Efficiency for Access Coalition and Acumen Create Investor Network to drive capital towards productive uses of energy
The Efficiency for Access Coalition and its newest member Acumen have partnered to create the Efficiency for Access (EforA) Investor Network, a group of over 15 leading, like-minded investors that have expressed interest in making investments into energy companies focusing on productive use, but want to gain more insights into the market first.
As the off-grid solar market continues to grow and evolve, off-grid appliances and light industrial equipment will be increasingly important. The off-grid fan market is $500 million; the off-grid refrigeration market is $1.1 billion; global demand is high and efficiency improvements are promising. However, many productive use technologies, ranging from cold chain solutions to water pumps, are far from commercial viability. Often, little to no data exists regarding the relative quality and performance of a given technology, how accessible products currently are for customers, and what companies are positioned for success. Despite investor eagerness, without access to such key information, the market will struggle to scale.
The EforA Investor Network seeks to break down those barriers so that investors can pinpoint where the off-grid appliance market needs to further mature and where its capital can be catalytic. The goal of this network will be three-fold: (1) for debt and equity investors to gain market intelligence, (2) build an investable pipeline; and (3) allow investors to ask more technical questions about specific technologies during their due diligence.
“The impact investment community wants to find new technologies and business models and learn how customers can benefit from this next wave of off-grid appliances,” said Leslie Labruto, Global Energy Lead at Acumen who announced the formation of the Investor Network last month in Kigali at the Unlocking Solar Capital: Africa. “We are excited to expand to larger-scale productive use appliances like solar water pumps and refrigerators, where very little objective market intelligence currently exists.”
Productive use companies that are showing good customer traction, strong performance track records and financing mechanisms to put their products within reach of low-income customers will need investment capital to reach true scale. Both equity and debt will be required to fund and scale core operations and finance inventory, respectively, which is where the EforA Investor Network will offer a shortcut for promising companies to access capital.
As the distributed energy sector acknowledges productive use as the next frontier, investors are joining the movement to bring these technologies within reach. Together, Acumen and the Efficiency for Access Coalition hope to ultimately stimulate the flow of risk capital from investors to entrepreneurs.
Efficiency for Access Coalition
Efficiency for Access first kicked off in 2015 as a year-long call to action and collaborative effort led by Global LEAP & Sustainable Energy for All. Now, a number of donors have joined together under a scaled-up Efficiency for Access – a coalition promoting energy efficiency as a potent catalyst in global clean energy access efforts. Coalition programmes aim to scale up markets and reduce prices for super-efficient, off- and weak-grid appropriate products, support technological innovation, and improve sector coordination. Current Efficiency for Access Coalition members have programmes and initiatives spanning three different continents, 26 countries, and 19 key technologies. The Efficiency for Access Coalition is coordinated jointly by CLASP, an international appliance energy efficiency and market development specialist not-for-profit organization, and UK’s Energy Saving Trust, which specializes in energy efficiency product verification, data and insight, advice, and research.
Acumen is a nonprofit global venture fund. Acumen invests in early stage companies tackling poverty. Since Acumen’s first energy investment in 2007, Acumen has invested $22.3 million across 21 companies. These companies have raised $210 million in follow-on capital. Over 85 million lives have been impacted across 60+ countries in sub-Saharan Africa and South Asia. In 2017, Acumen launched the Pioneer Energy Investment Initiative investing in, supporting, and scaling innovative energy companies providing access to electricity in the poorest markets.