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Pablo pointed me to this event, which will be held tomorrow in DC:

Top Down, Bottom Up: Searching for New Ways of Financing Development

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While browsing online this morning, I found a couple of new interesting ideas on the blogosphere worth mentioning on NextBillion today:

The PSDBlog of the World Bank has touched the subject of biofuels (which I blogged on last week). They quote a very interesting article regarding world poverty and the increase in food prices in the world.

"What do Kellogg's, Fidel Castro and Hugo Chávez all have in common? All three blame biofuels for pushing up food prices. The new issue of Newsweek breaks down components of the recent price hike."

Ethan Zuckerman, author of My Heart's in Accra, also has an interesting view on the increase of food prices, specifically the cost of maize. It isn't really related to the biofuel debate, but plays more as an economic - free market view. "White maize is selling for $0.32 a kilo in Ghana today, and for $0.22 across the border in Burkina Faso, a disparity that might be explained by Ghana's comparative wealth and spending power. But if you're looking to engage in agricultural arbitrage, you might want to go long in onions, which are selling for $0.31 a kilo in Benin and $0.91 a kilo in Ghana. Of course, before you load that lorry, you should probably do some research. One of the reasons that commodity prices are so varied in the region is that regional trade is tough to accomplish - the infrastructure connecting Ghana and Benin isn't great, so transport costs are high, and the process of crossing borders between Ghana/Togo and Togo/Benin is likely to involve tariffs, shrinkage of your crops and a number of other unanticipated costs." While food prices might trend up because of the new biofuel demand, staple food prices also increase because of difficulties in regional trade, such as the lack of infrastructure or even because of high tariffs between countries, thus affecting people in the BOP. So don't go blaming everything on biofuels just yet…

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This Investor Feature is based on a recent interview with Pramod Shedde, a pioneer of India's venture capital sector. Pramod discusses problems and prospects for sustainable SME investment in India and explains why many of the country's green funds are getting it wrong.

PDF Version of this article available here.

To say that Pramod Shedde is one of the pioneers of venture capital in India is no overstatement. Mr. Shedde has over 30 years of experience in the financial sector, a career studded with impressive titles including a term as President of the Indian Venture Capital Association and a recent stint as a Managing Partner of BTS Investment Advisors, Pvt. Ltd. In 1988, he helped co-found ICICI Venture, an ambitious endeavor, Shedde notes, as there was “very little in the way of venture capital in India at the time.”

But in our interview, Shedde makes clear that he is much less interested in VC’s past as where the sector is going and the trends that are shaping its growth. During our discussion, this veteran of the Indian financial community explains why he thinks triple-bottom-line investing is becoming an increasingly attractive proposition for investors in India.

Shedde sees significant investment in India beginning to move toward sustainable sectors, a shift he describes as being largely driven by environmental and social ills, such as the challenge of rampant power shortages that especially afflict rural areas, or unwieldy amounts of urban waste generation. The demand this generates intersects with India’s comparative advantages such as a large endowment of locations suitable for wind power production or low production costs that ease scalability in the organic agriculture sector.

Yet even with the gradual mainstreaming of sustainable technologies, the current dearth of triple-bottom-line funds, and the obstinate barriers to growth facing many of the country’s green and BoP focused startups warrants some further exploration. Shedde points to a number of potential factors, including the need for a better policy environment to nurture these companies, but he emphasizes that there is still mainly a lack of adequate deal flow of smaller enterprises. Many SMEs have the potential to be solid investments but suffer from poor management – Shedde points to the oft cited situation of a single promoter who does not have the team needed to help manage the marketing, financial and other aspects of the enterprise that will help it to grow.

Here Shedde places much of the burden of adaptation on investors, arguing that if they expect to unlock the growth potential of a small sustainable enterprise, they have to be willing to tailor their funds specifically to these companies. A successful green fund in India, Shedde explains, must have a long investment cycle, a specific sector focus and a lead investor who believes in that sector and has a great deal of experience in it. He laments that unfortunately, most green funds in India today are getting it wrong.

