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The social enterprise space is alive and well in India.  This is my overarching conclusion having spent all day Tuesday at the inaugural Sankalp Forum, hosted by Intellecap in Mumbai.

Sankalp - which means "pledge" or "determination" in English - focused on the role of business in driving social change.  When I arrived on Tuesday morning, the main plenary hall was packed with attendees from across the social sector - entrepreneurs, investors, business executives, media, think-tanks, non-profits and students.  It was heartening to see such a diverse crowd.

The first plenary panel was among the best of the day.  It featured three investors, a journalist and a consultant.  I'm sure there's a joke somewhere that begins with such a cast of characters!  Vineet Rai, of Aavishkaar - a BoP investment fund - suggested that C.K. Prahalad's 2004 arguments have evolved, and that selling shampoo isn't social enterprise.  (You won't find much disagreement here.)

Unlike other Prahalad critics, however, Rai offered his "Four S's of Social Enterprise" in retort: Social, Small, Sustainable, Scale.  Whether he intended it to or not, this 4-S framework persisted throughout the day - especially in the investment panels.

Investment panels?  Sankalp was not a typical conference - it was also a social enterprise investment forum.  The event was home to the final round of judging, identifying 15 high-impact enterprises serving social ends through market-based means from a field of 300 nominees.  Some of the interesting enterprises I saw at Sankalp include - in no particular order:

Ziqitza Education: Also known as "Education Access for All", Ziqitza Education is a young social enterprise operating private schools and e-learning tools in Rajasthan, Kerala and Tamil Nadu.  Can there be chain private schools?  In India, where the demand for good private education is universal, the answer is probably yes.  (Parents of all but the poorest kids are willing to pay school fees, research shows.  Education spending is the first priority after food and shelter...)  If you are looking for a new company to keep your eye on, Ziqitza Education might be a good place to start.

Vaatsalya Healthcare: Vaatsalya won the Sankalp High Growth Award in the Healthcare category.  It's a corporate hospital operating in semi-urban and rural areas - a first for India.  With a strong presence in Karnataka and coming expansion to Andhra Pradesh and Maharashtra, Vaatsalya is another company worth tracking.

Gramin Suvidha Kendra: This is a partnership between the Multi Commodities Exchange and India Post to use postmen - ubiquitous across India - to bring price information to rural farmers.  It's allowing farmers to access futures contracts for the first time, which allows for cash flow smoothing.  For all the talk of microfinance, the kind of work GSK is doing is really the bricks and mortar of a functioning agricultural supply chain - which could do more to alleviate poverty than many of these other, more complex, companies.

D.Light Design: A social enterprise that sells solar-powered LED lights in East Africa and India, D.Light works to eradicate kerosene lamps from the world.  These lamps are inefficient, costly and terrible for your health.  A D.Light lamp - they have a range of brands - gets at all three of these problems.  (Full disclosure: Acumen Fund, my employer, is an investor in D.Light.)

There were dozens of entrepreneurs at the event, all of them with inspiring business plans in various stages of development and implementation.  I hope the investors present left with pockets full of business cards and plenty of new ideas about the viability of the social sector here in India.

In many ways, Sankalp reminded me of the 2004 Eradicating Poverty Through Profit conference, which was arguably the first significant event ever to focus exclusively on the intersection between development and enterprise.  (I should know - I helped plan the 2004 event as a World Resources Institute employee.)  As in 2004, there was a palpable buzz among participants Tuesday - that finally, there was critical mass around the idea of using business to do good.  As in 2004, however, there were also too many panels and not enough networking time.  And there was a nagging feeling that it might be a little inappropriate to run a conference about alleviating poverty and environmental problems in a 5-star hotel with the air conditioning set at a chilly 68 degrees Farenheit.  You heard the same criticisms of the 2004 event, held at a high-rise San Francisco hotel.

I should restrain my criticism, however - Sankalp was a great event.  Personally, I was glad to see colleagues from India, Asia and as far away as the United States during the tea breaks.  Despite all the talk of recession - or perhaps because of it - the social enterprise space is alive and well. 

