Zola, Sun King and M-KOPA offer three paths to Africa’s off-grid … – ImpactAlpha

Private equity is leaving billions of dollars in sustainability value on the table. Private equity firms have amassed hundreds of billions of dollars in capital from institutional investors looking to juice their returns. As they put that fundraising bonanza to work, they have an historic opportunity to create financial and societal value through sustainability. Some PE firms and investors, primarily in Europe, have developed sophisticated value-creation approaches. For example, Europe’s Investindustrial boosts sustainability in its portfolio companies to attract higher valuations at exit. But many firms do not know how to identify, create or capture that value, according to fresh research from New York University’s Stern Center for Sustainable Business. Interviews with general partners, or GPs, and limited partners, or LPs, found that due diligence focuses mostly on “red flags,” write the Stern School’s Tensie Whelan and Julien Marchese and Florent Nanse of Arthur D. Little in a guest post on ImpactAlpha. ESG efforts often are little more than collection of metrics after an investment is made. “Many GPs and LPs are at the beginning of the sustainability value-creation journey,” the authors write, “which creates a lot of opportunity for improving societal impact and growing financial returns.” 
Big Bets: Rockefeller Foundation’s Raj Shah on how large-scale change really happens (excerpt). Climate change. Poverty. War. The daily drumbeat of news can cause people to become cynical, detached or apathetic. Even for those committed to positive change, barriers seem insurmountable. Raj Shah, president of the Rockefeller Foundation, calls that creeping feeling of helplessness the “aspiration trap.” The antidote, he argues: betting big. Big bettors don’t seek to better a few lives with charity or comfort, says Shah. Instead, they set a huge, audacious goal. In an excerpt from his new book, “Big Bets: How Large-Scale Change Really Happens,” Shah explains the mindset that has informed his career. Rockefeller has bet big on climate action, with a $1 billion commitment over the five years. This month, the foundation awarded $11 million to 25 companies.
ImpactAlpha, November 17 – That women are more adversely affected by climate change is well established (in impact and development circles at any
This week’s Agents of Impact Call continued a tradition started nearly a decade ago by Fran Seegull of the US Impact Investing Alliance
ImpactAlpha, Sept. 29 – It’s the age-old struggle: labor vs capital, workers vs. owners.  But what happens when employees get a stake in the
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ImpactAlpha, July 28 – Most historically Black colleges and universities were formed during the Reconstruction era. In the more than a century since, Spelman,
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ImpactAlpha, Feb. 9 – The fatal beating by police of Tyre Nichols in Memphis last month exposed risks to the city’s finances that have
ImpactAlpha, Nov. 18 – Cities around the U.S. are raising low-cost capital in the municipal bond markets by highlighting intentional efforts to address long-standing
ImpactAlpha, September 30 – Capital to support women’s economic growth and financial inclusion is flowing – finally! – in many advanced economies. In emerging
ImpactAlpha, Sept. 19 – Investors, entrepreneurs, corporate executives and world leaders have descended on New York for Climate Week, the annual gathering alongside the
Pension funds, with hundreds of billions in long-term assets, can be a key source of capital for impact investors and entrepreneurs. Black, Indigenous,
The Wilmington coup of 1898 is not as well known as the Tulsa massacre of 1921. But the events of that day changed
ImpactAlpha’s Dennis Price catches up with María Hollan, a second-generation steward of her family’s assets at Timke Ventures in Mexico City. Hollan was
David Bank catches up with Courageous Capital Advisors’ Laurie Spengler to talk about what the mainstreaming of impact investing means for smaller impact
Graham Singh shares the financing mechanisms that Trinity Centres Foundation is developing for repurposing churches. And, David Bank shares ImpactAlpha’s big news. Plus,
Unicef USA’s Cristina Shapiro joins David Bank to introduce child-lens investing, a framework for considering investment harms and benefits to children, who have
Roraj Pradhananga and Jane Swan of Veris Wealth Partners join host Monique Aiken to discuss how the wealth manager is rethinking due diligence
Host Brian Walsh shares highlights from this week’s agents of impact call, “The employee-ownership edge,” which explored the range of opportunities for investing
David Bank is joined by Marjorie Kelly of The Democracy Collaborative to explore the ways that impact investors both help and hinder systemic
🎧 Impact Briefing. Host Brian Walsh chats with Amy Cortese to set the stage for the UN General Assembly and Climate Week NYC.