So will Shedde himself be one of the investors to popularize this new investment framework? He indicates that he has indeed explored the idea of creating a new fund for sustainable startups. He has noted the lack of VC funds in this area and just as he helped to usher in a new era of venture capital in India, he sees sustainability as being a new shift on the horizon. Shedde makes clear that he believes the low levels of sustainable SME investment are not out of any absence of interest from entrepreneurs, a fact he noticed through his participation in the 2006 New Ventures India Investor Forum, when a deluge of 150 business plans from eager entrepreneurs flooded the NVI offices. In all, Shedde argues that there is no real shortage of potential deals, only of willing investors. Whether Shedde becomes one of those investors remains to be seen, but if he does, it would not be surprising if many others in the VC community followed.

The Rising Ventures Series features articles, announcements and profiles of investors and entrepreneurs related to the theme of innovative small and medium businesses (SMEs) in emerging markets that deliver social and/or environmental benefits. These business models have been identified through the New Ventures (www.new-ventures.org) and Development through Enterprise (www.nextbillion.net) projects. To view other Features in the Series, visit http://www.new-ventures.org/risingventures

Guest blogger Ben Powell is Managing Partner of Agora Partnerships. Last week, he traveled to Sao Paolo, Brazil, to attend Innovation for the Third Sector: Sustainability and Social Impact, and filed this report. Read below for Ben's observations of the rapidly growing Latin American social enterprise sector - including some poignant success stories as well as potential hang-ups.

Rob Katz asked me to report on the goings on of a major social enterprise conference that just concluded in Brazil - and because I'm a big fan of Rob's and of NextBillion.net, I agreed. As it turns out, the conference deserves some publicity in the US because what it accomplished was both remarkable and important.

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Here is an interesting case of serendipity where a product designed for a developing market has found application in a bigger and more mature market albeit in a niche space:

For over a decade, Procter & Gamble has been distributing sachets of its PuR water purifying powder at cost in water-challenged countries. The program was never meant to be anything other than a break-even proposition. But that was until the company realized that the single-use packets would be ideal for camping trips, other outdoor recreational uses, or to sell to U.S. tourists traveling to destinations where they cannot drink the water.

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When I think about people living in the BOP, I immediately picture people in developing countries. I didn’t really picture people in the U.S. as people in the BOP. I have realized now after living for six weeks in the D.C. area that I could not be further from the truth. There is a big population in the U.S. in both rural and urban communities that live in poverty.

For example, according to the U.S. Census Bureau, California has over 5,000,000 people living below the poverty line, some in Third World situations without clean water, lights, sanitation, or jobs. Los Angeles County alone has over 1,000,000 people living below the poverty line.

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Tapan Parikh (left) has proved that innovations need not be as complex as they are made out to be. Often, simple ideas make the best impact. What makes Tapan different – and Technology Review's 2007 Humanitarian of the Year – is that he saw in mobile phones an accessible opportunity for social impact.

Tapan Parikh is the founder of a company called Ekgaon Technologies. Parikh has created information systems tailored for small-business people in the developing world with the mobile phone at their core. This is made possible by the high penetration of mobile phones in developing countries.

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I often find myself criticizing governments worldwide for failing to create opportunities for poor people, especially in the education sector. We certainly should be critical, but must also realize that, as a responsible society, we cannot and should not leave everything to the government and NGOs. The education sector is not exclusively the obligation of the government. If the governments and NGOs cannot cope with the responsibility, then why shouldn’t the private sector do something to balance the lack of good education?

In many developing countries, public education leaves a lot to be desired. Teachers are not as motivated to show up regularly, perhaps because they do not feel accountable to the students, but instead to distant government officials. Public school teachers and their unions are sometimes politically divisive; the problems in Oaxaca, Mexico come to mind. On the other hand, the infrastructure of classrooms could be seriously improved; often the infrastructure is below the average standards of a respectful educative environment.

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On NextBillion, we recently covered an editorial from Arun Maira of The Boston Consulting Group in India. Maira wrote that the organizations which will succeed in BOP markets will be those which don’t merely down-size existing products but invest in developing innovative business models.

Surinder Kapur’s column profiles a striking example of this – Cosmos Ignite Innovations.

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Some of my recent blog posts focused on venture capitalism (Wulff Capital, Agora Partnerships). Well, it must be a trend – I just came across Echoing Green.

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