christian schattenman, bamboo finance
TRANSCRIPT
1May 1, 2023
Investing with ImpactMay 1, 2023
Bamboo FinanceInvesting In Off-Grid Energy
2May 1, 2023
Content
About Bamboo Finance
3May 1, 2023
A Global Private Equity Firm
• Impact Investing and Microfinance pioneers
• Management team with track record
• Diversified portfolio by geography and stage
• Demonstrated returns with exits delivering IRRs from
18 - 39%
• Tangible significant social impact with top quintile
rating by third party
• Strong investor base – 75% institutional investors
$280MPrivate Equity
38 Investments
>20Countries
4Regional Hubs
Bamboo Finance is a commercial investor specializing in low-income consumer business models that produce and deliver essential products and services in frontier markets. 3
Funds
4May 1, 2023
• Invest in companies that reach underserved regions in emerging markets profitably
• Focus on affordable healthcare, education, housing, financial services, agribusiness and renewable energy
• Fund innovative distribution and financing models
• Expand and strengthen local economies, communities and businesses
• Integrate impact measurement alongside financial performance from the beginning
• The company delivers or supports the delivery of essential products and services to low income consumers in emerging markets
• The usage of the product/service results in increased income or reduced expenses and better quality of life
• The company generates employment/income in local communities
• Map impact objectives, governance, policies, distribution channels, supplier integration, human resource practices and incentives to the company’s business model
• Establish a set of output indicators that the company will report on a quarterly basis
• Take a board seat and contribute to social and financial performance ongoing
• Support the use and advancement of third party impact measurement systems and initiatives
INVESTMENT CRITERIA AND IMPACT MANAGEMENT
INVESTMENTSTRATEGY
INVESTMENTCRITERIA
IMPACT PROCESS & TRACKING
About Bamboo Finance
5May 1, 2023
FIRST GENERATION OF FUNDS
Oasis Fund
Fund size# of Investments
#of Exits
US$ 195 Million30 Investments4 Exits
US$ 53 Million16 Investments2 Exits*
Strategy
The Bamboo Financial inclusion fund invests in a range of microfinance institutions and funds serving the lower socio-economic segments in emerging economies
The Oasis Fund invests in commercially viable companies that provide access to housing, healthcare, education, energy, financial services and agriculture
Portfoliosample
Financial inclusion Fund I
* Represents Debt Investment and Partial Equity Exit
About Bamboo Finance
6May 1, 2023
About Bamboo FinanceA portfolio of 38 investments across more than 20 countries
XAC BANK (Mongolia)
APOYO INTEGRAL (El Salvador)
EFC (Zambia) EDPYME NUEVA VISION
(Peru)
SICSA
AAVISHKAAR
AFRICAP
FASO (Uganda)
APOYO INTEGRAL (Mexico)
BANCO FIE (Bolivia)
FIE GRAN PODER (Argentina)
BANCO WWB CALI (Colombia)
CREATION INVESTMENTS
APOYO INTEGRAL (Guatemala) CFE (Panama)
SVASTI (India)ASMITHA (India)
MIBANCO (Peru)
AMfB (Nigeria)BANCO POPULAR
(Honduras)
BAI TUSHUM (Kyrgyzstan)CHF (Romania)
CHF (Lebanon)
CFE (Tanzania)
EAMF (Cameroon)
EASL (Ghana)
CFE (Uganda)
FINAE (Mexico)
BILLE (Brazil)
IMMERSION (Pakistan)
GREENLIGHT PLANET (India)
VAATSALYA (India)
HUSK (India)
VORTEX (India)
JOMA (Vietnam, Laos)
KOPO KOPO (Kenya)
VIDAGAS (Mozambique)
CARECROSS (South Africa)
Financial Inclusion Fund Investments
Oasis Fund Investments
Offices
Bogotá (Colombia)
Geneva (Switzerland)
Singapore
Luxembourg
ORB (India)
Nairobi
BRIDGE (Philippines)
COAST COCONUT(Kenya)
MODERN FAMILY DOCTOR (India)
BRAZIL+
BBOXX (UK, East Africa)
7May 1, 2023
Content
The Off-Grid Energy Opportunity
8May 1, 2023
Solar Makes Sense…
Solar is the best energy solution for off-grid: Geographical spread of countries in South East Asia
and large rural off-grid markets in Africa make solar the most appropriate technology.
Distributed solar energy is cheaper than extending the grid and will drive off-grid electrification in Sub-Saharan Africa, South Asia & Southeast Asia.
