Transcript Document

Financial
Ecosystems in Acess
to Electricity
Christophe Poline
Sustainable Investments Manager, Schneider Electric
Italy-Africa working together for a sustainable energy future
As the Global Specialist in
Energy Management ™
24
billion € revenue
(FY 2013)
43%
of revenue in new economies
(FY 2013)
150 000+
employees in 100+ countries
4-5%
of sales dedicated to R&D
A large company, with a balanced
geographical footprint and a commitment
to sustainability
Fostering access to reliable,
affordable and clean energy
B
I
BOP
P
Partners &
collaboration to
succeed
A combined approach of
business
and philanthropy:
Business, Innovation
& People at the Base
of the Pyramid
Since 2009
11
2 Million
investments in France,
Africa and India
households gained access to energy
50 000
people supported to be
trained in energy
Providing access to electricity is technically easier
> Solar Home Systems
• Prices have come down drastically thanks to Pannel mass production and
energy efficiency that allows size reduction of systems. The next breakthrough is likely to
come from batteries
• Embedded Pay As You Go Systems are increasing affordability
• Renting systems alos available
> Micro Grids
• On going technical evolutions.
• Payback of Investment is still difficult without a strong base load
Confidential Property of Schneider Electric
4
Solar Home System Economical
Challenges
> Customers don’t have cash
> Customers are living out in the bush
> Customers don’t know how to install &
> maintain the products
Economical Challenges: Customer doesn’t have cash
Option 1: financing the customer : Donation
Donors
-fondation
Cash Payment
Supplier of
Equipement
-International NGO
-Development Aid
Distributor
Customer
$
Partial
Cash Payment
Examples : Solar Aid; Solar Sisters, …
Not sustainable : it lasts as long as the subsidies lasts
“Spoils the market” Once a product has been given or bought for cheap
nobody in the neighborhood will pay for the product (and hence will not have
it)
Local Entrepreur
Local NGO
Economical Challenges: Customer doesn’t have cash
Option 1: financing the customer : Micro Finance
Cash Payment
Cash Payment
Supplier of
Equipement
Distributor
Customer
•Examples : Grameen, Pamiga,
•But MFIs don’t want to take the technical /quality risk on an energy product.
$
• But If you add the cost of distributing the energy products and the cost of
distributing the loans it becomes unaffordable. (having the MFI distribute the
energy product is tricky for regulatory reasons and for business reasons)
Micro Finance
Instalments
Economical Challenges : Customer doesn’t have cash
Option 2 : Financing the distributor
Pay as You Go
Cash Payment
Supplier of
Equipement
Re Payment
Distributor
$
Customer
Impact Investing
Working Cap financing
• But Financing needs are huge
• But the risk for the investor is high & no track record yet. Only example: M Kopa but other are coming (Simpa Network)
• But no local commercial bank will finance the existing companies.
Our vision
• Some large impact funds are arising in collaboration
with DFIs.
• There is a definite need for derisking instrument such
as guaranties. Both equity and debt investors need
that kind of instrument.
• Creation of new type of financing institutions with
deep market knowledge (to minimize commercial risk)
and able to link impact money and solar projects. Two
models are emerging : SPV linked to a solar company
(BBOXX, Azuri) or sectorial institutions such as
“SunFunder”
Confidential Property of Schneider Electric
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