FMO CDC Swedfund and IFC Participate in First Closure of Dolma Impact II Fund Focused on Nepal


The timing is important as COVID cases are on the rise in Nepal, following the trend in India. Dolma II’s target sectors will directly address capacity constraints in healthcare and enable digital solutions to evolve rapidly, which will be vital during and after the pandemic.

Dolma Fund Management announces the first closing of Dolma Impact Fund II (Dolma II) – a private equity fund investing primarily in renewable energy, healthcare and technology in Nepal. The investors in this first $ 40 million close are FMO, the Dutch entrepreneurial development bank; CDC Group, the UK development finance institution and impact investor; Swedfund, the Swedish development finance institution; and the International Finance Corporation (IFC). The final close is targeted at $ 75 million.

The timing is important as COVID cases are on the rise in Nepal, following the trend in India. Dolma II’s target sectors will directly address capacity constraints in healthcare and enable digital solutions to evolve rapidly, which will be vital during and after the pandemic.

Before COVID, Nepal was one of the fastest growing economies in the world, achieving GDP growth rates of between 6.7% and 8.2% in 2017-2019, according to the World Bank, so that it continues on its way to middle-income country status. Even in 2020, Nepal outperformed its South Asian peers. Dolma II is part of an evolution towards an increase in foreign direct investment (FDI) in Nepal, a country of nearly 30 million inhabitants. Dolma II follows the success of Dolma Impact Fund I (Dolma I) which pioneered institutional FDI and environmental and social standards from 2014 in this emerging high growth market. Dolma I’s portfolio includes nearly 50 MW of renewable energy, some of the country’s leading AI and e-commerce companies, as well as much-needed pharmaceutical manufacturing and healthcare.

Other successes of foreign investment in Nepal include an internet service provider, mobile telecom operators and hydropower projects, while long-established multinationals such as Standard Chartered, Unilever and Coca-Cola continue to thrive in the market. country. To further accelerate FDI, the Nepal Invests platform was launched last month by CDC, FMO and the Swiss Agency for Development and Cooperation (SDC).

Tim Gocher, CEO of Dolma Fund Management, said: “Our second fund is an international vote of confidence in Nepal’s private sector and talent. Our first fund demonstrated the business and impact opportunities in Nepal. Dolma Impact Fund II is a big step forward in opening up these opportunities to a wider range of foreign investors for whom impact is a priority ”.

Jaap Reinking, Director Private Equity, FMO said: “As a benchmark investor in Dolma Impact Fund I, we are delighted to invest in Dolma Fund Management’s second fund. Not only does this support our ambitions to accelerate climate action, financial inclusion and reduce inequalities, but it also focuses on improving the environmental and social conditions for many Nepalese workers and businesses. We are proud to support Dolma Fund Management which will invest in emerging technology sector and much needed health services and jobs in Nepal. ”

Srini Nagarajan, Managing Director and Head of Asia, CDC Group, said: “Following the launch of Nepal Invests, CDC’s investment in Dolma Impact Fund II reiterates our commitment to help attract more FDI to Nepal, particularly in sectors such as renewable energy, technology, healthcare and education, where there are opportunities for high social impact. We are pleased that our engagement will play a role in supporting the country’s post-pandemic economic recovery, help improve digitization, boost skills development and facilitate a prosperous and resilient economy.

Gunilla Nilsson, Energy and Climate Manager at Swedfund, said: “Dolma Impact Fund II focuses on Swedfund’s three key sectors (renewable energy, financial inclusion and health), while technology and increased digitization are essential themes for us. A strong driving force behind our investment is to increase the number of decent jobs in the formal sector and boost the local economy in Nepal. We are happy that the fund is also supposed to contribute to the economic empowerment of women and meets the criteria of the 2X Challenge. “

Babacar S. Faye, IFC Resident Representative, said: “Private equity funds can be an important source of capital and expertise for local entrepreneurs in Nepal, especially in enabling them to expand their businesses, create more jobs and provide essential goods and services. IFC strives to deepen the private equity market in Nepal. Dolma is our second investment in this sector, and we hope this will have a demonstration effect, beyond the financial returns, and attract more investment. This market will continue to grow if it is also supported by additional enabling reforms. ”

Dolma Impact Fund I and II targets risk-adjusted market returns while their impact is aligned with Nepal’s SDG targets. For SDG 5 – Gender Equality, Dolma II qualifies for the 2X Challenge, in order to promote gender balance in the portfolio. For SDGs 8, 9 and 10 – related to work, industry and inequalities, Dolma I portfolio companies have generated quality jobs for nearly 5,000 people in Nepal since 2014. The majority of these jobs concern young people under 35 years old. an estimated 2 million young workers, mostly, left Nepal to work abroad. For SDGs 7 and 13 – Clean energy and climate action, Dolma I’s renewable energy portfolio will avoid 219,000 tonnes of CO2 emissions per year. Further reducing pollutant emissions at Dolma II is a priority as Himalayan glaciers are expected to lose two-thirds of their mass in a business-as-usual scenario, according to the International Center for Integrated Mountain Development (ICIMOD), threatening 600 million people . living downstream with devastating flooding.

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