Africa has been leapfrogging telephony and banking. The same will happen to energy.
9May 1, 2023
Large Underserved Market…
Large underserved market for fast growing companies:
The off-grid SHS (solar home system) and appliances market size is estimated to be USD 50 billion. This market size grows significantly if adding business opportunities around the provision of content (internet, e-learning, entertainment, etc).
A new breed of fast growing off-grid energy companies is seeking capital to expand.
10May 1, 2023
Social & Environmental Impact…
There is a significant development impact: Energy is the basis of development. Clean energy is the
basis for sustainable development. Investments in off-grid energy have the potential to create
a virtuous cycle in which energy access enables economic development which triggers more demand for energy.
We can’t afford that the 1.3 billion off-grid people develop with traditional polluting energy. If we want to reduce carbon emissions and fight global warming, we have no choice but to invest in renewable energy for off-grid communities
11May 1, 2023
Stanford Energy Club, Berkeley Energy & Resources Collaborative, Oct 2014 “…This exciting development…may also foreshadow how the energy system of the future will look.
As these systems continue to develop they will be able to meet increasingly greater energy needs, such as enabling the use of refrigerators, and spur increasingly complex types of economic development…”
“… Africa’s leapfrogging of the traditional energy infrastructure…”
…Confirmed By Many Experts
Report on the Off-grid Lighting Status for Southeast Asia and the Pacific, Nov 2014 “…population of Southeast Asian countries…is around 507 million, of which nearly 111 million (around 22 per cent)…do not have access to grid electricity…”
“…due to the geographical location…generation of electricity through solar energy is the most appropriate one.”
“…A full transition to energy efficient off-grid lighting in Southeast Asia would result in energy savings of 19.3 million barrels of crude oil energy equivalent; cost savings of USD 1,423M; and a CO2 reduction of approximately 7 million tonnes.”
12May 1, 2023
Recent Off-grid Energy Deals Several off-grid solar firms raised US$44 million in the first two months of 2015 from major strategic and financial investors, continuing from the US$64m raised in 2014. This includes debt and equity investments and shows increasing exit pathways for SFA portfolio.
US$10mn
US$12.5mnWarnerPhillips
US$12.6mn
Some of the
investors in 2014
US$7mn
US$2.1mn
US$0.5mnUS$2mn
13May 1, 2023
Energy Access Sector OverviewEnergy poverty has moved from being only a huge development problem to a large market opportunity driven by developments in renewable technologies, mobile penetration, economic development, population growth, price of fossil fuels, mobile financial services etc.
Slow grid extension demands for off-grid solutions !• Grid extension is a resource intensive long-term
effort facing multiple challenges• Long distance transmission lines are not cost
effective in rural, less densely populated areas• This is even more the case if terrain is difficult
(mountains, islands, etc.)• It is therefore expected that 70% of rural areas
will be connected with either mini-grids or with stand-alone off-grid solutions
Key Growth Drivers
Active SIM Connections
3G penetration
rate
Smartphone penetration
rate56.9MMobile Money Users
56.9MRenewable Technology
PricesKerosene & Diesel Costs
Un-electrified population in Africa: More than 500m people as of
today Expected to grow by 2030 to 700m
as rapid population growth is outpacing the many positive efforts to provide access
Nearly 80% of those lacking access to electricity across sub-Saharan Africa live in rural areas.
Un-electrified population in South & South-East Asia: More than 800m people as of today Most of these households depend
on conventional fuel burning that pollutes and damages, both their health and environment, indicating a great need for clean and affordable products.
Un-electrified population
2009: 1.3 billion people2030: still 1.3 billion people, with 700 million alone in Sub-Saharan Africa
14May 1, 2023
Climbing the energy ladder requires appropriate energy sources offering a growing investment opportunity…
Market Potential
Market size estimates (AT Kearney 2014):
• Today’s solar portable lamp market volume : $200M
• Short-term solar portable lamp market volume : $2.71Bn
• Mid-term Solar Home System (SHS) market volume : $6Bn
• Long-term SHS and accessories market :$50Bnincluding devices aiming at powering
• Radio
• Television
• Others (e.g. fans, refrigerators, tablets, smart phones, etc.)
• Large additional market opportunity: provision of content from movies to music, internet, etc.
…exemplified by exponential growth of off-grid energy companies:
Example 1: Company selling solar lamps growing from $1m business to $21m in just 3 years
Example 2: Company offering SHS with PAYGO technology selling 300’000 systems within 3 years.