Yet there is much to do.  Antony Bugg-Levine, of the Rockefeller Foundation, suggested in the closing plenary that we must be afraid of the hype.  Social enterprise might be alive and well, but it has not arrived, at least not yet.  Let's remember that it took 30 years - and substantial subsidy - to get the microfinance sector fully developed.  Impact investing - and BoP business strategy - can be done quicker and better by learning from microfinance, but it won't be an overnight change.

Are you ready to go beyond profit, to explore the range of social enterprise?  If you're reading NextBillion.net, the answer is probably yes.  In this case, you're in luck - a new magazine just launched, targeting this very niche (beyond profit, beyond charity - the missing middle.)

Unsurprisingly entitled Beyond Profit, it is a media project of Intellecap, the social enterprise knowledge and business incubator with offices in Hyderabad, Mumbai and Palo Alto.  The inaugural issue is currently available for a special free preview, and if you hurry up, you can get a free 1-year subscription via their web site.

Why bother with another magazine, you ask?  Admittedly, this is not The Economist or even Stanford Social Innovation Review, but what Beyond Profit may lack in editorial panache it more than makes up for through its coverage areas.  The magazine includes regular features on the latest deals, a social sector outlook, and media updates.  The inaugural issue includes articles by social sector leaders Antony Bugg-Levine (Rockefeller Foundation), Linda Rottenberg (Endeavor), Pamela Hartigan (Oxford University), and Greg Dees (Duke University).

There's also a fantastic piece by Chris White, entitled "The Questions at the Bottom of the Pyramid", which I strongly recommend.

At the end of the day, Beyond Profit is worth a look, and a subscription.  There aren't enough places to find good content in this space, so I for one am thrilled to welcome Editor Lindsay Clinton and her top-notch team to the fold.

Editor's note - despite the indication that there is a free preview issue of Beyond Profit available, I am unable to access it myself.  Stay tuned for a link...

Updated May 1, 2009: The link is working: http://beyondprofitmag.com/preview.php. Happy reading!

Oxford business professor Linda Scott is trying to verify something that many BoP business models are based on: the idea that becoming an Avon lady could help poor women in developing nations get out poverty.  Her research in South Africa, which is not yet complete, indicates the Avon model might be what some need to get out of poverty; and in South Africa, Avon's approach seems more accessible and better matched to community interaction than does microfinance.

Avon was established in the USA in 1886 and today works in over 100 countries through more than 5.8 million independent sales reps.   Key to the Avon mission is empowering women to achieve economic independence by offering them a superior earnings opportunity as well as recognition, service and support - a mission statement echoed by many of the businesses discussed here at NextBillion, in particular those that have adopted a microfranchising or business-in-a-box approach.

Mainstream companies like Avon Products, Herbalife and Amway have built armies of part-time sales representatives selling everything from insurance plans to anti-aging creams. Those reps, in turn, are encouraged to recruit others and are promised that they will receive a portion of new enlistees' profits. The companies profit, at least in part, by collecting increased revenue and fees paid by new sales representatives.=

At the base of the pyramid, variations of this approach can be seen in Living Goods (Health Promoters) VisionSpring (Vision Entrepreneurs), Hindustan Lever (Shakti entrepreneurs), Grameen Phone (Village Phone Operators), Freedom From Hunger (Health Keepers) and many others.  Similarities with Avon include:

• reliance on a network of sales reps, often working only part-time
• a relatively small up-front investment to become a licensee (or franchisee)
• a majority of goods sold on consignment
• marketing that relies on word of mouth, and at least initially, tapping into the seller's network of family and friends.
• a personalized shopping experience of selling to peers, often within the buyer's home

In these models, women are the target market for franchisees, although, as with Avon, men are not off limits.  And like Avon, the BoP models also promote self-reliance and economic empowerment.

What is different among the BoP models, however, is their clear emphasis on protecting the entrepreneur from bad decisions and financial exposure through training, almost no emphasis on multi-level marketing, and a strong focus on products that have significant social value for their purchasers at prices generally affordable to the poor.  Products are often packaged in single serving quantities to meet cash flow needs, and BoP models also often have a microcredit component as well to help meet initial start-up or licensing costs.

