An impact investing syndicate aims to identify companies developing solutions to constraints undermining work for those at the bottom of the pyramid. It assesses business models and impact potential, provides technical assistance, and connects companies to investors. The syndicate has built awareness, developed local pipelines in 5 countries, and convened technical assistance providers. It aims to finalize first deals by end 2014 and reach an $8 million portfolio by 2016. The syndicate looks for commercially viable prospects addressing market constraints and improving livelihoods, especially for women. It uses grants, impact investors, ethical investors, and commercial investors, blending equity and loans for $150,000 to $2 million deals. Impact is measured on individuals, businesses, and market systems.

1. an impact investing syndicate

2. Introducing…
A consortium comprising of:

3. What is our role?
 Identify a long-list companies seeking to develop solutions to
critical constraints that undermine their ability to work for the
bottom of the pyramid
 Assess potential viability of their business models & capacity to
deliver measurable social impact
 With a shortlisted pipeline, we identify investibility gap and deliver
technical assistance
 Assist the company to understand its financing needs, help them
access it locally, and/or introduce them to impact investors
 Ensure a social impact monitoring plan, against which we
measure our impact

4. At what stage is ACRE?
 Initiated in 2012: so far
– Built the investment vehicle and investor awareness
– Local pipeline development in 5 countries in Nepal,
Bangladesh, India, Zimbabwe, Malawi, Bolivia
– Convened international technical assistance provider pool
 Blueprinting 2014 - 2016: Aim of first deals agreed
by end of 2014. US $8 mil portfolio by end of pilot in
2016.
 Fully online in 2016: Independence from (tech
assistance) subsidies; proof of TA/investment
vehicle blend concept.

5. What we look for in
prospects
 Potential for commercial viability
 Potential to address constraints in the market systems they
operate (e.g. sectoral innovation, market infrastructure, policy
influence)
 Clearly identified, measurable impacts on the livelihoods of
the poor (special focus on wellbeing of women)
 Has limited access to affordable finance
 Investment needs of US $150k - 2mil.
 Shows continuous improvement in environmental sustainability
 Leadership in place with the latent skills and incentive to grow
the business
 Not on consortium, investor and country foreign direct
investment negative lists

6. ACRE and access to energy
 Current pipeline:
– Solar, anchor-based community lease-to-buy systems
(Nepal)
– hydropower grid-connected with 25 % community ownership
(Zimbabwe)
 Under consideration:
– Mini-grid franchising (Malawi)
– Carbon financed LPG (Sudan)

7. Who are the investors?
Grants Impact
investors
Ethical
investors
Commercial
investors
Sources Charities,
governments,
aid agencies,
foundations
Impact
investment
funds, aid
agencies,
wealthy
individuals,
trusts
Investment
funds,
wealthy
individuals
Investment
funds,
individuals,
companies
Motivation Focus on
impact
“Impact
first”: focus
on impact,
but wish to
recover their
capital for
reinvestment
Focus on
profit, but
will not invest
where ethical
criteria not
met
“Finance
first”: Focus
on profit

8. Investment vehicle
 Investor syndicate managed by Challenges Capital
 Investors assess prospects on a case-by-case basis
 Deal to use blends of equity and loans
 Costs covered through syndicate membership fee
and sweat equity
8

9. Measuring impact
On the
poor
Improved wellbeing of
poor people directly
affected by the business
On the
business
Improved viability,
environment
sustainability and
growth of the business
On
market
systems
Greater sustainability,
inclusiveness and
equitability in the
market systems
E.g. # BoP individuals
gaining reliable and
affordable access to
electricity
E.g. Viable
demonstrations for
programmatic CDM,
carbon financing, input in
policy formulation
E.g. Subsidy
independence and growth

10. Some reflections so far:
 Programmatic / systemic approach to sector change
 Complex technical assistance needs can be delivered
through multi-partner framework agreement
– Extended periods of coaching investor readiness sometimes
necessary
– Big technical assistance bill, up to 35 % of investment deal size.
Until investibility and returns are proven, requires co-funding for
technical assistance to companies
– Syndicated investors reduce transaction costs while offering
tailored hands-on, patient, venture capital

11. Moving forward
 Seeking partners to pilot bottom-of-
the-pyramid energy access investing:
– To invest in innovative, bottom-of-the-pyramid energy
portfolio within the US $8 mil. pilot portfolio by end 2016
– To support technical assistance to a pipeline of
innovative, bottom-of-the-pyramid enterprises/companies
of up USD 700,000 up to end of 2016
– To propose further pipeline development partnerships to
scale up scope of pilot

12. Thank you
Aaron.Leopold@practicalaction.org.uk