Is Impact Investing the Next Big Thing for Bloomberg?

Tuesday, June 3, 2014

Despite his business background, Michael Bloomberg’s philanthropy has been pretty traditional, albeit in an outsized way: He’s made big cash grants to NGOs trying to solve major problems.

Now, Bloomberg Philanthropies is trying something different, making its first-ever “impact investment” — to a Berlin-based company, Little Sun, which creates portable solar lamps for use in the developing world.

The Bloomberg funding comes in the form of a $5 million low interest loan that will allow Little Sun to continue growing and providing clean and affordable energy to homes, businesses and schools in Sub-Saharan Africa.

Five million bucks is small change for Bloomberg, who’s quick add another zero or two to the checks he writes. But this investment strikes us as a big deal, potentially opening a major new chapter for one of the nation’s most active large-scale philanthropists. It signals yet another step forward for the field of impact investing, which is red hot and, clearly, getting even hotter. (See, among other developments, the new ventue launched by Michele Demers, Boundless Impact Investing.)

Oh, yes, and it’s also potentially a big deal for people in Sub-Saharan Africa. Little Sun Managing Director and CEO Felix Hallwachs said that seven out of 10 people in the region currently lacked access to basic electricity and instead relied on toxic kerosene lamps, which, over a four-hour period, caused as much damage to human health as smoking 40 cigarettes.

Given that Mike Bloomberg has been one of the top funders fighting smoking-related deaths, you can see why Little Sun caught his eye.

Climate change is another top Bloomberg cause, and Little Sun is doing good here, too. Kerosene has been estimated to emit up to 200 million tons of carbon dioxide per year, which is equivalent to emissions from 60 large US coal plants. And it isn’t even that cheap, with households in Africa unconnected to the electricity grid spending about 20 per cent of their household budget on its use.

Source: Inside Philanthropy (link opens in a new window)

impact investing, philanthropy