Creating a Pipeline of Local Entrepreneurs: Reducing Risk in Energy Access Investments

Local Kenyan entrepreneurs are developing profitable energy access businesses, but these investable opportunities are a blind spot for impact investors.

WRI, with support from the DOEN Foundation and Wallace Global Fund, has sought to make these businesses more visible by conducting interviews with both local entrepreneurs and investors, documenting barriers and opportunities for investment and exploring ideas for shifting approaches to investing.

These businesses and opportunities include:

• A last-mile distributor of pay-as-you-go products who is distributing products to households/fishermen and needs access to working capital.
• An indigenous provider of pay-as-you-go products who struggles to raise capital even as international companies raise millions of dollars. 
• A solar developer who installs systems for children’s homes, schools and hospitals, but needs capital to import solar products.
• A solar developer who installs solar for horticulture units but does not have access to impact capital to expand their marketing activities.       
• A company that has set up an award-winning, river-based microgrid but does not have access to capital to replicate.    
• A company that sells biodiesel pumps to farmers whose customer bases lack access to loans.
• A biomass briquette manufacturer for schools and industries, who cannot access capital because their business is not asset-backed.

These examples are abundant in Kenya, which has seen a large inflow of capital to a handful of companies in the energy access sector. Impact investors have characterized the sector as over-hyped but have not attempted to diversify their portfolios. As some of the companies have started to stall, it is possible that investors will move away from the sector completely. This will severely risk reaching the 2030 energy access goals, unless something changes. This event will encourage discussion around:

Exploring solutions

Foundations or interested stakeholders will explore possible broader solutions that have emerged in WRI’s research, including:

• Helping local investment fund managers raise capital
• Supporting energy-focused incubators
• Galvanizing angel investing from the Kenyan diaspora

Understanding investment opportunities

At this workshop alongside the 2019 SEForAll Charettes, impact investors will have the opportunity to understand more about these local companies, and WRI will facilitate introductions. WRI is also planning a follow-up workshop in Nairobi and activities in Kenya for interested stakeholders.

For more information or to register, please contact Sanjoy Sanyal or Molly Caldwell.