The Brief: Impact investing in water – let it flow!

Greetings Agents of Impact! This month’s edition of ImpactAlpha Latin America comes out later today. As an ImpactAlpha subscriber, you get the top stories first (see below). For the full LatAm experience, opt-in to the speciality newsletter at no additional cost. ¡Disfruta! – David Bank

In today’s Brief:

• Co-investing in water for underserved communities 
• Small business lending in Palestine
• Health equity and green buildings for Wisconsin hospitals
• Impact investing at Latin America family offices

Featured: Deploy!

Making impact investments to help communities maximize historic federal funding for water infrastructure. The $50 billion in funding earmarked for water in the 2022 bipartisan infrastructure law is the single largest amount of federal funding for US water infrastructure ever. Communities have an historic opportunity to upgrade their facilities to improve health outcomes, build climate resilience, lower greenhouse gas emissions, and lay the foundation for economic growth. “Water is one of the best bets that we can make as a nation,” says Radhika Fox, who as assistant administrator of the Environmental Protection Agency spearheaded the water funding in the bipartisan infrastructure bill. The unprecedented appropriation, which includes $15 billion for lead pipe removal and $500 million for technical assistance for localities, is only a drop in the bucket. Disadvantaged communities often “lack the technical, financial and managerial capacity to be able to access and compete for these dollars,” says Fox, now with North Star Strategy. “That’s also a huge opportunity for the impact investing community.” 

• Filling gaps. Foundations, green banks, intermediaries and private investors are devising innovative funding mechanisms to address the obstacles. The nonprofit Water Finance Exchange partners with communities to build their capacity to finance water and other essential infrastructure. “We work with them to show there are ways to finance this infrastructure affordably,” says the group’s Rogelio Rodriquez. WaterFX has created a “disadvantaged community advancement fund” to help places with modest needs – say, $10,000 to fix a pump. Its low-interest loan fund covers engineering and other pre-development activities. And WaterFX is looking to pool impact and philanthropic capital to provide bond insurance for small communities.
• Green banks. The IRA’s $27 billion Greenhouse Gas Reduction Fund sets up a distributed green lending network for community solar, building retrofits and other climate-friendly projects. Clean water projects are eligible as well. The range of climate-friendly solutions runs from rain gardens, urban tree canopies and projects that reduce harmful run-off, to renewable energy for water utilities and water efficiency measures. Washington, DC-based Quantified Ventures is working with a half-dozen green banks to build water programs and tee up investable water projects. “We see green…