 Okay, so welcome to our panel on renewable energy for Africa. If I can ask you there at the back to either come and take your seats and join us. Okay, thanks. Thanks, Michael. That's right. So thank you very much for joining us today to talk about renewable energy for Africa, moving from talk to action. My name is Aria Green. I'm the Chief Strategy Officer for Gigawatt Global, a renewable energy platform for Africa. I actually attended with some of the members, my friends here on the panel, SOCAP last year and Davos in February and also the Milken Institute conference. And here we are again at SOCAP and I know that we all have attended all sorts of conferences talking about the very, very important issues that here at SOCAP we're addressing also, whether it's poverty, health, education, and of course, access to energy. And I will share with you in one word of introduction why we're sitting here today. And that is, well, in a word, frustration. I want to keep us very positive. This is the only negative thing I'm going to say from beginning to the end. But for years now, the world community has been talking about creating mechanisms to bring more energy, access, more electricity to the poorest regions of the world. And there's been a lot of talk and we've all been involved in that. And talk is good because talk usually can or should lead to action. But the frustration that many of us in the field, funders, NGOs, companies, banks, and activists feel is that we've spent a lot of time talking about and creating the drive and the interest in promoting more energy access, especially in the developing nations and especially in the continent of Africa. And too little has actually been done. Now, turning to the positive side of the scale, there is a lot being done now. I'm sure many of you are familiar with the Green Climate Fund that just announced a billion dollars in funding of different projects across the world, including some actual projects to bring energy to Africa. Many of the projects are more in creating awareness and climate change resilience and other programs. But the fact is there is interest and there is action. But there's not enough. And so we created this panel to try and address the pressing need for real action beyond just the talk. And so I'm going to stop talking and turn to our panelists who are leaders in actual activities, funding NGO, advising and consulting and building the kind of energy infrastructure that's needed to alleviate the poverty, malnutrition, educational issues, promote women's empowerment, et cetera, throughout Africa. I'm not going to introduce them altogether. I'm going to turn to each of them one by one and at that point I will introduce them so we can maximize our time together. I'm going to be relatively assertive, as I've shared with you as my friends, to keep us each to five minutes of opening remarks and then two minutes of response to the remarks that have been shared and then a full, at least 30, if not 40 minutes of discussion with you who've come here, who've expressed interest by being here with us in these particular issues. So I'd like to start, please, with you, Matt. Matt Patsky heads the Trillium Asset Management in Boston, in Boston, Massachusetts. The firm has been deploying capital into impact investing since its founding in 1982, one of the first, before we even had the term impact investment firms, to be managing funds with a values orientation. Matt and Trillium currently manages over $3 billion in funds focused on positive social and environmental impact. He was formerly at Lehman Brothers. He served as a portfolio manager on the investment committee of the Green Solutions Fund of the Winslow Management Company. He currently serves on different boards relating to environmental issues and holds a Bachelor of Science in Economics from the Renneslauer Polytechnic Institute. Matt, if you'll open the discussion with some observations of your own and then we'll go from there. Thank you. I would say the interest in renewable energy is obviously now being driven globally by the economics of renewable energy and that it's become compelling without subsidy in many parts of the world and so we're starting to see the market forces itself start to come into play of trying to provide capital. But the big disconnect that I think we're still seeing in parts of the world is there's not enough debt capital. And what's that about and how do we solve for that? And for Trillium, our exposure geographically to Africa is through many different parts of our asset allocation. We have exposure through the traditional public markets and public fixed income to Africa but we also have been active lenders to all of the different loan funds from MCE, OICO credit, to I think there's a couple others that have been doing lending to organizations in Africa. We also are direct lenders to root capital and shared interest which have exposure in Africa. But we are ourselves not project finance oriented. We're doing it all through pooled vehicles and so to that end we are launching actually the documents came back from the lawyers today so we're launching a fund to funds vehicle to finally be able to do direct or investments in with fund managers who have more direct exposure to the continent. So we're looking forward to being able to deploy more money but our exposure in the renewable energy space right now is largely in the public markets and then through loan funds that we're participating in. Matt, you said the documents just came back today so you're using this platform to announce the launch of this new fund to funds? Yeah, Trillium Impact Partners was launched today. Wow, that's great. We have done investments before in the private space but it's because we're a separately managed account platform that is administratively very complex and not fund for the fund managers to receive money from us nor for the way we've been booking it and so now we'll be able to actually participate. So there are certainly at least one... We are looking at funds and there are funds represented here today on stage that we are active due diligence on. That's fantastic because I had asked everybody on the panel to have something practical to say, tangible, instead of just all the discussions that we've had and that's very exciting. That is really exciting and I'm hoping to see by next year at Socap the kind of speed that we're talking about that you will have already used that invested in the funds as the fund of funds in the funds and that the funds will have actually deployed that capital into renewable energy projects in Africa. Let's hope so. I'm going to change the order of things slightly because Morgan Simon, my good friend from just around the corner is getting on yet another plane and Morgan apologizes for having to run off but I'd like to ask you Morgan at this point, let me introduce you for a second although I know you well, I still have some notes here. Of course you're the founding partner of the Kendi Group and Morgan has close to two decades of experience in making finance a tool for social justice on a number of different levels and fields. In the time that you've been actively involved in this I know that you've influenced over $150 billion of investments in various different activities and fields. You're a regularly sought out expert in the whole issue of financing the impact investment community and of course Morgan wrote a book just recently just out last year called Real Impact, the New Economics of Social Change and she's been a featured Harvard Business School and United Nations speaker and expert. I'm very glad to have you with us. Can you share your thoughts before you run off to the airport? Thanks for having me. So I wanted to just by a little bit more way of background so Kendi Group is a registered investment advisor. We have a small client list of families so more akin to a multifamily office and we've invested in 65 companies and funds over the last six years and some of that has been both microgrid and utility skill energy in Africa and in general we are extremely broad in terms of the sectors and geographies that we invest in and what we're always looking for in any sector is what is the systemic intervention that we can make that what actually solves the problem as opposed to making it a little bit less miserable to be poor or to actually have the type of energy at the cost and amount that you need rather than some approaches that can feel good enough for those people. That's really the kind of attitude we want to be pushing back against and that means there's a couple principles of how we think about investing in renewables in Africa that I wanted to share so three points. So first is really thinking about this question of affordability and that what we've seen is that often approaches have scaled because they were easy to finance as opposed to necessarily the best for people. So how do we make sure as investors we're really holding ourselves accountable that it's not about our needs, it's about the people who need energy and that a number of lanterns home systems