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Published by: HEC Paris
Published in: 2021

Abstract

Schneider Electric is a leader in the field of power management and automation systems. In its effort to fight against the energy gap, it created an impact investment entity, the Schneider Electric Energy Access (SEEA) fund to make investments into companies and businesses with the explicit intention to generate a measurable, socially or environmentally beneficial impact with a financial return. The SEEA fund particularly aims to make investments into businesses to reduce the world energy gap. A key concern in the electricity market of rural areas in developing markets is that potential customers do not have enough cash on hand to purchase and own solar-home-systems equipment directly. A potential solution would be to provide direct financing to customers so that they could purchase the system. Micro-finance could be considered as a viable option. Unfortunately, actors from the micro finance industry do not possess sufficient expertise. The case describes three different investment opportunities that the SEEA Fund is currently considering. Students are asked to make a decision, taking the role of the fund manager on the supervisory board. First, the supervisory board screened and identified three pay-as-you-go solar home system companies, and the investment committee confirmed its potential interest in those businesses. Second, the fund manager is reviewing additional information obtained from those companies before their presentation to the investment committee. His job at this stage is to analyze the business model, and forecast expected social impact and future financial performance of these companies. For those companies the investment committee selects, the fund will execute a comprehensive technical, social, regulatory, legal and financial due diligence at a later stage. Then, following the recommendation, the investment committee makes the final decision.

Teaching and learning

This item is suitable for postgraduate courses.

Geographical setting

Region:
Africa
Country:
Kenya

Featured company

Schneider Electric

About

Abstract

Schneider Electric is a leader in the field of power management and automation systems. In its effort to fight against the energy gap, it created an impact investment entity, the Schneider Electric Energy Access (SEEA) fund to make investments into companies and businesses with the explicit intention to generate a measurable, socially or environmentally beneficial impact with a financial return. The SEEA fund particularly aims to make investments into businesses to reduce the world energy gap. A key concern in the electricity market of rural areas in developing markets is that potential customers do not have enough cash on hand to purchase and own solar-home-systems equipment directly. A potential solution would be to provide direct financing to customers so that they could purchase the system. Micro-finance could be considered as a viable option. Unfortunately, actors from the micro finance industry do not possess sufficient expertise. The case describes three different investment opportunities that the SEEA Fund is currently considering. Students are asked to make a decision, taking the role of the fund manager on the supervisory board. First, the supervisory board screened and identified three pay-as-you-go solar home system companies, and the investment committee confirmed its potential interest in those businesses. Second, the fund manager is reviewing additional information obtained from those companies before their presentation to the investment committee. His job at this stage is to analyze the business model, and forecast expected social impact and future financial performance of these companies. For those companies the investment committee selects, the fund will execute a comprehensive technical, social, regulatory, legal and financial due diligence at a later stage. Then, following the recommendation, the investment committee makes the final decision.

Teaching and learning

This item is suitable for postgraduate courses.

Settings

Geographical setting

Region:
Africa
Country:
Kenya

Featured company

Schneider Electric

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