As part of Blog Action Day, we introduced you to the public purpose investment company, E+Co. To recap, E+Co is a non-profit that provides local energy entrepreneurs in developing countries with business development services as well as investment capital. Active in 28 countries across Africa, Asia, and Latin America, it has fostered the growth of 180 enterprises, offering an additional 4.3 million people access to clean energy, and offsetting 3 million tons of carbon.
E+Co is a renowned expert in program development: it was recently awarded 2008 Sustainable Investor of the Year by the Financial Times and the International Finance Corporation (IFC) of the World Bank Group, and is a member of the Aspen Network for Development Entrepreneurs (ANDE). With a successful model in place, the organization is now in a position to shift gears and focus on scaling up. E+Co’s membership commitment to the Clinton Global Initiative reflects that decision. Its current business plan sets three target goals for 2012: create partnerships and generate the necessary funding to invest $190 million of services and capital in local energy businesses, bring clean, modern energy to an additional 17 million people, and offset over 15 million tons of carbon.
E+Co grew out of an international project management consultant firm. In the early nineties, the Rockefeller Foundation asked for an assessment of impact opportunity within the vast sphere of the global environment. E+Co’s recommendation was threefold: fund energy initiatives, do it in the developing world, and invest in business because the need far surpasses government capacity for growth. Thus, E+Co’s vision was born, and with a firm belief that it would take an inter-sector approach to provide the public good of sustainable energy.
As we mentioned, E+Co strives for a world with universal, sustainable energy. For now, each commitment it makes brings E+Co closer to the long-term goal – serving 80 to 120 million people. Founder and Chief Executive Officer Philip LaRocco explains how it arrived at that key range. In 2001, the G8 Renewable Energy Taskforce issued a report outlining an agenda for the expansion of renewable energy, suggesting that renewable energy would need to serve 800 million people before it would become mainstream. Only a few years later, it was the International Year of Microcredit and the leadership at E+Co was inspired to learn that an industry that had served between 60 and 100 million clients was generating so much positive attention. Extrapolating from the output of its then current enterprises, E+Co became increasingly focused on the tipping point: creating a model for business and government to provide small-scale sustainable solutions to the developing world.
While the Investment Officers at E+Co were once seeking entrepreneurs out in electric shops, with news ads, and by hosting workshops, they are now inundated with opportunity. Their strategy is simple: find and invest “in men and women who want to make their livelihood supplying clean energy to their neighbours.” One of their investees, Zara Solar, just won the Energy Globe Award for providing access to electricity in Northern Tanzania. They also won the 2008 World Bank Lighting Competition and the Ashden Award for Sustainable Energy in 2007.
E+Co recently began to augment the profit earned by its entrepreneurs by playing an advisory role to its investees as they begin to sell offsets. La Esperanza is a hydroelectric facility that supplies clean energy to over 13,000 households in Honduras, and one of the first small-scale renewable energy projects to sell carbon offsets to the World Bank Community Development Carbon Fund through the Clean Development Mechanism (CDM). E+Co is working with Gold Standard and targeting institutional clients. In fact, Goldman Sachs recently purchased the majority of E+Co’s available offsets. Individuals can purchase smaller quantities of offsets through Live Climate.
The success E+Co has earned allows it to increasingly operate more like an investment firm and less like a non-profit. Its funding is shifting from grant money to private investors. While venture capitalists investing in energy have often expected a 20-30% return, E+Co offers 8-10%. As LaRocco asserts, “That 20% is an illusion…the value distortion will be corrected.” With a diverse portfolio comprised of solar, wind, hydro, biogas, LPG and energy efficient businesses, E+Co is well-positioned for newly skeptical investors.
Interested in investing? It’ll have a new site up in a week. Want to learn more about E+Co? Post questions, and we’ll get them answered.