where people are paying four to six dollars a kilowatt hour where they could be getting two cents an hour from grid scale how do you make sure you don't want to penalize people who legitimately need energy today but you also want to make sure that you're providing a much longer term affordable solution. Second to that is the question of consumptive versus productive forms of energy that it's great to be able to power a radio to read at night and sort of the assumption of the long term impact of that but if it's not enough for you to be able to run a business to be able to pump water to be able to have productive sources of energy are we actually going back to are we providing the type of energy that helps get people out of poverty to having it be a little bit less miserable to be poor? I'm going quickly given the five minutes and I do want to acknowledge I think it's all important it's all good, it's all part of the spectrum but really trying to in a universe of scarce capital really think of how do we get to the solutions as quickly as possible and the third piece to make sure I don't forget what it is is also the question of ownership so I think the other that we've been concerned by is that the majority of capital has been going to expats and has been coming from foreign capital which means that people get access to energy on the continent and that's amazing but the profits that are made from that are fundamentally extractive or are leaving the continent and we've tried to prioritize companies that really are working on having some degree of local ownership or local entrepreneurship so some of the examples I should note we are invested in Gigawatt Global the way that they've structured some of their deals like their first utility scale project in Rwanda of partnering with an orphanage in school to put the solar field on their land and essentially ensure that they're going to have operating budget for the next 10, 30, 20 years so really thinking about how do we make sure that more of the proceeds from these projects actually go to community as opposed to just saying and I think this is a problem across impact investing not just in terms of renewable energy of seeing beneficiaries just as the recipients and not as the protagonists and that if we really want to be in partnership we need to shift that frame and really provide more opportunities for economic participation and ownership so I hate to do the classic mic drop but I'm going to have to jump off and appreciate the opportunity to be here I'm sorry to miss everyone's remarks Thank you, Morgan and I think there's no question that I would imagine all of us would agree that the issue of whether it's local employment or training for the technicians as well as benefits to the communities, the local communities whatever the industry is, energy or otherwise is a very important element of the whole issue of Africa in particular a little on other emerging markets so thank you for that, off you go be careful as you go down those stairs I'm going to move over here next to you, Rick if you don't mind so Rick we've talked about well, tuftless is the word we use in Hebrew or Yiddish which means getting to it getting to real action and so Matt and Morgan kind of gave a more strategic look into what it is we're talking about about this kind of impact investing in renewables in Africa and Morgan actually challenged us with three good and important elements but still kind of on the strategic level I want to ask you to go a little bit more into the specifics so let me introduce Rick Nidam is the CEO or a partner I'll have to tell you I'm happy to give you the promotion here we're announcing things in the public so this is really from talk to action Rick is a partner in the RISE Fund and he's the fund sector lead in energy RISE is a fund as many of you know I'm part of or initiated by TRG and it's a two billion dollar fund I've heard rumors as maybe the rest of you had or read in the newspaper of a new fund TRG is creating RISE 2 or whatever it might be called which may well be a three billion dollar fund so one of the major players in impact especially on the renewable side Rick has a very rich background in energy and sustainability he was at Google responsible there for transformative large scale renewable energy projects investing he led that team about two and a half billion dollars of Google's investing in renewables the most amazing part of Rick's background which most people maybe don't know unless they look him up is that he was an officer in the US Navy a submarine and so I suppose you're used to maybe this kind of it's not that we're claustrophobic here but I was going to ask somebody who might know something about technology if we could turn the air conditioning a little bit stronger here because it's a bit warm in this tent in this room but Rick's background in aeronautics astronautics from MIT NBA from Harvard Business School and Aerospace Engineering Bachelors of Science from the Naval Academy means that he knows a lot more about the engineering and science side of renewable energy production but that informs his understanding of both how and best practices of investing in renewable energy projects in particular now so Rick please share with us some of your practical tangible recommendations or observations I appreciate the introduction and appreciate being on the panel with everyone here and I'll try to get practical I think one of the things getting back to Matt was saying was just the opportunity I guess when we look at renewables and the opportunity of renewables at large is pretty dramatic based on the massive cost reductions that have happened over the last few years something like 80% for solar and 67% for wind over the last eight years which is driving them to be the new energy source of choice because of economics flat out and when you look at Africa in particular with probably the biggest solar potential in the world something like 10 terawatts of potential 100 times the capacity that exists on the continent today Sub-Saharan Africa it's kind of shocking what the opportunity looks like so why isn't more happening why aren't more projects being developed why aren't more solar installations being done we talked about this a little bit there are some challenges that we've seen this is from my time at Google we invested in two projects in Africa and then looking at it now at the RISE Fund where we have lots of different sectors that we look at but within the energy sector the things that we tend to focus on are deep decarbonization and energy access deep decarbonization has many elements to it efficiency, low carbon power and electrification so all these things can play out on the African continent I think the things that we've seen are in many locations it's this big question on when will we actually get over to the point of financial close and then execution there's not frankly not a lot of risk in constructing a project getting it onto the grid and it running and delivering power it's pretty unlikely a solar plant just stops working the difficult thing is how do you make sure it actually gets built and you know this from having to do development over many many many years or to get to the point where you can actually get a project finance so I'd point to a couple of examples of places that have done it well in windows of time South Africa remember they had their kind of renewable energy basically program it's got a bunch of letters in it but that allowed them to massively deploy renewables to the order of gigawatts in a clear transparent way this reverse auction mechanism and that works out really well up until 2016 when suddenly they got to a point where they kind of filled it up now what do we do to the policy makers and then suddenly policy makers were deer and headlights so I think having a clear transparent kind of ecosystem in which you can deploy projects is incredibly helpful not in Africa but in Latin America same kind of thing happened in Argentina where I've talked to the energy minister there for the World Bank to establish mechanisms by which you can basically get greater support for the power purchase agreements it made everything a lot clearer so then projects flow which then allows debt to flow into those projects and that's kind of the larger scale there's also the smaller scale distributed power as well and that's whether it's solar home systems, microgrids it's a great extension actually as well as a fund we've actually invested in a company that does commercial industrial rooftop installations in India and one of the reasons that we found India attractive is the this gets to another one of the challenges is the economics of the powers being delivered to commercial industrial customers versus the cost of deploying solar on the rooftops there's a big enough gap there where you can make an investment an equity investor and deploy those projects and earn a profit return in some countries within Africa in some cases the power is subsidized the actual price of power can be lower so it becomes difficult to actually deploy those projects