Incofin nears $35m for first close on ‘pioneering’ water fund

Incofin Investment Management is seeking $70 million for what it says will be the first private equity impact fund focused on providing affordable and safe drinking water to underserved communities. 

Founded in 2001, Belgium-based Incofin is a global impact fund management company focused on emerging markets with $1.4 billion of assets under management. It has seven active Article 9 funds focused on agriculture and financial inclusion. 

Launched two years ago, this will be Incofin’s first fund dedicated to the water sector. The firm is targeting $70 million in total and expects to reach its first close on $35 million by the end of the year, a spokesperson for Incofin told New Private Markets.  

According to the firm, the potable water sector “is a space that hasn’t been given a lot of attention by the impact investment community, but the local technology around safe water provision is now of a large enough scale that we are seeing more investment opportunities”.

Incofin will invest in three types of solutions – water kiosks, water pipes and water technologies – across areas where safe water is scarce, largely in Africa and Asia. By investing in these companies and offering technical assistance, Incofin are “pioneering an investment approach” in the budding water sector, the firm said in a statement announcing its new venture in 2020. 

Incofin compared the water sector to what the financial inclusion sector looked like for impact investors two decades ago. “We see a vast amount of young emerging water companies in Africa and Asia,” said Loïc De Cannière, founder and managing partner at Incofin. “Ambitious, innovative entrepreneurs are leading them, driven by the desire to make a tangible impact for the local population. But the capital needs of these companies are relatively high. This is a situation comparable with microfinance institutions twenty years ago. Just like back then, we want to play a catalyst role and help the pioneering water sector achieve a large scale and achieve a return that will attract other investors in the future.” 

The fund will be managed by Dina Pons, who works in the firm’s Cambodian office as managing partner responsible for risk, impact and ESG. 

The fund is a joint initiative with French corporation Danone as its anchor investor. Other backers include Dutch NGO Acqua For All, as well as a range of US and European development finance institutions, family offices and high-net-worth individuals. 

“More than 2 billion people do not have access to safe drinking water,” Corinne Bazina, general manager at Danone, said in a statement. “Safe water enterprises can be a scalable and sustainable solution – complementary with other approaches – to supply access to safe water to many of those people in need. Danone’s ambition is to accelerate the development of the water sector and to contribute to [sustainable development goal] SDG 6.”