Stephan Peters, Managing Director of ICFA; Credit: Kangkan Halder

Chronicle.lu recently had the opportunity to speak with Stephan Peters, Managing Director of the International Climate Finance Accelerator Luxembourg (ICFA), a non-profit public-private partnership supported by Luxembourg’s Ministry of Finance and the Ministry of the Environment Climagte and Sustainable Development, and the European Investment Bank (EIB), aimed at promoting and supporting sustainable and climate action fund managers.

Since its inception in 2018, the ICFA has supported 20 emerging fund managers and three special awards. The selected fund managers, with their key focus on climate action, are offered a two-year programme, which includes access to financial support, training on a wide range of topics, an experienced coach and other benefits.

Chronicle.lu: Could you please introduce yourself and the ICFA?

Stephan Peters: Great to speak with you and thank you for the opportunity! My name is Stephan Peters. I’m a Dutch national who’s [has] lived and worked across four continents. My professional background spans investment banking, strategy consulting and private equity investing, but I’ve been solely focused on impact investing and sustainable finance since 2016. I hold an MBA from INSEAD and I am a CFA Charter Holder. Since last year, I lead the International Climate Finance Accelerator, or ICFA in short.

The ICFA is a unique non-profit initiative, created in 2018, with the aim to support and scale innovative and high-impact climate solutions. We support first- and second-time fund managers with a focus on climate action. The ICFA is a public private partnership by private entities part the Luxembourg financial sector, with experience in impact finance, and by the Luxembourg Ministry of Finance and the Ministry of Environment, Climate and Sustainable Development.

While the ministries provide financial support and guidance to the ICFA, we rely on our private partners to provide trainings to our fund managers, assist us with fundraising efforts for our cohorts and provide us with a strong and reliable network.

Chronicle.lu: What are the main focus areas of the ICFA and how is it relevant in terms of the UN Sustainable Development Goals?

Stephan Peters: The ICFA contributes to a broad range of SDGs but we directly work on Climate Action (SDG 13), which urges to take action to combat climate change and its impacts. Climate change is already affecting every country on the planet, disrupting economies and affecting lives. Changing weather patterns, rising sea levels and changing weather events are just some of the impacts of climate change. We seek to mobilise more capital to flow to climate change mitigation, climate change adaptation, REDD+, and other climate action investment areas.

As a quick explainer, climate change mitigation aims to reduce, limit, or sequester green-house gasses. Climate change adaptation helps projects to adapt to current and future impacts of climate change. REDD+ stands for Reducing Emissions from Deforestation and forest Degradation, plus the sustainable management of forests, and the conservation and enhancement of forest carbon stocks.

We also seek to contribute to SDG 17 Partnerships For the Goals. The United Nations Sustainable Development Goals can only be realised with strong global partnerships and cooperation. We seek to bring different stakeholders, from public institutions to private investors to charitable foundations, together. By doing so, we encourage and promote the creation of initiatives and strategies that will more holistically tackle the climate crisis.

Chronicle.lu: How does the ICFA's work impact Luxembourg, both directly and indirectly?

Stephan Peters: We contribute to building a more sustainable world by leveraging Luxembourg’s unique strengths and enhancing them further by fostering climate finance. We seek to enhance the financial ecosystem by creating an attractive and supporting environment for climate fund managers in Luxembourg. The ICFA’s private partners play an outsized role in this by sharing their expertise with the fund managers we support, and by developing specialised knowledge around climate finance.

Chronicle.lu: What kind of support has the ICFA provided to fund managers seeking to launch a climate fund? 

Stephan Peters: Selected fund managers are provided five full days of training with our partners over the course of a year, on topics like legal structuring, fund distribution, and impact measurement and management. We also match them up with a coach, typically an experienced fund manager or former executive active in the impact investing space, who will dedicate time to provide advice and feedback to the fund manager. A selected fund manager is further given access to a support envelope of €80,000 to be used to set up and develop their fund as well as a working capital facility of €200,000 to be used for fundraising, marketing, team development and so on.

Chronicle.lu: How does the ICFA achieve gender equality (SDG 5) and reduce inequalities (SDG 10) through the winning cohorts of fund managers?

Stephan Peters: These SDGs are cross-cutting and, despite not being our direct focus, they play an important role when we select fund managers. During our selection process, we already assess all the applicants on their ability to address these SDGs. We actively work with the fund managers in our training sessions to build their knowledge and understanding around diversity, inclusion, and equality, and help them design and implement policies to reduce inequalities in the communities they will be active. Looking across our cohorts, many have embedded various social SDGs as direct or indirect objectives as part of their investment and impact strategy. For many of our fund managers, climate change mitigation or adaptation remains their main focus, but many also recognise the importance of social sustainability and everyone’s right to live in dignity and prosperity.

An example of this would be Enabling Qapital and their Spark+ Africa Fund. They launched in partnership with twelve development finance institutions, foundations, family offices, and pension funds as the world’s first impact fund financing clean and modern cooking solutions in developing markets. Through their investments, they aim to keep families safe and healthy, save them time and money but also have a whole range of societal benefits including health benefits for women and children, greater gender equality, reduced greenhouse gas emissions and deforestation, and industrial and economic development.

Chronicle.lu: What are the next major goals for the ICFA in near and long term?

Stephan Peters: In the near-term, we are working hard to improve all aspects of our initiative – operations, people, administration, relationship management, our selection process and finally improve our marketing.

In the long-term, we are seeking to build up our network of strategic partnerships with public institutions, development financial institutions, funds-of-funds, private banks, family offices, foundations and other industry initiatives.

We are also keen to align our target areas with the EU Taxonomy’s six objectives by formally including the sustainable use and protection of water and marine resources, the transition to a circular economy, and pollution prevention and control. While we already cover climate change mitigation and climate change adaptation, we also want to move beyond REDD+ into the protection and restoration of biodiversity and ecosystems.