even though they would typically tend to make sense or other ones that don't have put in policies around what the feed-in tariffs might be that might not be attractive enough to bring in equity investors so I'm not sure how practical some of these things are but there are many people who work in the social capital space who are thinking about how do we actually establish the ecosystems the conditions on the ground such that investors can come in get much greater visibility into those investments because the project investments in the renewable energy projects they're not like VC investments they have market risk, product risk you know if you build it it's going to deliver power you've got it establish mechanisms that enable those projects to get to the point where they can get built would probably be the biggest enabler to help deploy more renewables actually going from that I want to turn to Lisa to talk a little bit about where we've been and where we're going because a lot of the work that you're doing at Shine has basically has helped to create that ecosystem and I have to say it was not purposeful but we're moving from Rise to Shine and that's and I was thinking about that the entire time we were preparing this and it's not in the order that I had here but I had to say it I'm sorry I hadn't even talked about that so Rise and Shine Lisa Jordan is a senior philanthropic executive in the senior career focused on impact and systemic change you currently serve as the campaign director for Shine which is a global campaign to mobilize finance to end energy poverty very much focused on what we're talking about today Lisa previously served as the CEO of the Bernard Van Leer Foundation and in leadership positions at the Ford Foundation also at the Porticus Foundation we've led many nonprofits organizations I'm not going through the whole list in Europe as well as the United States which has a master's degree in development studies from the Institute for Social Studies in the Hague Netherlands and thank you for joining us I want to take us from exactly from what Rick was talking about in terms of the mechanisms that have been put in place are in place maybe you can give us a little bit of both the history and a little bit of a direction of where we're going again on the practical tangible side isn't you you're active in it you know on the ground thanks a lot Arya that's a very funny rise in shine I can't believe that it's the first time that you thought of that I mean that is so I want to say a few words first about Shine because it's a really new campaign it's a new mechanism it launched in May it brings together a set of unusual suspects it brings together faith organizations it brings together finance organizations and it brings together foundations and these are three organizations that have a very big role to play in ending energy poverty and are not normally speaking to one another and are not aligned across the way in which to tackle ending energy poverty and we don't talk about the full renewable energy markets we talk about the last mile of development that's really where Shine is focused so we launched in May we launched with a hundred million dollars in commitments coming from these three sectors and really deploying those commitments to access to energy champions of which I see many sitting in the room in front of us so those are people who are really looking at last mile distribution mechanisms and Sub-Saharan Africa is a place which you saw in the description of this panel where 600 million people are living without reliable secure or safe energy sources today and if we're going to go through this renewable energy revolution we should be bringing all 600 million of those people with us as we go through the energy revolution so one of the things that we thought was really important to do was to start mapping where is the money actually going and who is it coming from and where is it headed and so we have been in our first few months working together linking and learning on another mapping where are the foundations putting their grant money what's happening with that and we can see that the foundations from 2015 to today are doubling the amount of money that they're putting into this field which is a fantastic thing because we also know that we're not going to actually reach SDG7 unless everybody gets engaged in one fashion or another and so they started with about 50 million in the field and they've gone to somewhere around from 2015 to today and a lot of that money is going to India for many of the reasons that were already articulated but the other half of the money or it's roughly the other half of the money is going into different places in Africa Kenya happens to be one of the places where there's critical mass on the African continent and not all of that money is being deployed to build renewable energy markets and some of it is being deployed for people who are in refugee camps and it's coming through a charitable lens some of it's being deployed around research and advocacy to try and get the policy frameworks which is what you can do with grant money that you can't necessarily do with investment money and then a portion of it is being used for direct products and service delivery and then another portion of it is being used to get the financing mechanisms right so this is the first thing that China is trying to do is really map out where is this money going we've done the same thing on the investment side from the private sector so we're not really looking at the government money but we're looking at the private sector money and we can see that in the last three years from 2015 to today there's been about 100 million a year deployed from private funds we did a survey of 10 private funds and we're excited to be able to say that there's a lot more money coming so these big announcements 2 billion, 1 billion so on and so forth a lot of new funds are coming online very exciting new funds are coming online and the 10 that we were able to survey it looks like they're going to try and deploy or raise 1.5 billion and they've already raised about 630 million from those 10 funds including our friends who are sitting here so it means that there's a lot more money that's going to be available for many grid for solar, solar is very popular biomass is less popular wind power is less popular but they're coming along so we can see that it's a six times a six fold increase if that 1.5 billion actually does get deployed over the next two years into the field and really remember that we're only really looking at that sort of access to energy or that energy poverty piece the issue for those funds to actually be able to fulfill the promise that they articulate is they're going to need because we're talking about last mile distribution they're going to need some concessional money that goes with them and this is where the challenge is really arising because foundations provide family offices and foundations that can provide that kind of concessional lending or that kind of grant funding that could help these funds actually really get to the last mile don't see they don't see eye to eye with the investors about how to deploy their money and that becomes somewhat of an issue so Shine's role is to try and facilitate a dialogue between different kinds of capital that's becoming available and to also bring in a very strong community engagement conversation which I think Morgan started to touch upon the productive use conversation that you know how do we build out economic growth in very rural areas for folks and we can do that with that faith footprint both with faith investors but also with church leaders being engaged in one fashion or temple leaders or mosque leaders or so on and so forth so this is I think what Shine can start to bring to the table and I'll just leave it there and pick up on some other things a little bit later. Thank you and in fact that's it's a very nice segue talking about the question of different kinds of both focuses, foci and needs or demands or requirements of the grant making world foundation world and geo world versus the investment world Jim Pass from Guggenheim partners has actually made a I would say a life's work of understanding some of those issues in the energy sector in particular so Jim actually I'd be happy if you would relate to the issue of how do we balance and how do we bring together the investment aspect and then the impact sustainability, how do we measure, how do we value and therefore how do we sell or pitch the kind of investments we're talking about Jim Pass is the senior managing director for global infrastructure at Guggenheim partners a project finance sector manager and a portfolio manager there as well he's responsible for research development implementation of investment strategies for the firm's efforts in the infrastructure arena you have a lot of background and experience and financing, advising and operating infrastructure assets, airports power plants, I know we were talking earlier about healthcare facilities etc student housing complexes I know you've