Mackenzie Welch GP

1. Smart Villages Workshop
April 28, 2017
Impact Investing in Solar

2. Expanding opportunity
for people living in poverty
MISSION AND MODEL
Families in
Poverty
Social
Enterprises
High-impact
products &
services
Impact
Investments
Investors
Donors
$225 million in impact investments with 101 partners in Latin America and East Africa.

3. CHALLENGE
STATEMENT
WHO IS SERVED
WHAT IS
DELIVERED
WHY IS THIS
IMPACTFUL
HOW IS THIS
SUSTAINED
Roughly 1.2 billion
people worldwide have
no access to electricity
and spend an estimated
$27 billion annually on
dangerous alternatives.
GP aims to improve the
economic position and
quality of life of off-grid
households by investing
in manufacturers and
distributors that provide
access to quality, low
cost solar lights and
home systems.
Target
demographic
is off grid
populations,
many of
whom live on
less than
$3.10 a day.
Solar products
that offer
choice with a
focus on:
• Solar lights
• Solar light
with charging
• Small solar
home
systems (SHS)
Household
economics and
quality of life
improve due to:
• Reductions in
fuel and
phone
charging costs
• Increased
productivity
• Decreased
smoke from
kerosene
• Increased
study time for
their children
Client pays
for the
product
upfront or
pay-as-you-
go. Once
paid off, the
solar light
products
create
savings
compared to
spending on
kerosene or
candles
SOLAR INVESTMENT INITIATIVE

4. LESSONS LEARNED
• Large reach working with manufacturers and large distributors
• Organizations excelling at section of the value chain, while branching
out through partnerships, from perspective of GP’s capital (debt)
• Pay-As-You-Go is a socially and financially appealing model
• Positive household impact: Reduced up front cost provides access to
lower income families while enhanced features provide more value
• Strong financing structure: Ability to lock and reclaim system reduces
portfolio risks by lowering risks associated with lending
• When clients have access to solar product, there is high demand
• Market study (n=400) in Nicaragua showed 50% of respondents wanted
large home system, though ability to pay was low
• 42% wanted combination of portable and plug systems, 100% adoption

5. CHALLENGES
• Lack of investor attention leads to fewer solar enterprises developing
• Focus on solar in Africa and Asia over need in rural Americas
• Small solar distributors in Americas have limited reach due to small size
but do not qualify for larger investor financing that would help growth
• Other lenders and earlier stage capital are not yet filling the gap.
• MFI adoption slower in Latin America and reach is limited to client base,
risk of over indebtedness
• Generics from copycats in China can create market spoilage, though
uncommon in the Americas

6. POSITIVE DEVELOPMENTS
• Opportunity to build energy ladders to increase rural incomes
• Solar, particularly PICO and small home systems, is household product
• Focus on larger systems for productive use in the future (i.e.
Refrigerators for produce, charging barbers clippers)
• Rural businesses can increase their income by reducing the costs of
energy and free, rechargeable energy
• Decreasing cost of solar components: Cheaper photovoltaic panels,
batteries and LED bulbs continue to speed adoption and increase access.
• Charging solutions for mobile phones continues to spur growth
• Some increasing investor focus and enterprises overcoming pioneer gap

7. THANK YOU