The end of four decades of conflict in Colombia presents a challenge and an opportunity for rebuilding affected communities. With the signing of the Peace Accord, the Government of Colombia and international actors are encouraging private sector investment, which could channel significant resources into communities that have historically faced economic, social and political exclusion.

While significant capital will be needed to support the post-conflict rebuilding effort, it is important to focus on how this capital will be deployed and who will play a role in determining its deployment in a way that is consistent with the needs of affected communities.

In partnership with Acumen Latin America, this project evaluates existing models of post-conflict investment practices and adapts them to the Colombian context. Combined with our experience in direct engagements with communities, entrepreneurs, and investors, and building on the Transform Finance Impact Methodology, we are designing a model for investing in post-conflict areas that deliberately considers issues of power, rights, and access to resources of historically marginalized groups.

This project is supported by the Ford Foundation’s Andean Region program.

Project Goals

The project aims to create a concrete model for how capital flows can contribute to the empowerment of local communities in post-conflict regions of the world, using the current experience in Colombia as a basis for this framework. This analysis will be field-tested by investments and the creation of a pipeline of investable opportunities. The specific goals of the project will be:

  1. Develop an understanding, grounded in existing theory and practice, of how impact investing can contribute to the empowerment of local in communities in post-conflict regions of the world and relate the analysis to the current experience in Colombia. This analysis will examine the role of the state in creating the enabling conditions for this type of investing.

  2. Develop a methodological framework to diligence, measure, and manage the impact of these investments in addressing the challenges of inequality and exclusion in post-conflict areas. Based on identified best practices for investing in post-conflict regions, develop a set of investment criteria that can guide investors in identifying promising community-generated investment opportunities in post-conflict areas Colombia.

  3. Validate and adjust these practices through (1) developing proof-of-concept investments supporting community-generated investment opportunities and (2) modeling a potential pipeline of pilot projects.

  4. Create a guiding document of practices for investing in Colombia’s post-conflict regions.

Project Update

Transform finance team meets with a community-led agro-business

Transform finance team meets with a community-led agro-business

In October 2018, Transform Finance and Acumen staff underwent a field visit to visit some of the targeted areas and met with three community led agro-businesses to determine what they hoped to accomplish through their enterprise.

A common theme throughout emerged: companies don’t just provide an opportunity for income for the growers in the communities. They also establish farming as a viable way of life and create opportunities for new skills and businesses like accounting and marketing to diversify opportunities in the area and reduce the “brain drain” that is so common in areas affected by conflict.

For these projects to succeed, much of the support these farmers need are not financial. Technical support related to business plans and contract negotiations are incredibly value to these enterprises. Market linkages – both in terms of infrastructure, and in terms of commercial support – are much needed, which contrast with previous efforts by the state and international NGOs in spurring economic opportunities. The one-time grants to farmers from the government and funding for processing infrastructure and farming inputs from multi-lateral organizations have done very little in enabling such market linkages.

As expected, building and maintaining trust within the communities is a very important part of the growth of these companies. Any investor going into such areas should be very mindful of community dynamics and the traditional power structures to mitigate some of the risks associated with rural investments.

We look forward to working with our local partners in facilitating an investment model that will help these communities grow as they continue to recover from decades of conflict and exclusion.

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