As Avon and their counterparts focus increasingly on the developing nations, competition for the best sales reps and consumer's scarce dollars is certain to increase, as is the debate over whether those living on just a few dollars really need deodorant and beauty products 

It is this argument - that consumer products have limited social impact at the BoP - that tends to stir the passions of pundits, academics, activists and businesspeople.  However, if Scott's research findings are indicative, there are measurable social benefits from the sales of consumer products in low-income communities.  Are those benefits as great as providing healthcare or clean water, for example?  That is for the reader to decide.  But given a choice between having little or no access to services and having some access to basic services, Avon and their counterparts may be the right choice.

From the start, this was not your average competition.  Last Friday 15 finalists from India, the U.S., New Zealand, France, England, Indonesia and Thailand gathered at U.C. Berkeley's Haas School of Business to compete in the Global Social Venture Competition (GSVC).  The teams presented business plans that were financially viable and make a social impact to an expert panel of judges including Varun Sahni of Acumen Fund, Sam Moss of Gray Ghost Ventures and Victoria Hale of OneWorld Health.  Although teams were technically competing for a grand prize, there was camaraderie among the group of finalists who all had unique approaches to changing the world.

By partnering with nine business schools from around the world, this year the GSVC attracted 311 entrants from 123 universities in 25 countries, making this truly a global competition.  The GSVC serves as an international forum for entrepreneurs to showcase their plans, for investors to support ground-breaking social ventures and for all involved to establish an international network of social entrepreneurs.

This year's winner, EcoFaeBrick, came from Prasetiya Mulya Business School in Indonesia, and were the first international team to win the Global Finals. EcoFaeBrick produces high quality and affordable bricks from the abundant cow dung in Godean and Sayegan, Jogjakarta.  They also plan to process methane biogas to fire the kiln. mPedigree Logistics from the Tuck School of Business at Dartmouth came in second. Third place went to SolarCycle from George Washington University.  Their primary innovation is a low-cost reflective material made from used plastic bags and the interior of metalized chip bags that can replace mirrors in solar concentrating applications.

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"How do I get a job working with BoP strategy?"  I get that question all the time.  The truth is that there is no one answer - everyone's career is different.  However, we can learn from those who have successfully transitioned into a career working with the base of the pyramid.  This series - BoP Career Paths - will interview BoP practitioners to learn how they became involved in the space, what worked for them and most importantly, their advice to job seekers at the nexus of development and enterprise.

Our inaugural post is an interview with Justin DeKoszmovszky.  Justin leads Strategic Sustainability for SC Johnson’s Developing Markets Platform. He has spent nearly a decade advising, supporting and catalyzing change within major corporations and the last six years focused on accelerating the growth of sustainable enterprise.

I first met Justin in December 2004, when he volunteered at the "Eradicating Poverty Through Profit" conference convened by my then-employer, World Resources Institute.  Justin was a MBA student, and he agreed to help us take notes during the track sessions - anything to get a free ticket to a $1500 conference, right!?  Of course, Justin has come a long way since his days as a conference note-taker - first, he was on the BoP Protocol pilot team in Kenya.  After earning his MBA from Cornell, he took a job with SC Johnson.  According to his bio:

At SC Johnson, DeKoszmovszky is leading Base of the Pyramid (BoP) initiatives aimed at delivering business results while supporting the company’s advancement of social progress, public health and environmental leadership. These initiatives include non-traditional deep distribution, sustainable supply chain, anti-malaria programs and new business development at the BoP. While a graduate student at Cornell University in 2005, DeKoszmovszky was part of the original BoP Protocol pilot team that tested the protocol’s applicability as a business development and innovation catalyst. He earned his MBA from Cornell University’s Johnson Graduate School of Management in 2006 with a concentration in sustainable enterprise. Prior to getting his MBA, DeKoszmovszky was a Managing Consultant at Kaiser Associates advising technology and consumer goods clients on a variety of strategic and tactical issues.