David Bank catches up with Robert Munson, President of SOCAP and Managing director at the Sorenson Impact Center, who is putting together next
Pro Mujer’s Carmen Correa joins host Monique Aiken to share how the pioneering Latin American microfinance institution’s bonds are democratizing gender lens investing
Private equity has a significant opportunity to create financial and societal value through sustainability.  PE firms that invest in improving the management and
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When UK Prime Minister Rishi Sunak watered down the UK’s commitment to its Net Zero targets earlier this fall, he at least started
Pump it up until you can feel it. Pump it up when you don’t really need it. – “Pump it Up,” Elvis Costello
In the US, venture backed investments are failing at rates not seen since the Great Recession. The market forces slamming these companies are
California just enacted a set of bills that together represent a huge leap forward in tackling the climate crisis.   Under SB 253, about
Five early-stage startups in Tunisia beat the odds of fundraising in a declining venture market last year, collectively raising $10.3 million with the
ImpactAlpha, Oct. 19 – Just a year after its passage, the Inflation Reduction Act has helped kickstart new battery and EV manufacturing plants
Hi there, Agents of Impact!  Welcome to ImpactAlpha Open, our free weekly roundup of top news and opportunities in impact investing and sustainable finance. ImpactAlpha’s Cesar
Small businesses are the growth engine for inclusive and resilient development in Africa. Yet the $330 billion annual financing gap remains stubbornly sticky
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ImpactAlpha, June 30 – The first thing that Katherine Stodulka does when you meet her is suggest you meet someone else. Then she’ll
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ImpactAlpha, June 15 – For a decade, access to affordable, reliable and modern energy increased by roughly 100 million people a year – until the global Covid-19 pandemic. 
Since then, the number of people who live without any access to electricity has actually increased, to more than 730 million people worldwide. A third of the world’s population lacks reliable energy.
The reversal of progress on Sustainable Development Goal No. 7 has been accompanied by a shakeout in the once-frothy global off-grid solar industry, which has attracted more than $3 billion in capital. The sector attracted $746 million in investment last year, up 63% from 2021, according to the Global Off-Grid Lighting Association. That surge was largely driven by Sun King’s equity raise of $330 million last year. 
Sun King, formerly known as Greenlight Planet, is one of a handful of winners, so far, in a market that has consolidated with acquisitions, pivots and shutdowns. “Survivors with specialized offerings may now be in position to ride post-pandemic growth,” ImpactAlpha predicted back in 2020. 
Those survivors, including Zola Electric and M-KOPA, as well as d.light, Bboxx and others, are pushing ahead with new strategies to connect people to reliable energy services and a growing number of commercial banks and investors are rallying behind them. The capital shift isn’t yet moving enough capital to close the global energy access gap, which requires annual investment of about $2.3 billion, according to the International Renewable Energy Agency. But it does signify maturity in a sector that not long ago depended on philanthropy and deep impact-first capital. 
“Everyone always thought of energy access as solar torches and small home systems, and that’s not the case,” Zola Electric’s Bill Lenihan tells ImpactAlpha. “You’re seeing institutional capital and these big strategic utility and telecom companies enter the market because they’re seeing that there’s a problem, and it’s big enough for them to be interested.”
In a series of interviews with ImpactAlpha, the co-founders and CEOs of Zola, Sun King and M-KOPA peer into the future of off-grid energy access in Africa, and recount their companies’ diverging approaches to the challenge.
Like many of Africa’s early off-grid solar players, Zola – formerly Off-Grid Electric – got its start with the kind of small-scale household solar products Lenihan was referring to. Launched in Tanzania in 2012, the company designed and sold solar home systems to power a cell phone and a couple of lights for about $6 per month. That was about what families would pay for a poorer quality alternative: kerosene. 
When Lenihan joined Zola in 2015, the falling costs of solar panels and other components was driving adoption of off-grid energy. Investors took notice. 
