“Radical imagination” for a sustainable energy future
The DOEN Foundation was one of seven leaders whose work in advancing Sustainable Development Goal 7 was celebrated at a Seven for 7 event Monday night in New York City.
In 2010, providing off-grid solar services in remote areas of India and Sub-Saharan Africa was in its infancy. Technology costs were prohibitively high, solar energy providers were few and far between and the UN Sustainable Development Goals, calling for universal access to sustainable energy, didn’t exist.
No matter, the DOEN Foundation saw a ripe opportunity to lift millions of people out of energy poverty and jumped on it. The Dutch foundation has been an early pioneer and innovator in providing financing to intrepid social entrepreneurs bringing affordable solar energy to the poorest parts of the world. And its leadership and impact has only grown as innovative financing models and falling solar costs open up markets and turn on the lights for millions.
Over 27 years, DOEN has supported 4,500 initiatives in 35 countries as part of its quest to achieve a “green, socially-inclusive and creative society.” DOEN is flexible in financing, using instruments ranging from grants, convertible grants and loans, as well as convertible loans and direct investments, through its investment arm DOEN Participaties. Advancing sustainable energy access gains – mostly with solar systems and mostly in Africa and Asia – has been an integral part of its strategy since 2010 when it awarded its first grant to SolarNow.
The dozens of enterprises that DOEN has supported over the past eight years are a veritable Who’s Who in the sustainable energy movement, from Frontier Markets and the Selco Foundation in India to BBOXX and SunFunder in East Africa. Collectively, DOEN-funded enterprises have reached tens of millions of people, most of them rural households that have long relied on polluting and expensive kerosene for power. Having solar-based electricity and better-quality lighting for the first time has transformed these people’s lives, leading to higher incomes, better education and improved health conditions.
DOEN is keenly focused on sustainable energy enterprises working in India and Sub-Saharan Africa where significant populations still lack access to basic electricity. These regions are also hotbeds for sustainable energy innovation. Reaching under-served ‘last mile’ populations in hard-to-reach rural areas is DOEN’s biggest priority.
DOEN also operates with a long view. Its relationships with its entrepreneurs are all long term in nature, from early-stage development, to business model fine-tuning to full-blown market expansion.
“We have learned an important lesson over the years – be patient and be flexible,” said Anneke Sipkens, CEO of the DOEN Foundation, in her video message at the Seven for 7 event. “Many of the initiatives we support work in very difficult situations, and it means they don’t know all of the challenges that they will face. As a funder, you must also be flexible and work and learn with the entrepreneurs.”
In the case of Selco Foundation, which operates in poor rural areas of India, DOEN provided $250,000 of incubator financing in 2012 when its model was still being developed. It then provided $2 million in 2016 to help Selco Foundation expand and scale its approach, which combines solar-powered lighting, sewing machines and other products with innovative financing tools that customers can use to buy them. In 2018, DOEN made an additional investment in SELCO India, which is focused on reaching the very poor with solar lighting and income generating products.
“Their financial support was critical. They came in at a time when no one else was looking at ecosystem development for energy access,” said Huda Jaffer, Lead Designer at the Selco Foundation, whose products are now being used by 7.5 million people in India.
BBOXX, a major off-grid solar energy provider in East Africa, has also received multiple rounds of DOEN funding that nurtured it from early development to a full-fledged expansion now underway in a half-dozen African countries. Operating as a distributed energy utility, BBOXX hopes to reach 4 million households with its solar products by 2020, an ambitious jump from 150,000 systems it has sold to date.
“DOEN has been catalytic by enabling us to demonstrate significant profile and risk-taking projects in existing and new markets,” said Anshul Patel, Chief Commercial Officer at BBOXX.
“Courage,” “risk-taking” and “radical imagination” are words that DOEN often uses to describe the initiatives they support. All of them have unique and innovative energy products with large growth potential in poor hardscrabble markets.
Technologies are an essential part of their business models, but affordability and accessibility are just as important. If an enterprise needs time to develop innovative financing tools suitable for a specific market demographic, DOEN is okay with that. Simply put, DOEN is a patient investor, a commodity all too rare in the investment world.
Consider the case of Selco, which spent several years working with communities and individuals in India to gauge what services they needed – and then helped them find workable financial products to pay for them.
“The best financial lesson I ever learned was from a street vendor who said to me: 300 rupees a month is beyond me, but 10 rupees a day I can manage,” said Selco co-founder Harish Hande, in an interview with the Guardian. “We have to meet people where they are and provide finance that is affordable.”
Hande’s passion, creativity and optimism personifies DOEN’s vision for changing the world.
“We believe it is possible to create a society where there is a good balance between social and ecological progress,” said Saskia Werther, Programme Manager at the DOEN Foundation. “This is a substantial movement underlined by progressive agreements governments have made with each other worldwide, such as the Sustainable Development Goals (SDGs).”
But achieving these ambitious goals, such as universal access to sustainable energy by 2030, will require bold, fearless ideas – something DOEN is happy to keep supporting.
“We have reached a tipping point in our present society, and we can arrive at a sustainable society only if we stick our necks out and keep on experimenting just like the sustainable energy sector has done with the pay-as-you-go models, mini-grids and we’re now seeing in using sustainable energy for productive use purposes,” Werther added. ”DOEN can do that by continuing to invest in new and innovative ideas for impact, and by providing support for a longer period of time, if necessary.”