spoken at the World Economic Forum the White House Business Council and many other different forums with your focus on energy I think that you also have a diplomatic history and political science from the University of Pennsylvania and you spent the last two decades focus specific on these issues I'd be happy if you'd share with us not only your comments and observations about the general topics but also I want you to mention the study that you just came out with which obviously I think is one of the biggest things we're talking about that answers some of these demands or needs that you were referring to thank you very much and thanks for hanging out with us until 5 o'clock on a Thursday afternoon first of all I think it's important to understand that infrastructure or renewable energy projects in Africa is a relatively new investment vehicle we all use infrastructure on a day-to-day basis but not too many of us consider owning an airport or buying a road or owning an energy facility and I think a lot of institutional investors like myself are still coming to grips on how do we analyze an infrastructure project whether it's in Africa in Asia or the United States for that matter and at one point value sustainability will all converge and at this conference obviously sustainability is very very critical and when we analyze an infrastructure asset whether it's a project in Africa or Asia or the United States it first has to have financial attractiveness it has to produce a return and that return will vary based upon a risk profile of the investor or of the project in itself but what we've begun to see and what we're trying to incorporate in our investment process is trying to understand what is the natural capital aspect of that because there's human capital there's financial capital but also there's resources that are in the ground or basically in the benefit of where the location may be where the energy facility could be in Africa and that natural capital is something that up until now has not really been evaluated extremely well and so when we look at a project in Africa for example we want to make sure that not only is the project transformational like what Shine was kind of like what your focus will be in making sure that is the last mile and what Morgan was saying we also want to take into consideration how do we preserve and protect the environment how do we preserve that natural capital that is extremely important to really the sustained goals of the UN really the 17 and when you put all this together you still have to have that aspect of a financial return and so what we've been doing at Guggenheim is we established a protocol not targeted in Africa at the moment but it's for the Arctic because it's another area where energy resource driven energy whether it's wind, solar, hydro can basically develop on a very very attractive basis and the big difference between the Arctic and Africa or one of the big differences is really just the vastness and what we've tried to do is make sure that all the stakeholders in our protocol which is now under the domain of the Arctic Economic Council is focusing on the indigenous people we want to make sure that they have a seat at the table when we're looking at that and what the paper that area brought about was really the culmination or the next step from the Arctic protocol to bringing that protocol into more of an institutional acceptance level of projects on a global basis because one of the aspects of my client base that's focused on is how do we measure sustainability if I'm going to make an equity commitment in a project in Africa how do I know that's actually going to transform the life of someone or to improve poverty and so forth so we like to have some type of metrics on how we can analyze the effectiveness of our dollars not so much the financial return but how do we make sure that the money is actually doing good lack of a better word and we're not impact investing this is institutional money that needs a return but we're layering in another aspect of this and so this paper that was announced about two weeks ago at a IMF meeting focuses on how can the institutional investor analyze the different standards that measure sustainability how do we measure the UN SDGs and in light of my opening comments that infrastructure is still an evolving asset these metrics are still evolving as well so even though there's been a lot of progress in Africa and other aspects once the tools for the institutional investor are there to really demonstrate and identify the effectiveness not just the financial return aspect of it but also the other intangibles it'll be a pretty effective tool I think also if I understood right Jim I was going to make this tool available not only for the use of your clients investors and what have you but also for the wider community my right so our goal following the study is to actually analyze four projects both are brownfield and greenfield they may be energy they may be transportation and analyze these metrics and see how they perform in different developments and then based upon those conclusions then that instrument will be available not just for investors that's terrific and also very practical the truth is Joe you have a master's in sustainability from Cambridge if we're talking about here about sustainability standards I'm assuming that you guys can have a conversation afterwards and Joe you can evaluate how good the and the mechanisms that Jim's talking about are so lastly let me turn to you Joe Opat is the senior managing the head of business development great day for both of us I should have promoted you to CDO I didn't bring, apologies Joe's the head of business development on the west coast for Acumen where you're leading partner engagement post investment support and fundraising strategy Acumen by the way has invested in some 113 companies I think across 13 different countries before Acumen Joe developed tech platforms for early stage ventures as the director of business development at the single brook technology company started your career in the United Nations in Kenya Russia the United States like Morgan and Jim and I guess the rest of us you're on the plane half the time and thank you very much for joining us today given that you did have an airport related incident that brings you a little bit in a bit more difficult circumstances than we anticipated but thank you for making the effort Joe holds a BA in political science and French from Middlebury as well as the masters in sustainability that I mentioned from University of Cambridge focusing on tangible issues innovative finance and sustainability happy if you'll share your thoughts with us Hi everyone I know it's mid-afternoon I can see some people nodding we're going to make this fun party right after this so we're leading up to that so Acumen we have as is mentioned invested around 115 million of philanthropy backed dollars and yet we operate as a VC so we either invest equity model is focused on identifying companies that are Ali stage in the pioneer gap and investing over a six to 12 year period using a patient capital model specific to energy our first investment was in 2007 with a company called Delight that was working on a solar lantern and has since moved to solar home systems our main focus has been thinking of renewable off-grid solutions and one of the things that we thought about this year is given that we've been doing this for 10 years how do we really understand how the market has moved and I like that Lisa began talking about the different players from a funding perspective we were looking at it both from how much money is going to Ali stage ventures in the renewable energy space now one of the things we found great news is that between 2012 and 2017 2012 entrepreneurs raised around 50 million in 2017 that went out to 300 million which is great so there's increased money flowing to this particular area now what was tricky about that data set is that if you think of the energy accessible all sustainable development goal 7 we fall pretty short of what we need when we think about what's annually going into the space you have around 11.6 million but if we're really to hit the goal of working towards energy access we actually need around 216 million per year just for this specific equity energy access this is not thinking of whether it's grid extension as a solution or the other types of capital whether it's debt there's a lot to be done furthermore as we dove into this into more detail trying to understand so fine it's not we have this 300 million how is it being dispersed one of the things that came up for us was 67% of all the money that's going into these ventures is going to four companies 67% not errors yeah and that gives us a moment for pause it seems like as investors we're all crowding the same deals and that was one side of it so what can we do to change that and to Morgan's point of how many of these companies have been run by in-country or local entrepreneurs as opposed to that dynamic where you have expatriates or can we even have situations where