Incofin’s Water Access Acceleration Fund.pdf

Presented at the 11th roundtable on financing water in Brussels, Belgium on 30-31 May, 2024.

Intervention by Dina Pons, Managing Partner, Incofin Investment Management

1. 1Committed Beyond Investment
Water Access Acceleration Fund
(W2AF)
11
th
Round Table on Financing Water
May 30
th
and 31
st
2024

2. 2
We invest for impact to drive inclusive progress
and sustainable transitions

3. 3
Introduction –IncofinInvesmentManagement
European AIFM licensed asset manager, we have 20+ years of experience investing emerging markets for impact
210
1,111
115
AUM (USD Million)
1,436
Financial Inclusion DebtPrivate EquityAgri Debt
16%
AUM CAGR in the
last decade
USD 4bn
invested since
inception
financial inclusion
agri-food
access to water
Sector FocusAsset Under Management (Q4 2022) Highlights
USD 9m159
TA projects
investments
TA projects
completed
2k
number of
transactions
186
Active
investees
65
Active
Countries
> 90
Employees
2001
Founded
5
Offices

4. 4
We have built long lasting relationships with a wide range of investors*
DFIs
Institutional investors, family offices and corporates
Banks
Advisor to top 10 Microfinance Investment Funds
*The names listed here include previous and existing investors in various Incofin funds

5. 5
THE PROBLEM (1): Today, over 2 billion people globally lack access to safe
and clean drinking water. This implies that…
…for every 3 people with access to safely
managed drinking water…
…there is 1 person without access to it

6. 6
Source: 1)Water.org, Financing SDG 6
THE PROBLEM (2): Today, many water businesses have a proven business
model. But, when they look for funding to scale, there is a lack of adequate
capital solutions available….
The funding ecosystem for PRIVATE PLAYERS looks like that…
Incubation
Grant
Project donation
Innovation
Piloting
SeedCapital
Venture Capital
Pre-Series A-
Series A
Scaling
Equity
SeriesB-C
Financing gap
New Idea
Proof of
concept
Ready for
investment
Scale up

7. 7
THE PROBLEM (3): Meanwhile, capital is available, but the ecosystem is fragmented
As a corporation, we
have a CSR budget but
I dont know how to
select the right water
businesses, i dont
have enough«on the
ground» knowledge
As a public funder, we
can offerde-risking
capital but itneedsto
catalyzeprivate
investorsfinancing.
As a foundation, we
are usedto grant
funding, I dont see
how I couldinvestinto
a vehiclewhichisnot
a grantfacility?
As a bank, wehave a
water investment
strategy, but cannot
taketoohigh riskand
the water sectoris
seenrisky

8. 8
THE SOLUTION (1): W2AF isthe first global impact investmentfundfocusedon
accessto drinkingwater to lowincomepopulation !
Impact ObjectivesFinancial Objectives
The Fundwantsto provideat least 20 billion
litres of safe drinking water to 30 million people,
a majorityof them, living belowUSD 8/day
The Fundhas ambitiousGenderandClimate
strategies
The Fund providesequityand quasi equity
financingtowater businesses globally, we
support market based solutions!
The Fund wants to provethe investment
readinessof the sector

9. 9
THE SOLUTION (2): W2AF is an innovative blended finance structure…
USD 16.3 m
EUR 19.1 m
EUR 32.1m
EUR 51.4 m
EUR
0.4m
•W2AF pools togethera diverse
group of investors, private,
public, institutional, individual,
foundations, bank, etc
•A unique first losscushion
maintainedat > 20% for de-
riskingthe fundand attract
privateinvestors(familyoffice +
bank)

10. 10
Headquarters Regional officesInvestments
How do we do it: W2AF already has a global reputation !

11. 11
2500+ water treatment plants
installed cover 12 Indian states
Community Water Plants
Power pump / Solar pump
based / Hand pump based
Operation & Maintenance
Water Supply Schemes
Rural Water Supply Schemes
Mini Water Supply Shemes
(solar based)
Water Treatment Plants
High capacity up to 200
m3/hr
Key Solutions Offered Key MetricsFootprint
Our results so far (1): First Investment: Rite Water Solutions (India)
31% | 22%
EBITDA margin | Net
profit margin
EUR 16.7 m
Revenue
*December 2023 Figures
1.5bn
Drinking water liters
provided
2.3m
People where 50% are
female

12. 12
Business Model Key MetricsFootprint
100 mn+
liters water filtered
Sustainable sourcing
Factory strategically located
close to main raw material - clay
Carbons Credits Generation
Significant additional income
through partnerships with
companies, development
programmes, etc.
Distribution
B2C & B2B though 40 sales
agents
Local production
10,000 filters produced per
month to be increased to 70.000
with the expansion of the factory
150,000
Carbon credits generated
USD 2.6 m
Revenue*
120k+ water filters sold in East
Africa
*December 2023 Figures
Current markets: Uganda
& Rwanda
Next market: Kenya
Our Results so far (2): Second planned investment: “Project Cascade” (June 2024)
2.1m
People where 50% are
female

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In Conclusion (1): Useful learnings…
How to channel funding in countries
which need it the most ?
What projects/ entities are likely to have
the biggest impact and are in need of
funding?
•Where the public sector stops, there are
competent and like-minded water businesses
ready to play their part in the water value
chain.
• Let’s fund them so they can scale!
•Use a blended finance structure to pool
public and private funding together
•De-risk !
Where ?
•Geographic diversification is key
•Water policies conducive to private sector
(license, tariff, ease of doing business, etc)
With which
money ?
How to convince investors to invest in
the water sector in emerging
countries?
What to do ?

14. 14
Dina Pons
Fund Manager W2AF
[email protected]
Wantto Learnmore ?