Smart Villages WorkshopApril 28, 2017

Impact Investing in Solar

Expanding opportunity

for people living in poverty

MISSION AND MODEL

Families in Poverty

Social

Enterprises

High-impact

products &

services

Impact

Investments

Investors

Donors

$225 million in impact investments with 101 partners in Latin America and East Africa.

CHALLENGE

STATEMENTWHO IS SERVED

WHAT IS

DELIVERED

WHY IS THIS

IMPACTFUL

HOW IS THIS

SUSTAINED

Roughly 1.2 billion people worldwide have no access to electricityand spend an estimated $27 billion annually on dangerous alternatives. GP aims to improve the economic position and quality of life of off-grid households by investing in manufacturers and distributors that provide access to quality, low cost solar lights and home systems.

Target demographic is off grid populations, many of whom live on less than $3.10 a day.

Solar productsthat offer choice with afocus on:• Solar lights• Solar light

with charging• Small solar

home systems (SHS)

Household economics and quality of life improve due to:• Reductions in

fuel and phonecharging costs

• Increased productivity

• Decreased smoke from kerosene

• Increased study time for their children

Client pays for the product upfront orpay-as-you-go. Once paid off, the solar light products create savings compared to spending on kerosene or candles

SOLAR INVESTMENT INITIATIVE

LESSONS LEARNED

• Large reach working with manufacturers and large distributors• Organizations excelling at section of the value chain, while branching

out through partnerships, from perspective of GP’s capital (debt)

• Pay-As-You-Go is a socially and financially appealing model• Positive household impact: Reduced up front cost provides access to

lower income families while enhanced features provide more value • Strong financing structure: Ability to lock and reclaim system reduces

portfolio risks by lowering risks associated with lending

• When clients have access to solar product, there is high demand• Market study (n=400) in Nicaragua showed 50% of respondents wanted

large home system, though ability to pay was low• 42% wanted combination of portable and plug systems, 100% adoption

CHALLENGES

• Lack of investor attention leads to fewer solar enterprises developing• Focus on solar in Africa and Asia over need in rural Americas

• Small solar distributors in Americas have limited reach due to small size but do not qualify for larger investor financing that would help growth• Other lenders and earlier stage capital are not yet filling the gap.

• MFI adoption slower in Latin America and reach is limited to client base, risk of over indebtedness

• Generics from copycats in China can create market spoilage, though uncommon in the Americas

POSITIVE DEVELOPMENTS

• Opportunity to build energy ladders to increase rural incomes• Solar, particularly PICO and small home systems, is household product • Focus on larger systems for productive use in the future (i.e.

Refrigerators for produce, charging barbers clippers)• Rural businesses can increase their income by reducing the costs of

energy and free, rechargeable energy

• Decreasing cost of solar components: Cheaper photovoltaic panels, batteries and LED bulbs continue to speed adoption and increase access.

• Charging solutions for mobile phones continues to spur growth

• Some increasing investor focus and enterprises overcoming pioneer gap

THANK YOU