UK’s publicly owned impact investor reveals lower rate of return on investments due to focus on “doing the hardest things in the hardest places”
CDC Group, the UK’s development finance institution, today underlined its commitment to play a key role in support of the UN’s Sustainable Development Goals.
The company, which is owned by the UK government and invests in private businesses in Africa and South Asia, said leading the fight against climate change was now a major area of focus.
In the company’s Annual Review, published today, Nick O’Donohoe, the Chief Executive of CDC, said that the organisation was now fully aligned to support the creation of sustainable and resilient economies.
“As we enter the decade of action to achieve the SDGs, our focus has been on maximising the development impact of our investments – supporting the companies we invest in, to help achieve a better and more sustainable future for their countries.”
“Even amid the current pandemic, we know the climate emergency will remain the biggest global development challenge over the next decade. We know it will affect those in the counties where we invest the most.”
The company made climate finance commitments in 2019 of £230m, up from £188m in the previous year. Overall 20 per cent of CDC’s total financial commitments since 2017 have been made in climate finance.
In addition, in 2019, CDC investments were focused to support basic access to goods and services such as food, health, education and power (SDGs 2,3,4 and 7). CDC investee companies directly employ over 875,000 workers and support more than an estimated six million jobs in the wider economy.
In 2019 CDC made a total of £1.66 billion of new commitments, with net assets rising to £6.4 billion compared to £5.8 billion in 2018. The portfolio value increased to £4.7 billion compared to £4.3 billion in 2018.
Overall, the company recorded a loss after tax of £371.6m, a loss of 6.4 per cent on net assets for the year when measured in Sterling.
Over half of the loss was due to currency fluctuations between Sterling and the US Dollar.
Since 2012, CDC has indicated that returns would be lower as it focused on investing for maximum impact in some of the least developed countries in the world. Up to $1.3 trillion a year is needed to achieve the SDGs in Africa alone.
The company’s average annual rate of return since 2012 now stands at 7.4 per cent when calculated in US dollars and 5 per cent when calculated in Sterling.
CDC also publishes its Annual Accounts today which can be found here.
Read further information about the Annual Review here.
Notes to Editors
CDC Group is the UK’s first impact investor with over 70 years of experience of successfully supporting the sustainable, long-term growth of businesses in South Asia and Africa.
CDC is a leading player in the fight against climate change and a UK champion of the UN’s Sustainable Development Goals – the global blueprint to achieve a better and more sustainable future for us all.
The company has investments in over 1,200 businesses in emerging economies and a total portfolio value of £5.8bn. This year CDC will invest over $1.5bn in companies in Africa and Asia with a focus on fighting climate change, empowering women and creating new jobs and opportunities for millions of people.
CDC is funded by the UK Government and all proceeds from its investments are reinvested to improve the lives of millions of people in Africa and South Asia.
CDC’s expertise makes it the perfect partner for private investors looking to devote capital to making a measurable environmental and social impact in countries most in need of investment.