Zola that year raised about $70 million from the Packard Foundation, Calvert Impact, DBL Partners, Ceniarth and others. The funding mix reflected the sector’s reliance at that point on catalytic philanthropic and high-impact capital, not commercial capital. Still, it was a significant amount of funding for a company selling unfamiliar products to rural customers with no credit history.
Zola has pivoted. It has moved almost entirely out of direct sales to become a technology partner to other off-grid electricity companies and utilities. It inked a deal with French utility EDF in Côte d’Ivoire. Nigerian oil and gas company OVH Energy is using Zola’s technology to provide urban residents and businesses with clean back-up power supplies. South African mobile telecom provider Econet Group is partnering with Zola to set up mini-grids in a country with deteriorating national electricity services. 
“From the beginning we always believed our core competency was on the technology side,” recalls Lenihan. “In the beginning, if you wanted to try to solve energy inequality, you had to be a technology provider, you had to do distribution, and you had to do financing because there weren’t other companies to do it. I don’t think anyone wanted to do everything. They just had to.”
The company now offers three products to meet the needs of customers from low-income, first-time energy users to middle-class, urban households, to commercial users. Zola Flex, a small charging system, caters to smaller and lower-income customers, whereas the larger Infinity system is designed for energy operators looking to provide customers with continuous energy. Zola launched an intermediate system, the Flex Max, in January.
Zola has also gradually “unplugged” the distribution, financing and other parts of its business that it “was not really built to do and not good at managing under one umbrella,” Lenihan explains. “If I can train up companies that already exist in these markets with our technology, that’s way more rapidly and efficiently scalable.” 
Zola’s technology has gotten more sophisticated. But, true to its origins, Zola hasn’t shied away from the neediest markets and customers. Last year, it signed a partnership with Haiti Green Solutions to deliver power to Haiti, a country ravaged by natural, political and economic disasters. It has also launched in Lebanon, which is suffering a financial and economic crisis among the most severe in recent history, according to the World Bank. The collapse of its state power grid nearly two years ago is driving more Lebanese families into poverty.
“If you do not have reliable, affordable energy, a country cannot pull itself out of a depression,” Lenihan says. 
Sun King is one of the oldest players in Africa’s off-grid solar sector. As Greenlight Planet, the company started in India in 2007 designing small lanterns and home solar products—much like Zola—then expanded to Kenya. Sun King has largely stuck to knitting, selling its products on a pay-as-you-go basis to five million households via thousands of field agents.
“A typical customer for Sun King is housed in a rural area, has no connection to the electric grid, and earns $2 to $8 per day,” Sun King’s co-founder Anish Thakkar tells ImpactAlpha. 
Its growth model is based on helping first-time energy users climb the energy access ladder by financing additions to small systems as customers’ incomes and energy needs grow.
Products like Sun King’s make up a shrinking share of off-grid renewable investments. Yet Sun King is among a handful of off-grid energy firms in pulling capital in. Last April, It raised a $260 million Series D equity round, led by General Atlantic’s climate investing arm, BeyondNetZero, last year. Leapfrog later invested another $70 million in an extension of the round. 
And last month, Sun King raised $130 million from Citi, Stanbic Bank of Kenya, and British International Investment by securitizing current and future cash flows from its customers.  
Not long ago, commercial banks were completely disengaged from the pay-as-you-go solar sector because of the costs and perceived risk of lending to low-income, rural customers. Banks are changing their tune, however. Bboxx, another off-grid renewables pioneer, last year secured a loan from SBM Bank Kenya to expand its solar products and services to 470,000 rural Kenyans. 
For Sun King’s deal, Thakkar says that he believes it’s the first securitization in Africa’s off-grid solar market. 
“This transaction is pretty consequential to extending access to clean solar for off-grid homes in Africa, because what it represents is a way to channel much larger amounts of debt finance to making solar home systems affordable,” he says. 
It wasn’t an easy sell. Sun King’s team spent a year educating investors and contributed a layer of junior debt as a risk cushion. The financing, denominated in local currency, will allow Sun King to provide product loans to 1.2 million customers in Kenya. 
