A PASSION FOR CREATING IMPACT
At this week’s board meeting, responsAbility’s mandate as the Global Climate Partnership Fund’s investment manager was extended to 2024. In this interview, KfW’s Claudia Arce, who has chaired the GCPF board for the past four years, explains why she is looking forward to a continued cooperation.
What were KfW’s expectations to the fund when you started out – and to which degree have they been fulfilled?
When GCPF was set up in 2009, the global discussion on climate change and CO2 reduction, especially regarding the importance of private investments, was still nascent. At that time, we didn’t know whether this fund would have the potential to grow and invest globally. Ten years down the line, we are proud to see that GCPF has been a success and that the fund has strongly contributed to strengthening climate investments in small and medium sized companies in emerging economies.
What is the GCPF board looking for in an investment manager – and how does responsAbility fit the profile?
We were looking for an investment manager that was willing and able to grow together with the fund and engage very actively – not only in increasing volumes but also in ensuring the fund delivers the required impact. responsAbility has more than fulfilled these expectations. In addition to handling the typical tasks of an investment manager – developing the pipeline, managing risks and looking to generate attractive returns – the team has developed a true passion and has made it its mission to make a difference with regards to impact.
«We were looking for an investment manager that was willing and able to grow together with the fund and engage very actively – not only in increasing volumes but also in ensuring the fund delivers the required impact. »
What are the learnings from this fund regarding how to successfully manage this type of blended finance vehicle?
The main learning is the awareness that you need to go step by step and continue to learn, every day. Challenges will pop up from a whole range of angles, especially when, as in the case of GCPF, you need to fulfill the requirements of a whole range of different stakeholders while exploring what is to a very large degree unchartered territory. There simply isn’t any best practice to copy, you need to go and establish those benchmarks through your work.
To master these challenges, it is key to keep communicating, to involve all stakeholders in a constant discussion and to ensure their support. This is something that responsAbility is very good at. They have managed to foster a real spirit of partnership, bringing together investors of all kinds, but also banks and project owners in developing countries, who all appreciate this exchange. So, while there will always be challenges, I feel that the Fund is well positioned to manage them.
«responsAbility has managed to foster a real spirit of partnership, bringing together investors of all kinds, but also banks and project owners in developing countries, who all appreciate this exchange. »
What are your expectations going forward and how confident are you that they can be met?
We want GCPF to continue to grow in both impact and volume. At the moment the invested portfolio stands at USD 670 m and we see continued interest from investors who are impressed with the fund’s 10-year track record. On the investment side, the responsAbility team keeps coming up with creative new ideas to further improve the offering, and the pipeline looks very promising. Last but not least, the fund’s Technical Assistance facility has been of great value to enable our partners to work with climate loans and to identify new and additional ways to create impact. So I think the fund is well set up to continue to grow – and we look forward to working with responsAbility to make this happen.