Accesss To Capital

As well as providing support on the operations of their business, we also assist companies to access capital to start-up, to expand, or to develop or construct projects.  In the developing world, the lack of access to capital is a key barrier to the development of successful micro, small and medium-sized businesses.

We believe that while private, commercial capital is fundamentally the right solution, there remains an important role for public/donor funding to catalyse and underpin private investment due to the early stage of the market.  We help design and implement private and public/private capital solutions by providing:

Capital advisory and introductions: We provide support related to financing strategy including capital structuring, identifying sources of capital, and preparation of documentation for financing processes. We also make introductions to capital providers where appropriate.
Credit enhancement: We offer guarantees to lenders to companies we have vetted, both at micro ($500 – 20k) and commercial bank ($20k – 1m) scale. The guarantees are intended to increase the availability of lending and to decrease its cost. To date, we have helped micro-enterprises finance equipment purchases, inventory and extend end-user credit. Since the successful pilot of the micro-guarantee facility, followed by a capital increase by new donors, 135 businesses have benefitted. A similar guarantee facility with commercial banks is currently being designed as part of our CARE2 programme.
Financial institution training: We train financial institutions to improve their knowledge of energy sector lending, and thus encourage increased activity. To date, our training programmes have served approximately 50 East African financial institutions.
Grant support: We provide grants to de-risk companies or business models, or to underpin the economics of a project to encourage private capital to participate. Grant funding will nearly always be combined with other support, as well as monitoring on the use of the grant. At any time, the availability of grant funding will depend on the status and objectives of individual programmes.

A few examples include:
The ESME programme provides grant funding in Senegal, Tanzania, Rwanda and Kenya for energy companies including developers of small hydro projects and solar product suppliers.
The IDEAS Energy Innovation Contest provides grants of up to $200k to innovative renewable energy projects in the Caribbean.
The Kenya Climate Innovation Centre provides proof of concept grants for early-stage Kenyan businesses targeting climate mitigation or adaptation technologies.
The Spark Fund provides funding for high-potential cookstove businesses in Kenya to improve their technical, product design and manufacturing capacity and practices.
Examples of our access to finance activities include:

Facilitating impact investments from an international investor
We served as technical advisor to a Zurich-based impact investor which resulted investments in three GVEP clients. Fenix International, SolarNow and SunnyMoney (2013 International Ashden Award winner) all benefited from term loans funded by AlphaMundi Group’s Social Alpha-Bastion fund.
Fenix International produces power generation and smart energy storage solutions. Its flagship product, the Readyset is an intelligent plug-and-play energy system that powers lights, radios, mobile phones, as well as other appliances. The loan was a bridge financing to the Company’s Series B equity offering. Solar Now is a Netherlands-based company selling and distributing solar home systems through a hire-purchase facility in Uganda. The loan will be used to finance the rapid growth of the hire purchase portfolio. SolarNow envisions opening branches in other East African markets in 2013 and beyond. SunnyMoney is the for-profit trading subsidiary of SolarAid, a UK-based charity focused on distribution of solar lighting for use in off-grid households. SunnyMoney is a product agnostic distributor selling d.light design, Barefoot Power, and Greenlight Planet products through schools promotions. The loan from AlphaMundi was in part facilitated by security the Company provided through a pledge of inventory as collateral.
Facilitating access to finance for a micro-enterprise
Janet Adeyo, a businesswoman and mother of four from Nyahera on the shores of Lake Victoria in Kenya, is a role model to many women in the region. Janet has become well known in Kisumu for producing high quality improved cookstoves. “It was not until I met GVEP staff who trained and mentored me on business development that I came to realize the potential for my business to grow,” explained Janet. Equipped with a well-crafted marketing plan (developed with assistance from a GVEP business mentor) she secured a loan of $1,500 from Ecobank to scale up production of cookstove liners and expand into constructing fully assembled stoves. She has also been able to employ four new permanent staff. “Since I obtained the loan in March 2013, I have been able to produce 120 assembled cookstoves, as well as 1,400 liners, each month," she explains. "I look forward to doubling my sales to $3,000 per month by June 2014”.
Facilitating grant funding for household lighting companies in Kenya
With funding in the ESME Programme we are supporting distributors of off-grid lighting products in Kenya. The grants are intended to help scale up activities of distributors and increase sales to consumers who need the products most – the poorest socio-economic group living off-grid.


Financing R&D efforts of a pay-as-you-go biogas company in Kenya
Only 11% of rural Kenyan households have access to electricity, and most families still rely on traditional fuels, such as charcoal, firewood and kerosene. To address this challenge, Takamoto is developing a pay-as-you-go (PAYG) biogas system that brings affordable biogas to low income, rural households by combining mobile payments with reliable pre-fabricated biogas units.
Takamoto has been awarded a proof of concept grant by the Climate Innovation Centre Kenya to test the technical and financial viability of PAYG biogas. The grant will be used to fund a 50-unit pilot in Githunguri, Kenya and allow the collection of information to allow the company to refine its business model before rolling out more widely.

 http://www.gvepinternational.org/en/business/access-capital?gclid=CKaBs-z2xsACFRWTjgodiEkA0w