Stockholm (NordSIP) – On April 16th, the Nordic Development Fund (NDF) announced it had invested US$14.5 million in BlueOrchard’s climate insurance private equity fund, the InsuResilience Investment Fund Private Equity II (IIF PE II).
The NDF is the joint Nordic international finance institution (IFI) focusing on the nexus between climate change and development in lower-income countries and countries in fragile situations. It was established in 1988 through an international treaty between Denmark, Finland, Iceland, Norway and Sweden. BlueOrchard is an impact investment manager and member of the Schroders Group.
“Climate insurance can provide concrete solutions to the disastrous consequences of climate change and the people and businesses affected by it. We are proud as NDF to partner with BlueOrchard, invest in InsuResilience Investment Fund II and be part of making positive change in the regions where this is needed the most,” Satu Santala, Managing Director of NDF said.
The Investment
NDF’s investments was in two parts. It committed US$13.5 million to the fund, and an additional USD 1 million as a grant for the fund’s Technical Assistance Facility. On the same occasion, BlueOrchard announced that the British International Investment (BII), the UK’s development finance institution, had joined the NDF’s investment in IIF PE II, bringing another US$15 million.
These new investments bring the total committed capital for the fund to over US$90 million, close to its target size of US$100 million. The final closing of the fund is expected to take place in the second half of 2024.
The Fund
The IIF PE II fund is a joint initiative between BlueOrchard and KfW, the German development bank, acting on behalf of the German government under the InsuResilience Global Partnership. Its primary objective is to protect vulnerable people and microentrepreneurs in emerging markets in Africa, South and South-East Asia, and Latin Americas, from the impacts of climate change by providing access to climate insurance.
The fund aims to establish a robust ecosystem that facilitates access to climate insurance, ensuring the protection of vulnerable populations and small businesses.The fund makes direct investments in business models at the forefront of providing climate insurance solutions to underserved communities, with a particular emphasis on parametric climate insurance and insurtech.
The fund is composed of a team of experienced investment and insurance sector specialists that actively collaborate with portfolio companies to achieve measurable impact and strong risk-adjusted returns.
Insuring Against Climate Change
As of December 2023, this fund and its predecessor have invested in 13 companies, reaching over 70 million climate insurance beneficiaries in emerging markets. Examples of its investments include Newe, a data-driven innovative Brazilian specialty insurance company, Igloo, one of the top insurtech companies in Southeast Asia, Pula, an agricultural insurance and technology company with an unparalleled outreach in Sub-Saharan Africa, and FinAGG, an Indian provider of cash flow financing solutions with embedded insurance coverage.
“Every year, natural disasters and climate-related events are impairing thousands of businesses and pushing millions of people into poverty. With climate change on the rise, this is a historic opportunity to develop and distribute relevant insurance solutions to those affected. In pursuit of this endeavor, we are focusing on companies that lead the development and use of relevant technologies, can expand rapidly, and exhibit high operational standards. With BII and NDF, we are thrilled to have strong partners join us in this endeavor. Together, we can make a real difference and provide much-needed support to those who need it the most,” Felix Hermes, Head of Private Equity and Sustainable Infrastructure and Member of the Executive Management at BlueOrchard concluded.
