responsAbility Investments AG is an asset manager in the field of development investments and offers professionally-managed investment solutions to private, institutional, and public investors.
Founded in April 2003, and now with more than USD 3 billion in assets under management, the company’s investment solutions supply debt and equity financing predominantly to non-listed firms in renewable energy, agriculture and financial inclusion in emerging and developing economies. Through their inclusive business models, these firms help to meet the basic needs of broad sections of the population and drive economic development.
Access to energy is a key driver of economic growth, yet many emerging market countries still face significant challenges in power generation and distribution, resulting in a population of over a billion people without access to electricity. According to the International Energy Agency (IEA), providing electricity for all by 2030 would require an annual investment of USD 52 billion per year, more than double the current level being mobilized. The investment objective of the Energy Access Fund is to bridge this gap towards more universal access to modern energy, by providing debt financing to entities which operate across the entire value chain in the energy sector. These small and medium size businesses (SMEs) operate in developing markets, and largely target low income households as well as SMEs. The ultimate beneficiary is typically the population with limited, unreliable, or no access to energy.
The Energy Access Fund provides working capital financing to companies selling solutions that provide access to clean energy to underserved populations.
USD 34 million 2015 Sub-Saharan Africa, Asia Pacific Closed, 10 Year Provide clean and affordable power to underserved SMEs and households #1: No Poverty #3: Good Health and Well-Being #5: Gender Equality #7: Affordable and Clean Energy #12: Responsible Consumption and Production #13: Climate Action #17: Partnerships for the Goals Two share classes, Senior equity (88%): Private capital First loss and mezzanine (12%): public and risk tolerant investors Current: USD 0.55m Senior loans Average of USD 1.5m Various across tranches
Assets Under Management
Technical Assistance Facility
Size of Investments
USD 34 million
Sub-Saharan Africa, Asia Pacific
Closed, 10 Year
Provide clean and affordable power to underserved SMEs and households
#1: No Poverty
#3: Good Health and Well-Being
#5: Gender Equality
#7: Affordable and Clean Energy
#12: Responsible Consumption and Production
#13: Climate Action
#17: Partnerships for the Goals
Two share classes,
Senior equity (88%): Private capital
First loss and mezzanine (12%): public and risk tolerant investors
Current: USD 0.55m
Average of USD 1.5m
Various across tranches
Blended Finance Elements
The fund is structured as a blended finance vehicle, using risk-tolerant capital from philanthropic and public sources to create an attractive investment opportunity for private sector investors. Because the energy access sector is not fully mature, the track records of all funds in this space are limited. Therefore, mobilization of the private sector depends on catalytic partners - in this fund, investors in the junior share classes. The risk protection, consisting of the first loss and mezzanine tranches, amounts to 12% of the NAV (net asset value).
Companies in the energy access sector face a set of challenges that can prevent rapid scale if not addressed. Besides difficulty in raising fit-for-purpose funding for growth and expansion, issues are mostly operational, including human resource management, and project and market selection and expansion. To mitigate these challenges, reduce borrower risk, and contribute to the maturation of the clean energy access sector, the Energy Access Fund has developed a Technical Assistance Facility (TAF) to strengthen the operational capacity of the portfolio companies of the fund. Areas of support include:
The final beneficiaries of the Energy Access Fund are normally households. There are approximately 1.2 billion people living without access to power grids, 97% of which are in sub-Saharan Africa and Asia Pacific. In sum, they spend USD 27 billion per year on lighting and charging. Reliable sources of energy for these households might include solar lanterns (which replace kerosene or other solid fuel burning by providing access to reliable light - some with options for small device charging) and solar home-systems (which provide household-level access to energy for charging, electricity, and lighting). Both contribute to significant reduction in harmful emissions, including particulates that impact human health and carbon, and can also act as a source of income generation.
Distributes, sells, and installs solar lanterns and Solar Home Systems (SHS) products via a mobile money PAYG system in Africa and Asia. The company was incorporated in 2008 and recently reached profitability. The loan provided was a USD $4 million senior corporate loan disbursed in tranches which would be used to finance working capital.
The fund has provided senior loans, either secured or unsecured.
Provision of clean and affordable power has significant impact on households while it reduces reliance on dangerous and emissions-heavy lighting sources. The Energy Access Fund seeks to provide access to clean energy for households and SMEs. responsAbility collects data from their borrowers across a set of defined outcome objectives.
In structuring and going to market with this fund, responsAbility has identified key learnings – on the structure of the fund, as well as on the energy access market more broadly - which they will incorporate into their ongoing work in energy access.
Lessons Learned on Fund Structure:
Lessons Learned on the Energy Access Market: