Voices from the USAID Finance and Investment Network: Unitus Capital
Unitus Capital is a boutique investment and advisory firm that helps businesses scale and positively impact society and the environment. In this interview, Richa Natarajan, a Director at Unitus Capital, discusses India’s WASH sector, the importance of collaboration, and the human impact Unitus Capital seeks to achieve through its work with USAID INVEST.
By Carolanne Chanik, INVEST Communications Coordinator
The Sustainable Development Goals (SDGs) were adopted in 2015 as part of an urgent call to end longstanding poverty and inequities. The collection of 17 audacious and interlinked global goals, meant to “achieve a better and more sustainable future for all,” are intended to be met by 2030. However, with that deadline now only 10 years away, government officials and development professionals from around the world are noting the staggering difference between the amount of capital necessary and the public capital available to achieve these changes.
India, for example, faces a $291 billion funding gap for SDG Six — clean water and sanitation for all. “The water, sanitation, and hygiene (WASH) sector in India is facing several structural challenges,” explains Richa Natarajan, a Director at Unitus Capital, a boutique advisory and investment firm offering debt and equity to socially-mind companies, headquartered in Bangalore, India. “The sector is struggling with a lack of access to finance and working capital, payment delays, and regulatory challenges — all of which dissuade private sector engagement and lead to a heavy reliance on public sector efforts. We hope to change that by providing a clear and thorough look at the barriers, so the private sector will reengage and help narrow the funding gap.”
Natarajan and her team at Unitus Capital are working with USAID India and INVEST to develop an analysis of India’s WASH sector. The Mobilizing Private Investment for Development: USAID/India WASH Opportunity Analysis will explore private sector engagement (PSE) opportunities and financial instruments for more efficient delivery of WASH goods and services across India. The Analysis will use both desk review and primary research to help USAID India identify its overall approach to PSE in the sector and identify financial instruments and services to help mobilize capital. “This will help the Mission to better understand the regulatory environment across India, as well as the supply and demand factors, financing sources and uses, and opportunities and constraints,” states Natarajan.
Undertaking a research project of this scope is no small feat, however. To help supplement efforts, Unitus is working with partner SATTVA — a consulting firm dedicated to delivering social impact. “Our skillsets are complimentary,” explains Natarajan. “SATTVA brings deep sectoral expertise and an understanding of the regulatory environment in the WASH sector, while Unitus brings the financial expertise necessary to understand viable business models and financial solutions. Together we can take a more rounded approach than if either of us were working alone.”
As with the other SDGs, the opportunity for human impact related to India’s WASH sector improvements is substantial. “We’re looking at a better quality of life and enhanced living conditions for millions of people living in low- and middle-income communities,” explains Natarajan. Innovation driven by the private sector and supported by public entities can grow an industry that’s been hindered by tariff controls and stagnant policy reform. “Through this project with INVEST, we feel that innovation can be accelerated by identifying and creating new financing instruments to open up the field to private sector players. The human impact can be significant.”