you have an expat local blend to make it work as you're discussing so that was one element of how do we identify that challenge and what we want to do about it the second is we then began to interview our investees and we spoke to 15 of our energy access investees and we're specifically asking them so one part is as investors we need to change our approach the second part of this is as an entrepreneur what do you wish you changed when you had the negotiating table what do you wish you had changed differently in your time sheet and we released a report that both dives into this data around how much money is flowing in the sector plus true stories from our entrepreneurs about the time an entrepreneur accepted debt when they really should have gone for equity and what was the role of grunts and if they to reach structure their table what would they go to what would they ask for now and if we had those kind of like tangible examples of how do you rethink the type of capital company needs as they grow the third part of this is exits that we're also curious about so Acumen yes we have patient capital 6 to 12 years but we need exits to prove this we need an and Trillium you're all wondering is this all funny money that's going out but what is the business model now there is it's hard to really understand what's going on in the exit world and so our next report that we're going to work on is going to focus on can we all begin to share what we're seeing about exits can we also take a step back and as we begin to think of the time sheet and enter into these deals can we structure the exit pathway and then also what is the possibility of a secondary market the idea that for Acumen a good number of our deals so with D-life we've invested 5 million over the time period we've been with them but when we have new investors coming in they're adding in more money but not necessarily buying out existing investors what does it take to create a secondary market to make that possible now I think in terms of tangible next steps one key one that's for me is this question of how do we look at local entrepreneurs in country and what's the blend is important so next year I am moving to Kenya to East Africa and really trying to understand how do we fit that into Acumen's larger model and have a specific focus that's terrific and a great starting point to move to the more practical we've been very practical in this discussion too and now in a minute I will turn to those of you I know that we have both investors and some NGOs I've referred to banks and also entrepreneurs and companies so if you have questions for any of us up here or general questions I'm going to turn to you shortly so prepare yourselves as it were but first I'm going to come back to you guys to talk I want to say if there's a company or a bank or an investment fund that's sitting here or watching online and looking for okay what do you need as an investment fund what do you need as a company to answer to practically move one step forward so for instance what you just said Joe which I really believe in is I think that you're more likely to get funded by an investment company firm VC bank what have you if you come with a local team or with at least a partnership with a local team because it shows you know what you're doing on the ground that's very true I know that there's an impact investment fund that we're in touch with we've had extensive discussions with they brought they have offices in Kenya and Tanzania even though it's a Dutch fund and they brought their entire team to our field in Rwanda to look and learn on the ground kind of what are the kind of things that they're getting involved in I think from our experience I would say that is a practical application to any company saying I want to do renewable energy rooftop or grid scale or something in between in Africa the first question is okay who do you have on the ground what do you know about the business on the ground so that's a good practical place to begin I'm asking you guys in whatever order you'd like what else can you offer as a practical tool to the people sitting here or watching that can help to accelerate the kind of investment we're talking about the kind of projects that we're talking about so perhaps I'll say something about the missing middle and the ticket size because that's a big issue we see that there's not enough investment going into those who are able to make deals underneath the $2 million mark and that is a really big need I think we have 85 small and medium business enterprises in our database now they're all working on ending energy poverty all working into some degree into that last mile and they are looking for deals that are they're looking for investors who can really operate in that missing middle space so when we talk to new investors coming into this field and we've that's what we've been doing for the last eight weeks is talking to a whole bunch of new investors to ask them you know could you get involved and what would you need to get involved and so on and so forth we're really stressing with them whether they could come in into the space with smaller deals so the $2 billion and the $1 billion and the son and so forth are very exciting but that means that you know how many people do you have on your team that's going to allow you to make deals where you can actually deploy that capital so that capital has to be democratized and disaggregated to a much greater degree hmm okay that's interesting anybody else I guess the one thing I would add is really having the role of a strategic partner especially with a lot of the institutional money that Guggenheim has it's much more I mean we're looking for partners to help us understand how to deploy capital in Africa and so I think that would be an aspect that if you're coming to our offices bringing a strategic partner would be extremely helpful in that project okay that's a very good point especially when you're talking about America where the appetite for investing in Africa is not as strong as in Europe there's a greater distance and unfamiliarity so coming in with a company where or a fund or a bank whatever that knows Africa and knows renewable energy is going to make a more comfortable conversation right here Rick I guess a few things one is certainly the local presence on the ground it's the market you're building your business in the local market ideally you have people who comprise the company from that market we also look to see this is one of the challenges we've seen in the off-grid solar space is for better or worse we tend to focus on larger check sizes minimum check size for us would be like 30 million so we're just not appropriate for some of the younger companies but there are companies that are looking for those check sizes but I'll be honest the economics of the business don't support the valuations and the usage of those funds so we are looking for businesses that are on a pathway to profitability if not already profitable and I know people will say well that's hard but that's where the big dollars will come and there has been a bit of a run towards this again is more the off-grid space a run towards let's get a lot of a lot of units out there a lot of people users for growth sake without necessarily fine tuning that business model piece to ensure you're delivering something that's of value at the right price you're actually able to make the economics of the business work well there's challenges I know in raising the financing and distribution monitoring servicing those systems that's what we would be looking for we haven't seen it yet in a company that has the ability to then scale that up but that's just one of the things that we would certainly be looking for we will talk later about global scaling up and our pipeline but we've been focusing on companies what kind of advice can we give to funders what kind of input can we give to an investment bank or an investment fund in terms of their decision making processes that would also help to accelerate and to streamline the process Matt putting you on the spot or Joe because you're smiling either of you whoever wants to go first I like Joe I can give you another minute to think because I have an idea so advice to invest or as funders about the space I would say I think there's generally a fear based on geography there's a fear based on lack of local knowledge so therefore again the partnerships and having people on the ground is important but I will just say back to sort of an earlier question which was the missing middle oftentimes what's missing also is when you're talking to the earlier stage entrepreneurs they're not sure what they're looking for in terms of capital whether they want debt or equity whether they're and how much and how to structure it and so you've got to bring to any earlier stage opportunity again an ability to structure and work with the entrepreneur which is very different than when you're trying to do a 30 million dollar investment so very different very different exercise I'll actually build on that we're actively seeking for better ways