alternative finance for clean...
TRANSCRIPT
Alternative Finance
for Clean Technology
2014 Asia LEDS Forum Deep-dive training on
Green Industrial Innovation
Xiaochen Zhang
About this lesson
• Market Potential of Clean technologies for SMEs
• Barriers to realize the market potential
• Crowdfunding for Green Industrial Innovation
• Scale-up crowdfunding in Asia
Outline Outline
Building Competitive Green Industries, World Bank, 2014, http://www.infodev.org/publications/green-industries
What barriers do SMEs face to realize the market potential of the clean technologies sector?
How can I validate business
model with reduced costs?
How can I reduce risk for investors for my business?
How can my projects be discovered
by investors?
How can I collect real-
time feedback effectively
How can I reduce inventory related
operational costs?
How can I reduce
capital costs to cover upfront
investment?
If I fail, how can I fail
early
How can I help the user of my products to afford my products
How can I find
potential customers?
Case study: Most common barriers face by clean technology SMEs in India
infoDev: http://www.infodev.org/infodev-files/infodev_crowdfunding_study_0.pdf
What barriers do SMEs face to realize the market potential of the clean technologies sector?
WHAT IS CROWDFUNDING
Crowdfunding
Friends and family finance
Social Networks
Internet Finance
Innovative Projects/ Venture
Crowdfunding Models
Donation-based crowdfunding: funders donate without expecting monetary compensation, average funding sought (US$) < $10,000, e.g.: socialants.org (Korea) Reward-based crowdfunding: funders receive a token gift of appreciation or pre-purchase of a service or product, average funding sought (US$) < $10,000, e.g.: wujudkan.com (Indonesia) Lending-based crowdfunding: Funders receive a debt instrument that pays a fixed rate of interest and returns principal on a specified schedule, average funding sought (US$) < $50,000, e.g. rangde.org (India) Equity-based crowdfunding: Funders receive equity instruments or profit sharing arrangements, average funding sought (US$) < $250,000, e.g. http://angelcrunch.com/ (China)
Build Rescue Boats in Flood Prone Communities (Philippines )
$25 Contributes to the costs of building a boat $100 Contributes toward the building of a boat $810 Builds a boat
http://www.globalgiving.org/projects/build-rescue-boats-in-flood-prone-communities/
The community of Banaba is affected by flooding almost every year. For the residents of this small community just outside Manila, it isn't a question of if there will be more flooding, but when. But these inspiring community members aren't taking matters lying down - they've organised themselves and are prepared to respond when floods come. Your donations allow them to build rescue boats so that they can look after one and other during floods.
Reward-based Crowdfunding for Energy efficient cookstove in Kenya
Reward-based Crowdfunding for Energy efficient cookstove in Kenya
Challenge: The Baker Stove seeks to raise funds to further its dream of providing women in developing countries with an energy efficient cookstove solution to the three-stone fire problem. Solution: The company launched a campaign on Indigogo, a reward based platform, to raise fund. The campaign raised $35632, 119% of the goal, from 318 funders. Result: The crowdfunding campaign helped put the initiative on the map around the world with articles in the US, EU, South Africa, and Thailand. The initiative was selected by the Global Alliance for Clean Cookstoves for their Investor Pitch and Deal Rooms initiative to scale-up its impact. https://www.indiegogo.com/projects/baker-stove-an-energy-efficient-cookstove-for-the-developing-world#home.
Husniya is a very hardworking and determined woman from Tajikistan EarthSpark International, Haiti,loans for retailers to purchase and resell both solar products and clean cookstoves to expand last-mile distribution; Barefoot Power, Tanzania, loans for small to medium-sized solar product distributors to expand adoption in rural areas; Credit Mongol, Mongolia, loans for clean energy and energy-efficient products in one of the most polluted countries on earth;
http://www.kiva.org/lend/647884
GREEN LOANS FROM KIVA
MOSAIC’S RESIDENTIAL SOLAR LOAN PROGRAM
Mosaic connects high quality borrowers who are going solar with qualified investors. The borrower gets clean energy and saves money. Solar power is less expensive than power from the utility. Investors get paid back with interest. Investors can easily re-invest payments or transfer them to their bank accounts.
