Fund Manager for E...

Fund Manager for Early Stage, Kenya Focused Climate Technology Investment Fund

infoDev is now seeking expressions of interest (EOI) from investment fund managers interested in managing the Kenyan Climate Innovation Center early stage investment fund

Background

infoDev (www.infodev.org), a Global Partnership Program hosted by the World Bank, with support from DANIDA and UKAid is launching a Climate Innovation Center (CIC) in Kenya. The Kenya CIC will provide a country-driven approach to climate change and directly support the government of Kenya’s objectives in the Greening Kenya Initiative and Vision 2030.

Each CIC provides a tailored suite of financing and business advisory services to enable domestic industry and SMEs to pro-actively and profitably develop innovative climate technology (cleantech) solutions that meet local needs. This supports countries’ economic development, job creation and industrial competitiveness in clean technologies, the most promising sectors of the 21st century.

Additional background on the infoDev Climate Technology Program is available at: www.infodev.org/climate.

Description of the Opportunity

infoDev is now seeking expressions of interest (EOI) from investment fund managers interested in managing the Kenya CIC investment fund that will make early stage investments in high-impact Kenyan climate technology businesses.

infoDev will provide capital and funding in the range of USD 5.0 million to be managed and invested by the selected fund manager. This funding will be for investments as well as management fees and pre-agreed and appropriate fund expenses, including organizational expenses. The funding from infoDev will be invested on a commercial basis by the fund manager.

The investment fund will be structured and managed in line with best practice fund management and governance approaches and advance the CIC’s key program priorities as described in the business plan that has been established for the Center through an extensive stakeholder engagement process. The business plan should be reviewed carefully before submitting an EOI and is available at: www.infodev.org/en/Document.1006.pdf. Bidders nonetheless are not bound to the specifics of this plan and infoDev is not obligated to establish the CIC investment fund in strict adherence to this plan.

It is expected that the CIC investment fund will be framed on the key principles outlined below. The framework for this fund may evolve and may be determined in discussion and negotiation with the selected investment fund manager.

Investment philosophy and approach

  • The fund should aim to address the financing gap for start-up and early stage business models and growth-oriented SMEs.
  • The investment fund should be managed as a ‘seed investment fund’ addressing the financing gap below the radar of the current set of impact and private equity investors in Kenya. The range of investments is expected to be between USD 75,000 to USD 1 million per investee.
  • The fund manager should expect to take a hands-on approach to support investee companies, working closely with senior management to advance each company’s viability and commercial success.

Climate technology focus

  •  The fund should invest in businesses that address climate change challenges either through mitigation (reduction of GHG emissions) or adaptation to changing local climate conditions.  This would include but not be limited to renewable energy, energy efficiency, off-grid power with lower carbon emissions than existing or planned alternatives, reduction of emissions from agriculture, forestry or land-use, and any activity that increases resiliency in response to climate change for agriculture, water supply or other affected sectors.

Financing mechanisms

  • The fund manager would need to assess the viability and commercial potential of each investment and structure the financing to ensure appropriate influence, commercial viability, an appropriate return on the investment, and potential exit within the defined exit parameters of the fund.
  • Investment parameters should follow best practices and be designed to provide focus and market and investment discipline.

Leverage

  • The fund manager will be required to leverage the capital committed from the CIC investment fund by attracting additional investment capital from other investors. It is envisioned that the total fund size will be up to USD 10 million.
  • Options for leveraging could include (i) raising additional capital from other likeminded investors, (ii) contributions from other funds that the manager may already be managing, or (iii) ensuring co-financing on each investment deal on pre-agreed parameters and principles.

Fund structure

  • The fund could be domiciled in Kenya or another country and should be established, governed and managed in line with best practice.  

Local presence and relevant experience

  • The fund manager should demonstrate local presence and an understanding of the Kenyan context and market opportunities and challenges.
  • The fund manager should demonstrate relevant experience and track record in fund management and impact investing and a strong interest in climate (clean) technology sectors.
  • At the proposal stage, the bidding firm will be required to present the specific profile and experience of the senior management team including the profile of the key senior investment officer(s) who would drive and be accountable for the fund.

Pipeline and deployment

  • The fund manager should demonstrate the strategy and capability to rapidly develop an appropriate pipeline and deploy investments.

Benchmark returns, expectations and exit value

  • In negotiation with infoDev, the fund manager would set an appropriate target return to investors in the fund and exit mechanisms and timelines.
  • The fund manager would define, in partnership with infoDev, supplementary targets and indicators to advance CIC’s overarching objectives.

Link to the CIC and proof of concept grant fund

  • While the CIC investment fund would be managed and governed independently from the CIC business advisory services, the two components are complementary and the investment fund must be clearly linked to the CIC business advisory programs. Ways to ensure this link will be developed by infoDev in conjunction with the managers of the CIC business advisory program and investment fund.

Submitting Expressions of Interest

infoDev now invites EOIs from eligible fund managers. Based on responses to this request for EOI, a shortlist of applicants will be established and invited to submit a full technical and financial proposal based on a detailed request for proposals.

Interested firms must provide information indicating that they are qualified to perform the services (description of similar fund management experience and track record, profile/brochures of funds under management, investee case studies, team profiles, experience in similar conditions and markets, experience in Africa, particularly Kenya, availability of appropriate skills among staff, etc).

At this stage, important evaluation criteria include:

  • Capabilities and experience to actively manage investment funds, including structuring new funds, strong internal governance frameworks and a track record of fiduciary responsibility and accountability.
  • Track record of successful venture capital type investments in early-stage companies in emerging markets, particularly in sub-Saharan Africa.
  • Experience with mentoring of early stage businesses in emerging markets, particularly in sub-Saharan Africa.
  • Ability and track record to leverage existing and additional sources of funding.
  • Existing presence or ability to establish a presence in East Africa.
  • Proven team capability and experience and/or ability to attract and build a strong team of individuals with necessary skills. Profile of the principal managers likely to be involved in managing the fund would be an advantage.
  • Understanding of the needs of climate technology SMEs in Kenya or similar contexts, including experience evaluating climate technologies and early-stage climate technology businesses.
  • Ability to implement and maintain appropriate financial management and reporting processes and a comprehensive impact assessment (M&E) strategy.

To respond to this request for EOI, please send the above information and a covering letter by email to Michael Ehst, mehst@worldbank.org, with a copy to info@infodev.org, no later than 11:59 pm EST on Monday December 19, 2011.

Please include "EOI Kenya CIC Investment Fund" in the subject line.

Only shortlisted candidates will be contacted.


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