1. Finance Track 2: Building a Green Impact Investing Network for the Mediterranean
20th October 2016
#switchmedconnect
@switchmed

2. Green Impact Investing Network
Aim: Engaging investment networks and creating platforms with local financiers for enhancing access to finance for Green and Young Entrepreneurs in the Mediterranean. In partnership with the Federation of Ethical and Alternative Banks.
Business Case Building
Collection of evidence Background Brief
Slides Pack for Missions
Seminars with International Investment Networks
Mail campaign Telecalls Missions in Europe (2015, 2016)
SWOT for the European market SwitchMed Connect session on A2F
Seminars with National Financial Sector
Egypt (2015)
Morocco, Tunisia and Lebanon (2016)
SWOTs for national markets
A2F session in the National synergy workshops organized by GE demo component
Innovative Financial Instruments
Business report: Actions for the development of innovative financial instruments for Green Young Entrepreneurship in the Mediterranean (2017)
GIIN Med
Breakdown of activities:
Activity management (preparing the Terms of References and work-plan);
Partnering with FEBEA in the identification of, peer-to-peer seminars for International Investment Networks;
Organising peer-to-peer seminars on SCP/RE opportunities for the national financial sector(s);
Support the development of innovative financial instruments for investing in Green Young Entrepreneurship in the Mediterranean (including expansion of existing one such as COOPMED).
Indicators and means of verification:
At least 8 International Investment Networks attend peer-to-peer seminars and corresponding SWOT analysis;
At least 12 national financial sector investors participate in peer-to-peer seminars and corresponding SWOT analysis;
Business report of the support actions taken for the development of innovative financial instruments for investing in Green Young Entrepreneurship in the Mediterranean.

3. In the search for innovative financing solutions for green entrepreenurs
Egypt
August 2015
Morocco
May 2016
Tunisia
June 2016
Lebanon
November 2016
Europe
November 2015 – December 2016

4. Findings from Morocco
Small ecosystem to develop and finance startups in Morocco FNAM, Al Baraka, INMAA, OCP Fondation, Drosos Fondation, Attijari Wafa Invest, Endeavor, Cluster Solaire, MITC Capital, BMCE
The existing financial offer is not suitable for "green entrepreneurs". But new tools are in the pipeline either regarding both lending and equity.
VC products are in the pipeline.
Banks monitoring trends and considering new products but they are still very risk- averse.
Young Entrepreneurship is a political priority and green entrepreneurs could benefit from this agenda.
Unfortunately, there is too much emphasis on start-ups with high growth potential and award winners.
No solution available for smaller projects

5. Mapping Instruments in Morocco
Early phase
Expansion phase
Stock market
Public-to-private
Profit zone
Loss zone
Family & friends
Incubators
Business Angels
Venture capital
Loan Finance
Seed
Start-up
First stage
2nd stage
3rd stage
4th stage
Concept
Launch
Production
Scaling
Standardization
Micro Finance
Foundations & Prizes

6. Findings from Egypt
A small ecosystem to support, develop and finance start-ups is developing in Egypt: 138 Pyramids, CairoInvest, AIC Finance, INJAZ, Shekra, Flat6Labs, CleanTech Arabia, Social Fund for Development.
Funds are locally raised and investors tend to be either existing Egyptian Entrepreneurs who want to help develop new young Egyptian startups.
Focus on "cherry picking” and designed to foster the emergence of innovative and hopefully very successful startups.
Public policy in Egypt could be oriented towards fostering eco-innovation among potential green entrepreneurs, rather than on the promotion of tried and tested concepts.
International technical assistance and public funding could be used to establish a high-performing guarantee scheme for start-ups.
Technical assistance could also be used to help banks assess the risk and potential of green enterprises.
VC and incubation is available for innovative start-ups but no lending solution

7. Mapping Instruments in Egypt
Early phase
Expansion phase
Stock market
Public-to-private
Profit zone
Loss zone
Family & friends
Incubators
Business Angels
Venture capital
Loan Finance
Seed
Start-up
First stage
2nd stage
3rd stage
4th stage
Concept
Launch
Production
Scaling
Standardization
Foundations & Awards

