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Strategic

The document discusses ABC Company's strategic financial plan and sources of capital. It describes how ABC can obtain financing from impact investors like BlueOrchard, as well as green investment funds, which provide debt and equity financing while pursuing environmental and social goals. The document also discusses blended finance strategies that leverage public funds to mobilize private sector investment in impact initiatives. It outlines various financial instruments like hedging, currency options, and smart contracts that ABC could use to mitigate risks from factors such as currency fluctuations, regulatory changes, and project delays. Finally, it notes some key considerations for ABC in balancing short-term financial needs with long-term sustainability objectives.
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0% found this document useful (0 votes)
32 views17 pages

Strategic

The document discusses ABC Company's strategic financial plan and sources of capital. It describes how ABC can obtain financing from impact investors like BlueOrchard, as well as green investment funds, which provide debt and equity financing while pursuing environmental and social goals. The document also discusses blended finance strategies that leverage public funds to mobilize private sector investment in impact initiatives. It outlines various financial instruments like hedging, currency options, and smart contracts that ABC could use to mitigate risks from factors such as currency fluctuations, regulatory changes, and project delays. Finally, it notes some key considerations for ABC in balancing short-term financial needs with long-term sustainability objectives.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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STRATEGIC
FINANCIAL
PLAN
Sources of Capital
Impact Investors- BlueOrchard

- BlueOrchard provides investors around the world with premium investment solutions, including
credit, private equity, and sustainable infrastructure, as well as debt and equity financing to
institutions in emerging and frontier markets.

Investing in people and our planet

-Impact investments aim to make a tangible positive difference, for example by supporting
underserved entrepreneurs or by protecting the environment from the effects of climate change.

Positive financial returns

At the heart of our impact investment strategy is a focus on making sure that everyone benefits.
That means you should see a return on your investment, while also knowing it is adding tangible
value to a local community and the environment.
Sources of Capital
Green Investment Funds

Green investment banks are mission-driven financing institutions. They have a mandate to advance
the deployment of clean energy. They leverage their funds to stimulate private capital. They offer
products across sectors and focus on bridging market gaps. It's similar to a traditional bank because
it examines all social, environmental, and ecological concerns with the goal of protection and
conservation of natural resources and the environment. Being associated with green investment
funds enhances a company's credibility and reputation in the market. Companies that align with
environmental, social and governance principles may benefit from a lower cost of capital as
investors recognize the long-term sustainability of their business models. Green investments often
demonstrate resilience and are seen as more future-proof, attracting investors seeking both
financial returns and positive societal impact.
Financing Mix
Blended Finance

What is our strategy?

Blended finance describes a fund structure or financing model that leverages public capital. The
aim is to mobilize private sector investments so a combination of public and private investing
accelerates the expansion of impact initiatives.

How can you benefit?

Blending public and commercial funding helps de-risk your overall investment strategy as you gain
access to instruments such as guarantees, first-loss capital, and technical assistance facilities.
Financing Mix
Blended Finance

Why invest with us?

We combine an established track record in blended finance funds with being a market leader in
impact management and measurement. Leveraging strong relationships with development finance
institutions and multilateral development banks, we have brought innovative investment solutions
to market. And our regional offices give us a strong local presence across four continents.

Blended finance can utilize these diverse sources, renewable energy projects can obtain the funding
required to design, build, and run sustainable energy infrastructure. Thorough planning, stakeholder
involvement, ongoing innovation,monitoring, and reporting, and adaptation are necessary to ensure
long-term sustainability in a renewable energy project. Selecting effective technology, involving
stakeholders, adhering to rules, innovating for efficiency, and supporting communities are all
important, as is remaining flexible in the face of change.
Financial Instruments and Derivatives
Currency Fluctuations

*Hedging- protecting ABC Company against foreign exchange exposures and curtail your losses by
using currency derivatives

*Currency options and futures- helps ABC Company by making use of the short-term movements in
the market

*Currency Swap- ABC Company exchange the principal or interest of a bank or financial
institution from one currency to another.

Regulatory Changes

*Smart Contract- The market is evolving to differentiate a “smart legal contract” from a smart
contract code. A smart legal contract is a legally enforceable contract in which some or all of the
contractual obligations are performed automatically by a computer program.
Financial Instruments and Derivatives
Project Delays

*Forward Contracts A forward contract is a customized agreement between two parties to buy or
sell an asset at a specified price on a future date. In the context of project delays, forward contracts
can be used to lock in a future price for goods or services that may be impacted by the delay.

*Futures Contracts Similar to forward contracts, futures contracts obligate the parties involved to
buy or sell an asset at a predetermined price on a specified future date. Futures contracts are
standardized and traded on exchanges, providing liquidity and transparency. In the context of
project delays, futures contracts can be utilized to hedge against potential cost increases or revenue
reductions resulting from the delay.
Short-term financial needs & Long term sustainability
Financial Pressure: Short-term financial needs may prioritize cost-cutting measures that conflict
with sustainable investments, making it challenging to allocate resources for long-term
environmental initiatives.

Investor Expectations: Meeting quarterly financial expectations can lead to decisions favoring
short-term gains over long-term sustainability, especially if stakeholders prioritize immediate
returns.

Regulatory Uncertainty: Frequent changes in regulations can create uncertainty, making it


challenging to plan and invest in long-term sustainability initiatives with confidence. .

Consumer Demand: Balancing short-term profits with evolving consumer demands for sustainable
products can be complex, requiring businesses to adapt quickly without sacrificing financial
performance.
Short-term financial needs & Long term sustainability
Limited Resources: Companies with constrained resources may find it difficult to allocate funds
for sustainability projects when faced with pressing short-term financial needs.

To summarize it all, Balancing short-term financial needs with long-term sustainability objectives
can be challenging. Immediate financial pressures may tempt decisions that compromise
sustainability goals. It requires strategic planning, transparent communication, and a commitment
to sustainable practices that align with long-term objectives, ensuring both financial stability and
environmental responsibility.
Considerations, Risk & Opportunities
Key Considerations:

*ABC Company Financial Goals

*ABC Conpany Financial Situation

*ABC Company Organization Growth

*ABC Company Profitability and Sustainability

Risk:

Financial Risk- One of the primary risks in impact investments is financial risk. Just like
traditional investments, impact investments are exposed to market fluctuations, economic
downturns, and other financial risks.

Social and Environmental Risk- Impact investments are unique in that they also carry social and
environmental risks. These risks pertain to the potential negative impact on the targeted
communities or ecosystems.
Considerations, Risk & Opportunities
Liquidity Risk- Liquidity risk is also a consideration in impact investing. Many impact
investments are illiquid, meaning they cannot be easily sold or converted to cash. This lack of
liquidity can pose challenges for investors who may need to access their funds quickly.

Regulatory and Policy Risk Changes- in regulations and policies can significantly affect impact
investments. Shifts in government policies related to social or environmental issues can either
enhance or impede the success of impact investment projects.
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