WASHINGTON – Tapped by the World Bank and a number of U.S. charitable foundations to lead a drive for profitable renewable energy sources in rural areas worldwide, Solar Development Capital will make its first investments private equity investments in the sector early next month.
With plenty of deals already in the pipeline, the $28.75 million fund’s first investments are expected to target Brazil, Indonesia and South Africa, said JD Doliner, managing director of Solar Development Capital. The fund will aim to place between $100,000 to $4.3 million of private equity interests in early-stage companies that lease, install, service or extend credit and financing for micropower systems in rural communities. The average investment size, however, will fall in the $1 million to $2 million range. Through its 10-year investment window, the fund expects to fund between 25 and 30 deals.
Solar Development Capital is an arm of Solar Development Group, itself the result of a rural electrification initiative launched in 1999 by the World Bank, International Finance Corp., the Rockefeller Brothers Fund, the Rockefeller Foundation and the Joyce Mertz-Gilmore Foundation. In its effort to mitigate climate change and create affordable local energy sources, Solar Development Group selected Stichting Triodos PV Partners to manage its venture capital fund. Stichting Triodos PV Partners is a foundation formed by three groups: Triodos Bank Group of the Netherlands; Environmental Enterprises, an Arlington, Va. group that provides investment capital for entrepreneurs in creating environmental industries in developing countries; and Global Transition Consulting, an Arlington, Va.-based non-profit with expertise in solar-based rural electrification projects.
Now, the fund is not only focused on improving education and health in developing regions of Asia, Latin America and Africa in order pave the way for sustainable economic growth, but, like any other investment fund, it is looking for significant returns on investment.
“It’s not a barn-burner, but we are looking for financial returns,” Doliner said.
Limited partners in SDC include AstroPower Inc., a Newark, Del. manufacturer of solar electric power products; the $240 million Calvert World Values International Equity Fund of Washington; International Finance Corp.; Rabobank Sustainability Fund BV; the Swiss State Secretariat of Economic Affairs; The Wind Fund PLC, a British fund dedicated to renewable energy, Triodos Deelnemingen BV, the strategic and seed capital investment arm of the Triodos Bank group and its “green fund”, Triodos Groenfond NV.