US based impact investor Acumen has announced a $25 million initiative to invest early-stage capital in companies providing renewable energy powered appliances to microentrepreneurs and smallholder farmers in India and East and West Africa.
Investments to be made under Pioneer Energy Investment Initiative: Powering Livelihoods Using Solar (PEII+) aims to leverage the use of renewable energy in powering mills, irrigation pumps, electric motorbikes, refrigerators and the like with a view to boost incomes and climate resilience in vulnerable communities, it stated.
"Productive use appliance companies have the potential to transform livelihoods, but lack access to investment capital to support their growth," explained said Sarah Bieber, Head of Energy Partnerships at Acumen. "Alongside our partners, we will continue to invest high-risk, early-stage capital in this next generation of innovations at the intersection of energy access, livelihoods, and climate resilience."
Calling lack of access to affordable and sustainable electricity as a 'major impediment to rising out of poverty' for several of the world's poor along with the rising challenge of climate change, Acumen said renewable energy powered appliances can be a game changer. A renewable energy powered irrigation pump supplements a farmer's income when there is no need to invest in expensive diesel generators. It further cites a solar-powered refrigerator as an example for a shop owner to keep eatables cool and avoid food wastage.
"These solutions will support families living in poverty to increase their incomes by sustaining their farms and businesses or by providing entrepreneurship opportunities in mobility, food processing and food storage businesses," said Programme Manager (Renewable Energy) at IKEA Foundation, Biswarup Banerjee. IKEA Foundation is one of the supporters of the PEII+, along with Charles and Lynn Schusterman Family Philanthropies, Autodesk Foundation and Distributed Power Fund.
It is strategically aligned with the Global Energy Alliance for People and Planet (GEAPP) commitments and has received follow-on funding with UK Aid from the UK government.
The initial phase of PEII back in 2017 supported 12 energy access entrepreneurs supporting people living in poverty with patient capital. These companies further mobilized an additional $128 million from other investors.
Acumen said it will utilize innovative financial instruments to make early-stage investments in 10 new businesses between 2022 and 2026.