What’s the big IDEA? A $25 million fund to connect Appalachia

Partnering with Appalachian Community Capital to accelerate broadband access

What’s the big IDEA? A $25 million fund to connect Appalachia

Today, we’re excited to announce that Connect Humanity and Appalachian Community Capital are partnering to raise a $25 million fund Investing in Digital Equity in Appalachia (IDEA). The fund will make investments to help bridge the digital divide across the Appalachian region, one of the least connected parts of the US.

Through this partnership, Appalachian Community Capital and Connect Humanity will also be focusing on developing opportunities and the capacity for local capital to invest in local infrastructure, including supporting a community of local Community Development Financial Institutions (CDFIs), banks, impact investors, and foundations investing to achieve digital equity across Appalachia.

IDEA builds on the work of Connect Humanity’s Appalachian Digital Accelerator, which, with the support of the Appalachian Regional Commission, will support 50 of the least connected communities in Appalachia to develop robust plans to build broadband networks that set families and businesses up to thrive in a digital economy. The comprehensive plans developed through the Accelerator will also help to evaluate and derisk follow-on investments.

Once those plans are developed, the next step is ensuring that sufficient capital is available to implement them and build a new generation of solutions to connect Appalachia. IDEA will help turn many of these communities’ plans into a reality.

Appalachian Community Capital, a CDFI with 33 members who have deep roots in the region, a track record of lending to over 100 local businesses, and a mandate to promote economic opportunity in Appalachia, is uniquely placed to partner to raise this fund and help grow a community of funders in the region ready to invest in digital equity.

Demonstrating community broadband is investable

The first phase of the partnership will focus on raising and deploying the $25 million IDEA Fund  to help finance new broadband networks in unconnected and underserved areas in Appalachia, primarily in communities participating in the Appalachia Digital Accelerator. CDFIs and other investors will have the opportunity to participate directly in IDEA Fund or as capital partners on individual projects.

Currently, the community-focused internet service providers (ISPs) that are best placed to connect underserved communities in Appalachia, and that are consistently delivering the fastest speeds at the lowest prices across the country, frequently lack access to sufficient capital. IDEA will fill this gap, providing capital in sizes and on terms that set networks, and the communities they serve, up for success. In doing so, we also intend to demonstrate the viability of investing in both these types of small and medium ISPs and in low-income Appalachian communities that large telecom operators have largely ignored.

Growing a community of digital equity investors

Alongside IDEA’s work to build the confidence among investors that community broadband is a good investment, Appalachian Community Capital and Connect Humanity will collaborate to grow a community of investors deploying capital for digital equity in underserved communities, including developing a technical assistance program to support Appalachian CDFIs to make investments directly in digital equity and this emerging asset class of community-focused ISPs. Connect Humanity, through the IDEA Fund, is committed to ensuring our related underwriting and due diligence materials are publicly accessible to make it easier for local CDFIs to participate. In time, we hope to see community broadband investments become a key part of CDFIs’ portfolios.

Both of our organizations believe strongly in the power of CDFIs to spur local economic development through local capital. In partnership with ACC and CDFIs in Appalachia, we can collectively unlock millions, if not billions, of dollars to connect the unconnected. With Federal Broadband, Equity, Access, and Deployment program (BEAD) funds projected to only meet 30% of the current need at best, this is the kind of capital injection we need to build the broadband networks that can secure fast, affordable connectivity for all. And it starts with an IDEA in Appalachia.

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