Welcome to September, Agents of Impact!
Outages in Louisiana make ‘resilience’ the watchword as electricity grids are rebuilt. When Entergy Louisiana was looking to replace an aging power plant a few years ago, local citizen groups urged the utility to add distributed, renewable energy that could provide a measure of resilience and reduce carbon emissions that are intensifying storms in the Gulf of Mexico. The utility rejected those calls, and even hired actors carrying pro-gas signs to pack a city council meeting. Instead, Entergy built a $650 million natural gas power plant that it promised would provide local backup to long-distance power lines in case of an outage. As it happens, Entergy’s new gas power plant remains offline as New Orleans passed its third day without power; Hurricane Ida knocked out all eight of the city’s long-distance transmission lines. “It shows the folly of this central-station kind of model,” Daniel Tait of the Energy and Policy Institute told ImpactAlpha. “Customers are paying over and over and over again to keep replacing the same thing.”
The falling costs of solar power and battery storage are most often associated with the reduction of climate change-inducing greenhouse gas emissions, which have intensified natural disasters like hurricanes and wildfires. But it is these technologies’ resilience to such disasters that may drive the adoption of a more distributed system of electrical generation and storage. Clean energy microgrids built by commercial and industrial customers, and even municipalities and other government entities, combine solar, storage and other backup energy. During normal operations, they feed the grid and save customers money. Perhaps even more importantly, they can sustain local electrical service when the grid goes down. “Resiliency-based revenue models can actually be more underwriteable,” says Spring Lane Capital’s Rob Day. “They’re effectively an insurance plan.”
Keep reading, “Outages in Louisiana make resilience the watchword as electricity grids are rebuilt,” by Amy Cortese on ImpactAlpha.
- Grid resilience dealflow. Breakthrough Energy Ventures backs Reactive Technologies to help network operators and energy storage developers assess grid stability. Last week, Apollo backed FlexGen with $150 million to expand grid energy storage.
- Catch up on all of ImpactAlpha’s coverage of climate finance.
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Investors plug into the electrification supercycle. What’s a unique way to play the popular electrification theme? A new angle for investors.
Dealflow: Off-Grid Energy
Energy Access Relief Fund attracts $68 million from public and private investors. Off-grid solar and other energy access companies with razor-thin margins in tough markets face a liquidity crisis. COVID-19 has disrupted supply chains, interrupted sales and frozen capital markets, Acumen’s Sarah Bieber told ImpactAlpha. One-third of off-grid solar lighting companies reported sales decreases of more than 50% in the second half of 2020. The Energy Access Relief Fund, a blended finance vehicle created by Acumen with CDC Group, the U.K.’s development finance institution, has deployed 11 short-term loans. Without the capital, many companies might have paused operations or permanently closed their doors, “which would disrupt energy access for customers at a particularly difficult time,” said Asad Mahmood of Social Investment Managers and Advisors, the fund’s manager.
- Catalytic capital. The fund has aims to raise up to $80 million. A first-loss grant cushion from private foundations and government donors, along with a portfolio guarantee from the Swedish government, secured a $30 million investment from the Green Climate Fund and helped bring in development finance institutions. Acumen itself has committed $500,000. The investment consortium also includes the IKEA, Shell and Rockefeller foundations, U.K. Aid, USAID, the International Finance Corp. and World Bank Group, Swedish International Development Cooperation Agency, Power Africa and others. The partnership, says Beiber, “required collaboration across governments, philanthropic donors and private capital providers.”
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Logistics company RubanBridge secures early funding to bring products and jobs to rural India. The explosion of emerging markets e-commerce platforms and services largely benefits urban consumers. Bangalore-based RubanBridge is building an e-commerce platform called 1Bridge to serve India’s 850 million-strong rural population. The five-year-old company trains and hires rural youth and informal kirana shop owners to help villagers complete shopping and personal financial transactions online. They also collect information on consumer preferences to build 1Bridge’s catalog. RubanBridge partners with major logistics companies like Amazon and Flipkart for last-mile delivery.
- E-commerce investment. Netherlands-based impact investor C4D Partners led RubanBridge’s $2.5 million funding round. KAAJ Ventures and several angel investors participated. Separately, Delhi-based Kirana247, a woman-led company, raised $1 million to expand its network of small warehouses and inventory delivery services for thousands of urban kiranas.
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Australia’s Giant Leap raises $15 million for second impact fund. The venture firm, launched in 2016, is a spin-out of Melbourne-based Impact Investment Group. Its $15 million first fund, raised in 2018, has invested in 19 early-stage companies in waste and cleantech, sustainable agriculture, medical tech, health and wellbeing, and education. Raising Giant Leap’s first fund took two years, said Giant Leap’s Will Richardson. The second vehicle hit its mark in four weeks due to growing demand for impact investments, he added. Giant Leap’s second fund received commitments from returning and new investors, including insurance company QBE and several high-net-worth investors.
- Clean and wellbeing. Giant Leap’s existing portfolio includes Sendle, a low-carbon delivery company for small businesses; Work180, which connects women with workplaces with a proven commitment to gender equality; food waste management company Goterra; and health motivation startup Perx Health.
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Dealflow overflow. Other investment news crossing our desks:
- Bamboo Capital’s ABC Fund invests $4.7 million in Bolivian microfinance institution Centro de Investigación y Desarrollo Regional to support lending for smallholder farmers.
- Massachusetts-based MeetCaregivers raises $1 million to match seniors with home health aides, nurse’s assistants and other caregivers.
Agents of Impact: Follow the Talent
Kavita Nandini Ramdas, ex- of the Open Society Foundations, will be the new president and CEO of The Nathan Cummings Foundation… Ashleyn Przedwiecki, Monica Jones, Chou Moua and Katelyn Retterath Martin are among nine social entrepreneurs selected for the FINNOVATION Lab fellowship… Sarona Asset Management is hiring a senior impact associate.
Greentown Labs is hosting “The IPCC report’s call to action,” with Dan Goldman of Clean Energy Ventures, Taj Eldridge of Include Venture Partners, Christina O’Conor of Congruent Ventures, and Greentown Labs’ Ryan Dings, Thursday, Sept. 9… KingsCrowd is hosting “State of the online private markets happy hour,” with Jonny Price of Wefunder, Krishan Arora of Arora Project, and KingsCrowd’s Chris Lustrino, Thursday, Sept. 23.
Thank you for your impact.
– Sept. 1, 2021