“We think it can be replicated across many markets,” Thakkar said. “It really is the key to linking these enormous pools of global, ESG-minded, return-seeking debt capital with this opportunity to deploy solar purchase financing to the hundreds of millions of homes that need it.”
For years, big milestone announcements for off-grid solar finance company M-KOPA touted  how many rural households it had connected to solar energy.  
“It took us two years to connect our first 100,000 homes and just eight months to connect our second 100,000 homes,” M-KOPA’s Jesse Moore said in 2015. The company surpassed 500,000 households two years later, with repeated support from catalytic and impact-first investors like LGT Venture Philanthropy, the Gates and Shell foundations, Blue Haven Initiative and Acumen. 
M-KOPA is today ranked among the top seven “large incumbent companies” in off-grid solar, according to an IRENA analysis. But Moore says it was never really an “energy company.” The company’s roots have always been in financial services: it was incubated and co-founded by Vodafone’s former head of global payments, who launched Kenya’s ubiquitous M-Pesa mobile money service. 
“We became known as an off-grid energy company, and we didn’t reject that moniker,” Moore tells ImpactAlpha now. “But our part of solar has always been financing the solar. We have always fashioned ourselves as a fintech company.”
Across its financial products, the company has facilitated more than $1 billion in credit to three million unbanked and low-income customers. M-KOPA began expanding its financial services in 2019, based on credit history data from its customers, which the company built from scratch. 
“One of the things they were most commonly asking for, as they were finishing paying off their solar systems, was for a smartphone,” recalls Moore. Cell phone financing is now M-KOPA’s most popular product. 
“When I’m asked what’s the science of our product R&D, the answer is that we just ask our customers. They tell us what they need,” says Moore. “There are many other life-enhancing assets beyond solar that we feel we can make affordable and accessible.”
The company’s reputation in Africa’s off-grid energy market played a role in its $255 million financing round, which closed in May. Solar financing investor Mirova SunFunder, for example, was a backer in the $200 million debt portion, alongside Standard Bank and a raft of international development finance institutions. Terms for the debt are linked to M-KOPA achieving solar financing growth in Kenya. They’re also linked to growth in another clean energy finance opportunity—electric vehicles—and to gender-based lending targets to support women’s financial inclusion.
“The spirit of the company is to lean into underserved market opportunities, which are, in our case, almost always related to social gaps.”
Choose beats that you’re interested in, and we’ll show you more of them as you explore…
Private equity is leaving billions of dollars in sustainability value on the table. Private equity firms have amassed hundreds of billions of dollars in capital from institutional investors looking to juice their returns. As they put that fundraising bonanza to work, they have an historic opportunity to create financial and societal value through sustainability. Some PE firms and investors, primarily in Europe, have developed sophisticated value-creation approaches. For example, Europe’s Investindustrial boosts sustainability in its portfolio companies to attract higher valuations at exit. But many firms do not know how to identify, create or capture that value, according to fresh research from New York University’s Stern Center for Sustainable Business. Interviews with general partners, or GPs, and limited partners, or LPs, found that due diligence focuses mostly on “red flags,” write the Stern School’s Tensie Whelan and Julien Marchese and Florent Nanse of Arthur D. Little in a guest post on ImpactAlpha. ESG efforts often are little more than collection of metrics after an investment is made. “Many GPs and LPs are at the beginning of the sustainability value-creation journey,” the authors write, “which creates a lot of opportunity for improving societal impact and growing financial returns.” 
Big Bets: Rockefeller Foundation’s Raj Shah on how large-scale change really happens (excerpt). Climate change. Poverty. War. The daily drumbeat of news can cause people to become cynical, detached or apathetic. Even for those committed to positive change, barriers seem insurmountable. Raj Shah, president of the Rockefeller Foundation, calls that creeping feeling of helplessness the “aspiration trap.” The antidote, he argues: betting big. Big bettors don’t seek to better a few lives with charity or comfort, says Shah. Instead, they set a huge, audacious goal. In an excerpt from his new book, “Big Bets: How Large-Scale Change Really Happens,” Shah explains the mindset that has informed his career. Rockefeller has bet big on climate action, with a $1 billion commitment over the five years. This month, the foundation awarded $11 million to 25 companies.
