Project detail - DOLMA IMPACT FUND II

DOLMA IMPACT FUND II

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Who is our client

Dolma Impact Fund II (“DIF II” of Fund II”) is the follow-on fund of Dolma Impact Fund I, where FMO played an anchor investor role. DIF II has a strategy to provide scarce (growth) capital to small- and medium-sized enterprises (SMEs) in Nepal, in the healthcare, renewable energy, technology, and other sectors with high growth and impact potential. Fund II is established to generate private sector-led growth while creating positive social and environmental impact. The fund is managed by Dolma Fund Management (“Fund Manager” or “Dolma”)

Funding objective

FMO’s investment in Fund II is from two government funds, MASSIF and Building Prospects. The objective of the investment is to continue supporting the first-time fund manager, Dolma, and assist the team in deploying capital towards impactful transactions that result in both economic and social impact.

Why we fund this project

Fund II invests in Nepal which is one of poorest 55 nations in the world and hence is classified as Least Developed Country (“LDC”). Supporting investments in LDCs is one of the core strategies of FMO and MASSIF. In addition, Dolma is one of the first private equity (“PE”) fund managers focused on Nepal and has played a key role in developing the PE sector in the country. Fund II’s strategy of investing in renewable energy in a country that has an energy deficit and investing in companies that need capital to grow alongside its economy (and hence simultaneously boosting it) touches another cornerstone of FMO’s strategy.

Environmental and social rationale

The investment is categorized E&S category A, as the fund may invest in hydropower. With the help of FMO's investment and (still ongoing) capacity development support, the fund manager has built up E&S capacity (including a dedicated E&S Manager and a dedicated E&S Analyst) and is enabled to mitigate and manage E&S risks, and to contribute to responsible hydropower development in Nepal. With the realization of this 2nd fund, the dedicated E&S capacity will be further expanded.

Website client
http://www.dolmaimpact.com/
Region
Asia
Country
Nepal
Sector
Infrastructure, Manufacturing and Services
Signing date
5/6/2021
Total FMO financing
USD 10.00 MLN
Fund
MASSIF
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
A