Egypt’s renewable energy sector presents investment opportunity

Egypt continues to mobilize private regional and foreign capital to support the country’s renewable energy sector, with wind and solar PV under the feed-in-tariff scheme presenting an investment opportunity of at least $6 billion to 2018, one of the region’s leading investment banks commented today in the build-up to the World Future Energy Summit.

Facing growing energy demands and pressure on fuel supplies for conventional energy generation, Egypt is focusing on renewable energy as a viable and effective source to add to the gas-dominated energy mix. Egypt’s New and Renewable Energy Authority aims to generate 20 percent of its power from renewables by 2020.

Egypt will need to add about eight gigawatts, foreseen to be split between 5.5 gigawatts of wind power, and 2.5 gigawatts of solar power according to EFG Hermes, one of the leading investment banks in the Arab World.

As a result, EFG Hermes predicts a debt and equity investment opportunity of approximately $6 to $7 billion for Egypt’s feed-in-tariff renewable energy program to 2018.

In these challenging times, renewable energy is increasingly serving as an innovative solution for Middle East and North Africa countries, especially Egypt, to rebuild, reconstruct, and drive diversified economic growth.

Renewable energy’s low cost of production, reduced environmental impact, and ease of implementation in rugged and demanding situations make renewables the best power source for Egypt’s future. Whether developed by governments, the private sector, or NGOs, renewable energy can transform the key development pillars of power, health, infrastructure, education, and people.

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US$100 Million Grofin SGB Fund Supporting SMEs in Africa

The Fund has initial commitments of US$100 million, which is expected to grow to US$150 million in two years, making it one of the largest funds specifically targeting small and growing businesses. * This Fund is a follow-on to the US$170 million GroFin Africa Fund that is fully invested * The GroFin Small and Growing Businesses (SGB) Fund aims to support over 9,800 under-served entrepreneurs and help create 47,000 sustainable jobs across Africa over the next 10 years. * The Fund has attracted investment from a range of development funders and investors including Shell Foundation (an independent charity), KfW Development Bank (KfW), the Dutch Good Growth Fund (DGGF) and Norfund. * The GroFin SGB Fund seeks to provide business development assistance and finance to small and growing businesses that are currently under-served in Africa.

Kampala, Uganda – Wednesday 23 September 2015 marked the official launch of the GroFin Small and Growing Businesses (SGB) Fund in Africa that aims to catalyse sustainable job creation through supporting small and growing businesses in Ghana, Nigeria, Uganda, Zambia, Kenya, South Africa, Rwanda, Tanzania and Egypt. The GroFin SGB Fund seeks to provide an integrated solution of patient risk capital and end-to-end business support for SGBs. Each year the Fund aims to support up to 100 entrepreneurs, with an estimated average loan size of US$ 350,000. Over the next 10 years the Fund will target the creation of 47,000 sustainable jobs. The Fund’s tiered capital structure is a distinguishing feature that enables a range of social and commercial investors to join the Fund post its launch. The fund is an uncapped and unlimited-life fund, and GroFin aims to initially grow the dedicated SGB Fund to US$150 million.

Typically, SGBs and entrepreneurs in Africa lack the vital resources they need to succeed: access to flexible patient capital; access to business skills and training; and linkages to the supply chains of larger organisations.

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Selling Solar to Rural Africa is Emerging as a Hot Market

Will electricity in developing rural areas spread more like cell phones than land lines? These startups think so.

After years of fits and starts, startups and big businesses are finally starting to pay attention to the solar market in rural corners of the developing world.

Over the past few months, a number of high profile investors have backed startups selling solar panels to off-grid customers across regions like Africa, India, and East Asia. Meanwhile, big solar companies have created divisions focusing on rural customers in the same areas.

That this market is now starting to mature shows how solar is increasingly affordable to people who earn less than $2 daily. At the same time, it highlights how business can lead social development—electrification, in this case—in ways that some non-profits have failed.

For the most part, wealthy countries like the U.S. and Germany have been the ones to adopt home solar panels. Home owners typically buy their solar systems out right or lease them from a third party like SolarCity  SCTY -2.29% . These solar systems tend to plug into the broader power grid.

But in regions like rural Africa, where the power grid is lacking, an entirely new strategy has had to be developed. These new solar products have relied on new types of financing, have ridden on the back of mobile technologies, and have depended on the emergence of cheap batteries. Will this type of solar product become the norm in rural off-grid areas?

The innovators

One of the rapidly growing startups tackling this market is M-Kopa, based in Nairobi, Kenya. The company was founded nearly five years ago by Jesse Moore and Nick Hughes, who was one of the original creators of mobile payment system M-Pesa. If you haven’t heard of it, M-Pesa is one of the world’s most successful mobile payment services. By some estimates, 95% of Kenyan adults use it to buy goods and services, and a third of Kenya’s GDP flows through it every year.

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Impact Entrepreneurship

Paul Graham sparked a furious debate over the last few days about inequality with his blog post, Economic Inequality. He points out that the focus of the dialog should shift from inequality to combating poverty and providing more economic opportunity. The power of entrepreneurship, mixed with technological disruption, is creating an “acceleration of productivity” that is leading to rapid, massive wealth creation. Paul’s essay argues that we should celebrate this, not seek to suppress it, and instead focus on inequality and social mobility.

I like that Graham is sparking dialog on this important topic. He puts himself “out there”, even if it means being exposed to some withering critiques.

His essay caused me to step back and reflect on the fact that I am seeing more entrepreneurs inspired to harness the power of some of the forces he describes – entrepreneurship, technology, innovation and shockingly fast productivity – to make a positive societal impact. I would like to see this trend continue. I’d like to see more Impact Entrepreneurs (a concept I first saw coined in an article in Wired Magazine by Adam Levene) not just wealth-creating entrepreneurs. Impact entrepreneurs are inspired to direct their entrepreneurial energy and skill to make a difference, help a group in society, right a wrong or turn around an injustice. Not just build the next Candy Crush Saga.

Don’t get me wrong – I love wealth-focused entrepreneurs, too. As a venture capitalist, investing in and supporting entrepreneurs focused on turning Flybridge’s seed and Series A investments into something very valuable is my day job. But if we want to unleash the full power of entrepreneurship and technological innovation to better society, more entrepreneurs need to direct their energy to truly making an impact. This effort can take a few forms. Some examples and trends are:

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How You Can Start Impact Investing In 2016

I have a New Year’s money resolution for you that would be good for your financial future and the world’s: Become an impact investor in 2016. And I’ll tell you how in a sec.

Impact investing, the buzzy term in investment circles these days, means investing for a financial and a social-impact return. A recent U.S. Trust survey found that roughly a third of high-net-worth investors either own or are interested in owning social-impact assets.

Retirees are keen on impact investing, too, according to a Merrill Lynch/Age Wave survey: 72% said that, compared to other ways of giving, social impact investing “can be more effective in getting results for causes I care about” and 43% noted that “seeing my rate of return helps me to measure how much impact my giving has.”

Beyond ‘Socially Responsible’

In recent years, the moniker I’ve used to describe investing to support causes that matter to you was “socially responsible.” It meant buying stocks in companies doing what you considered to be the right thing.

Impact investing takes this do-gooder idea a step further: Here, you buy stocks or bonds of startups or other small ventures that are aggressively working to crack big global challenges such as poverty and affordable housing.

Until recently, impact investing was generally reserved for the very wealthy — individuals with at least $1 million in investable assets or income of $200,000 a year — and minimum investments typically started at $250,000.

But lately, it’s becoming easier for the rest of us to become impact investors.

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