for investors to talk about deals they're interested in making can we sit around the table and understand that your grant money is going to flood the company at the wrong time and my equity should go to this goal and they need debt but if we don't work out their equity to debt ratio we're screwing them all together those conversations don't happen as much as they need to that's one for investors how do we work through that the second is on impact measurement the fun one around four years ago we totally felt quite frustrated that sending our investees and working through existing systems for one time intensive and totally felt like investor tell me what I want to know in the same way of doing your tax returns versus being insightful R&D that the company wanted to do so we introduced a method called Lean Data and the idea is to leverage mobile and in a six to eight week period get feedback directly from the end user so the Lantan about the clean cook stove about the mini grid system they're on and the good thing about that is that you can break it down to gender if someone says I'm using this reproductive use and it's running the fridge and the lights in my store you ask what are you doing with the free time what is your earnings is this helping you move up the energy ladder and just continue with this mobile back and forth and build a database that then not only allows you to truly see this company from the perspective of the end user but then we can then benchmark so we're doing this together with Gates with the media with DFID and 40 other investors in the space and our idea is to have a platform that anyone can access as an entrepreneur or as an investor or a consultant somewhere in the middle a practitioner and we can have a better idea of how does what you're doing in Kenya correspond to Haiti or how does this cook of company compare to the other and share best practices Fantastic that's really interesting and that's new to me that seems to me to be an incredibly important tool and which will augment Jim what you were talking about about the sustainability index in order to be able to evaluate from an investment perspective what's actually being achieved let me turn to the participants here with questions please raise your hand there's a microphone we'll start with you in the back just because the microphone is there and then we'll come up to you we're just waiting for the microphone to be turned on Hi I'm Mitra Arjan and I was the CEO and founder of Lumeter Networks which built the Pego software that was operating many of the companies in 20 countries also in Africa and we exited 18 months ago to Mobisol which means I can say the things here that entrepreneurs who are looking for money can't say and in particular echo the point made about the missing middle there really is very little money there's a lot of studying a lot of talking and very little action in that missing middle and there's two big consequences of that one consequence is that that money in the missing middle is ridiculously expensive not because of the percentage of it but because of the time it takes you to get it and this is a sector which is growing so fast that we when we sold were doubling in size every three months so you can imagine how expensive the money is when it takes six months to do the DD which is true for several of the many of the impact investors of this conference the second consequence is something that Joe mentioned about all the money going to a few players what does that mean in practice it means that those companies can afford to sell products that are more expensive and lower quality than all their competitors they essentially drive the competition out of business by using impact money to drive marketing to sell inferior lower quality products we sold technology to companies for example that are way in Kenya with products that were much cheaper and much better than the products that were coming from Mcopa but because Mcopa gets all the impact money they still dominate the market and that's true across a lot of sectors but I think impact investors really need to have more of the entrepreneurs in this conversation and some of the distortions that we're seeing when you look at it from San Francisco might disappear if I can just translate that into a I'm trying to be very practical and tangible what are the things that you're saying is that the investment community should be reaching out to interpreters even if they're not going to be funding them necessarily in terms of their own funding decisions but to learn more about the particular market or the country whatever that they're thinking of investing and I really agree with that it's a very good point thank you you had your hand up? we just need the microphone down here please thank you I am Jeff the CEO of a company called Jazza that operates in Tanzania and I kind of have a question for Billy on something Joe mentioned going to Rick like the really early stage stuff and you know talking about valuations and like you know you sell half your company for a million bucks and then on the other side of the table like we see one deal which is our own so in terms of the transparency of like how we build that road map and you guys are talking like well how do we structure this like debt, equity, grants at what phase like it's hard on our side to understand are we making a mistake by even taking a grant and then you know Rick's not going to fund it because he's like that doesn't work for us right so like on the other side of the table Acumen you do a great job of like publishing and writing and getting the information out there but in terms of the transactional road map what can we do on our side to learn more about all the information all the deals you see so we can structure the company's right to continue that road map thank you thank you you're spot on and every one of our energy investees that we spoke to mentioned that that this is something that as a sector we should consider which is part of why we included their feedback in the report the report is called Accelerating Energy Access the role of patient capital it's on our website and it dove into I should not have it's based the CEO of X company breaking down I received money this time I should not have what we're trying to see is in country can we also have moments where we bring those CEOs together and have a round table where they can share best practices and we've done that I think twice not as often we need to do it more and even had heated conversations around should you ever accept grants and what does that do for you and which types of grants so yes I think the tricky part to how do you get plugged into those networks and it's as you're really starting is another that we need to build in terms of a local ecosystem we're trying to work on it not forget that but I'd love to give my contact so you can connect to the other CEOs yeah can I say something about that as well I wouldn't overestimate the amount of knowledge that investors have because it's not a lot there is no aggregated I mean really sorry yes you're right I just wouldn't overestimate that amount of knowledge because in other fields that are nascent and this is especially the piece of this field that I'm working on the access to energy piece of the field and in other fields that are nascent that have just a few investors or a few foundations engaged in there are aggregators who are bringing some transparency to those fields I'm thinking about people who are working in the agriculture field with small farmers for example there are aggregators that bring data together so that investors can learn from one another we don't have that in this field and I would really like to see shine start to begin to experiment both with looking at deal flow and who is tracking deal flow and bring some transparency to that but also to figure out a way in which to get people to link and learn as they're both looking at what happens with grants and looking at what happens with with these new funds that are coming online so I just point absolutely taken investees don't have access to that information but I really don't think the investors have access to that information either I guess I would it's not like at least from our perspective we don't have some magic structure that a company has to have I'll make it really simple make it have a company that's delivering a product or service to a customer that's willing to pay more for it than it cost you to make there it is right but that's obviously tongue in cheek but obviously takes capital and time to build a business to build a product and do those things there are it's sometimes frustrating when I've looked at the space too there's no there's a little bit of a I don't know that it's kind of come together maybe as the ag group has it feels like there's more kind of competition between companies versus co-op addition and even just definitional things like what's the quality of your receivables like not only you're going to get a different answer different definitions of that answer how does an investor like even compare