Preparatory work for setting-up TAKE-a-STAKE Fund for SMEs in WASH and linked sectors
With our support the TAKE-a-STAKE Foundation aims to set-up a new Impact Investment Fund for small and medium-sized enterprises (SMEs) in the water, sanitation and waste sector in developing countries and emerging markets, linked to related sectors including renewable energy, agriculture and health. The initial idea is to start in Kenya, Uganda and India and expanding to other countries at a later stage. The companies involved are complementary to local utilities and centralised solutions in the countries. They can specifically serve the last mile, low income and marginalised communities.
The main objective of the fund is to mobilise investments in SMEs to strengthen and upscale the supply and value chain of water and sanitation services, resulting in more and better quality of products and services. At the same time these SMEs will contribute to regional economic growth and employment.
Within the diverse SME segment in the three countries, TAKE-a-STAKE targets the so-called Small and Growing Businesses (SGBs) that can play a much larger role to strengthen the sustainable growth of local economies and generate jobs in low-income communities. The overall issue here is that, even with having good track records in place, in many cases SGBs lack access to capital. To address this challenge, TAKE-a-STAKE will:
• Offer them a mix of investment instruments raised from public and private entities and much-needed capacity building.
• Mobilise co-investments via collaborations with local and international financial institutions and banks
• Collaborate with the FINISH (Financial Inclusion in Sanitation & Health) program, in which WASTE and TAKE-a-STAKE bundle forces.
In this programme, the TAKE-a-STAKE foundation has the role of mobilising investments for the entrepreneurs, while we, together with FINISH, work on demand creation for sanitation, business development and strengthening local (institutional) systems. More specifically, our activities between 2017 & 2018 included:
• Studying the WASH and waste sectors to understand the dynamics, investment risks and opportunities, and the potential impact of the fund via its investees.
• Identifying and analysing 100+ financially sustainable Small and Growing Businesses that need more than €100 million capital to expand and increase their impact.
• Forming relationships with potential investors in the new TAKE-a-STAKE Fund and co-investors in the SGBs.
• Starting to build impact measurement and portfolio management tools.
• Identifying governance structures for investing in the SGBs.
The groundwork for starting lending to SGBs in Uganda, Kenya and India has been done. As a next step the aim is to start with initial investments within a Pilot project. Once the TAKE-a-STAKE Fund would be successfully incubated, the lifespan would be at least 10 years to contribute to sustainable regional economic growth and employment.
Impact we realised
Stakeholders have been aligned and partnerships have been established to strengthen the enabling environment.
The supply chain has been strengthened via investments in about 200 SGBs across Kenya, Uganda and India.
The contribution of the investees have impacted about 10 million people in Kenya, Uganda and India.
Employment opportunities in the 200+ enterprises involved has been generated.
Partners we work with
• TAKE-a-STAKE Foundation
• Kenya Innovative Finance Facility for Water (KIFFWA)
• Kenya Climate Innovation Center
• FINISH Society
Funded by SIDA