NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

In the aftermath of COVID, venture capital rounds dropped by 44% in the US alone. In Q1 2020, no capital was secured by ASEAN-focused private equity funds, demonstrating a challenging fundraising environment. Now, SMEs like SOLshare who deliver critical services to underserved communities are facing exacerbated challenges in accessing finance. To support SMEs in raising capital, IIX is leveraging on-the-ground data-driven insights to provide businesses and investors with  comparative, standardized information on risk, return, and impact (RRI) so that they can create risk mitigation strategies, make capital allocation decisions, and more effectively and transparently drive capital towards where it is needed most.

Dr. Sebastian Groh, Managing Director of SOLshare, said: “The SOLshare team had been working on a financing round for many months and COVID-19 was an additional unexpected challenge. Thanks to the tremendous support of existing investors, support partners, and mentors the company was able to move forward. We’re thrilled that investors recognize the critical need on the ground, especially in some of the most vulnerable communities in the world who risk losing access to clean energy as well as the great potential SOLshare has to show the path into a better energy future.

IIX Chief Investment Officer and MD of Portfolio Management, Robert Kraybill, said: “IIX is thrilled to continue supporting SOLshare, following our 2018 investment through our IIX Growth Fund. Over the past decade, IIX has built a highway of support for enterprises across their stages of growth, effectively connecting them to capital markets through Impact Partners. With investors reeling from the market meltdown, we believe that RRI investment strategies will become the new norm. Investors who can assess opportunities through the lens of risk-return-impact can look to make attractive returns from investing in COVID-resilient businesses while creating positive impact for people and planet.”

Stefan Padberg, Managing Director of innogy New Ventures LLC, said: “We are doubling down on SOLshare’s vision and mission, which continues to prove to the world that a deep commitment to underserved communities pays off for investors. We are excited to be a part of this journey to make affordable clean energy accessible to everyone.”

Even before the pandemic, SMEs formed the backbone of the global economy, making up over 90% of all firms, 70% of total employment, and 50% of GDP. The UN highlights that COVID-19 threatens to have devastating consequences in least developed countries (LDC) like Bangladesh, and may undo progress achieved towards sustainable development if SMEs are not provided with support quickly.

IIX supports SMEs like SOLshare through its award-winning technical assistance program ACTS (Assistance for Capacity-Building & Technical Services). ACTS is currently supported by the Korea International Cooperation Agency (KOICA), and through programs such as IIX’s Equity@Scale –which is funded by the Australian Department of Foreign Affairs and Trade. ACTS is the only accelerator program in the world to provide a leverage of 25x (meaning that for every dollar of grant funding received, IIX unlocks 25 times the private sector capital).

SOLshare is in discussions with the United Nations High Commissioner for Refugees (UNHCR) office in Bangladesh for supplying smart solar microgrids in the Rohingya refugee camps where currently more than 800,000 Rohingyas reside. SOLshare also announced today that it has won the Ashden Award in the energy access category for Finance and Business Model Innovation, a gala ceremony referred to as the Green Oscars at the Royal Geographic Society in London, UK. Ashden spotlights and supports climate and energy innovators around the world – including businesses, non-profits and public sector organisations which are delivering proven, ready-to-scale climate solutions.

Bangladesh has six million solar home systems installed –making it the country with the highest number in the world. However, more than half of Bangladesh’s population has no access to electricity, and demand has reached nearly double the country’s generating capacity. Asia and the Pacific region is home to the majority of the world’s energy poor, with an estimated 700 million people without access to electricity.

Photo courtesy of Marufish.