those like it takes like several conversations digging into like what exactly are you measuring just want to understand how much you're what are you getting paid for that product so it becomes difficult so as much as you can be transparent in the definitions that you use that's going to just help whatever investor you go to you know what's your name Jeff Jeff your question reminding me of something I learned this morning that I hadn't my background I've lived in Israel for the last 35 years and my background in business has been more in the startup high-tech sector in Israel as many of you know there are more startups in Israel than than anywhere else in the world outside of America and it's always fascinating to me how the investment community looks at potential high-tech or biotech or health tech but mainly software or networking startups in Israel which is basically oh this is an interesting idea and it seems that there might be a market and so we'll value the company at X and we're hoping to get you know 10X out of our investment what I learned this morning after 30 years in following and being actively involved in these kind of deals in the high-tech sector is that the average return for most VC funds including start including seed venture funds the average return is not this mythical 10X that people always talk about that's what they want to get they normally get one out of 10 if they're lucky, 10X and they'll get one out of 10 maybe 5X and then they'll get maybe 2 or 3 that are 1X meaning they get the money back which is hard to consider the success. The point this morning by Lune Liebes I think this way grants his name I found fascinating is that when you calculate what the real return is there's about a 2.3X return for most VC funds over the last 20 or 30 years even in the high-tech startup sector what have you I think to you Jeff as a company or to all of us and I'm actually taking this conversation and turning it as I really want to do to the investment community is that we have a bit of a mismatch here this is my 2 cents if you will and there's a question over here the mismatch is when an investment company or an investor looks into the high-tech sector they have no idea what the potential returns are they have no idea what the product is going to sell what the revenue is going to look like and some chart of well the market is 300 million strong and if we get 10% of that market we're going to have 30 million customers you know good luck with that some work and most don't but they value the company and then they put the money in based on this kind of feeling like there could be success whereas what you were saying Rick and this is on relating to Jeff your question is that here in the energy sector you're talking about assets which exist companies with track records PPAs or purchase agreements which are bankable assets because they're assured streams of revenue the investment community to a certain extent I'm challenging those of you in the investment community who are with us today are watching the investment community should take a leaf out of the high-tech sector and give up at least a little bit of the rigidity that is traditional in the infrastructure world we need to have this kind of return we need to have this kind of a we need to have this percentage of equity versus debt or what have you if you're going to throw 10 million or 20 million dollars into a start-up venture which has one in 10 if you're lucky maybe one in 100 chance of succeeding right and your average return is going to be two or two and a half X then take some of that risk or that some of that risk profile and and apply it to renewables in Africa and say okay it has to meet certain standards that we're looking for but I'm going to take a little bit more risk than I usually would in infrastructure and not least because there are these risk mitigation envelopes and mechanisms that are built into the industry but I've talked enough there was a question back here yes miss the young woman and then the gentleman in front of her Hi, my name is Uguaman Nao I'm the co-founder and CEO of Solstice Energy Solutions for an energy technology company that develops hardware and software to connect and intelligently manage distributed energy assets my question especially since we're talking about renewables and energy in Africa we often immediately start talking about energy access and the millions of people who need connection and while that's important it often overshadows the millions of people in cities not only in Africa that struggle with unreliable and bad grids nearly 2% of Africa's GDP is lost because of unreliable electricity grids in these urban areas what are we doing to not only talk about energy access but talk about the increase in energy consumption majority of which for the next 20 years in the world is coming from emerging markets the current trajectory says it's going to be fossil fuels and this is not off-grid we have a chance to change that but we have to think about those market segments as well and the stability of them I'm glad you asked that question I even had one of my notes Africa loses I heard GDP because of unreliable power like 9 out of 12 worse countries unreliable power this is a really it is a segment I think that hasn't garnered as much attention as it should and frankly from an investor perspective it's really interesting because you have small and medium businesses who rely on power for their business they're not it's not a customer that's deciding you know I'll pay for my home solar system so I can get the light or a kerosene lamp to do that I need to run my business I need the power and so sometimes the alternative is either the business isn't working or it's run a diesel genset that's sitting in the back and another interesting quote I heard someone can check the veracity of this but Nigeria has a grid capacity of something like 4 gigawatts they have a diesel capacity of something like 10 gigawatts I mean that's like a grid that's been built out three times and why because it's just unreliable so I think that's a really interesting opportunity and there should be more attention paid to it because it's actually you know I think one of the reasons just my guess is it's the maybe the depth of impact on individual people from access is pretty clear and everyone can see that the impact that comes from a more reliable power might accrue more to businesses you don't have a family that's no longer burning your home right what you have is a business it's no longer burning diesel in their genset so it's a little bit different but I like that opportunity I'd love to chat more probably a young company for us but I know there's others that should be looking at it Thank you Anybody else? That particular tier we talked last night that particular tier will be highlighted in the energizing finance report which is coming out on November 13 by SC for all because it is an opportunity for the 30 million it's an opportunity for much bigger deals and it's an important area they tier across five tiers what kind of energy people have access to and you can make commercial deals with that arena I'm actually interested in what you said I would be happy to speak with you afterwards also because we're involved as a company in some of the most fragile states in Africa, Burundi, South Sudan Liberia and many others and it sounds interesting to me at least just the half a sentence that you gave in terms of the software that you're providing and thank you for the question The gentleman here Great point growing up in Kenya definitely have family and friends who are living through that just unreliability of the grid there is as we look at it, there's another unique level that comes to dealing with that particular problem of public policy where you're then more directly engaging the government with existing infrastructure and in a number of countries the government has a very strong hold on that and what do you need to build as an investor to not only think about the dollars you're pushing out but also have a public policy and that has been really tricky to wrap our heads around but we're trying to figure it out Thank you The gentleman here and then I guess we'll take one last question Hi, my name is Ben Bowie I work for a consultancy called TMP Systems we work with large investors on renewable energy projects amongst others across Africa and Southeast Asia and one issue that we've come into very consistently with kind of I'd say medium rather than large scale energy projects is getting local buy-in I think there's an assumption that it's a renewable energy project therefore it's going to be green it's going to be nice and the people are going to want it but the most notorious examples probably in Kenya at the moment but Lake Takana for example Kinanpop there are plenty there are plenty of these examples and it's fundamentally the same issue that you see in any large land-based investment agriculture forestry so I was just I know that Jim touched on that kind of briefly when he mentioned engaging indigenous peoples in the Arctic I was