Sounds about right.  So, without further ado, let's ask Justin a little bit about his career path.

Rob Katz, NextBillion.net: When you were 18, “what did you want to be when you grew up”?

Justin DeKoszmovszky, SC Johnson: I wanted to be a forest ranger, and build trails for the forest department.

NextBillion.net: What about when you were 22?

Justin DeKoszmovszky, SC Johnson: At 22, I had just applied to – and decided not to join – the Peace Corps.  Instead, I decided to be a strategy consultant; I wanted to be the best darned strategy consultant a 22-year old could be.  Looking back, I guess I was more confused at 22 than when I was 18, but deep down I was always hoping to get back to my forest ranger roots.

NextBillion.net: What changed between 18 and 22?

Justin DeKoszmovszky, SC Johnson: I went to Cornell, and started my degree there as a natural resources major.  I was very focused on the environment.   But as I took more and more economics courses – especially environmental economics – that became more interesting versus the science-related environmental work.  As I was getting ready to graduate, I went through the process of applying to the Peace Corps, which mapped well against my desire to get out and see the world in a real, deep, different way.  It also satisfied my interest in having an impact on the world.  Between 18 and 22, I had a big increase in pragmatism and humility – I realized that I could make an impact on the world, but to do so, having good intentions wasn’t enough.  I needed skills and experience.

NextBillion.net: What was your first job out of college?  How did you get it?

Justin DeKoszmovszky, SC Johnson: My first job was at Kaiser Associates, a small strategy consulting firm headquartered in DC with offices in London and South Africa.  This was in 1999, at the height of the dot-com and telecom bubbles; unsurprisingly, I worked on a lot of telecom and internet projects.  I did a stint with them in London as well as in DC.

NextBillion.net: Why did you decide to go to business school?  Why Cornell?

Justin DeKoszmovszky, SC Johnson: After DC, I moved up to the New York office of Kaiser.  When their office in New York closed, I found some work doing consulting in the beverage industry – specifically milk, of all things.  At the time, I was in my mid/late twenties and finally had a little time to read.  I picked up books by Hawken, Hart, Lovins, Prahalad, Elkington – my forest ranger meets strategy consulting light reading.

These books helped show me a path to link my consulting skills and my interests in having a positive impact in the world.  Before I even thought about business school, however, I went to Costa Rica to work with some eco-tourism organizations helping them green their operations even further.  I realized that the impact I could by joining a small organization was more tangible, but limited.  So I strategized about what to do – and started looking at business schools, and applied to Cornell and the University of Michigan.

NextBillion.net: When was the aha! moment when you decided that BoP could be a career for you?

Justin DeKoszmovszky, SC Johnson: I went back to school to merge career and interest – consulting and sustainability.  So I tried my best to get on Stu Hart’s radar.  I got onto his calendar and gave him my best pitch about how I could help him and how he should help me.  It was pretty audacious, looking back.  Stu was really generous with his time – and his advice was to focus not necessarily on the environmental aspects of business, but rather the social side – the “base of the pyramid” aspects.  It was a younger, more interesting, less developed field and therefore more of an opportunity for me as a young business school student.

I came out of that meeting somewhat crestfallen – I had really wanted to green companies, to work on the environmental side of things.  I wanted Stu to help me find the way there, not point out some new field of study.  But at the end of the day, it was some of the best advice I ever received.

NextBillion.net: What do you do on a day-to-day basis at SC Johnson?

Justin DeKoszmovszky, SC Johnson: My title is Manager of Strategic Sustainability at SCJ in the Developing Markets Platform.  This means that I am guiding the company’s activities in the grey area between purely for-profit (our “base” CPG business) and philanthropic (non-profit) initiatives.

It was an uncoordinated space when I joined, with lots of smaller projects.  My job at first was to create a real strategy – in and beyond Africa – on how SC Johnson can operate in the nebulous area between business and philanthropy.  Moving along the spectrum, I work on distribution of key products and services to low-income communities with new models/technologies.  This example is very close to our base business, so here I serve more as an advisor to our local teams.  We do a lot in terms of malaria prevention – which is of course related to our consumer insect control business, but also the sustainability interests of the company.  We’ll soon be announcing several new partnerships with major anti-malaria players – stay tuned!

