The European Investment Fund (EIF) has agreed to commit €30 million as cornerstone in support of ‘IB Deuda Impacto España’, a fund that will finance Spanish businesses investing in high social impact areas such as rural development, labor inclusion, climate and environment, circular economy, sustainable agriculture, and gender equality. MicroBank, CaixaBank’s social arm, has agreed to commit €10 million as initial backer. Other institutional investors such as pension funds and foundations also support the project.
The fund launched and managed by Impact Bridge Asset Management, a Spanish fund manager founded in 2018 and specialized in social impact investing, is the largest of its kind in Spain, with a target size of €150 million. The initiative pioneers with its focus on debt financing with a positive social impact.
‘IB Deuda Impacto España’ is a flexible private debt fund focused on capital preservation that aims to finance 40 high-impact social projects in Spain with an annualized target net return to investors of around 6%. The vehicle has a 3-year investment period and an additional 4-year harvesting time. The fund is already registered in Spain by the CNMV as a European Social Entrepreneurship Fund (EuSEF) and is classified as Article 9, the highest sustainability category of the European taxonomy (SFDR).
EIF’s backing is made possible thanks to the InvestEU programme, which promotes investment supporting common European Union policy priorities. More specifically, the announced investment falls under the ‘Small and medium-sized enterprises (SMEs)’ and ‘Research, innovation, and digitization’ policy windows of InvestEU. EIF’s support is expected to generate a catalytic effect to attract new investors and support the fund to reach its target size.
European Commissioner for the Economy, Paolo Gentiloni, said:
“Securing a sustainable, digital, and inclusive economy requires substantial and continuous investment. I welcome the crucial role InvestEU is playing in this context. This agreement will provide SMEs in Spain with the necessary resources, helping them to grow and create jobs, while advancing important goals such as gender equality, energy efficiency and rural development.”
“This flexible debt fund will support quality impact projects that could not be financed through equity. We are finding extraordinary investment opportunities, from both the impact and the financial point of view, which are expected to be implemented soon,” Arturo Benito, CEO and co-founder of Impact Bridge said. “Our IBIST® proprietary measurement tool, plays a key role in our investment’s impact management and measurement. Additionally, our academic researchers will carry out in-depth analysis of invested projects’ social impact.”
EIF Chief Executive, Marjut Falkstedt, added:
“We are pleased to support the launch of this pioneering social impact debt fund through an agreement made possible by the InvestEU programme. The EIF investment will contribute to boosting social inclusion via tailor-made debt financing to EU SMEs, facilitating access to basic services, creating jobs for vulnerable groups, and addressing other social challenges in Spain.”
“The launch of ‘IB Deuda Impacto España’, aimed principally at investments in Spain, will enable us to broaden our scope, reach more projects and generate more social impact through new impact investment formulas,” MicroBank CEO, Cristina González Viu, said. “Undoubtedly, this alliance, hand in hand with the EIF and Impact Bridge, will promote projects linked to the social economy, focused on challenges such as the inclusion of vulnerable groups, rural development and support for women, among others,” she added.
The impact advisory committee of the fund is chaired by Cristina González Viu, CEO of MicroBank, and includes other well-respected sustainability professionals such as Saskia Bruysten, co-founder of Yunus Social Business, Isabela del Alcázar, global head of sustainability at IE University, Joaquín Garralda, president of Spainsif, and José María Vera, expert in social organizations. The fund’s legal documents include impact management best practices, such as financial impact incentives for both the fund manager and the projects to be financed. An external impact auditor will validate the entire process on an annual basis.
Background information
About the European Investment Fund (EIF)
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized enterprises (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.
About InvestEU
The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.
About Impact Bridge Asset Management
Impact Bridge is a Spanish fund manager exclusively devoted to quality impact investing focused on projects that generate authentic, intentional and measurable impact. Founded in 2018, its team is composed of professionals with extensive experience in prestigious international investment, sustainable, impact and academic entities. Its investor base is formed by institutional investors such as pension funds, foundations and family offices.
About MicroBank
MicroBank, CaixaBank’s social bank and Europe’s leading microfinance institution, responds to different segments of the population whose financial needs are not sufficiently covered. It plays a decisive role in CaixaBank’s Sustainable Banking Plan, in which it is entrusted with the mission to promote financial inclusion, facilitate the most vulnerable groups’ access to credit, and to strengthen its commitment to the socioeconomic development of the regions it operates. MicroBank’s mission is to contribute to the progress and welfare of society by providing financing to those groups and projects that generate a social impact.