A new partnership between Coffey International Development (Coffey) who manage Pacific RISE (Pacific Readiness for Investment in Social Enterprise) and Pacific Trade Invest (PTI) Australia will boost an Australian government investment that aims to increase the amount of private sector capital deployed into 14 Pacific Island Countries through new impact investments.
The current phase of Pacific RISE is being managed by Coffey for three years and is focused on:
- Scoping and identifying investible businesses capable of delivering both financial and social returns;
- Applying a gender lens across investment deal-flow to understand the involvement of women and how they improve performance;
- Identify what investors are looking for and attract them to an emerging Pacific market;
- and Working through intermediaries to support and improve their scoping and due diligence to secure deals.
As part of the Department of Foreign Affairs and Trade (DFAT) aid for trade program, PTI Australia will work with Coffey to identify investment opportunities in Pacific Island businesses and help them to access new investor capital.
PTI Australia has been working with Australia's private sector to develop trade with businesses in 16 Pacific Island countries for more than 38 years.
In 2016, PTI Australia assisted 412 Pacific Island businesses, facilitating more than $8.39 million in investments and $18.76 million in exports. This includes helping 110 women-led businesses secure 58 deals worth more than $2.93 million.
Australia will invest up to $1.1 billion in the Pacific in 2017-18 representing over a quarter of the total aid budget. But development assistance alone is not enough.
DFAT is also looking at opportunities to facilitate greater private sector investment and better trade links with Australia as the Pacific emerges as a viable investment market.
The Australian government has set an aid for trade target that represents 20 per cent of the total aid budget by 2020, as part of which, in January 2017, DFAT launched Pacific RISE, an initiative designed to create an impact investment market in the Pacific.
Amanda Jupp, Pacific RISE's facility manager, explains the partnership formalises an already strong relationship with PTI Australia. 'This partnership will enable Australian investors to access PTI Australia's extensive networks and contacts with Pacific-based businesses,' Ms Jupp said.
Impact investment in the Pacific
Economic growth in much of the Pacific region is not keeping pace with population growth. The remote nature of island nations and weak domestic infrastructure makes international trade expensive.
This challenging business environment means traditional investment tools are inaccessible to many Pacific Island businesses.
Impact investments - investments that look to make a financial return as well as deliver measurable social and environmental improvements - are on the rise globally.
They are well suited to the Pacific region, because of their potential to drive sustainable economic growth and value chains in sectors, such as sustainable agriculture, aquaculture, forestry, manufacturing, renewable energy, eco-tourism and microfinance.
PTI Australia, Trade & Investment Commissioner Caleb Jarvis, said the Pacific offered opportunities for investors to help break new ground and contribute to impact investing on a much larger level than previously available in other investment markets.
'While philanthropy and grants have historically been a significant part of capital flow in the Pacific, opportunities for investing with a social impact are largely untapped. The Pacific is fertile ground for innovative ideas,' Mr Jarvis said.
Gender lens investing
Pacific RISE uses gender lens investing - the practice of choosing investments that take gender into account - as a tool to get more investment into businesses that have a positive impact on women.
Mr Jarvis said women in the Pacific Islands had the potential to make significant contributions to communities and economies.
'There is a growing recognition among governments and in the private sector that investing in women and girls has a powerful effect on productivity, efficiency and economic growth,' Mr Jarvis said.
Ms Jupp said women faced additional obstacles in the investment climate preventing them from growing their businesses from unequal access to property, credit and justice to a lack of experience and comfort with formal business processes.
'Working with PTI Australia, who have already engaged with a large number of women-led, Pacific-based businesses and have such a great investment record, makes great sense.
Our two Australian-funded initiatives can now maximise opportunities, share resources and reduce duplication to support more Pacific-based businesses.'
Coffey International Development and PTI Australia are committed to Pacific RISE and to attracting new capital flows using a gender lens into the Pacific Islands.
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Published October 2017