What originally brought me into the company is the BoP Protocol project, in Nairobi.  This began in 2005 with a BoP Protocol pilot test – working to apply the Protocol with community-based partners and local consumers, with whom we co-created a new business that married the community’s and SC Johnson’s objectives and capabilities.  Out of this Protocol pilot, and a lot of subsequent work, came a company called Community Cleaning Services.  Now, almost 4 years later, the company focuses on cleaning shared toilets – which is an attractive cost-benefit proposition.  At the local level, we have co-created a successful social enterprise that is delivering new entrepreneurial opportunities, incomes twice the official minimum wage, cleaner toilets in slums and doing so with an operational model that reuses packaging, closing the loop on waste.  At the corporate level, we will be testing scalability and profitability as we shift from a pilot project to a business over the next 12-18 months.

NextBillion.net: What advice do you have for a prospective employee of BoP initiatives?

Justin DeKoszmovszky, SC Johnson: The way I got my job was to take a bit of a risk.  I came into SC Johnson on contract; it was not a guarantee.  To get into this space, especially considering the economic realities and the challenges that companies are having investing here, you will need to take some risks to create an opportunity rather than finding a perfect job description.

Skills-wise, among many other things, you need humility and empathy. 

Humility: these are massive issues [poverty, sustainability, gender, etc] and we’re not the first people to work on these things.  Professionally, you need to tap into a broad network of people who are already working in this area (academic, development, etc.)  You have to assume you have no answers, as well, which is really hard.  You, the outsider, do not have any answers.  We might have skills, assets, tools and a new perspective but thinking you are riding in on a white horse is dangerous. 

Empathy: you need to understand the objectives, motivations and challenges of the people with whom you’re working.  Working with the BoP, requires asking lots of questions – active empathy – to really understand those who you are working with.  Outside the BoP, empathy is also crucial when working with large organizations (your own or partners) to catalyze change.  It is a key skill in getting buy-in and engaging people.

I wish I were able to make it to San Francisco this weekend. One of the most exciting business competitions in the social enterprise space, the Global Social Venture Competition, wraps up with presentations by the finalists during the day followed by a session with Paul Polak tonight and a day-long symposium tomorrow at the Haas School of Business of UC Berkeley.

NextBillion.net will be covering the highlights of this venue through Guest Posts that will appear in the next few days. Meanwhile, I encourage you to check out the projects that will be presenting in today's finals and the agenda for tomorrow's symposium on social entrepreneurship.

For now, I'm off to the last sessions of this year's Global Philanthropy Forum. I'll be turning my notes into blog posts over the weekend so stay tuned.

Happy Friday!

"Emerging Markets, Emerging Models", the report on BOP entrepreneurship from Monitor Group is probably the most important new study in the last couple of years. Unlike some recent, fairly derivative reports, this one is based on some intensive original research -covering 270 enterprises and a careful analysis of 9 business models- and focused on the key question: why haven't most BOP efforts scaled?  I highly recommend that you download it and read it in its entirety.

My own observations are fully supportive of the report's conclusions, especially the barriers faced by  single product, go-it-alone distribution channels and the imperative for community-scale infrastructure, for para-skilling services, and for arranging high-through systems that use scarce talent very efficiently.  The last two approaches are essentially complimentary, and can be used in tandem.

I would go a bit further than the report, however, and suggest that overcoming the barriers to BOP businesses is particularly difficult for large corporations, because many of the solutions that appear to work require intimate knowledge of BOP mindsets and often local presence in those communities -not easy for corporate to implement. Moreover, partnering with NGOs or community groups may be the best way to open such channels, and that, too, is a challenge for most businesses (and most NGOs): the right frameworks and toolsets are by and large not yet in place. To me, that suggests that successful models are most likely to be built not by large companies but by social entrepreneurs. The large company role may come later --they can invest in such efforts, and they can buy them when they are already at scale, and they can usefully source new technology to continually upgrade products and services.

