Acumen announced the launch of its Pioneer Energy Investment Initiative (PEII), an effort to bridge the funding gap in off-grid energy and catalyze the underinvested sector to accelerate energy access across the developing world. The aim of the initiative, anchored by a $5 million grant from the IKEA Foundation, is to impact 8 million people through Acumen’s portfolio of companies by 2026.
Over the last decade, Acumen has invested more than $20 million in 18 companies across East and West Africa, India and Pakistan to build the largest portfolio of off-grid energy companies serving the poor. Working across every rung of the energy ladder, these social enterprises have provided tens of millions with access to energy. Many of them, from d.light to M-Kopa, have pioneered the off-grid sector, opening the doors for new energy companies working to find faster, more efficient solutions to improve the lives of low-income people everywhere.
With the initiative, Acumen will expand its work in energy by investing in the scale-up of early-stage businesses, filling gaps in the value chain, and supporting the off-grid energy ecosystem. The investments will focus on new ways to generate and distribute energy to homes, small businesses, and communities not connected to the central electrical grid, such as home systems, mini-grids and innovative products that use solar or other renewable sources to bring power to low-income people. In addition, Acumen will provide these energy companies with the support needed to scale, including technical assistance, access to customer insights using Acumen’s Lean Data approach, and strategic partnerships across sectors.
“When Acumen began investing in energy, there were few established players in the market but we saw an opportunity in intrepid entrepreneurs who recognized the potential of renewable energy to help bring access to range of other benefits to families,” said Acumen Founder and CEO Jacqueline Novogratz. “With the price of solar reaching unprecedented lows, we are at a tipping point. More and more companies are emerging today, but it’s critical they have access to catalytic capital that will not only help them scale but reach millions of communities in need.”
“With its focus on innovative businesses committed to the needs of low-income communities, we believe Acumen can bring high-impact energy solutions such as solar home systems to the people who need them most, creating safer, healthier homes for children and their families,” said Elizabeth McKeon, Head of Strategy for the IKEA Foundation. The foundation is supporting Acumen grant through its healthy homes program designed to provide children a safe place to call home and a healthy start in life. This is one of the foundation’s first major grants for energy under its €400 million commitment to address climate change.
In conjunction with its investing, Acumen will also work to advance collaboration and investment in the off-grid space through the PEII. It will cultivate greater understanding of emerging markets and their customers by sharing insights, research and impact data collected from its portfolio companies with the public and private sectors. Acumen recently kicked off an impact series featuring a range of research that looks at the social impact of off-grid energy in the developing world. The first study, funded by Google and in partnership with SolarAid and ETH Zurich, sets out to understand how low-income households in rural Kenya use solar products, how much they save, and the impact these products have in their day-to-day lives.
“To achieve the impact we’ve set out to with this initiative requires a different kind of collaboration,” said Yasmina Zaidman, Acumen’s Chief Partnerships Officer. “The support of IKEA Foundation and our other partners, including the UK Department for International Development and the Osprey Foundation, is helping to establish an environment where experimentation is encouraged and investment is focused on impact. Our partners share our commitment to bringing access to the poor, sharing our lessons and data, and engaging with other key stakeholders in the sector.”
To receive updates on upcoming research and PEII activities or get involved, please contact Yasmina Zaidman at [email protected].