Impact lender Caspian Debt teams up with Water.org to promote funding to MSMEs in WASH sector

Caspian Debt, the lending arm of India-focussed impact investment company Caspian has announced plans to deploy $10 million in funding by 2028 for the water, sanitation & hygiene (WASH) sector as it believes the sector to be underfunded and with immense potential for impact.

The Hyderabad-based company said it has also signed agreement with Water.org through which it is likely to increase the availability of funding for micro, small and medium enterprises (MSME) in the sector. The investment is expected to benefit around 50,000 households.

The major area of collaboration between Caspian Debt and Water.org capitalizes on the knowledge and network support of each organization to catalyze the flow of credit to the WASH sector. With the support of Water.org, Caspian Debt plans to expand its funding pipeline of MSMEs/MFIs in the water and sanitation sector.

Water.org will facilitate collaboration between Caspian Debt and banks, financial institutions, and multilateral agencies to access blended financing sources.

“Caspian Debt has been at the forefront of identifying new asset classes, and has been enabling credit to sectors like food & agriTech, clean technology and ed-tech. We aim to demonstrate that water & sanitation is a new credit worthy asset class and collaborating with Water.org is a great boost in that direction. With the combined strength of our institutions and networks, we intend to improve the flow of funds to the WASH sector. We look forward to working closely with Water.org team”, said Caspian Debt Managing Director Viswanatha Prasad.

Through the partnership, the WASH companies in the Caspian Debt portfolio will receive technical, monitoring, and evaluation support from Water.org team. Caspian Debt will also ensure that its WASH portfolio companies participate in the impact studies initiated by Water.org to improve the body of knowledge for the WASH sector.

Among the Caspian Debt portfolio companies are Ecozen Solutions Private Limited, a provider of solar-based irrigation solutions and solar-based cold storage systems for agricultural usage and Haber Water, which provides eLIXA, AI driven platforms to help companies convert raw data into actionable intelligence to reduce water wastage.

In May 2020, Caspian Debt had raised $20 million as long-term debt from US International Development Finance Corporation (USIDFC), an arm of the US government that provides finance to impact-oriented projects. The company has, since it was set up over 15 years ago, raised about $250 million across several rounds, both through debt and equity.

Over the past five years, Water.org has played a significant role in India’s progress toward improving water and sanitation, empowering more than 13.8 million people with access to safe water and sanitation. By partnering with different types of organizations, including microfinance institutions, self-help group federations, housing finance corporations, commercial banks, payment banks, social enterprises and the Indian Government, Water.org is mobilizing resources and sharing knowledge to increase access to improved sanitation and safe water.

“Water.org pioneers market driven sustainable financial solutions to address the global water and sanitation crisis. Our technical assistance and capacity building support to financial institutions like MFIs, banks, self-help group promoting institutions (SHPIs) has resulted in these institutions looking at WASH as one their mainstream product offerings to their customers. Our collaboration with Caspian strives to catalyze commercial capital into the WASH sector thereby providing complete impetus to rapid scaling of this sector in India”, said Water.org India Managing Director Manoj Gulati.