Such conclusions are, to my reading, latent in the report but not spelled out. Nonetheless, to say that takes nothing away from the quality and usefulness of this new resource. 

I just got back from a very exciting trip to Colombia, where the first New Ventures Investor Forum took place last week. I'm preparing a full debrief of that experience and will soon share it here on NextBillion.net, so stay tuned for that over the next day or so.

I'm also spending some of my morning preparing to cover this year's Global Philanthropy Forum, which takes off tomorrow here in Washington DC. Titled "Five Crises, Multiple Solutions and Our Shared Commitment to Act" , this year's promises a very interesting set of talks and discussions amongst the world's leaders in the philanthopy/ social investment spaces. I encourage you to take a look at the agenda and the group of speakers that are participating.

I will be attending and writing about most of the sessions relevant to the topic area of NextBillion.net, and hopefully sit down with some of the attendees and social entrepreneurs for short interviews. If you are planning to attend the forum or know someone who is, please contact me. It would be great to meet up over there.    

If only the corporate and NGO BoP market investment matched the degree to which ambitious, smart and inspired MBA students were willing to work for it. If the number of applicants is any indication, 2009 seems to have a surplus of MBA and other highly-qualified interns.

If you do not have exposure to this annual process, January through March is open season on intern hunting. Strategically placed ads will garner you cleanly formatted resumes and cover letters, all strikingly similar in form and content with consistent references to personal drive, a love of reading and a passion for your business.

The economic downturn may be just the incentive needed for students to seek the edge that comes with a high-profile internship in lieu of a summer road trip.  Or perhaps MBA students who formally may have explored a financial sector opportunity are now thinking about what the next biggest growth opportunity could be. The expectation that emerging markets will recover faster from the economic downturn may be driving the most ambitious to this burgeoning discipline.

Or, perhaps it's the collapse of the banks and the prevalence of corporate corruption juxtaposed with the hope instilled in the masses with the Obama campaign and subsequent win that is turning burgeoning capitalists to turn their sights to BoP markets where they believe the market can begin to address real problems. Regardless the reason, potential interns seem to be flocking to the world of BoP enterprise, corporate social responsibility and emerging market business development.

Just take a look at the Acumen Fund (disclaimer: Acumen Fund is a sponsor of NextBillion.net) where 690 applications came in for just 10 intern spots.  And that's not an isolated case - many of my non-profit friends are reporting huge upticks in their intern pools.

The failing global economy inevitably means tough times ahead for developing economies. With consumers, business, NGOs and governments all reigning in expenses, services to the most needy are likely to suffer. Even the most well-meaning organizations will face cuts and make hard decisions. Corporate social responsibility initiatives are often the first to get cut in tough times and even for-profit investments are seeking out the least risky investments - often turning to well-known and tested markets where strong market data can support decisions.

A surplus of interns interested in positions with a socially responsible bent means that the select number of positions with socially responsible programs will end up being staffed with the very best this year's crop of MBAs has to offer. It also means that those passionate about BoP topics who did not secure positions in this field will filter into more traditional internship positions. These possibilities can both yield positive results for the BoP. Socially responsible programs will benefit from the expertise and progressive thinking that comes with inspired, smart interns. But, even more so, the filtering of passionate and socially-minded interns into other fields will help pepper other industries and business units with a new perspective on and consciousness of BoP markets.

In short, it's a tough market, even for smart, highly qualified interns eager to work passionately and tirelessly for free. Having reviewed my fair share of intern applications, I would remind candidates to use their passions to show what they can do for the company or organization to which they are applying. We hear over and over again how our internship is a perfect fit for the candidate's interests but little is said about what the candidate will do to support our day-to-day work and help to further our mission. And not all businesses with an interest and passion for the BoP are created equal. Understand each organization's approach and what makes each different. Programs may be focused on profit, corporate social responsibility, philanthropy, or in the building of brand or government good-will. And each requires a different skill set in their interns.

