raise and deploy social impact investment capital to enterprises including microfinance institutions to help scale Water.org’s proven WaterCredit solution and level the playing field for those living at the base of the pyramid (BOP). Over seven years, WaterEquity’s WCIF3 Fund is projected to reach at least 4.6 million people in South and Southeast Asia with access to safe water and/or sanitation, at nearly zero philanthropic cost.

“At Water.org and WaterEquity, we think about the billions of people who desperately need access to safe water and sanitation a bit differently – we see them as customers with financial power, rights, and the energy to shape their own futures. We see them as agents of change,” said Matt Damon, co-founder of Water.org and WaterEquity.

WCIF3 builds on the success of WaterEquity’s first social impact Fund, which launched in 2014 and raised $11 million. Funds were distributed to seven of the highest-performing Water.org microfinance partners in India, which have already put this capital to use, disbursing more than 35,000 loans to provide water and/or sanitation to nearly 180,000 people through the second quarter of 2017. Over seven years, the Fund is projected to impact one million people.

“OPIC’s investment represents an important milestone towards achieving Sustainable Development Goal 6 and provides an opportunity for other social impact investors to join us on this journey. It signals a shift in mindset, and demonstrates how blended finance is uniquely positioned to unlock the levels of capital needed to match the scale of the crisis. As a result, women and girls will no longer have to walk miles, wait hours, or pay extortive prices for safe water,” said Alix Lebec, Director of Business Development and Investor Relations at WaterEquity.

OPIC has supported water infrastructure projects both large and small, from Asia to Africa. In Algeria, for example, OPIC financing supported construction of a reverse-osmosis water desalination plant that has helped alleviate severe water shortages by providing water for approximately 350,000 families. OPIC’s investment in WaterEquity’s WCIF3 Fund is its largest to date in the water and sanitation space.

“WaterEquity’s social impact investment efforts will bring together the financing capabilities of global markets to meet the demand at the base of the pyramid to solve one of the world’s most pressing challenges – to ensure everyone has access to safe water and sanitation,” Washburn added.

Images courtesy of Water.org.