Hello ImpactAlpha readers!

#Featured: The Brief Quiz (No.9)

This week a huge fleet of icebergs hit a North Atlantic shipping lane, and Jerome Tagger had a couple of strong mojitos. His memory is foggy, how’s yours? Take the Brief Quiz #9.

Q. New Forests just made an investment in Laos. What does New Forests invest in?

a. Err, new forests?
b. Err, old forests?
c. Err, Laos?
d. Err, sustainable timber plantations, rural land and conservation investments related to ecosystem restoration and protection

Take the Brief Quiz, from Jerome Tagger, at ImpactAlpha.

#Dealflow: Follow the Money

Vox Capital backs education startup to boost student performance in Brazil. Rio de Janeiro-based Aondê has created a multimedia-teaching approach, called Conecturma, that combines books, games, cartoons, music and puppets into an interactive story to teach Portuguese, mathematics and social and emotional skills to youth. Conecturma is used in more than three dozen schools and reaches more than 4,000 students in Brazil, which has some of the worst education outcomes in the world, according to the OECD. Vox Capital’s R$4 million ($1.3 million) investment, the first from the impact investor’s second fund, will help Aondê further develop and roll out Conecturma, as it aims to reach nearly 200,000 students in the coming years. Vox, one of Brazil’s earliest impact-investing fund managers, has backed more than 20 startups since 2009. The firm now manages about $120 million between its two funds. Impact investors in Brazil made 48 investments totaling roughly $70 million in 2014 and 2015, according to the Aspen Network of Development Entrepreneurs.

Inspirafarms raises $1.75 million to stem food waste on small farms. The startup, based in Sevenoaks, U.K., designs and manufactures cold-storage and food-processing equipment that is modular and can work off-grid to help small agribusinesses reduce post-harvest losses due to pests, heat and exposure to the elements. With the equipment, a small-scale farming operation can “diversify its business and income, create jobs and get a foothold in the global supply chain,” says Dr. Michele Bruni, InspiraFarms technical director. The funding will help the company expand operations and extend interest-free financing for its technology to farmers and dairies in East Africa and Central America. A slew of agriculture, off-grid energy and impact investors joined the Series A round, including Fort Collins-based Factor(e) Ventures, PYMWYMIC and the Doen Foundation in Amsterdam, Paris-based Energy Access Ventures, the Montpelier Foundation in London.

Oikocredit raises $2.1 million to finance SDG solutions. Debt and equity investments by the Netherlands-based cooperative help to finance microfinance institutions and small businesses in agriculture, renewable energy and infrastructure that are working to meet 16 of the 17 U.N. Sustainable Development Goals. Last year, the co-op’s portfolio grew 16% to €1.05 billion ($1.1 billion), including a 19% bump in Africa, according to results released in March. Oikocredit raises capital from institutions and individuals (the firm boasts 54,000) through the sale of depository receipts in the Oikocredit International Share Foundation; investors earn an annual dividend. Oikocredit says that 80% of the capital it raises is invested within three months and that its efforts reach 40 million people in 70 countries. The new funds were raised last year by Oikocredit’s U.K. and Ireland office, according to a recent annoucement, with the help of ClearlySo, a London-based impact investment bank.

See all of ImpactAlpha’s recent #dealflow.

#Signals: Ahead of the Curve

With the forecast cloudy, investors are forced to confront when and how to play climate. Climate disruption is moving faster than most people realize, and “the responses are going to move much faster as well,” Jeremy Grantham, a veteran British investor and co-founder of Grantham, Mayo, & van Otterloo (GMO), told the Financial Times [paywall]. Grantham thinks the Trump administration’s action last week to help polluters could accelerate the market for clean energy and climate solutions. “Doing his absolute worst will galvanise the response,” he says. It isn’t just the weather that’s changing: government policies, new technologies and shareholder activism are also forcing investors to act on climate. As climate economics collides with investment activism, the FT notes, “investors are forced to consider both the potential effects of climate change and the weight of money taking account of carbon.” Unfortunately, the answers aren’t simple, especially when it comes to timing. Some early solar companies, for example, took heavy losses as they pushed supply into a young market. And coal? “The stranded-asset argument was very strong a few years ago, particularly in relation to coal,” Ewen Cameron Watt, a senior director at BlackRock, told FT. “Then last year you had a massive rise in the coal price.”

Recycling finance can work. A Closed Loop project in Iowa shows how. Scott County, Iowa had been successfully recycling for 20 years, with eight out of 10 residents participating. To divert more material from its local landfill and boost recycling volumes it decided to replace aging equipment and upgrade its facility to handle all recyclable materials in a single stream. To finance the project, it tapped a $2.7 million no-interest loan from Closed Loop Fund, the project finance fund from New York-based Closed Loop Partners, that provides zero- and low-interest for recycling infrastructure across the U.S. The county also raised $8 million in municipal bonds. With the funds, Scott County provided 48,500 95-gallon carts to residents – and more than doubled its recycling capacity with a facility upgrade. In less than a year, recycling volumes are up 61% and municipalities already have seen more than $100,000 in new savings and revenues. The project is expected to divert more than one million tons of material from the Scott County landfill by 2025. The Lessons? Combine investments in upgrades with a robust education and promotion campaign to boost awareness. Make sure public officials are on board when seeking bond measures. And tap surrounding counties to fill additional capacity.

How can investors build an economy that works for all? ImpactAlpha will join over 250 institutional investors for the 8th Impact Capitalism Summit on April 25-26 in Chicago to talk climate solutions, financial inclusion, education, and gender-lens investing. This year’s summit, The Path Ahead: Building An Economy That Works For All, will focus on the role of capital markets in creating an economy where opportunity and prosperity are widely shared. Speakers from Partners Group, UBS, Ascension Investment Management, Wespath, the MacArthur Foundation, Leonardo DiCaprio Foundation, Bloomberg and more will explore a simple premise: “Stakeholders who have a hand in creating value should share in its successful outcomes,” says Big Path Capital, the conference organizers. ImpactAlpha Editor and CEO David Bank will moderate a discussion on innovative financing solutions for foundations. Stay tuned to The Brief for coverage of the summit. Wanna join? Register here.

#2030: Long-Termism

African renewable-energy supply could surpass demand by 2030. Just 37% of people in Africa had access to electricity in 2014, with the vast majority living in rural areas. Demand is set to skyrocket, projected to triple 2010 consumptions levels by 2030 (an amount three times that of the U.K.).

Renewables make up just one percent of the energy on the continent. Falling costs of solar and wind have driven growth of renewable energy in a few countries yet half of African countries lack even basic estimates of their potential. A new study maps the potential for expansion of wind and solar plants in Angola, Botswana, Burundi, Djibouti, Democratic Republic of Congo, Egypt, Ethiopia, Kenya, Lesotho, Libya, Malawi, Mozambique, Namibia, Rwanda, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe.

The results, explored in a post on Carbon Brief, are fairly astounding: given the quality and quantity of the resources and other markers of suitability, the potential supply of renewable energy could outstrip demand. By a factor of at least two.

One setback: the resources are unevenly distributed between and within countries. In order to meet 2030 demand, significant investment would be needed to extend transmission lines between neighboring countries.

Onward! Please send any news and comments to TheBrief@impactalpha.com.