Project detail - Lendable Decarbonisation Fund SCSp SICAV-RAIF

Who is our prospective customer?

Lendable Decarbonization Fund (“the Fund”, “LDF”) is a newly created impact-driven fund with an investment focus on SDG13 sectors, including E-mobility, Energy Commercial and Industrial, Clean Cooking, Sustainable Agriculture, and Energy efficiency. Capital will be deployed by providing debt financing to Small and Medium-sized Enterprises (SMEs) and Mid-Market Enterprises (MMEs) in sectors that reduce Green House Gas (GHG) emissions footprints and improve resilience to climate change effects. The Fund is a Luxembourg domiciled fund to be managed by Lendable Inc. with third party alternative investment fund manager Royalton Partners.

What is our funding objective?

Capital is being raised for this newly created fund across four tranches – Senior Loans (up to 55%), and equity tranches A and B/C (together no less than 20%). FMO will invest up to USD 30 mln of which USD 20mln will be in the Senior Loans tranche, and USD 10 mln will be in equity Tranche A. LDF’s investment objective is to provide capital to emerging markets for the avoidance or the reduction of GHG emissions and to improve resilience and adaptation to climate change. To promote these practices, the Fund may provide interest rate step-downs linked to GHG targets, where appropriate. FMO’s funding will invest in SMEs and MMEs, addressing the funding gap within these high-impact sectors.

Why do we want to fund this investment?

As anchor and existing partner, FMO’s direct investment in the Loans tranche will help to bring the Fund to its target size. The downward protection provided by Tranche A is key to bringing the junior tranche to the required size and for mobilization of the senior tranche. As such, FMO will be facilitating financing to high-impact sectors and borrowers where there is no commercial funding, especially for smaller debt amounts. The Fund is highly aligned with FMO’s strategy to reduce inequalities and is working on meeting the 2X Criteria and supporting initiatives related to SDG13. FMO’s Green and Reducing Inequality labels are expected to apply 100%. FMO will also be additional by contributing to a continued professionalization of LDF’s E&S standards / ESMS and in the E&S standard of LDF’s investments.

What is the Environmental and Social categorization rationale?

The E&S category is determined to be B+. The E&S characteristics of (prospected) pipeline strategy/sectors are low risk (for instance C&I solar, e-mobility solutions or clean cooking), or medium risk (for instance EV manufacturing and some agricultural activities). High risk investments which would make this a category A are explicitly excluded. Taking into account the risk characteristics of the pipeline sectors, the exposure to topics that are most prevalent in the (prospected) pipeline are IFC Performance Standards (PS) 1 – 4 (ESMS, Labor, Pollution, Community Health and Safety). Some investments may trigger PS 5 and 6 (Land Acquisition, Biodiversity). PS 7 and 8 (Indigenous Peoples, Cultural Heritage) are not expected to be triggered. On E&S risk management, Lendable has demonstrated a strong commitment to implementing high ESG standards in its investments. The investment manager has developed a full-fledged Environmental and Social Management System (ESMS), which is embedded in the Fund’s Responsible Investment Code. Next to that, the Fund has a Client Protection Policy in place. The ESMS includes screening of E&S risks and performance of investment opportunities, and monitoring this performance once the investment is made. Lendable has a professional, experienced team in place. E&S consultants may be engaged for high-risk Due Diligence. Note that all investments will be managed in accordance with the IFC PS, with any gaps being covered by an Environmental & Social Action Plan (ESAP) to be implemented.

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Date	Total FMO financing
5/2/2025	USD 10.00 MLN