8 social venture funds that invest in India’s clean energy sector
On July 30th and 31st, India suffered the world’s biggest blackout, which left more than 600 million people without power, leaving the government shamed. Despite being the world’s second most populous country, its share in world energy consumption stands at a meager 4.2%, The International Energy Agency (IEA) estimates that India needs an investment of at least $135 billion to provide meet the energy needs of its population. However, it has a significant renewable energy power generation potential; solar energy is a source with the highest attractiveness in the country, and is among the 15 most attractive countries for renewable energy.
Despite an increase in the installed capacity of power through conventional energy sources and the National Solar Mission launched in 2010, India is energy-deficient. About 400 million people have no access to the power grid and therefore rely on kerosene, which is hazardous to health and releases tons of carbon dioxide in the atmosphere. Energy access is poorest in remote and rural areas: overall electricity access of rural households has increased from 36% in 1994 to only 56% in 2011. However, electricity access is limited even in electrified villages due to inadequate generation and distribution infrastructure. Ensuring a lasting supply of clean energy becomes a prime requirement to promote inclusive growth. The good news for the country is that its energy needs can perhaps be fully met entirely by solar and other renewable sources.
In the past few years there has been a proliferation of social enterprises adopting a variety of business models in the clean energy sector. Mainly they sell devices that meet basic lighting and cooking solutions, household energy systems and off-grid energy solutions delivered to large communities. 25 per cent of social enterprises surveyed in Intellecap’s 2012 social enterprise landscape report were in the energy sector and had the highest growth compared to other sectors. Investment in India’s renewable energy sector was down by 45 per cent in 2012 to $6.85 billion compared to the $13 billion in 2011 according to the Global Trends in Renewable Energy Investment 2013 report.
We look at eight investment funds that have invested in this sector:
Acumen: Acumen is a non-profit venue that raises charitable donations to invest in companies, leaders, and ideas to serve low-income population. Acumen started investing in energy in 2007 and has reached up to USD 12 million in innovations in energy worldwide, impacting tens of millions of lives. In India, they have invested in D Light, Avani Bio Energy, Husk Power Systems and Orb Energy, with a total investment of USD 5 million.
Bamboo Finance: Along with Oasis Fund since 2007, this commercial investment firm is dedicated to empowering low-income communities with access to essential services, products and opportunities that improve their quality of life. Bamboo Finance joined forces with Ashoka and the Canopus Foundation to launch the solar energy fund “Solar for all”. This global initiative aims at making solar energy affordable to the 1.4 billion people worldwide who are without access to electricity.
Ennovent: Ennovent is an innovation accelerator working with entrepreneurs, mentors, investors, foundations, NGOs and companies to accelerate innovations for sustainability in low- income markets in developing countries. Their Impact Investment Holding (IIH) offers an opportunity to make a sustainable impact at the base of the pyramid in India while generating financial returns for investors. They have made an investment in Barefoot Power, which manufactures and distributes lighting products, solar phone charging and business development services specifically for low income populations.
Invested Development: Invested Development funds startups that are committed to reducing poverty in underserved markets through innovative alternative energy, agricultural technology, and mobile technology. Out of 13 investments made by them around the world, two are clean energy focused social enterprises in India: Simpa Networks and Promethean Power Systems.
LGTVP: part of the The Liechtenstein Global Trust (LGT), group of the princely House of Liechtenstein, the LGT Venture Philanthropy supports organizations with outstanding social or environmental impact, providing financial intellectual and social capital to supported organizations. Striving to increase the sustainable quality of life of less advantaged people, LGTVP have made an investment in Husky Power Systems, which brings electricity to rural areas in North India that lack access to power.
The Accelerator: in partnership with First Light India Ventures and Shell Foundation, The Accelerator provides high level of technical and business development assistance to entrepreneurs that are improving access to modern energy services in under-served markets. They afford energy provision, innovative solutions to improve energy efficiency and find solutions that enable the energy eco-system. Three social ventures which they have invested in are Promethean Power Systems, ER (Excellent renewable) and Anthro Power.
Unitus: Unitus Group has positively impacted more than 20 million families living at the base of the economic pyramid. Out of 53 investments made by Unitus around the world – 39 are made in India – one has been made at the renewable enery sector: Simpa Network, a venture-backed technology company which makes modern energy simple, affordable, and accessible for everyone.
Ventureast: Ventureast is a pioneering indian VC fund manager. They invest in innovative businesses across multiple sectors, and have enabled over 60 businesses in Technology, Life Sciences and emerging sectors to become leaders in their individual spaces. Two clean energy-focused which they have invested are Bharat Light and Power and Intelizon Energy.
Picture courtesy: www.commodityonline.com
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