In the past months, IBA has been actively exploring the topic of Corporate Impact Venturing as an increasingly important catalytic force to inclusive businesses worldwide. One of the corporate frontrunners in this field is French energy multinational ENGIE. Through initiatives such as their Rassembleurs d’Energies initiative, they actively support inclusive businesses to reach the next growth phase, and recently invested in IBA-registered venture Green Bio Energy. We talked to Jessica Souriau, Investment Manager for Rassembleurs d’Energies, to get a deeper understanding of their activities.
What does ENGIE do, and why did ENGIE decide to build an impact venturing initiative like ENGIE Rassembleurs d’Energies (RdE) ?
“ENGIE develops its businesses (power, natural gas, energy services) around a model based on responsible growth to take on the major challenges of a transition to a low-carbon economy: access to sustainable energy, climate-change mitigation and adaptation and the rational use of resources. The Group provides individuals, cities and businesses with highly efficient and innovative solutions largely based on its expertise in four key sectors: renewable energy, energy efficiency, liquefied natural gas and digital technology. In 2011, ENGIE, launched its corporate impact investment fund, whose aim is to improve the social and economic development of remote areas and help reduce energy poverty both in Europe and worldwide, through direct investment in innovative enterprises offering access to sustainable energy to poor populations.”
What is your role within ENGIE RdE? Which venture that you supported are you most proud of?
“I’ve been an investment manager within ENGIE RdE for 2 years. I am in charge of analyzing new projects applying for RdE’s investment, then managing the due diligence process, preparing internal Investment Committee presentations, then dealing with the follow-up of the company. Among the 16 ENGIE RdE investments, I am proud of SimGas for instance, which sells individual biogas solutions to off-grid farmers in East Africa, because I really believe in biogas. One often underlines the 1,3 billion people without access to electricity but there are 2,7 billion people having no access to clean cooking solutions. This is a huge challenge.”
Can you give some examples of inclusive businesses that RdE supports, and explain why ENGIE RdE specifically chose to support these businesses?
“In emerging countries, ENGIE RdE’s mission is to support businesses offering energy access solutions to poor and off-grid households – start-ups selling affordable solar energy solutions like Solar Home Systems with Pay-as-you-go, for example. Last-mile distribution to BoP population is a key aspect of the inclusive businesses we support. In northern countries as France and Europe, ENGIE RdE supports social or inclusive businesses dealing with energy scarcity, such as social housing renovation with energy efficient solutions, for example.
ENGIE RdE has 5 investment criteria:
- Environmental performance (CO2 economy, kerosene replacement, health improvement)
- Social performance (education, women empowerment, job creation, people reached)
- Relevance of the solution (to the market, the customer’s need, the broader BoP population)
- Financial value (profitability, financial viability, cost effectiveness)
- Synergies with other ENGIE entities or with other existing investments of RDE”
What role do you see for corporate impact venturing and why do you believe this is important for further building inclusive businesses in developing country markets?
“We do see corporate impact venturing as a key factor to develop inclusive business in emerging markets, because business launch always needs capital, shareholders and investments to be successful. Corporate impact venturing provides the funds necessary to scale up the businesses, and helps corporates learn different approaches from new markets through field contacts with local entrepreneurs. Corporate impact venturing also supports the development of these countries by promoting inclusive businesses, as ENGIE RdE has experienced in the sector of rural electrification.”
Do you collaborate with any impact investors? If so, how do you collaborate? If not, would you see any added value -and how?- in working with impact investors?
“ENGIE RdE collaborates with other impact investors as co-investors in most of the companies of our portfolio : for instance we co-invested with Khoshla Impact in BBOXX, with Investisseurs & Partenaires in PEG Ghana and with Insitor Investment and ICCO Investment in Mera Gao Power in India. We also have carried out due diligences jointly with other impact investors without eventually closing the deal. However, we shared our conclusions and learnt a lot from each other.”
What do you think is needed to convince other corporates to also start corporate impact venturing initiatives?
“Corporates need to understand that impact venturing is not a philanthropic approach only dedicated to humanitarian aid : it is definitely a profitable investment, from which the company may make acceptable financial return, but also highly valuable extra-financial profits, new management skills, innovative processes, new markets knowledge etc. It’s a win-win opportunity.”
For the ventures that are registered on IBA.ventures, and that might fit ENGIE RdE’s vision, what do you look for in the ventures that you invest in/work with?
“ENGIE RdE is looking for new projects fitting with its diversification strategy: in terms of geography developing our investments in South America, South Asia, Eastern Europe; in terms of technology such as biomass, biogas, hydro; or in terms of new social businesses.”