Greetings Agents of Impact!
In today’s Brief:
- Off-grid energy’s high marks
- AI-driven adaptation
- Export-Import Bank’s fossil folly
⚡ Hop on today’s Plugged In: Tech equity in action. Google-backed Tech Equity Collective is working to double the number of Black developers in tech by 2030. Tech Equity Collective’s Rachelle Olden joins ImpactAlpha’s Sherrell Dorsey on the next Plugged In, today, March 13 at 10am PT / 1pm ET / 5pm London. Join Live on LinkedIn.
Featured: Energy Access
The path to universal energy access is local, inclusive and women-led. In Zimbabwe, Agriput Solar leverages a network of local women to sell solar home products in rural communities. Women-led Grean World in Ethiopia employs “village level entrepreneurs” as sales agents for its home solar and clean cooking offerings. Oorja Solutions in India co-designs its solar-powered irrigation, milling and cooling products with its smallholder farmer customers. Such locally- and women-owned clean energy companies aren’t appearing in big ticket investment news headlines (yet). But they’re having an outsized impact on global energy access. Two-thirds of customers of locally-owned off-grid energy companies report an improved quality of life, compared to 53% of off-grid energy customers overall, according to “Why off-grid energy matters: 2024,” a new report from 60 Decibels.
- Happy customers. Locally-owned companies reach more women and very low-income people, and are key to bringing energy access to the more than 660 million people worldwide that lack reliable energy. Women-led companies have a particularly strong impact record in terms of customer satisfaction, financial health and inclusive access. Investors should take note, 60 Decibels’ Kat Harrison tells ImpactAlpha. “Customer experience is such a good temperature gauge of a viable business model and traction in the market,” she says. 60dB, an Acumen spin-out, has been tracking the impact of off-grid energy, financial services and other emerging market products and services for more than decade.
- Investment blind spots. Expat and male-led companies d.light, Sun King, Bboxx have built the off-grid energy market and brought in billions of dollars in debt and equity for energy access in emerging markets (see, “Big Solar: D.light securitizes customer loans as incumbents consolidate off-grid energy market“). Just 1% of off-grid solar industry investments go to women-led companies and 5% to locally-owned companies. As larger energy companies face investor pressure to move upmarket, local and diverse-led companies will be crucial to reaching the most underserved markets and demographics, says Harrison.
- Small is mighty. Solar lanterns may no longer be novel, but they remain the most beloved off-grid energy product. Of the 3,000 solar lantern customers 60dB surveyed, 94% percent reported quality of life improvements because of the product, and more than half report improvements in family health and income. “Investors are pushing companies away from cheaper, lower-spec, lower-margin products, but doing that means leaving a lot of people behind,” Harrison observes. “One of the solutions to affordability or over-indebtedness is having more affordable products that people can start with.”
- Keep reading, “The path to universal energy access is local, inclusive and women-led,” by Jessica Pothering on ImpactAlpha.
Dealflow: Adaptation Tech
IBM commits $45 million for AI-powered climate resilience solutions. Startup accelerators backing early stage, AI-driven solutions to making cities safer, more resilient and sustainable aren’t new (see, “Urban-X aims to accelerate startups using AI to reengineer cities”). But few have the capabilities of tech giant IBM, which is looking to scale government and nonprofit-led projects for urban climate adaptation and resilience in underserved communities around the world. Two-thirds of the world’s population is expected to live in urban areas by 2050. The IBM Sustainability Accelerator will support five projects this year, which could benefit from IBM’s AI and cloud computing technologies in order to “transform the cities we live in, and to deploy solutions that harness the potential of artificial intelligence to build a more resilient future,” said IBM’s Justina Nixon-Saintil.
- Global portfolio. SIBM’s accelerator has backed 15 global projects driving sustainable agriculture, clean energy and water management. The latest cohort included the University of Sharjah in the United Arab Emirates, which is building an application to forecast water access conditions in the parched region. IBM supported backed the Japanese city of Miyakojima’s plans to develop a microgrid, and Sustainable Energy for All’s work to model future energy needs. Applications for the new cohort are open through April.
- Check it out.
IFC extends $20 million to Burundian bank to bolster small business lending. The International Finance Corp. and a group of institutional investors have extended a $20 million loan to Banque de Crédit de Bujumbura to expand access to financing for thousands of small and informal businesses in Burundi. Half of the funding is earmarked for female entrepreneurs. Burundi is one of the poorest countries in the world, with 71% of the population living below the poverty line. Burundi’s small businesses face a $491 million financing shortfall. BCB is receiving an additional $5 million from IFC’s global trade finance program to support lending to local exporters and importers.
