The always excellent Jamie Broderick Advocate for social impact investment, board member, Impact Investing Institute and former RAOEurope23 Speaker has posted this exciting news from Mirova whose Gigaton Fund is making waves in blended finance for sustainable development:

Mirova announced last week that its Gigaton Fund has raised $282 million to supply medium- to long-term debt funding for clean energy projects in developing economies. It expects to fund a wide range of climate-related solutions, including residential and commercial solar, agri-solar, mini-grids, battery storage, climate-smart food systems, energy efficiency and other areas.

The fund has access to a junior layer of support from the Luxembourg-EIB Climate Finance Platform, which provides blended finance to encourage non-government institutional investors, although most of its funding to date seems to come from development finance institutions. This innovative fund just hit $282 million in commitments, fueled by $75 million from the EIB. The Fund reached a first close of $171m in March 2023, has a target size of $500m. It aims to attract institutional investor support for climate mitigation and adaptation, social development, economic infrastructure and gender equality investment across developing countries. It is managed by Paris-based Mirova, which is part of the Natixis Group, while Mirova SunFunder East Africa is acting as investment advisor. 

Ryan Levinson, the fund’s director and Mirova’s head of emerging market energy transition, said the EIB’s involvement in the fund was
“a positive signal to private and public investors looking to allocate capital in emerging markets”.

The fund also participates in the G7's 2X Challenge, which supports women in emerging economies with access to leadership opportunities, quality employment, and products and services that enhance their economic participation and inclusion.

“The challenges of sustainable finance go beyond the borders of developed countries. By exceeding half its target after only one year of fundraising, the Mirova Gigaton Fund is testament to our ambition to develop our emerging markets platform to provide capital where investment needs – particularly in infrastructure – will be the greatest in the coming decades,”

Raphaël Lance, Mirova’s head of energy transition funds, said.

The model of commercial asset managers partnering with development finance institutions, for both capital and blended finance, is a promising one. Now it is up to institutional asset owners, especially those in the Net Zero Asset Owner Alliance to add their support.

The fund is already putting money to work on the ground, with investments in solar companies expanding energy access across Africa. This demonstrates the potential for blended finance vehicles to drive real impact aligned with the SDGs.

Here are three key things the Mirova Fund highligh

• - It's attracting major institutional investors who see the value in financing climate solutions in emerging markets. Reaching over half its $500M target in a year signals strong appetite.

• - The fund's diverse sector focus, from solar to e-mobility, reflects the breadth of climate investment opportunities in developing countries.

• - The EIB investment validates the fund's blended finance model and can help catalyze additional private capital. This sends a positive signal to other institutional investors.

To learn more about how the Mirova Gigaton Fund is mobilizing institutional capital for climate action in emerging markets, click here.