Rungwe Avocado Company has expanded avocado production significantly in just one year and has increased its engagement with a handful of farmers to more than 2,300 households through an outgrower scheme. It has also signed conservation contracts with each of its outgrowers, extending the conservation impact. Photo by: Carolin Schmidt
African Wildlife Foundation announces new Clinton Global Initiative Commitment to Action to scale up investment in Africa for the benefit of people and wildlife
NEW YORK, September 24, 2013—The perception of Africa as a troubled continent—riddled with war, stricken by disease, handicapped by corruption—may have once hampered private sector growth, but this is rapidly changing. Foreign investors are looking to Africa as a land of opportunity, while a growing group of African entrepreneurs is discovering a much friendlier business environment as the costs of starting and maintaining a business in Africa have fallen by more than two-thirds over the last seven years. At the same time, a new species of investor—the impact investor—is looking for more than a financial return on investment, in search of businesses that will also yield social and environmental returns.
With the confluence of these factors, the African Wildlife Foundation (AWF) today announced a Clinton Global Initiative (CGI) Commitment to Action at the CGI Annual Meeting to raise and subsequently invest US$5 million in African businesses through its impact investing subsidiary, African Wildlife Capital (AWC). The commitment offers a glimpse into the innovative new way in which one nonprofit conservation organization is leveraging private investment to promote conservation and sustainable development in Africa.
“Development is sometimes seen as anathema to conservation,” said African Wildlife Foundation CEO Patrick Bergin. “But the fact is, Africa is developing at a rapid rate, with or without the blessing of the conservation community. The decision for conservation groups is whether we sit on the sidelines or whether we try and direct this development and foreign investment in Africa for the good of wildlife and people. This is precisely what African Wildlife Capital aims to do.”
While AWF as a not-for-profit organization raises private and public funding to achieve its conservation objectives, its subsidiary AWC harnesses the power of the private sector to promote sustainable development on the continent, providing long-term debt and quasi-debt financing to for-profit enterprises in Africa. AWC invests in small to medium-sized enterprises—primarily in the agriculture and conservation tourism sectors—across sub-Saharan Africa.
With its announcement at the CGI Annual Meeting, AWF commits to raising US$5 million for AWC over the next 12 to 24 months, which will then be invested in up to 10 enterprises that protect habitat and biodiversity while generating economic benefits and employment for the people living alongside wildlife. The US$5 million will be raised in the form of a second Conservation Bond—building on the first pilot Conservation Bond of US$3 million, which has already been invested in enterprises in Ethiopia, Kenya, Tanzania, and Namibia.
Just as investment firms rely on contractual commitments to secure certain financial returns, AWC has pioneered the use of “Conservation Covenants” as a core distinctive feature of each investment contract. These covenants help AWC measure the non-financial, conservation-driven returns it seeks through its investments.
The Conservation Covenants have already proven to be particularly effective. Rungwe Avocado Company, a sustainable agriculture enterprise in southern Tanzania, received a US$950,000 loan through the first AWC Conservation Bond. Avocados grown in the region are typically too soft for transport. The AWC investment allowed Rungwe to apply a new technique of grafting a more lucrative variety of avocado, the Haas, onto its existing avocado rootstock. With this, Rungwe increased avocado production—without the usual attending sprawl—and, through an outgrower scheme with surrounding farmers, extended the social impact of the investment through increased employment. Moreover, Rungwe multiplied the environmental impact of its Conservation Covenant by entering into similar covenants with each farmer.
“Rungwe offers an excellent example of how a modest investment can have a cascading positive impact on both local people—through the outgrower scheme—and wildlife with the containment of agricultural sprawl and the stabilization of land use,” explained Giles Davies, investment manager for AWC. Located near Kitulo National Park, Rungwe sits in an area of high floral diversity and is home to rare species like the kipunji, a species of Old World monkey discovered only a decade ago.
On the other side of the continent, investment in a community-owned conservation lodge in Namibia demonstrates how innovatively structured financing can help protect local communities from the risks of an unknown market.
Grootberg Lodge sits in the 850,000-acre Khoadi–Hoas Conservancy, where rare species such as black rhino, cheetah, and mountain zebra live alongside people. The lodge made renovations and upgrades to the facility with the US$500,000 loan it received from AWC and is now projected to return more than four times the current annual disbursement of US$45,000 to the community.
