The "in between" space - Can investments that combine public purpose and business-like behavior produce results?

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Presentation by Christine Eibs Singer, Deputy Executive Director - E+co - USA.

Presentation by Christine Eibs Singer, Deputy Executive Director - E+co - USA.

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  • 1. The “In Between" Space Can Investments that Combine Public Purpose and Business-Like Behavior Produce Results? TBLI Conference, November 2005 Christine Eibs Singer Deputy Executive Director [email_address]
  • 2. E+Co E+Co, a public purpose investment company established in1994, delivers services to and invests in developing country small and medium energy enterprises that deliver modern energy to households, businesses and communities, creating: -economic opportunity; -quality of life improvements and -positive environmental impacts Triple Bottom Line Returns on Investment E+Co operates in 20+ countries through locally based staff in Costa Rica, Brazil, Bolivia, South Africa, China and Thailand, with support offices in The Netherlands and US.
  • 3. E+Co Overview
    • Business Development Services are provided Pre- and Post Investment to support market and technology validation, financial analysis and structuring, business plan development, implementation and growth.
    • Investments (equity and debt) at the early stage and structured based on local market conditions and enterprise needs.
    • E+Co is technology neutral – the technology must be appropriate, available and affordable to its end-users.
    • E+Co blends public and private resources.
    • Sponsors include social investors, charitable foundations, financial institutions, multilateral banks and development organizations, bi-lateral agencies and multi-national corporations.
  • 4. The E+Co Enterprise Centered Model Local Partners Energy Services result in micro enterprises, productive uses and income generation Tools & Training Enterprise Development Services Seed Capital Enterprise Growth Services Growth Capital E+Co services and financing Energy Services Energy Entrepreneurs Local Partners
  • 5. E+Co Portfolio Performance Summary January 1998-June 2005
    • 112 investments $10.7 million in 35 countries
    • Modern Energy Services 2.1 million people
    • 17 Enterprises Written Off $1.1 million
    • 19 Loans Repaid in Full $2.3 million; ROI 10.2%*
    • Projected Weighted Average IRR on Total Portfolio, after write-offs 8.4%
    • * ROI excludes enterprise development costs and a portion of operating costs, which are funded separately through contracts and grants
  • 6. Enterprise Investment Profiles
    • Tecnosol, Rural Energy Services Company, Nicaragua
    • Clean Thai, Waste to Energy Solution Provider, Thailand
    • LaEsperanza, Hydro-Electric Power Plant, Honduras
  • 7. Nicaraguan-based Clean Energy Company Solutions to lighting and water needs
    • Nicaragua: 50% of population has no access to any type of electricity services and 75% of the rural areas are still un-electrified.
    • TecnoSol , promotes solar, wind and hydroelectric and provides energy alternatives for the lighting, refrigeration, water pumping and irrigation needs of businesses and communities.
    • TecnoSol has installed almost 3000 systems, primarily on a cash basis. Over next 2-year period, plan to install >6400 systems.
    • The company has experienced accelerated growth and it forecasts a 100% increase in sales in the coming years.
    • Tecnosol Highlights
    • E+Co Financing: US$300,000
    • Term : 6 years
    • Jobs Created : 13
    • Impact : PV systems replace use of kerosene and candles.
  • 8. Thailand enterprise uses waste to displace oil usage
    • Clean Thai and KWTE Highlights
    • E+Co Financing: US$ 197,500
    • Co-Financing: US$3,400,000
    • Jobs Created : 20
    • Environmental Impact :
    • 8 million liters of fuel oil displaced annually, emissions reduced by 250,000 tons CO 2 per year
    • Clean Thai uses proven anaerobic digestion technologies to recover and convert organic waste into biogas.
    • Thailand’s largest cassava producer uses the biogas to power its production boilers and to generate electricity to be used by the factory.
    • The factory is displacing 8 million liters of heavy fuel oil, generating 30,000 MWh of electricity each year.
    • The result is multimillion dollars of savings in operating costs , significant annual carbon emission reductions and energy self-sufficiency .
  • 9. Honduran Hydro Enterprises produces Triple Bottom Line Impact
    • La Esperanza is a 12.8 MW run-of-river hydro-electric project utilizing an abandoned powerhouse foundation.
    • La Esperanza produces triple bottom line benefits: financial, social and environmental. Permanent jobs, improved roads, reforestation, potable water and displacement of environmentally negative greenhouse gases.
    La Esperanza Highlights: E+Co Financing: US$450,000 Term : 4 years Co-Financing : $12.6 million Jobs Created : 40 direct, 120 indirect Environmental Impact : -Planting of more than 18 hectares of new forests. -Displacing 35,000 tons of greenhouse gases annually that would result from the traditional use of fossil fuels.
  • 10. La Esperanza Hydro Facility
    • E+Co’s Value Added
    • EDS for business plan preparation
    • Catalytic Seed Capital for construction of the first powerhouse
    • Follow-on investment to assist in securing financing for full construction
    • Assessing and quantifying its carbon offset potential; packaging, selling and registering the FIRST small scale CDM project, which should close in 2004.
  • 11. Triple Bottom Line Reporting
    • E+Co implements a Monitoring and Evaluation (M&E) Program that tracks the impact of modern energy delivered by E+Co investee companies along 30 social, environmental and financial indicators.
    • Highlights:
      • 2.1 million people now have access to modern energy services
      • $120 million in co-financing leveraged
      • 480,000 tonnes of CO 2 Offset Annually
      • 44.5 million liters of clean water pumped
      • 46,000 tones of firewood displaced
      • 6 million liters of kerosene displaced
      • >1,800 jobs sustained
  • 12. 5-Year Business Plan
    • $84 million invested in 200+ clean energy enterprises
    • Leverage >$900 million of co-financing
    • Establishment of Local Funds and Affiliates
      • Central America - Complete
      • Cameroon – In Progress
      • Ghana – In Progress
  • 13. CAREC
    • Central American Renewable Energy and Cleaner Production Facility
    • Innovative Mezzanine and Debt Facility
    • E+Co Capital Latin America – Fund Manager
    • First closing reached at $15 million; $20 million target
      • Leveraged fund – 60% equity, 40% debt
      • USAID-DCA Principal Guarantee for Private Sector Debt
    • 25-30 SME Investments
    • Market:: 20 million people lack clean energy in Central America
      • 5000-5700 MW of new capacity over next 10 years, 50-60% in renewable energy; = ~$4 billion of
      • investment
    • ~10% Return to Investors
  • 14. For Further Information… Contact: Christine Eibs Singer Deputy Executive Director [email_address] Tel: 1.973.868.6321