Commercial Returns & Social Impact - We believe that achieving commercial returns and making a difference should not be mutually exclusive.
Emerging Markets - Private capital has an integral role to play in the growth of off-grid solar in emerging markets. There is significant demand for debt capital in off-grid solar in developing countries that will deliver attractive commercial returns and revolutionize the way in which electricity is delivered to millions of people.
Leapfrog Technology and Infrastructure - The rise of distributed solar energy as a low cost and scalable alternative to grid connection across the developing world provides investors with a unique opportunity to inject capital into a "leapfrog" technology similar to the mobile phone revolution skipping fixed-line technology.
SIMA has identified significant investment opportunities in the off-grid solar sector, which is set to experience tremendous growth over the next decade. It is expected that by 2020 the off-grid solar sector will require more than $3.1 billion in private capital investment every year. SIMA’s vision is to increase the accessibility of debt financing for off-grid solar companies by driving investment into these companies and consequently delivering clean electricity to millions of households.
SIMA is able to drive debt capital to the off-grid solar industry in emerging markets by aligning business and social incentives so that our investments deliver commercial returns as well as a sustainable social impact. Specifically, we provide demand-driven commercial capital and appropriate advisory solutions to create and scale profitable businesses with exemplary financial, social, and environmental impact.
SIMA is developing a US$75 million off-grid solar fund, which will invest in innovative off-grid solar companies that are established in the region, have predictable revenue streams and provide ongoing support and servicing to their customers. The fund consists of five different investment tranches, each with a different risk return profile, catering to a range of investors with differing risk appetites and return objectives. The return on investments range from a 3% coupon payment in the Super Senior tranche which has a $35 million risk cushion, up to returns of 20% IRR in the Equity tranche.
SIMA is providing you with the opportunity to invest in our US$2.25 million Mezzanine Tranche, which delivers a return of 12% over 3 years and is protected by a first loss risk cushion of approximately $4 million (equal to 5% of the total fund amount).
SIMA has designed this fund to bring together a range of different investors including institutional parties, funds, development agencies and commercial partners to leverage a wide range of resources to create a single investment platform focused on providing debt products to off-grid solar companies in emerging markets and delivering commercial returns to our investors. The fund has already had interest from a number of development banks and institutional investors and SIMA continues to be in discussions with private investors for other tranches of the fund. You must be an accredited investor to invest with us.
SIMA is a social asset manager and advisory company that is designing new and innovative funds that deliver commercial returns to investors while achieving meaningful social and environmental impact. We are a new generation of company that recognizes that we no longer have to choose between doing good or making money. SIMA will work to deliver ongoing benefits to society while continuing to deliver value to its investors.
SIMA prides itself in structuring funds that use innovation to further the service to Base of the Pyramid (BoP) markets. We are also proud of the organizational structure we have developed for SIMA based on core cultural values of simplicity, transparency (both external and internal), and employee engagement. A few examples of this: SIMA ensures that all employees are engaged in the decision making process; salaries of employees are internally disclosed to provide a more transparent and logical method for recognition; and employees have a voice in the bonus allocation to senior managers. We want our employees to feel valued, engaged, and loyal to the firm's objectives.
SIMA’s management team, one of the longest serving in the industry and pioneers in the field, has an exemplary record in the social investment space. We have disbursed more than $1.5 billion in social investments and managed 11 different funds with more than $400 million in assets, with less than 0.5% in overall losses and 3.4% in losses internationally. Not only is SIMA committed to social impact, the managing directors are as well, and have committed that 10% of their individual profits will be reinvested in early stage social impact ventures.
Solar energy is fast becoming an integral part of the world’s energy generation portfolio. In emerging markets the uptake of off-grid solar systems is disrupting the status quo and fundamentally altering the way in which electricity is generated and delivered to customers.
The rise of solar is a result of a confluence of events including 1) rapidly falling costs for solar cell technologies, 2) the ability to pay in installment via mobile phone payments, and 3) remote system operation and data collection.
The combination of these events has provided the perfect platform for rapid growth in the off-grid solar industry, especially in developing countries across Sub-Saharan Africa and Asia.
There are currently 1.2 billion people with access to electricity, of which 95% live in Sub-Saharan Africa or developing Asia. The Solar Revolution is allowing for the rapid expansion of affordable off-grid solar systems and it is predicted that by 2020, one in every three households in these regions will have some form of off-grid solar solution.
Share of people without electricity in developing countries (UNDP, 2008)
Off-grid solar companies that have established themselves and have stable revenues currently lack the debt finance to grow and scale up their off-grid solar businesses. SIMA is seeking to fill this void by providing debt financing and advisory services to grow these companies and deliver returns to our investors. This investment opportunity is driven by $27 billion of consumer demand in developing countries for electrification. Due to the fact that solar systems can now be provided to poor customers for a price similar to the amount spent on kerosene, Base of the Pyramid customers are using their $27 billion purchasing power and switching to off-grid solar.
More than delivering a financial return to investors, providing access to electricity via off-grid solar energy is essential for economic development and a range of additional benefits:
Health: Decreases household pollution as a result of burning kerosene, which is associated with 4.3 million respiratory related deaths per year;
Economic: increases household income – customers save an average of $3.15 for every dollar spent on pico (less than 10W) solar systems, as well as allowing businesses to run longer and trade later;
Environment: reduces the 90 million tonnes of carbon emissions produced by burning fossil fuels for lighting; and
Social: increases social interactions and safety, especially among women, as well as provides light for children to do their homework after dark.
SIMA will invest in innovative off-grid solar companies that are established, with predictable revenue streams and have strong customer support. There are a number of companies already working in Sub-Saharan Africa to deliver off-grid solar to the poor including Greenlight Planet, Fenix, BBOXX, and Nizam Energy, just to name a few. These companies are both socially responsible and financially sustainable. They deliver quality solar products to their customers, provide ongoing service and warranties, and at the same time, deliver savings to their customers.