Access to finance is the single largest barrier hindering clean energy access beyond the grid — but the tide may be turning.
2014 was a breakout year for beyond the grid clean energy investment with at least $64 million invested, according to Greentech media. But in spite of this growing investment, the debt needed to scale successful companies is still all but absent. Which means whomever unlocks this debt unlocks scale, and that means powering hundreds of millions of lives.
In what may be a watershed moment on that front, the U.S. Overseas Private Investment Corporation (OPIC) just this week closed a deal with Simpa Networks, a leading solar-as-a-service company operating in India. Their announcement included raising $4 million in commercial debt financing from OPIC and GDF Suez.
With this new funding, Simpa Networks will be able to reach an additional 200,000 people with clean, reliable, beyond the grid energy. To date, Simpa Networks has delivered over 65-megawatt hours of power and has created over 2,800 full and part-time jobs. Simpa Networks’ press release included the following statement from OPIC’s President and CEO Elizabeth Littlefield:
“Simpa’s inclusive approach to spreading energy access makes them an ideal partner for OPIC’s impact-focused development investment strategy. The kind of technological leap Simpa and like-minded innovators are achieving proves that off-grid, clean energy in emerging markets is not merely viable, but a true opportunity both financially and environmentally.”
It just so happens we at the Sierra Club are quite familiar with the work of Simpa Networks. We featured them in our short video, “Harnessing the Sun to Keep The Lights On in India” — a video that, by the way, will be screened at the wild and scenic film festival early next year.
All in all, the Simpa/OPIC deal may just be an important moment that marks a shift in the growth of this market. If this is in fact the case, it will be in large part thanks to innovative public agencies like OPIC whose U.S.-Africa Clean Energy Finance (ACEF) initiative has committed to supporting 25 clean energy projects in 10 African countries — including significant support for beyond-the-grid clean energy companies.
The truth is OPIC is a leader in this market, and other agencies would do well to follow in their footsteps.