How innovation is improving access to clean energy.

Jun 24, 2024

We are delighted to welcome several investments from GIF’s portfolio to our office this week, while they are in town to attend London Climate Action Week. This groundbreaking annual festival brings together individuals, organisations and communities to collaborate on finding global solutions to tackle climate change. One of this year’s key themes is the road to climate ambition at COP30, with a focus on the cooperation, politics and diplomacy needed to deliver a 1.5C aligned outcome in 2025.

SparkMeter CEO Dan Schnitzer (second from left) with GIF's Lily Steele, Avinash Mishra and Joseph Ssentongo

GIF recognises that it is crucial to cooperate across the world on local solutions to climate challenges. A frequent pattern seen across the developing world is the use of unclean, unsafe fuels, such as kerosene or diesel, in the absence of reliable electricity and gas supplies. Not only does using these fuels carry health risks for consumers, they also emit a considerable amount of greenhouse gases which worsen global warming.

Connecting underserved consumers to the grid

SparkMeter is an innovation in GIF's portfolio which uses smart meters and a software platform to provide affordable, reliable, clean power to consumers. Its technology enables underserved poor customers, particularly those from rural areas who would traditionally have relied on unsafe fuels, to be connected to the grid.

The benefits of such a shift are many. Health risks from hazardous fuels – which include burns, poisoning, and respiratory diseases – are reduced, small business incomes are boosted through efficient energy usage, and overall quality of life is improved through access to better lighting and consumer appliances. Climate concerns are addressed through a reduction in greenhouse gas emissions.

GIF was an early investor in SparkMeter, loaning the business $600K in 2016 which was subsequently converted into equity. It has also provided two rounds of follow-on funding.

“GIF provided us with the capital to help develop the technology and to expand,” says SparkMeter CEO Dan Schnitzer, who visited the GIF London office this week. “At the time GIF invested we had customers in maybe five or 10 countries. We now have customers in about 30 countries.

“GIF is focused on working with enterprises that are solving really hard problems, specifically in emerging markets. A lot of investors would never even have looked at SparkMeter, or taken a look and decided to pass, because of the markets that we’re serving. Whereas that’s what GIF is built to do.

“GIF is now one of our shareholders in the company and continues to support us with new investments. GIF certainly took on much more risk compared with other investors, so that helped us scale to where we are today.”

SparkMeter recently announced it will work with Honeywell, one of the largest utility digital solution providers in the world, to connect underserved customers across Africa, Asia and Latin America to electricity networks, and enable improved energy resilience without costly upgrades.

Honeywell is leveraging SparkMeter's modern industrial IoT technology as part of a cloud-based platform to help utilities improve their operations and enhance performance of existing utility grid assets. The system is designed to give insights and visualisations to run electricity grids better, as well as integrate solar panels, wind turbines and energy storage systems.

“Honeywell has come in and led our most recent financing round, starting a partnership with us,” explains Dan. “We wouldn’t have got to where we are today without the early support and derisking that GIF and others took on.”

Bringing clean cooking fuel to Kenyan homes

GIF also supported PayGo Energy, a pay-as-you-go technology provider focused on bringing clean cooking fuels to homes in Kenya by providing an uninterrupted supply of affordable gas. 

PayGo Energy enabled the provision of gas to low-income urban consumers who would ordinarily have been priced out of making the switch to clean cooking gas due to upfront and recurring costs. Its innovative smart metering systems allowed customers to prepay for gas, and helped to predict their usage, ensuring that an uninterrupted supply was available.

GIF’s 2016 investment of $800,000 helped PayGo to finalise its product and services, and to trial them with household consumers. PayGo was acquired by SunKing in 2023 and the two companies have joined forces to develop a range of clean cooking fuels and services to help families transition to clean, safe, and environmentally friendly fuels.

Providing solar power to poor consumers in India

GIF investee Simpa operated in rural India, selling solar-as-a-service to households and micro-enterprises usually unable to afford access to solar power. Customers made an initial payment to have a solar home system installed and then made ongoing payments towards the services and the device’s eventual ownership.

This solution helped to tackle the health and environmental concerns faced by the millions of Indians who often spent significant portions of their incomes on unclean and hazardous fuels.

GIF invested $2.3 million in equity into Simpa in 2016 as part of a series C round that included impact-oriented investors. GIF then completed an exit from Simpa in 2018. 

This followed challenges to Simpa’s sales growth and overall path to profitability during our period of investment. These were partially caused by a rapid extension of the Indian electricity grid, which shrunk the total addressable market, as well as a sales and distribution model which proved difficult and expensive to scale. Low adoption of mobile payment services also rendered follow-through of ongoing payments for the solar devices difficult.

Far from being a sign of failure, researching and understanding these challenges helps us, as well as innovators and other investors working in this space, to predict and address similar problems in future innovations. We outline all of our key learnings from this investment in this completion report.

Despite challenges, Simpa acquired over 60,000 additional customers, thereby providing an estimated 300,000 beneficiaries with clean energy.