Currently in its pilot phase, Wellers Impact and Water Unite have partnered to create the Water Unite Pilot Investment Vehicle (WUPIV).
WUPIVs provide risk-tolerant capital to Small and Medium Enterprises (SMEs) in the water, sanitation and plastics recycling sectors who are contributing to addressing the following three global challenges:
people globally who live without sanitation facilities.
tonnes of plastic produced annually, of which less than 10% is recycled.
people globally who live without access to safe water.
WUPIVs address the funding gaps in parts of the financing ecosystem not met through charitable foundations, microfinance institutions, commercial banks and/or formal capital markets. We are catalytic, bringing together new private sector investors, retailers and other existing participants in the water, sanitation and plastics recycling sectors.
Structure of the Investment Vehicle
The WUPIV has been structured using an innovative financial model to leverage greater private sector capital into the water, sanitation and plastics recycling sectors and to build long-term financial sustainability of its investees. It demonstrates a creative way of enabling each dollar of funding to support more than one organisation to generate social and environmental impact multiple times over.
The investment vehicle is structured using micro-levy contributions from international retailers to provide catalytic capital. This capital is used to take a higher risk-reward position, acting as a credit enhancement mechanism to leverage additional Senior Capital. The Senior Capital is protected by the Catalytic First Loss Tranche Capital, as they will rank higher in the pecking order in a default scenario. Through the portfolio of investments made, the WUPIV targets to deliver an attractive financial return to Investor Partners.
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WUPIV has a significant leveraging effect: attracting external expertise and commercial capital into achieving social impact.
The diagram below depicts the innovative financial structure for WUPIV:
Currently, in a pilot phase, WUPIV’s objectives are to validate the following:
Ability of WUPIV to achieve social impact and generate early positive financial returns in the water, sanitation and plastics recycling sector
Amplified contribution to the UN SDGs due to leveraging effect of the proposed structure
Demonstrate availability of a pipeline of diverse SMEs that fit the defined investment strategies
Wellers Impact is continuing to seek interested Investor Partners who have aligned impact and financial objectives with WUPIV. Please contact us to learn more.
As an example, retail partners make a donation, through a 1 cent/penny per litre of water sold, to Water Unite. Water Unite uses these donations for grants towards WUPIV. Current retail partners include:
Water Unite is a UK based, non-profit organisation that works in partnership with the private sector to raise and invest funds for clean water sanitation and plastics recycling. Funds are raised via voluntary donations, for example, one cent per litre from retailers of bottled water. Started in 2018, Water Unite is supported by The Co-operative (UK), Elior UK, The Rockefeller Foundation, Stone, Vitol, One Foundations and many other organisations supporting SDG focused outcomes.
If you are an organisation interested in partnering with Water Unite please visit waterunite.org.