Presentation on managing climate risk through ecosystem-based adaptation – linking urban and rural development planning by Jon Duncan from the Old Mutual Investment Group, South Africa

1. Mobilising Private Sector Investment in Ecological Infrastructure
OLD MUTUAL
INVESTMENT GROUP
April 2015
Jon Duncan

2. OLD MUTUAL AT A GLANCE - 2014
Investment
400+ Investment
Professionals –
Global multi-style
Savings
Insurance
Banking
Established in South
Africa in 1845 – Dual
Listed LSE & JSE
US$514bn1 Funds
Under Management
* Core operations as at 30 June 2014 - Includes Asia & Latin America
US$273bn
US$137bn
US$104bn*
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3. GREEN BONDS – AND OPPORTUNITY FOR EI INVESTMENT?
Institutional investors already make
large scale investments in infrastructure
in South Africa - either by way of
private equity vehicles or through t
fixed income investments – such as
infrastructure bond funds. By
leveraging the existing financing
arrangements that are used for hard
infrastructure, coupled with innovations
in the Green Bond market & support
from DFI’s it may be possible to
leverage private sector finance into EI
investments
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 Requirements:
 Municipal EI assets assessed and valued
 EI assets recognised on balance sheet and % value received annually from
national fiscus for maintenance
 Municipality issues Green Bond with proceeds ring fenced for EI maintenance
 Opportunity for Development Finance to be used as grant funding to support initial
repayments and/or to provide loan guarantees

4. BUILDING EI INTO THE BUSINESS CASE ?
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Agriculture Insurance in Africa
 Is there business case for redirecting a small
portion of premiums from the sale of Agri
Insurance into EI maintenance -- in the
catchment area where the Agri occurs – thereby
lowering long term risk and additionally taking
some social risk off the table (i.e. job creation)
Challenges
 Agri risk insurance is sold annually whereas the insured risks are long term and
systemic
 Scale of premiums that could be redirected are likely to be insufficient to
make a meaningful long term EI investment – thus requires partners
 Monitoring and evaluation of long term risk reduction benefits
Opportunity
 Leverage private sector interest into EI and tying this into social resilience at a
catchment scale
 Calling on DFI grant funding to build the business case and develop
stakeholder networks

5. CONTACT DETAILS
Jon Duncan
Head Sustainability Research and Engagement
Email: jduncan@oldmutualinvest.com
 021 5091014
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