- Bridging the gap. The investment is part of the IFC’s $1 billion Base of the Pyramid strategy to address the small business financing gap in emerging markets. The investment, said Mary Porter, will provide them with “better access to the funding they need to grow and create jobs.”
- Share this story.
Dealflow overflow. Investment news crossing our desks:
- UK-based Ada Ventures raised $80 million for its second fund for early stage, diverse-led ventures driving climate equity, healthy aging and economic empowerment. (Ada)
- TowerCo of Africa secured $40 million from the European Investment Bank and other development financial institutions to expand mobile network coverage in rural Uganda. (TOA)
- Konexa snagged $18 million from Climate Fund Managers and Microsoft’s Climate Innovation Fund to launch its energy trading system and connect Nigerian Breweries to the grid. (APEN)
- Nonprofit Finance Fund secured $1.5 million from the Mellon Foundation to document stories from communities of color and low-income and rural communities, which are underrepresented in historical records. (NFF)
Impact Voices: Climate Finance
US Export-Import Bank bucks the green finance agenda – to its own detriment. It was just a few months ago that global leaders wrapped up the COP28 climate summit promising to transition away from fossil fuels. In the US, the Biden administration has hit pause on liquified natural gas exports as part of an ambitious climate agenda. The US Export-Import Bank did not get the memo. The agency, which extends credit to derisk export projects that create American jobs, is considering a more than $100 million loan to support 400 oil and gas wells in Bahrain. A vote is expected tomorrow. “Should the US government really be allocating public funds to support oil drilling in the Middle East?” Igor Shishlov of Perspectives Climate Group and Tawanda Mutasah of Oxfam America ask in a guest post on ImpactAlpha.
- Climate laggard. Despite a requirement to allocate 5% of its funding to renewable energy, efficiency and storage, the Export-Import Bank, or ExIm, has committed just 1.3% of its authorizations to environmentally beneficial projects, according to an Oxfam and Perspectives Climate Group analysis. A mere 0.2% has gone to clean energy. In contrast, Denmark’s export credit agency has dedicated at least $1 billion, or 75% of its portfolio, to green energy initiatives annually since 2015. ExIm recently approved a $100 million loan for a fossil fuel project in Indonesia, where the US is funding a Just Energy Transition Partnership, and $400 million to support US methane gas exports. It is mulling multi-billion dollar fossil fuel projects in Papua New Guinea, Guyana and Mozambique.
- Calls for reform. Shifting ExIm’s portfolio to renewables “would greatly boost the competitiveness of the American clean tech companies against rapidly rising Chinese competition” and the creation of good jobs, write Shishlov and Mutasah. “The choice for ExIm and similar institutions is clear: adapt and lead in the transition to a sustainable global economy, or remain tethered to outdated practices that jeopardize their relevance and the health of our planet.”
- Read their full post.
Agents of Impact: Follow the Talent
👋 Next Week’s Call: The Great Deployment runs through the muni bond market. Join Calvert Impact Capital’s Beth Bafford, Growth Opps’ Michael Jeans, and other Agents of Impact on the next Call, Wednesday, March 20 at 10am PT / 1pm ET / 5pm London. RSVP today. Catch up on ImpactAlpha’s Muni Impact coverage, made possible with support from the Robert Wood Johnson Foundation.
Hannah DeAlto, formerly with One Earth Future Foundation, joins Impact Charitable as controller… Jonathan Rose Companies promotes Brandon Kearse to partner and Carolyn Au to chief operating officer… Oogway Capital’s Hanson Gong joins the Center for Sustainable Finance and Private Wealth North America as a board member… Mission Driven Finance is hiring an investor relations director, a fund services manager, and a senior director of business development and partnerships… Opportunity Finance Network is recruiting a climate-focused senior investment officer… ICA Fund is looking for an investment manager.
Latimpacto seeks a country manager in Mexico… The European Investment Fund has an opening for an investment analyst in Luxembourg… The National Community Reinvestment Coalition will host the Just Economy Conference in Washington, DC, April 2-4… Calvert Impact launches its biennial “Impact Investor Survey,” a 5 minute survey about what motivates investors and what challenges prevent them from investing for impact.
👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.
Thank you for your impact!
– March 13, 2024