8. Findings from Tunisia
Tunisia has a large number of Banks and yet very few financing possibilities for SMEs or Start-ups.
Banks are risk averse and financing seems to be a slow and bureaucratic process which requires a very high level of collateral. Not suited for Green Entrepreneurs (GEs) and start-ups .
There are some initiatives from non commercial Banking institutions regarding the green economy (Enda, BTS,) but Entrepreneurs seem not be aware of them.
Venture capital and microfinance, however are segments with a variety of providers present. Today they not adapted to Green Entrepreneurs, but are potentially interested in Green Entrepreneurship and a route worth exploring.
BTS, as a government Bank, is principle best suited to finance future Green Entrepreneurs, it is focused on mesofinance, so can provide larger loans and longer terms and can also take more risks by using existing public garanties.
Heavy bureaucracy is in any case hampering the development of green entrepreneurship and it affects financing too.

9. Mapping Instruments in Tunisia
Early phase
Expansion phase
Stock market
Public-to-private
Profit zone
Loss zone
Family & friends
Incubators
Venture capital
Bank Finance
Micro Finance
Foundations & Prizes
Seed
Start-up
First stage
2nd stage
3rd stage
4th stage
Concept
Launch
Production
Scaling
Standardization

10. Findings in Europe
More than 15 financing institutions, development agencies and networks interviewed and to be interviewed: Banca Etica, Alterfin, CoopMed, Crédit Cooperatif, AfD, Comptoir de I’Innovation, FEFISOL, ResponsAbility, Etimos Foundation, ANIMA, Global Alliance – For Banking on Values (GABV), Global Impact Investing Network (GIIN), KfW, Hivos, Oiko Credit, Triodos Investment Management.
There is in principle interest to invest but the focus is on enterprises with a track record and potential for growth. The size of investments desired is often above the €1 million mark.
Attending events targeting financing institutions to promote green entrepreneurs, identify existing instruments and advocate engineering of new funds.
ALFI Impact Investing Conference – European Microfinance Platform, GIIN, LuxFlag
FEBEA General Assembly – in Croatia on 6th June
SANABEL Network Event – The Microfinance Network of Arab Countries, in Morocco on 1st-2nd November

11. Potential venues for GE funding
High
Crowdfunding at idea stage
Grants at development stage
Medium
Microfinance for working capital
Start-up Venture capital at first expansion
Commercial finance
Low
Banks for mature ideas

12. Potential venues for GE funding
Venture Capital
Business Angels
Microfinance
Crowdlending
Grants
Crowdfunding
Potential for growth

13. CoopMed Fund
Legal Status: Limited liability company established under Belgian law
Target size: EUR 20 M in 2 steps: launch: EUR10,5 M (operational since 09/2015)
Q2 2016: closing of the second part to reach a total of EUR 20 M
A committed partner for local financial intermediaries:
To provide quasi-equity and long-term debt: CoopMed offers subordinated and senior loans
To finance the development of local activities through the financing of social economy, micro and small enterprises
To support our clients’ operations and growth (thematic credit line to develop targeted project/product, support to the implementation and the improvement of social performance management …)
Area of intervention:
Beneficiaries located in countries of the Southern and Eastern shores of the Mediterranean: Morocco, Tunisia, Lebanon, Jordan and Palestine as the first zone of investments

14. CoopMed Fund

15. SWOT summary findings
Strength: General Interest in green economy and green entrepreneurship as a sector with growth potential (recycling, energy efficiency and production, eco-tourism, organic farming, etc)
Strength: potential financing sources in micro-finance, venture capital and crowdfunding platforms.
Weakness: Funding of small sized start-ups like the Switchers is a huge challenge. Almost no instruments are available in the countries of focus.
Weakness: Lack of social lenders/investors and social entrepreneurship agenda

16. SWOT summary findings
Opportunity: New financing pipelines from Europe to North Africa can be established (e.g. CoopMed). However, this needs intense facilitation.
Opportunity: Guarantee schemes and hybrid funding (grant+VC+Debt) are missing but badly needed.
Threat: Due to its innovative nature, failure of the “first wave” of Green Entrepreneurs can kill the interest in the sector as a whole.
Threat: Security and political instability does not attract investment.

17. What we would like to learn from you:
What are the main challenges and opportunities in financing green entrepreneurs in the Middle East & North Africa (SWOT)?
How can we get you involved in SwitchMed Initiative?
Given these findings, what could be the role of a Green Impact Investing Network for you?