Innovative investment fund launched to accelerate access to off-grid energy solutions
Zurich, 31 March 2015 – responsAbility Investments AG, an independent asset manager specializing in development investments, is launching a new investment fund in collaboration with founding partner Shell Foundation and anchor investor IFC, a member of the World Bank Group. The fund is dedicated to providing debt financing to fast-growing companies which promote access to decentralized modern energy solutions, primarily in Africa and Asia.
Demand for off-grid energy solutions is booming. In Africa the market for solar portable lights alone has grown by 90% annually for the last four years. Innovations in business models, coupled with declines in the cost of components like solar panels, are opening new opportunities for companies to offer affordable, high-quality products that can serve the needs of over 2 bn people worldwide who lack access to reliable and affordable energy. Households in this population currently spend around USD 50 to USD 150 annually on energy sources such as kerosene or disposable batteries for torches. These new affordable and modern energy products provide a range of socio economic, health and environmental impacts to households, businesses and community services such as schools and clinics.
Lack of working capital is a key barrier to faster growth for manufacturers, importers and distributors of such solutions. These companies have difficulty to access debt financing as they usually lack the track-record and collateral required by local lenders. The new responsAbility fund will address this financing gap by providing loans typically ranging from USD 500,000 to USD 3 million to commercially viable business models in the energy access value chain.
Investors and a Technical Assistance Facility
The fund has capital commitments of approximately USD 30 million and plans to raise additional capital in the medium term in order to ensure that it is a reliable financing source for companies as they continue their growth path. Shell Foundation, a founding partner, is also a co-investor along with anchor investor IFC and other private investors including Skopos Impact Fund and The Adolf H. Lundin Charitable Foundation.
The fund is complemented by a Technical Assistance Facility, which is supported by the Swiss State Secretariat for Economic Affairs SECO. The technical assistance aims at strengthening the operational capacity of client companies of the fund in order to ensure sustainable business growth and maximize development impact.
The partners’ comments
Commenting on the launch of the new investment fund, Klaus Tischhauser, Co-founder & CEO of responsAbility, said: “In addition to representing exciting investment opportunities, these businesses significantly contribute to development. We are pleased to partner with pioneering investors for our latest fund, which, for its offering, size and pan-regional reach, is the first of its kind.”
Simon Desjardins, Portfolio Director – Access to Energy, Shell Foundation, said: “This fund is not only serving a critical need in the market but will also generate a significant economic, social and environmental impact. The fund is expected to impact the lives of nearly 20 million people in the next three years. We also look forward to the fund providing validation to the wider investor community that this market segment is indeed creditworthy.”
Alzbeta Klein, IFC Global Director of Manufacturing, Agribusiness, and Services, said: “Energy costs are a heavy burden for low-income people who do not have access to the electricity grid, both financially and in terms of the health impact. Innovative solar energy-based products can save money for consumers, create employment from manufacturing and distribution, and contribute to reduced pollution and greenhouse gas emissions.”
responsAbility Investments AG
Ulli Janett, Media Relations
Telefon: +41 44 250 67 15
E-mail: ulli.janett [at] responsAbility.com
Richard Gomes, Head of Policy and Advocacy
Telephone: +44 207 934 2627
E-mail: richard.gomes [at] shell.com ( )
Telephone: +1 202 4580387
E-mail: eprice [at] ifo.org
Liliana de Sá Kirchknopf
Head of Division Private Sector Development
Telephone: +41 58 462 19 31
E-mail: liliana.desa [at] seco.admin.ch
responsAbility Investments AG is one of the world’s leading independent asset managers in the field of development investments and offers professionally-managed investment solutions to both private and institutional investors. The funds managed by the company supply debt and equity financing to non-listed firms in emerging economies and developing countries. responsAbility currently has USD 2.5 billion of assets under management that is invested in around 530 companies in more than 90 countries. Its shareholders include a number of reputable institutions in the Swiss financial market as well as its own employees. responsAbility is registered with the Swiss Financial Market Supervisory Authority FINMA.
About Shell Foundation
Shell Foundation is an independent charity established by the Shell Group in 2000 to create and scale new solutions to global development challenges. They apply business thinking to major social and environmental issues linked to the energy sector, and deploy a blend of financial and non-financial resources to accelerate social innovation and harness private markets to deliver public benefit at scale. The Foundation works with a small number of entrepreneurial partners to identify underlying market failures behind intractable problems and co-create new social enterprises to solve them. Over the last 15 years these partners have created 35,000 jobs, improved over 22.6 million livelihoods, saved 6.2 million tonnes of CO2 emissions and secured almost USD 5 bn of investment.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than USD 22 bn in financing to improve lives in developing countries and tackle the most urgent challenges of development.
The Swiss State Secretariat for Economic Affairs (SECO) is the federal government’s centre for all core issues relating to economic and labour market policy. As part of this role, SECO's Economic Cooperation and Development Division aims to support the integration of developing countries and Eastern European transition countries into the world economy. SECO also coordinates the relationships between Switzerland and the Work Bank Group, the economic development banks and the economic organisations of the United Nations.