This is a situation that solar firm, EcoZoom, operating in Kenya, East Africa experienced in 2015.
However, a crowd funding company, TRINE came to the company’s rescue, Thomson Reuters Foundation reported.
According to media, the Swedish company has a community of about 1,000 young investors in northern Europe, who are willing to each give a minimum of $27.14 to solar firms, which aim to help the world’s poorest gain access to electricity.
Crowd funding benefits multiple projects
EcoZoom’s founder Ronald Van Harten commented: “Few banks if any could finance a social investment project dealing with people seen as high risk group, and even worse banks are expensive and give conditions that are not easy to meet.” Read more…
TRINE’s regional manager in East Africa, Matthew McShane told media that through crowd funding, the company has raised more than $814,200 for 10 renewable energy projects since its launch last year.
The firm has invested in countries including Kenya, Zambia, Uganda, Tanzania and Senegal.
“The majority of [our] investors can invest in many other ventures in Europe but [they] choose to put their money in social impact projects partly because they want to touch the lives of the poor and partly because returns are slightly higher when compared to … normal investments,” McShane said.
He said the returns are about 6% because of the perceived higher risk associated with this market.
New class of capital
Media cited the World Bank’s statistics which have revealed that globally, crowd funding provided $2.1 billion in investment in 2015, and investments in developing countries alone are predicted to exceed $96 billion a year within a decade. Read more…
“Crowd funding is clearly no longer just for start-ups and has the potential to provide a new class of capital for energy access,” Azuri Technologies CEO, Simon Bransfield-Garth, said.
It is reported that through this investment scheme, in February Azuri East Africa, part of Azuri Technologies received $175,000.