Advantage Environment: Crowdfunding investments generate affordable solar power

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Crowdfunding investments generate affordable solar power

Posted: 10 Oct 2017 05:15 AM PDT
TRINE wants to end energy poverty. The company’s digital platform funnels micro investments to local energy entrepreneurs, funding economically viable off-grid solar energy projects in rural regions of developing countries.

More than one sixth of the world’s population lack access to electricity. One third live in energy poverty, without clean cooking facilities, and have to spend a lot of time gathering fuel for their daily needs.

Reliable access to electricity means being able to avoid hazardous exposure to smoke and fumes from open fires, kerosene and diesel. It also enables progress, frees up time and simplifies work. Energy is the first step on the stairway of economic growth to a modern standard of living.
Digital platform to end energy poverty

Crowdinvestments assembled by TRINE are used to fund local solar power installations. In a project in Nyabondo, Kenya, 2 400 solar home systems have given 12 000 people access to clean electricity. Photo: TRINE.

“Electricity changes everything”, as the Gothenburg-based company TRINE puts it. The company has developed a digital platform that connects micro investors in the wealthy part of the world with local entrepreneurs installing solar power facilities in countries like Kenya, Zambia, Tanzania, Senegal and Uganda. TRINE evaluates all local partners meticulously to make sure that the projects are sound and to give investors a good assessment of the risk they are taking.

”So far, 16 projects involving more than 2 000 investors have been fully funded. The replacement of fossil fuels has resulted in an immediate reduction of 50 000 tonnes of CO2 emissions, and 170 000 people have gotten access to renewable energy. Our goal is to fund a thousand projects before 2021, and lift 66 million people out of energy poverty”, says Sam Manaberi, CEO of TRINE.

”In the coming 24 months, our expanded operations will generate 100 million Euro of public investments. We are looking to create the perfect connection between investors, entrepreneurs and the people in need of energy. Our ultimate goal is to eliminate energy poverty”.
Triple impact investing

People living in energy poverty are exposed to health risks from dirty fuels. Solar power replaces fossil fuels and lowers the energy cost for end users. Photo: TRINE.

Energy poverty is most widespread in parts of Africa and Asia, regions with good conditions for generating solar power. The electricity can be produced to a lower cost than kerosene and diesel, but the high entry cost of having solar panels installed is insurmountable for the locals. Thanks to the loans mediated by TRINE, end users can get immediate access to sustainable, low-cost energy, and pay for their consumption on a monthly basis. Meanwhile, investors get a reasonable return on their investments. The company calls it “triple impact investing” – a profitable investment with a purpose, that contributes to sustainable developments in several ways:

    The investments are sustainable and profitable. They fund local companies and stimulate the local economy.
    The projects provide environmental advantage by replacing fossil fuels with renewable energy.
    The projects raise the quality of life and save money for end users.

Aid and relief efforts have an important role to play, but the company believes that profitable investments are necessary to make a lasting environmental impact and enable the local economy to grow:
”Our investors get a reasonable return, while they contribute to making the world a better place. The local entrepreneurs that we are funding get the opportunity to grow long-term sustainable operations, with positive ripple effects on the local economy.”
Profit with a purpose

The company is primarily seeking individual investors to fund the projects. The digital platform makes it easy to add funds and look over how the projects are developing.

”Investing sustainably should be easy”, Sam Manaberi says.

”We present the active projects and their required funds on our website. Investors pick the project they want to support, and by how much – from 25 Euro up to the remaining amount needed to get the project going. Once the project is fully funded, the loan is issued to our partner company on location. Investors are payed back with interest in regular installments during the project’s running time.”

The actual installation is handled by the local partner company, which pays an agency fee of five percent of the loan amount to TRINE. The interest is shared equally between TRINE and the investors.
Empowering the end users

There are three kinds of solar powered systems installed in the projects: lighting, modular home systems that supply light, electricity and mobile phone charging for single homes or companies, or mini grids that supply a number of homes or an entire village. The end users are spared from the initial cost of installation and pay for their consumption.

”Almost everything is digital; the system’s electricity meter connect with the users’ mobile phones. The solar companies that we lend the funds to get a good view of credit histories and payments, and are able to charge the users regularly for their consumption. With the pay-as-you-go model, the end users get lower energy costs compared to what they would otherwise pay for kerosene and diesel”, says Hanna Lindqust, Communications Manager at TRINE.

The article was published in October 2017.

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