Since its origin, Investing for Development SICAV and its sub-funds have leveraged the concept of blended finance. The Fund has aimed to address complex development problems. These areas require patience and innovative solutions, yet investors interested in collaborating to solve these issues may have very different risk appetites.
For this reason, the Fund has been structured as a blended finance vehicle. The Luxembourg State – as an investor which is prioritising a developmental impact and which is seeking to leverage further financing to contribute to environment – is an investor in Class I shares. These shares provide a layer of capital protection for Class J shares which have been designed for a broad range of experienced investors. These shares also permit investors to participate in this Fund and to support the development of forestry projects, but are provided with a degree of risk mitigation.
In this way, investors with diverse risk appetites and different priorities have been able to come together to support the Fund’s work in supporting innovative projects focused on the restoration of secondary and degraded forests.