Sustainable finance: Do we have to reinvent the wheel?
Are we missing a trick by not tweaking tried-and-true instruments for sustainable finance? Can we talk more broadly about commercial viability? And then, of course, there’s Goldman Sachs.
When it comes to finding private-sector financing solutions for social and environmental challenges, do we need to reinvent the wheel? I’m beginning to wonder. For example, Gary Kleiman, who runs an emerging markets analysis and advisory firm, has been arguing for many years that we already have the instruments we need for financing refugee-related infrastructure and jobs.
A sovereign bond dedicated to job creation for refugees or job creation to reduce migration would be perhaps a simpler solution than finding small impact investment opportunities that finance refugee entrepreneurs. While the latter is still important, smaller projects often require more complex structures and we have yet to see an investable product launch in this area. Kois Invest’s refugee livelihoods bond, for example, will have taken three years to structure when it launches next year.
I was thinking about this perspective of using traditional markets while looking at the IPO of ASA International. It is the first-ever IPO of a global microfinance issuer and the deal was coordinated and sponsored by Citi.
ASAI is one of the world’s largest and most-profitable international microfinance institutions and focuses on lending to low-income, predominately female entrepreneurs – around 1.9