Impact Investing to Change the Debate on Australia’s Use of Water
Wednesday, 4th November 2015 at 11:19 am
A new impact investment with The Nature Conservancy is set to provide exposure to Australia’s emerging water market while aiming to deliver significant environmental watering to some of the country’s most precious wetlands.
Investment house, Evans and Partners have been appointed as Lead Manager of the The Murray-Darling Basin Balanced Water Fund, described by senior investment partner, Christopher Thorn, as a significant event in the development of the social finance and impact investment market in Australia.
“The initial launch of the Fund is targeted at a minimum of $25 million, including a $5 million seed investment from The Nature Conservancy Australia, and up to $5 million of debt,” Thorn said.
“So we are looking for $15 million in private equity.”
He said the fund is aimed at investors who are interested in investing in water, the environment and who are prepared to be leaders in what is a model for funding some of Australia’s most challenging social and environmental challenges of the future.
“This fund will provide the first opportunity in Australia for wholesale investors to achieve the multiple objectives of securing water for agriculture, realising a financial return and restoring threatened wetlands through a single investment,” he said.
“Financial returns will be generated through the annual lease of water entitlements, the trade of water allocations and through the long-term capital appreciation of the Fund’s portfolio of water entitlements.”
He said that in the past these objectives have been seen as opposing uses of water and the fund hopes align these interconnecting needs of the environment and agriculture.
“We want to change the debate about the use of water in Australia,” he said.
“Environmental and social returns will be achieved by returning water to wetlands on a ‘counter-cyclical’ basis; when water is scarce and demand is higher, more water will be made available to agriculture. Conversely when water is abundant and agricultural demand is lower, more water will be made available to wetlands.”
He said the environmental watering will be carried out by the Murray Darling Wetlands Working Group, which has more than 20 years’ experience delivering environmental watering programs in the Basin.
The Information Memorandum is available here and the offer is expected to close at the end of November.