A few weeks ago, I was fortunate enough to catch Richenda Van Leeuwen, a founding board member of the Good Energies Foundation, after the Ross Net Impact Forum. I asked her a series of questions about the firm where she works, Good Energies Inc., a global private equity firm focused on renewable energy investing, and its affiliated non-profit, the Good Energies Foundation. The foundation is trying to tackle the multiple challenges of providing clean energy to citizens around the world, particularly in developing nations. The following is the transcript from our conversation:

Grace Augustine, NextBillion.net: I find your organization’s design interesting. Is it the hope of the Good Energies Foundation to fund projects that can one day be commercial through Good Energies Inc.?

Richenda Van Leeuwen: The Good Energies Foundation is an independent non-profit foundation, and the operations are separate. Our mission in the foundation is two fold: poverty alleviation via provision of access to modern energy, and future poverty prevention through climate change mitigation. Where we can, we actually leverage our corporate expertise to drive our work in the social sector.

The Good Energies Foundation focuses on geographies and situations where a fully commercial approach may not be viable, where any returns may be lower or take longer to achieve than generally accepted by investors or the people are so poor that even with micro-credit they couldn’t afford any sort of system. We have focused a lot on small scale solar powered lighting to date. Our foundation’s work with Stiftung Solarenergie, a solar provider in Ethiopia would be one example. See video on the Stiftung Solarenergie website on its Ethiopia project here.

Initially, Stiftung Solarenergie was completely dependent on subsidies, but having proved their model and shown that solar lighting works in the local context, it is now exploring quasi-commercial community solar options. This includes such solutions as solar home products, LED lanterns and small lighting systems, in order to drive scale. The organization is currently raising a fund to support their drive to scale.

Our social mission is not just concentrated within the foundation. On the commercial side, our company, Good Energies, also has a 3-P mission, which stands for People, Planet and Profit. Good Energies is a private equity firm focused on investing in renewable energy with the goal of having a positive impact on people and the planet, but of course needs profit to function. In fact, all the investment work of Good Energies is, broadly speaking, beneficial to society from an environmental standpoint and in terms of reducing carbon emissions.

NextBillion.net:  Could you tell me a little more about your other partnerships, maybe specifically with SELCO India? I see that SELCO is a social enterprise.

Richenda Van Leeuwen: We recently made a “social equity” investment in SELCO India, along with E+Co and the Lemelson Foundation. SELCO India is an award winning registered business based in Karnataka, India. It is a strongly mission-based social enterprise, focused on energy access for the poor, and has cumulatively sold almost 100,000 solar systems since being founded in 1995. SELCO has to be commercially viable in order to be sustainable and to scale their services further, but their mission orientation is all about providing custom solutions for their low income customers. In fact, they were the first solar company focusing on access for poorer customers to reach scale in conjunction with a microfinance partner, SEWA Bank, even before Grameen Shakti in Bangladesh, another significant social enterprise operating in this space. With our social investment in SELCO, if we made a dividend or decided to exit, any money that we made would go back into supporting SELCO or to other projects of the Good Energies Foundation.

NextBillion.net: Speaking of E+Co, I think our readers are familiar with both E+Co and Acumen Fund, which both seem to be pursuing similar objectives, so what would you say differentiates you?

Richenda Van Leeuwen: We look at both of those organizations as cooperative partners. In the case of E+Co, we’ve already been an investor alongside them. I think what they do is terrific. I would say that the only difference is that we’re trying to get ahead on the issue of climate change, and develop products that intentionally mitigate the risk for the most vulnerable populations.

We keep in touch closely with Acumen Fund as well. The primary difference there is that we’re affiliated with a major global player in the renewable energy space, with deep expertise across the solar, wind, hydro, green buildings, and other sectors, and therefore we can bring that commercial expertise to the table as well.

NextBillion.net: I’ve heard that microfinance is becoming a bigger part of the solution to energy access. Can you tell me more about these recent advances?

