Impact Investment Fund for Post-Conflict Rural Areas
Impact investment fund aiming to empower the Internally Displaced Population (IDPs) and other victims of the armed conflict in Colombia
I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.
Start-Up (a pilot that has just started operating)
Annual budget in 2017 (USD)
Number of beneficiaries impacted so far
Headquarters location: Country
Headquarters location: City
Carrera 11a #94a-56 Oficina 301 Centro 95
Location(s) of impact
Colombia: near Pasto, Nariño
Problem: What problem is this initiative trying to address?
1. Rural Development (Economic): 50 years of conflict meant neglection for rural Colombia. While the poverty rate in urban areas of the country is 15.4%, in rural areas is 44.1%. 2. Internal Displacement (Social): Colombia has the largest number of internally displaced people worldwide (7.2 m), surpassing Syria (6.3 m), Sudan (3.3 m) and Iraq (3 m). 3. Land Ownership (Economic): Colombia is the most unequal country in Latin America in land access, where 1% of owners control 80% of the land.
Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?
The solution is to finance, with 0 initial capital requirement, the acquisition of land and housing by IDPs who want to return to rural areas because of the lack of formal income in major cities.
Through a rural lease structure and a sustainable business model which TerraBlanca builds, we ensure the families make enough income to pay the lease, have a dignified livelihood, and overcome extreme poverty relocating them from urban areas to underdeveloped rural areas. (Attached TerraBlanca Framework)
Example- Exporting Quinoa
1 Institutional demand for quinoa,2 Optimal regions for quinoa crops are identified,3 Unproductive lands are acquired, and housing units built,4 Displaced families (from region in point 2) who would like to return home as small producers of quinoa are identified,5 One plot per family is allocated and quinoa is planted,6 With the sale of quinoa to the institutional buyer, it is expected that 6-8 years, families would pay off the lease and legally own the land.
Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work
1. Displaced Families
a. Opportunity to own land and housing
b. Empowerment through a rural enterprise
c. Overcoming extreme poverty and informality
2. Institutional Buyer
a. Risk management in the purchasing process
b. Direct access to producers
c. Traceability and product quality certification
d. Moving from corporate social responsibility to creating shared value
3. Impact Investors
a. Profitable investment opportunities with high social impact
b. Sustainable Development Goals #1 (No Poverty), #16 (Peace, Justice and Strong Institutions)
The current pilot is with the first family growing quinua in Nariño, Colombia. Quinua takes around 6 months from planting to harvest and we just planted the crop, we expect to have quantitative impact data early next year.
Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?
My current budget is 100% from the Rockefeller Foundation & Kellogg School of Management Sustainable Investing Fellowship. This fellowship will last until mid 2018.
By then, I expect that initial quinoa crops will be ready for sale and families could start paying the first lease payments. To give you a better sense, from the income generated from the quinoa sale, around 20% is the lease payment, 55% are production costs, and 25% is income for the family. That 25% is nominal terms is around 4x what IDP families are informally earning in their current situations.
Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?
Impact investing is growing globally and is tackling many of the world's most pressing challenges. However, at TerraBlanca we are focusing the largest internally displaced population worldwide + decades of rural underdevelopment + extreme inequality in land ownership. Our goal is to build a replicable and scalable framework for post-conflict areas, we are currently starting and operating only in Colombia, but our hope is that the TerraBlanca framework can be used in other parts of the world.
Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.
2 Aha! moments. 1- 7 years ago I volunteered for 3 years with and NGO fighting extreme poverty and met many IDP families, I helped them build emergency houses, build budgets for small scale business plans and provided microcredits for business plans. For these, families had the goal to save 10% of income to buy a piece of land and return home. 2- I participated in the 2015 Morgan Stanley Sustainable Investing Challenge, this opened my eyes to the world of impact investing and met many people and organizations in the ecosystem which made me believe that investment opportunities targeting IDPs were feasible.
Where did you hear about the Nestlé Creating Shared Value Prize?