Example 3: The Bamboo’s latest investment in company expected to sell 100’000 SHS within 2 years
inter-connected
Households
Portable
Low High
PL
SHS
Mini-grids
Cost of Solutions
Modern
Productive
Basic
Low High
Energy level
Use
Market potential
Time HorizonTodayShort-term Mid-term Long-term
15May 1, 2023
Content
Bamboo Off-Grid Solar Energy Experience
16May 1, 2023
Bamboo Off-Grid Energy Examples
Bamboo Finance has a track record of successful investments in off-grid energy companies. Current portfolio companies show strong growth and significant value increases through third party transactions.
February 2012 January 2015
Bamboo invests in Series A round of Greenlight Planet.
Fidelity invests in Greenlight Planet in Jan 2015 at significantly higher valuation than Bamboo.
"Greenlight Planet has established itself as a product leader with a strong brand in the fast-growing off-grid energy segment. We are excited to partner with Greenlight Planet and its exceptional management team as the company embarks on its next phase of growth." – Kabir Narang, Managing Director of Fidelity Growth Partners India
Greenlight Planet
September 2012 January 2015
Bamboo purchases shares of Orb from Zouk Ventures.
"We have reviewed many solar businesses now entering the African market, and we found Orb's diversified range of solar products, designed and manufactured by Orb to the highest standards of quality, to be very compelling. This, combined with Orb's unique branch network for the sale, installation, and service of residential and commercial customers gave us confidence that Orb will serve the Kenyan customer and its banking partners well. The investment fits well in FMO's renewable energy strategy for Africa.“ – Robert Voskuilen, Senior Investment Officer, FMO
Orb Energy
October 2012 August 2014
“Where Husk is going is very positive, it is not fixating on one technology, it is fixating on solutions.” – Daniel Kammen, energy researcher at the University of California, Berkeley.
Bamboo invests in Husk Power Systems in October 2012.
Husk Power Systems
February 2015 February 2020“Bboxx records customer usage data in minute detail. Gathering data on customers' energy usage behavior is the only way we can learn how to provide energy as a reliable service. We believe this innovation is central to unlocking the pay-as-you-go business model and making solar energy an accepted, trusted and financeable product in the eyes of the off-grid world.” – Sandhya Hegde from Khosla Impact
Bamboo invests in BBOXX in February 2015.
BBOXX
FMO invests in Orb Energy to support Africa expansion at a significantly higher valuation than Bamboo.
First Solar Inc. invests in Husk to support expansion to solar mini grids at a significantly higher valuation than Bamboo.
Company expected to show strong growth over a 5 years holding period. Exit to strategic or financial investor.
17May 1, 2023
Content
Risks & Mitigation
18May 1, 2023
Focus on Downstream
Bamboo invests in innovative businesses downstream the energy value chain: no upstream risk
Product design and engineering
International distributionManufacturing National
distribution Retailing
Manufacturers
Consumer financing
Distributors and retailers Consumers
• Need capital for R&D in product tailoring to BoP customers and to pass along good terms to logistics and distributors
• Distributors and retailers need to finance upstream and downstream
• Huge working capital needs because of long transport and distribution times
• More than 50% of consumers need to finance their off-grid product
R&D (Solar/PV cell)
Not in investment scope !
Bamboo doesn’t invest in capital intensive technology risk of upstream solar
19May 1, 2023
Portfolio Diversification
Portfolio mix of Businesses models and products: pico-solar / SHS against up-front payment SHS with consumer financing, energy service model project finance, mini-grids B2B services and products using solar energy Enabling businesses
Active portfolio risk management with focus on diversification
20May 1, 2023
Portfolio Diversification
Active portfolio risk management with focus on diversification
Geographic diversification: Investing in a diversified portfolio across Sub-Saharan Africa and Southeast Asia Invest in companies that have multi-country and region
approach to further increase geographic diversification on individual investment level
21May 1, 2023
Portfolio Diversification
Active portfolio risk management with focus on diversification
FX and country risk reduced by investments in international companies exemplified by BBOXX: Headquarters in London Quality management and procurement team in China Regional finance and operations team in Rwanda Distribution with sales & tech staff in Kenya, Uganda, Rwanda Franchise partners and sales presence in over 30 countries Accesses LC financing for customer receivables: securitization
of receivables in LC, financing from local banks and MFIs