Pension funds, with hundreds of billions in long-term assets, can be a key source of capital for impact investors and entrepreneurs. Black, Indigenous,
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post
ImpactAlpha, November 17 — An unparalleled wave of federal funding has sparked a cottage industry of organizations helping entrepreneurs, project developers and municipal
Email [email protected] for an invite
This year’s Ben Affleck and Matt Damon movie, Air, is a classic story of American enterprise. It features people and organizations once on
ImpactAlpha, October 16 — Giving workers ownership stakes in the companies they work for improves employees’ motivation, productivity, retention and drives long-term business
ImpactAlpha, October 2 — Equitable homeownership is a key strategy for narrowing racial wealth gaps. Centering Black women is key to the success
Host Brian Walsh shares highlights from this week’s agents of impact call, “The employee-ownership edge,” which explored the range of opportunities for investing
ImpactAlpha, Sept. 29 – It’s the age-old struggle: labor vs capital, workers vs. owners.  But what happens when employees get a stake in the
ImpactAlpha, September 28 — Vernier Science Education, a textbook, software and lab equipment provider for K-12 science and technology education, is converting ownership
ImpactAlpha, September 28 — Black ownership was the theme that echoed through the Walter E. Washington Convention Center at last week’s annual legislative
ImpactAlpha, Sept. 25 – It’s the age-old struggle: labor and capital typically are at odds in the workplace and the financial markets. Case in
ImpactAlpha, September 14 — Women leaders of color are stepping up ecosystem-building efforts to counter the recent legal attacks against minority-owned and led
This essay is adapted from Marjorie Kelly’s forthcoming book, “Wealth Supremacy: How the Extractive Economy and the Biased Rules of Capitalism Drive Today’s
ImpactAlpha, August 23 — Over the decades, discriminatory practices in the US real estate industry have blocked many households of color from the
ImpactAlpha, August 22 — Brooklyn, NY-based Teamshares has raised $245 million to build a national portfolio of 10,000 employee-owned small businesses. The opportunity:
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post or on
ImpactAlpha, Oct. 18 – A new approach to a well-worn financing mechanism is attracting attention to Chicago. The city is employing a new
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post or on
ImpactAlpha, Oct. 11 – A community’s racial makeup, irrespective of economic variables, affects its cost of capital in the $4 trillion US municipal bond
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post or on
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post or on
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post or on
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post or on
ImpactAlpha, Aug. 21 – The amounts are small, but the implications could be profound. When micro lender Pro Mujer earlier this year distributed
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post
Editor’s note: ImpactAlpha has partnered with HIP Investor to highlight upcoming bond issues with social and/or environmental significance. Disclaimer: Nothing in this post
ImpactAlpha, November 17 — Foundations, fund managers and other investors are hunting for impact talent before the year comes to a close. Just this
ImpactAlpha, November 10 — Banks, fund managers and other investors are hunting for impact talent before the year comes to a close. Just this
ImpactAlpha, November 3 — Fund management firms, banks and other investors, particularly on the US east coast, are on the hunt for impact talent.
Foundations, pension funds and fund management firms are among the organizations on the hunt for impact talent this fall. Just this week: US East
ImpactAlpha, October 20 — Foundations, banks and fund management firms are among the organizations on the hunt for impact talent this fall. Just this
ImpactAlpha, October 13 — Impact investors are seeking new talent in the US and globally. Just this week: In the US In Washington,
ImpactAlpha, October 6 — Foundations, banks and fund management firms are among the organizations on the hunt for impact talent this fall. Just
ImpactAlpha, September 29 — The majority of openings on this week’s impact jobs board are in big cities such as San Francisco, New York
ImpactAlpha, September 22 — Impact talent is in demand. Fund managers, foundations and other impact investors are hiring in US and global cities.
ImpactAlpha, September 15 — Impact investors in the US, Europe and the rest of the world are looking to fill newly-vacant positions ahead
ImpactAlpha, September 1 — In the US, Europe and other international locations, impact investors are searching for talent to help maximize their impact.
ImpactAlpha, August 25 — Impact investors in the US and abroad are looking for analysts, managers, associates, interns and fellows ahead of a

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