Irish development agency Vita has closed a €10 million green impact fund to invest in decarbonisation projects in the Horn of Africa.

The fund is being backed by Irish venture philanthropists and American impact investors in what Vita hopes will be the first of a number of funds helping millions of people in rural Ethiopia and Eritrea use carbon-saving cookstoves and access safe water.

Vita says its first €10 million fund will support 1.3 million people and remove 630,000 tonnes of carbon annually. The Vita Green Impact Fund is being managed by a new non-profit Irish fund manager called FCI Ltd, which has assembled an experienced board.

The directors of FCI are Cathy Bryce, managing director of AIB’s capital markets division, and Professor Gerry Boyle, the former chief executive of Teagasc. FCI is chaired by Donal Daly, who previously co-founded Avoca Capital, the Dublin asset manager that was bought by KKR in 2014.

Leading Irish law firm Arthur Cox and American multinational law firm Sidley Austin are legal advisors to the new fund. Vita has already completed a successful €2 million pilot fund which delivered clean water and cookstoves to 311,000 people between 2016 and 2020. Vita estimates this pilot investment generated two million tonnes of carbon emissions savings and saved millions of trees from being cut down. The new fund provides a return to investors from the sale of verified and accredited carbon credits generated by the fuel-efficient stoves and community water points.

“This is a ground-breaking social impact investment vehicle”

John Weakliam

Céline Reilly, the chair of Vita and a former executive manager in Dublin City Council with a responsibility for climate change, said: “The world needs innovative, smart solutions to reverse climate destruction. The Vita Green Impact Fund is a proven impact investment model that brings new capital to the continent. This is more sustainable and effective than traditional aid funding models.”

John Weakliam, the chief executive of Vita, said: “This is a ground-breaking social impact investment vehicle that leverages climate finance to deliver basic services to rural households in Africa. It provides a structured opportunity for investors to take climate action and to make an appropriate return.”

Weakliam added: “The Fund uses a unique community-led and woman-focused approach that ensures long term equitability and sustainability. The social impacts are instant, sustainable and life-transforming. Women and their children, particularly girls, benefit the most through reduced drudgery and greater access to education due to significantly less time spent gathering sticks and fetching water.

“Health impacts include substantially reduced illness from unclean water and smoke pollution. Communities will save their trees and also plant millions of new trees.”

The Fund, he said, delivers measurable impact on at least eight of the United Nations 17 Sustainable Development Goals. 

Weakliam said the first Vita Green Impact Fund was now closed. “Once the fund delivers on the ground and demonstrates its viability, we will start the second capital raise of €20 million, to take the fund up to €30 million and to provide 4.1 million people with clean cookstoves, safe water and forestry,” he said, adding that the fund was aimed at professional private or institutional investors who wanted to make a social and climate impact in return for a lower return. 

According to Weakliam, FCI Ltd was providing fund management expertise as Vita as a charity is not mandated to manage a fund or receive investments. “FCI is not a charity but is not for profit,” Weakliam explained.

Vita was founded 34 years ago. It operates in Ethiopia and Eritrea and employs 90 people in the Horn of Africa and in Ireland.