10 years, 100 transactions: DFC’s Portfolio for Impact and Innovation reaches two major milestones
This year DFC’s Portfolio for Impact and Innovation (PI2) marks its tenth anniversary and surpasses 100 PI2 transactions supporting businesses that have pioneered creative solutions to major world challenges but faced struggles accessing financing. Projects supported through this program have expanded access to medical oxygen in Kenya, feminine hygiene products in India, and helped refugees in Jordan and Lebanon develop microenterprises to generate household income.
Dia Martin, Managing Director in DFC’s Office of Catalytic Investments, has led the PI2 program since its 2014 launch under DFC predecessor, the Overseas Private Investment Corporation. She recently spoke about how this focus on small, innovative enterprises is advancing DFC’s mission.
Why is it so important to invest in small and early-stage businesses?
There is a large financing gap that makes it hard for promising young businesses and funds to access capital. Many of these businesses have developed innovative solutions to longstanding challenges facing underserved communities, from insufficient healthcare to a lack of financial services. Many of the businesses DFC has supported are also pioneering innovative business models such as development impact bonds or blended finance funds to help extend impact. When DFC can help them grow an achieve traction, it provides a demonstration effect and can support the company as it scales and pursues more financing.
What have you learned over these past ten years supporting these investments?
Underwriting PI2 projects requires a different mindset and a nuanced approach. You can’t just replicate the same deal structure and terms at miniature size. You have to take a customized approach to assessing real and perceived risk, closely track all developments, and most importantly, partner with businesses that have thoughtful and passionate leaders. These smaller transactions can be just as complex and require targeted focus.
Tell us about one PI2 project that has gone on to achieve an outsized impact.
SunKing, a company formerly known as Greenlight Planet, is an off-grid solar energy company in Africa and Asia that was one of the first businesses to receive financing through the Pi program. The young company used technology to offer a pay-as-you-go model and retail distribution network made solar energy affordable and accessible for many low-income households.
The company has gone on to provide solar power to millions of people and small businesses in remote communities, often outside of the range of electrical grids. As it has grown, it has also raised more than half a billion dollars in financing from private investors and development institutions, enabling it to continue to scale. As one of the first institutional lenders in earlier stage companies focused on impact and innovation, DFC plays a catalytic role in mobilizing private investment, nascent markets, and emergent subsectors to solve some of the world’s most critical developmental challenges.
About the Author
Dia Martin is DFC’s Managing Director for the Office of Catalytic Investments. Martin has led the PI2 program since its 2014 launch under DFC predecessor, the Overseas Private Investment Corporation.
