Antigua, Guatemala, November 3, 2023 — The International Finance Corporation (IFC) and the U.S. International Development Finance Corporation (DFC) are investing $15 million in Antigua-based Pomona Impact Fund II to support the growth of small and medium-sized enterprises (SMEs), create jobs, and boost economic development primarily in Central America.
IFC and DFC's backing, with $7.5 million in equity investment from each institution, will enhance Pomona's support for SMEs in the agriculture, education, health, and water sectors, among others. The $30.5 million fund will provide organizational and operational support for businesses and help create value, while also promoting women-owned and managed companies. Mainly focused on Central America, the fund will also evaluate relevant projects in Mexico, Ecuador, and Colombia.
"We are delighted to deepen our relationship with IFC and DFC, which has proven crucial to reach our fundraising target in a challenging environment," said Richard Ambrose and Daniel Granada, Managing Partners of Pomona Impact Management, the fund manager. "Their support will send a strong signal on the opportunity in Central America. It will also help us generate deal flow and demonstrate attractive commercial returns from investment in the market, especially the SMEs segment."
The investment aims to help develop the nascent private equity industry in Central America. In recent years, almost all funds raised in Latin America have focused on the largest economies in the region, such as Brazil, Mexico, Chile, and Colombia. Funds like Pomona Impact Fund II focus on smaller markets facing challenges raising capital from local and international investors.
"By promoting the sustainability and growth of SMEs in Central America—particularly SMEs that tend to be underserved, including women-owned SMEs, very small enterprises, or climate-smart SMEs— we can encourage other investors to do the same," said Sanaa Abouzaid, IFC Regional Manager for Central America. "We do this by making direct investments and supporting funds like Pomona. We share their vision that SMEs are a driver of job creation and economic development outcomes in the region."
"DFC is committed to providing impactful investments in Latin America to bolster economic prosperity, improve livelihoods, and strengthen shared ties with the United States," said Mateo Goldman, Acting Head of DFC's Office of Equity and Investment Funds. "Through strategic investments with partners like IFC and the Pomona Impact Fund II, DFC can increase its support for small businesses and address pressing challenges impacting northern Central America."
IFC's $7.5 million investment includes $6.5 million from SME Ventures—an IFC program launched in 2010 to support private equity funds focusing on SMEs in underserved private capital markets— and $1 million from the Women Entrepreneurs Finance Initiative (We-Fi), which works with the private sector to enable female entrepreneurs to start and grow businesses. IFC and DFC will help Pomona integrate gender elements into its mainstream fund and implement environmental and social best practices. Pomona has committed to allocating at least 30 percent of amounts committed to the fund by DFC in women-owned or led companies.
DFC supports countries facing significant gaps in development by creating inclusive and sustainable economic opportunities. In Northern Central America, DFC aims to improve livelihoods and advance U.S. priorities, including by addressing the root causes of irregular migration. DFC will work with Pomona to advance investment in small businesses to grow economic opportunity and address pressing challenges impacting the region. Pomona has committed to investing at least 50 percent of investable capital in Northern Central America.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
Stay Connected with IFC on social media
About DFC
The U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, critical infrastructure, food security, and small business support. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.
About Pomona Impact Management
Pomona Impact Management is a Fund Manager headquartered in Antigua, Guatemala. The Fund's team brings over 35 years of experience in deal sourcing, due diligence, fund management, portfolio monitoring, and impact assessment. We currently manage Pomona Impact Fund II and the Pomona Impact Pilot Fund. The team has invested in 28 dynamic companies in Central America, Colombia, Mexico, and Ecuador thus far. Pomona Impact and its affiliates have also launched the leading Central American Accelerator programs for AgTech, GreenTech and Renewable Energy, and developed an extensive network of partners including accelerators, technical assistance providers, universities, and co-investors. As one of Pomona's partners, USAID has worked with the Fund since 2018 providing technical assistance, which has contributed to the formalization of Pomona's operations, the establishment of a special investment vehicle, and the identification of potential investments in Guatemala. These relationships support the Fund's promotion, deal flow, capacity building, and co-investing. Lastly, Pomona has been selected for the second year in a row as an ImpactAssets 50, Emerging Impact Manager. The IA 50 Emerging Impact Manager list is intended to spotlight newer fund managers to watch that may demonstrate potential to create meaningful impact.
About We-Fi
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
Stay Connected with IFC on social media
About DFC
The U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, critical infrastructure, food security, and small business support. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.
About Pomona Impact Management
Pomona Impact Management is a Fund Manager headquartered in Antigua, Guatemala. The Fund's team brings over 35 years of experience in deal sourcing, due diligence, fund management, portfolio monitoring, and impact assessment. We currently manage Pomona Impact Fund II and the Pomona Impact Pilot Fund. The team has invested in 28 dynamic companies in Central America, Colombia, Mexico, and Ecuador thus far. Pomona Impact and its affiliates have also launched the leading Central American Accelerator programs for AgTech, GreenTech and Renewable Energy, and developed an extensive network of partners including accelerators, technical assistance providers, universities, and co-investors. As one of Pomona's partners, USAID has worked with the Fund since 2018 providing technical assistance, which has contributed to the formalization of Pomona's operations, the establishment of a special investment vehicle, and the identification of potential investments in Guatemala. These relationships support the Fund's promotion, deal flow, capacity building, and co-investing. Lastly, Pomona has been selected for the second year in a row as an ImpactAssets 50, Emerging Impact Manager. The IA 50 Emerging Impact Manager list is intended to spotlight newer fund managers to watch that may demonstrate potential to create meaningful impact.
About We-Fi
The Women Entrepreneurs Finance Initiative (We-Fi) is a collaborative partnership among the 14 governments that have made financial contributions, six multilateral development banks that serve as implementing partners, and other public and private stakeholders. We-Fi was formally established in October 2017 as a Financial Intermediary Fund hosted by the World Bank. We-Fi invests in programs and projects that help unlock billions of dollars in financing to address the full range of barriers facing women entrepreneurs—increasing access to finance, markets, technology, and mentoring, while strengthening policy, legal and regulatory frameworks. As one of the We-Fi Implementing Partners, IFC supports private sector clients with investment and advisory services to expand financial services and market access for women-owned/led firms, as well as increasing the capacity of women entrepreneurs to run high-growth businesses. For more information, visit www.we-fi.org.
Contacts
For IFC:
Francisco Fernandez Funes
fffunes@ifc.org
For DFC:
Pooja Jhunjhunwala
Press@dfc.gov
For Pomona:
Maureen Nakamura
maureen@pomonaimpact.com
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