To protect conservancy members from fluctuations in the tourism market, AWC creatively structured the debt financing so that AWC receives revenue-based royalties rather than interest on a loan. “AWC allows us that kind of creativity when it comes to making loans so that we can protect the most vulnerable while still achieving our conservation goals,” explained Davies.
With the success of Rungwe, Grootberg, and other conservation-friendly enterprises, AWF is proving that business and development need not be detrimental to wildlife, but in fact can play a valuable role in helping to protect Africa’s treasured natural heritage.
“We are mobilizing capital and direct investment to be a force for good that will now and in the long-term have a positive impact on wildlife,” said Bergin. “The question for countries in Africa and elsewhere is this: How can we thrive economically without doing irreparable damage to important ecosystems and wildlife populations? It’s time for a new brand of business that, far from exhausting or abusing natural resources, actually builds environmental and wildlife protection into the bottom line.”
In addition to its Impact Investment Commitment, AWF announced two additional commitments at the CGI Meeting—one to build innovative conservation schools in remote African landscapes and the other, conveyed as a joint commitment between conservation groups attending CGI, to stop elephant poaching and the illegal trafficking of ivory.
# # #
AWF CEO Patrick Bergin will be in attendance at the CGI Annual Meeting from September 23 – 26 and available for interviews. To schedule an interview, please contact AWF’s Communications and Marketing Officer, Kathleen Garrigan, at +1 202 939 3326 or firstname.lastname@example.org. You can also visit the on-site Press Room or see an APCO consultant at the Global Connect Café to arrange interviews with CGI Commitment Makers.
About African Wildlife Foundation
Founded in 1961, the African Wildlife Foundation (AWF) is a leading conservation organization focused solely on the African continent. AWF’s programs and conservation strategies are based on sound science and designed to protect both the wild lands and wildlife of Africa and ensure a more sustainable future for Africa’s people. Since its inception, AWF has protected endangered species and land, promoted conservation enterprises that benefit local African communities, and trained hundreds of African nationals in conservation—all to ensure the survival of Africa’s unparalleled wildlife heritage. AWF is a nonprofit organization headquartered in Kenya and registered as a 501(c)(3) in the United States. For more information, visit www.awf.org and follow us on Twitter @AWF_Official and Facebook at facebook.com/AfricanWildlifeFoundation.
About African Wildlife Capital
Established in 2011, African Wildlife Capital (AWC) is a mission-related investment subsidiary of the African Wildlife Foundation (AWF) and operating in support of AWF’s conservation mission. AWC uses impact investment capital to help develop private-sector enterprises with promising commercial and conservation potential. Though it is wholly owned by AWF, AWC is legally independent and governed by an independent board of directors. For more information, visit: www.awf.org/awc.
About the Clinton Global Initiative
Established in 2005 by President Bill Clinton, the Clinton Global Initiative (CGI), an initiative of Bill, Hillary & Chelsea Clinton Foundation, convenes global leaders to create and implement innovative solutions to the world’s most pressing challenges. CGI Annual Meetings have brought together more than 150 heads of state, 20 Nobel Prize laureates, and hundreds of leading CEOs, heads of foundations and NGOs, major philanthropists, and members of the media. To date CGI members have made more than 2,300 commitments, which are already improving the lives of more than 400 million people in over 180 countries. When fully funded and implemented, these commitments will be valued at $73.5 billion.
CGI also convenes CGI America, a meeting focused on collaborative solutions to economic recovery in the United States, and CGI University (CGI U), which brings together undergraduate and graduate students to address pressing challenges in their community or around the world, and, this year, CGI Latin America, which will bring together Latin American leaders to identify, harness, and strengthen ways to improve the livelihoods of people in Latin America and around the world. For more information, visit clintonglobalinitiative.org and follow us on Twitter @ClintonGlobal and Facebook at facebook.com/clintonglobalinitiative.
1400 16th St NW Suite 120
Washington DC, USA
Director, Media Relations & Advocacy
Tel +254 720 947612
Tel +254 722 890551
7:17am Aug 23rd
7:16am Aug 23rd
5:42pm Aug 22nd
7:59am Aug 22nd
7:36am Aug 22nd
4:08am Aug 22nd
5:25pm Aug 21st
11:00am Aug 21st
9:55am Aug 21st
9:44am Aug 21st