just wondering how that kind of jived with your experience and whether you did see that as a significant barrier to getting to scale I'll just say one of the reasons why Shine has worked very hard to bring the faith community into this conversation is because the faith community has a footprint all over Africa and in fact all over many places around the world are really deeply engaged in community and can build the community demand and I think Morgan talked about this in her remarks before she left which was an important point around what is the energy going to be used for I mean we talk about energy we talk about energy on its own but in fact energy is a utility and a utility is used for all sorts of other aspects of your life and building that demand organizing around that demand that foundations do with their grant monies it's also one of the things that churches and church institutions can do is to try and organize the community around okay what do you want energy for and how can it make your life better in some aspects or another there is a really fantastic community owned utility in Tanzania that came about because of the years of community building by the Catholic by a number of Catholic charities and then EU financing that came in and it's a really wonderful model where now that community owns the electricity they own the utility they're actually having checks written by the government coming into the community as a result of the work really the sort of ground community demand work that was done by the Catholic community and it's a good point and we also have examples where things have really failed because the community was not brought in where that conversation didn't take place and they simply can't afford it or they don't know what to do with it or it's not useful to their daily lives they don't feel that they're thankful I'll just add one comment from our experience that Rwanda is the land owner where our field is but more than that in all the projects that we build we try and involve the local community by providing employment which obviously creates a stakeholder effect providing medical treatment or medical clinics for the local communities in Burundi for instance we're building our first off-grid, mini-grid facility because the small community is actually next to the land building our commercial scale field is not connected to the grid they're going to be living next to this commercial field and not have the electricity or the benefits from it we're also providing them employment and I want to also mention what you said Lisa about the faith community first of all the Vatican and the Anglican church together are basically the largest land holders on the continent of Africa land owners they don't do a lot with the land that they own we're in extensive discussions with both of the Anglican and the Vatican church through an NGO that we're partnered with called the Interfaith Center for Sustainable Development and they have a project called FIRE Faith Inspire Renewable Energy and one of the elements of the program that we're pursuing together is to build off-grid, mini-grid installations on church land to get this combination where the church benefits from even if it's subsidized lease terms from some income for their own educational or welfare purposes the community sees this project as something that's affiliated with their faith community with the church and therefore there will be less vandalism and more interest in supporting it so you're 100% right that the issue of and what you're talking about the challenge is to get together to support the enterprise because they will benefit from it and not see it as some outside foreign company coming in just to make a living or to make a profit or what have you it's a very, very important issue so we only have like 5 minutes left so one last question here and then I'll ask each of you to give me 30 seconds of a response or a wrap up My name is Emilian I'm a partner in a company which focuses on Africa digital growth we invested in electric in Tanzania amongst other companies so I particularly know the pace you go solar industry and I've looked at every single player in the industry my question is around we all know that the industry needs way more money than we thought a couple of years ago I was reading a really interesting report published by the Shell Foundation a couple of days ago $2 billion total investment needed in the industry a lot of new players and I think some of the CEOs of those companies are here at the second level I would say Pave's Go solar companies everyone comes to me and asks me who are the people to whom we should know we should go and ask them for money because we see that the typical commercial VCs, I mean the industry was super super hot a couple of days ago and you know it's much more difficult to raise money today than it was in 2016, 2015, even 2017 so the question is who are the names, if one of those second level Pave's Go solar companies would come to you guys, who are the few names or who are the type of VCs, the type of capital you would advise those guys to tap into thank you for the question Lisa I'm turning to you because I seem to remember, correct me if I'm wrong that you actually have a list of leading investors and investment funds in this realm yeah there's a can we survey 10 funds to figure out what their ticket sizes are what they're investing in where they're going with their capital how much they've deployed how much they hope to deploy how much they hope to raise etc so some of those players will be known to you it's Tritidos, it's Responsibility it's Bamboo, it's Acumen SEMA many MC is coming into the space there's a lot of new investors who are coming on and those who have been in the space and really are the pioneers like Acumen and like bamboo capital, they are they're going for larger portfolios now or trying to build out their portfolios in many kinds of ways so this is what I mean about bringing transparency I mean they don't know each other this is a really interesting thing people don't know each other and they don't know what the relation on the capital scale they're actually fulfilling but in fact that's correct we're trying to figure out how to make that a little bit more transparent so everyone can see anybody else any other any closing comments or observations yeah, I think this is a wish for the investment community if we could please beef up our post investment support we've talked a lot about capital NEA, money is good but at the end of the day if we really want to build these companies and if we use the template from the tech sector we really fail on the post investment support that companies need and given the expectations we have of them and what does it take for us to line, what does it take for us to implement given that our margins are smaller and collaborate on that I want to it's a great way to kind of wrap up the conversation what's your name? Emilio, your question is a good lead-in to kind of summarizing and closing and Joe your point is a hundred percent taken and I have to say on behalf of Gigawatt that North Fund, FMO SCAT Tech and our equity partners in our Rwanda project have been terrific in terms of the post investment accompanying us and partially because it was the first commercial scale field in sub-Saharan Africa partly because it was the first field under the rubric of Power Africa and I want to mention that in Emilio in response to you said the USAID the US government has an initiative called Power Africa whose goal is to bring more electricity to Africa and they have lists of the investors and investment funds and banks and what have you that are most actively involved in the sector so there are tools out there and I would say on a practical basis and I want to end on a positive note, I learned from McKinsey that of the three trillion dollars expected to be overseen by private equity firms in two years in 2020 three trillion dollars only that's the negative part because a positive only 10% of that is going to go to impact investing type of investments well that only 10% is if you do the math because I didn't that's why I wrote it down here is 300 billion dollars 300 billion dollars not 2 billion that you were just talking about of course I'm not referring to energy or not only to Africa 300 billion dollars is going to be available is going to be mandated for impact investment in the next two years if we the funding community, the collaboration organizations like SHINE the companies can get together and have these conversations and discussions in order for the companies to provide what the funders need the funders to see what the companies need and be more responsive and perhaps less conservative I think that we're going to see a transition really a transformational period in the next few years and I want to thank you all for your involvement for your active involvement not just in the panel but in your life's work in helping to bring renewable energy to Africa thank you very much for listening and let's go enjoy the party that's down the road thank you very much