Richenda Van Leeuwen: The combination of renewable energy and microfinance is just now becoming fully mainstreamed, although some groups such as SELCO India and Grameen Shakti have shown that the model can work for a number of years. There are now proven track records, despite the fact that historically many microfinance groups (MFIs) have been leery of going into any kind of asset-based lending. It has also been challenging for MFIs to structure the right kind of product.

For example, if you’re trying to lend to a farmer who only gets paid once a year, how do you structure an appropriate payment plan? On the renewables side, it is also difficult at the local level for system installations to have expertise as a loan collection agent, so generally speaking it has usually worked best when each entity focuses on its own core competences.

There are new groups out there, like ARC Finance, headed by Ellen Morris and Niki Armacost,  and Micro Energy Credits Corporation, led by April Alderdice, that are providing a roadmap for MFIs to show how they can work together with renewable energy providers. MECC is also tackling the carbon credits side of the equation, helping the MFIs tap into the carbon markets, which could be a potential for revenue generation, while ARC focuses more on assisting MFIs entering the renewable energy lending space.

NextBillion.net: In terms of technology, what advances have you seen that are making energy access more of a reality?

Richenda Van Leeuwen: There have been many recent technological advancements that have helped this sector tremendously. The cost of solar panels has gone down 20-30% even since the start of the year. If these savings are passed along to consumers, it increases affordability to an entirely new class of people, since the poor are very price point sensitive. There has also been innovation in LED lights. There are now super-bright LEDs used in low-cost lighting projects. When I was in India with SELCO recently, I saw a product working very well when I visited a poor village outside of Bangalore with approximately 50-60 people that had just installed some solar lighting projects. The houses were probably 12 x 8 feet and the LED lights, hooked up to a solar panel, produced sufficient light for those spaces. LEDs are also more environmentally-friendly than CFLs, as they don’t have the issues of mercury and special disposal, the latter being unrealistic in a rural village. LEDs do, however, tend to be very directional. Only recently, groups like d.light, Barefoot Energy and SunNight Solar have designed low cost products to overcome that limitation.

Battery technology, and energy storage in general, has also been on ongoing issue, but there is a lot of research going into these solutions and I think we’ll see some major developments in the near future.

It’s important for me to note that the Good Energies Foundation is technology neutral, meaning that we don’t give preference for one technology over another, although to date much of our work has been focused on solar lighting, since it is a natural fit.

NextBillion.net: Ok, so to wrap up, can you tell me about the major challenges with providing energy access to the world’s poorest people?

Richenda Van Leeuwen: I think one of the challenges is just the scale of the problem. The average person in the U.S. or Canada probably does not realize that one-quarter of the world does not have reliable or often any access to electricity.

Many non-profits and SMEs are in the space, but face challenges around taking their business or non-profit model to scale. Access to finance is one part of it. I did a rough back of the envelope calculation recently, which found that to provide a 50W system to the 1.6 billion people without access to electricity – generous enough to power lights, a radio, and possibly a small TV  – it would cost in the range of US $150 billion; less, incidentally, than the size of the bailout given to AIG. It could probably be done on a more basic scale for around US $100 billion. It may sound like a lot, but it is a finite, solvable problem where cost savings would not only be seen at the level of the household, but also in terms of improvements in health and education that accrue with a non-smoky, less dangerous and better source of lighting.

Our foundation is focused primarily on Sub-Saharan Africa and South Asia, where the largest concentrations of people lacking access to electricity live, but we’re also supporting a non-profit in Nicaragua, Blue Energy that is helping to bring electricity to Caribbean coast communities there. Because of the scale of the problem, working in partnership is essential, with groups such as Lighting Africa, run out of the World Bank.

We need to emphasize those approaches that really have the capacity to scale up in order to eliminate kerosene-based lighting. I have spent years working in the non-profit world, and that is a sector that has often really struggled with producing scalable and sustainable solutions, in part due to the inherent limitations of completely subsidy-driven approaches, or lack of business expertise. A commercial orientation, even within the context of a social enterprise, will often bring more discipline to evaluating the viability of a particular business model, although finding the right balance between commercial and social orientations is a challenge, as we have seen in the microfinance sector over the years.