https://www.crowdfunder.com/quetsol/deal/
Crwodfunding as a business solution
Validated by the crowds
support
Crowdfunding campaign is a brand creation and user engagement process
Investors can find my
projects easily
Direct communications with final
users and stakeholders
O inventory through CF pre-order model
Crowds ask for much less equity than
VC
Demonstration before scale
up Debt based crowdfunding for BOP
CF as marketing and
pre-order
In the era of Crowdfunding
MARKET POTENTIAL FOR CROWDFUNDING ACROSS THE REGIONS
infoDev:http://www.infodev.org/infodev-files/infodev_crowdfunding_study_0.pdf
http://cdn.crowdfundinsider.com/shared/2014/08/Renewable-Energy-Crowdfunding-Map-Web.jpg
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Name Country Model Year of establisthment Website
Badhai India Donation 2012 http://www.badhai.in Ekjaa India Lending 2013 ekjaa.org
Exhilway Private Capital Market India Equity 2013 exhilway.com
IGNITE INTENT India Reward 2012 igniteintent.com MicroGraam India Lending 2009 micrograam.com Milaap India Lending 2010 milaap.org Rang De India lending 2008 rangde.org M-Changa Kenya Donation 2012 changa.co.ke
Mobile Movement Kenya Donation 2009 mobilemovement.tv
DreamDoIt Mexico Donation 2012 dreamdoit.com
Fondeadora Mexico Reward 2012 fondeadora.mx
Can Crowdfunding be employed for clean technology development in Asia?
World Bank / infoDev Climate Innovation Centers (CIC): Basic Model
CIC Services
Technology Commercialization
Technology Collaboration
Proof of Concept Grants
Facilities
Venture Acceleration
Education and
Training
Market Development
Policy Advocacy
Regional Networks
Market Analytics
Access to Finance
Investment Syndication
Seed Capital Facility
Business Development Services
Cost: USD 15-20 Million
The growing CIC network
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The Ghana CIC will support local competitiveness in the SME sector
The Morocco CIC will support local SMEs to participate in CTF Ourzazate and other solar ambitions
The India CIC will support a networked approach, covering multiple locations and will address skills constraints and lack of financing for the next generation of Indian cleantech entrepreneurs
The Ethiopia CIC will focus on agriculture and include a women-led innovation program
The Kenya CIC, is featured on GoK’s Climate Change Action Plan and is already working with more than 70 Kenyan firms
The Caribbean CIC will be regional and focus on tourism, agriculture, distributed renewables and adaptation tech
The Vietnam CIC will focus on green buildings and support the government’s Green Growth Strategy
The South Africa CIC, featured in the government’s Green Economy Accord, will promote inclusive innovation
World Bank / infoDev Climate Tech Program in Asia > Vietnam Climate Innovation Center
(VCIC) • Likely to be launched in Spring /
Summer 2015 > VCIC Proof-of-Concept Competition
• Identified the most promising Vietnamese climate technology ventures to be supported by VCIC
• 24 finalists out of 158 applications • Bootcamp training on developing &
improving a business plan (in Ho Chi Minh City, Oct 10-13, 2014)
> India CIC is being developed in 2016
Participants & Mentors at the Vietnam CIC Bootcamp
Barriers hinder the scale-up of crowdfunding in developing countries
Joint research program: • Crowdfunding readiness for national development banks • Crowdfunding co-investment models for developing
countries; • Crowdfunding eco-system in Asia… Joint Initiatives • Crowdfunding PPP • Academic-industrial initiatives • Donor-developing country government initiatives • Industrial association…. Crowdfunding for clean tech in Asia • CC/GG community and CF community initiatives
(1) Lack of Crowdfunding infrastructure: (2) Lack of business models knowledge: (3) Barriers to reach wider and deeper for successful platforms (4) Lack of knowledge, tools and data: (5) The lack of risk management skills and tools.
Partnership and collaborations are extremely important !
Thank you
• https://www.linkedin.com/in/cmyidea • Xiaochen Zhang