Why One Private Equity Firm Is Betting Big On Impact Investing In Renewable Energy

The concept of impact investing is hardly new and one that is refreshingly simple. It is simply about funneling investment dollars into companies established with the intention of generating a quantifiable, visible and broadly beneficial social impact alongside a financial return.

Advocates of the practice claim it has the power to change lives and are often found exploring ideas and ventures in emerging markets.

Being typically accustomed to engaging with private equity companies exploring potential opportunities worth billions in the oil and gas business, and especially the U.S. oil patch now that a period of relatively stronger oil prices is among us, your correspondent was intrigued to come across Bamboo Capital Partners (BCP), a Luxembourg incorporated boutique PE firm, pumping millions premised on impact investing into renewable energy.

BCP

Installation of solar panels in Goma, Democratic Republic of Congo, via a project back by Bamboo Capital Partners.

With a pedigree of having raised $300 million via its funds since 2007 behind it, quite recently BCP launched a new investment platform to deploy an initial $50 million to scale energy access for millions in sub-Saharan Africa and Asia.

BCP’s Managing Partner Florian Kemmerich says the investment vehicle will target distributed energy service companies (DESCOs). “It extends our impact investing footprint, which is predominantly focused on financial inclusion in emerging markets and lower income populations. Energy poverty is the issue of our age, and we feel alleviating it could be achieved using renewable energy.”

Kemmerich says developing energy markets are not burdened by legacy infrastructure.”In fact, there are parts of sub-Saharan Africa, and many other places in our world that have not even been electrified, let alone have a regular supply of power.

“It is here we feel that the legacy of fossil fuels could be skipped by deploying at source generation via solar power.”

In keeping with such a thinking, BCP’s latest investment platform is backing start-up BBOXX and “its data-driven DESCOs, providing off-grid energy to consumers in Africa and Asia, and generate greater impact in their respective markets.”

BBOXX claims its solar platform brings “machine-learning and customer experience optimization” to rural Africa, and Kemmerich likens its transformative potential to what mobile telephony has achieved in Senegal, where fishermen and traders – in the absence of fixed-line telephony – bypassed it all via mobile phones to connect with the wider market.

“Nearly a decade later, the model has spread across Africa progressing beyond telephony straight to mobile money, mobile banking, and so on. New energy companies, new business models have the power to disrupt the power market in a similar fashion helping electrification reach the ‘off grid’ population.

“The conventional method is for someone to produce energy, wire it and then sell it. That is being leapfrogged and changed massively with rooftop power solar energy, locally generated wind energy. In the proverbial ‘Industry 4.0’ age, we firmly think backing such a drive is what impact investing is all about. In fact, I’d say it has taken the investment community to ‘Impact Investing 2.0’ too!”

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