#Featured: ImpactAlpha Original

Hello ImpactAlpha readers!

Pfund and Bank on the clean energy transition. Nancy Pfund, founder of DBL Partners, was an early investor both Tesla and SolarCity. Flush with $400 million from her third fund (with an f!), Pfund is looking to what’s next in the transition to a clean energy economy.

Last week, ImpactAlpha’s David Bank joined Pfund on stage at the CommonWealth Club in San Francisco for a one-on-one conversation. Pfund and Bank talked subsides, billionaires, achieving climate goals and the SDGs. In a wide-ranging conversation, Pfund dishes on the Tanzanian solar startup and Californian energy-storage firm she’s excited about...and why the next thing in conservation is... cemeteries?

Watch the full conversation (on YouTube): Nancy Pfund on Impact Investing.

#Dealflow: Follow the Money

Swiss investment firm SUSI raises $85 million to fund renewable-energy storage. The SUSI Energy Storage Fund, which launched in 2016, announced its first close at €66 million ($70 million) to invest in improving battery capacity for renewables. Already, says SUSI, which has more than $1 billion under management, an additional €14 million ($15 million) has been committed. The renewable-storage market is expected to reach $400 billion by 2030, according to Citi GPS, and big power and electronics firms, including Tesla, Panasonic and Pacific Gas and Electric, have recently invested in tech development for energy storage. SUSI’s fund, backed by a group of unidentified institutional investors new to renewable-storage investment, has developed a pipeline of projects totaling 400-megawatt hours in storage capacity; its first investment is in a portfolio of projects in Ontario, Canada.

Kenya taps mobile-money platforms to issue infrastructure bond. The Kenyan government has issued the first mobile phone-based bond to users of mobile-money platforms M-Pesa and Airtel to develop a new funding stream for infrastructure projects. The bond, a 150 million KES ($1.5 million) offering called M-Akiba, reached a 50 percent subscription rate within a week and was bought by about 10,000 investors (suggesting large buyers are driving the numbers). The minimum investment for the three-year bond is 3,000 KES ($30); it offers a 10 percent tax-free return. The Kenyan government intends to use the M-Akiba platform, which has 61,000 registered subscribers, for a 4.85 billion KES ($47 million) bond in June. Only 38 percent of Kenyan adults have a bank account in a country of 47 million but there are more than 33 million mobile phone subscriptions and 25 million M-Pesa accounts.

Age Strong fund finances first projects to aid older, low-income Americans. Age Strong — a social investment initiative from the Calvert Foundation, the AARP Foundation and Capital Impact Partners targeting support for low-income seniors — has invested $14 million in five projects since launching October 2015. The organizations backed so far include: Colorado-based Washington County Green House project and Detroit-based Green House at Riverton for their long-term care facilities; Brown’s Superstores, in Philadelphia, to expand low-cost grocery stores to areas with high numbers of low-income seniors; Primary Health Network to extend community health centers in rural Pennsylvania and Ohio; and Philadelphia-based NewCourtland LIFE Center for a mixed-use senior living facility. Investments in Age Strong are made through Calvert Foundation’s community-note platform, where individuals can invest as little as $20. The AARP Foundation has committed up to $6 million in matching funds to the initiative.

CARB-X puts up $24 million to develop new antibiotics. The biopharma accelerator is backing 11 companies with the funds, including three that are developing new strains of antibiotics. The increase in antibiotic-resistant bacteria — largely due to over-prescription of antibiotics and their excessive use in animal agriculture — is a worrisome development for global health. CARB-X launched last year as a partnership between the U.S. Department of Health and Human Services (HHS) and Wellcome Trust, a U.K.-based biomedical-research charity, to spur development of antibiotics and superbug therapeutics. “Our target is that at a minimum, two products make it to human testing in five years,” Joe Larson, acting deputy director of the HHS agency overseeing CARB-X, told the Washington Post. The alliance has earmarked $350 million over the next five years towards that goal. The 11 companies that received funds in the round will be able to tap an additional $24 million if they meet certain targets.

See all of ImpactAlpha’s recent #dealflow.

#Signals: Ahead of the Curve

Warning of an industry rush to “mainstream,” Oxfam offers up ideas on bolstering impact. Investors targeting market-rate returns through impact investments risk overlooking the needs of the enterprises attempting to solve global poverty. Such “have your cake and eat it too” expectations can “undermine the meaningful role [impact investing] can and should play in poverty reduction,” writes Oxfam’s Mara Bolis in an introduction in NextBillion to a new report from Oxfam and Sumerian Partners. Impact Investing: Who Are We Serving? proposes some good ideas for returning the industry’s focus to impact. Develop investment vehicles, such as permanent-capital vehicles and evergreen funds, that meet the needs of enterprises combatting poverty. Be transparent in reporting performance. Deploy smart subsidies alongside investors seeking net financial returns. Bolster research to understand how investments can help businesses maintain their commitment to impact. Adopt incentives that encourage optimizing impact — and adhere to a code of practice that prioritizes it. Oxfam’s Bolis and Sumerian’s Chris West will join Toniic’s Lisa Kleissner, Duke University’s Cathy Clark, and Arabella Advisors’ Julia Sze to debate the report on Friday at the Skoll World Forum.

South-to-south finance on the rise. India’s ambitious energy plans don’t stop at its own borders. The Asian country is investing heavily in African energy expansion as well. It recently opened a $10 billion line of credit to African nations — primarily for energy-infrastructure development — matching a $10 billion commitment to the Africa Renewable Energy Initiative from multiple countries. Its goal is to boost energy access for some of the nearly 650 million people in Africa without electricity — and to create new opportunities outside India for its homegrown equipment and construction businesses. Nearly 300 million Indians also live without access to power, a problem the government has vowed to resolve by 2019 through a mix of grid, micro-grid and off-grid power projects. The south-to-south trade-and-investment relationship between India and Africa has surged in recent years, with India now standing as Africa’s fifth largest investor, behind the U.S., U.K., France and China. Signifying the deepening relationship, the African Development Bank will host its annual meeting in Ahmedabad in May.

#2030: Long-Termism

Cities of the future must learn to adapt...like their older peers. Masdar in the United Arab Emirates was conceived a decade ago as a zero-carbon city in a region otherwise dependent on fossil fuels. Only five percent of the 2.3 million square miles allotted have been developed, but what’s there is 75 percent solar-powered. That could be too much of a good thing, according to the researchers behind a new study published in the Renewable and Sustainable Energy Review.

Lack of power diversity means that “Masdar could be in danger of getting locked into certain renewable systems,” while overlooking opportunities to generate other types of clean energy, notes the report’s co-author Peter Braithwaite, a civil engineer at the University of Birmingham in the U.K. In that respect, a highly advanced, ambitious city like Masdar could learn a thing or two from its older, industrial-era urban peers. Birmingham, U.K., which is 400 years old, runs mainly on fossil fuels. But it has begun diversifying its power sources, turning, for example, to methane generated from sewage as a fuels source.

Although cities with older infrastructure may be slower to evolve, urban centers like Birmingham survive because of an ability to adapt—something new cities will also have to be able to demonstrate, Braithwaite says. “Cities have to be able to innovate, experiment, and adapt to changing conditions.”

Onward! Please send any news and comments to editor@impactalpha.com.