Metrics in Social Impact InvestingInternational Transactions Clinic

University of Michigan Law School

E+Co: Clean Energy Enterprises

April 12, 2011

E+Co Overview

• Investments in >250 enterprises in 21 developing countries

• Market-based & Entrepreneur-centric• Six regional offices (Costa Rica, South Africa, Tanzania, Ghana, Thailand, China)

• Affordable, Available and Appropriate Technology• Solar, Hydro, Biomass, LPG, Wind, Cook Stoves

• Finance Continuum• Services• Seed Investments• Growth Investments

MissionTo positively impact climate change and reduce poverty through investment

in small and growing clean energy enterprises.

The Energy LadderTransitions in Fuel Use at Different Stages of

Economic Development

Crop Waste/Dung

Firewood

Charcoal

Kerosene

Gas, LPG

Electricity

Income

Cost

, Cle

anlin

ess,

Effi

cien

cy

E+Co Triple Bottom Line ReturnsSocial Environmental Financial

Access to Clean Energy

6.2M

Carbon Dioxide Reduced

4.6M tons

Capital Invested$40M

Entrepreneurs Trained

> 1,200

Firewood/Charcoal Displaced

1.1M tons

Capital Mobilized$253M

Income Generated$7M

Decreased Oil Consumption

910,000 barrels

Portfolio Return8.7%*

Cumulative 1998-2009

*After write-offs and before operating expenses

Toyola Energy manufactures and sells energy efficient cook stoves in Ghana

In 2010 E+Co approved its third investment in Toyola for $542,000

Served over 35,000 households

Sold over 100,000 cook stoves

The operation has created over 200 jobs

Offset over 140,000 tons of CO2 emissions

Toyola Energy Ltd.Fuel Efficient Cookstoves in Ghana

6

Investment Management - Approval Process

Prepares Intro Sheet

IO

Yes

Approves Intro sheet

RM

Prepares Fact Sheet and Investment

Recommendation

IO

No

Lead Identified

Process complete

Start EDS

IO

Review and advise on Intro

sheet

SM

Ent Training Reqd.?

Approves Fact sheet and Recommendat

ion

RM

Review and Approves Fact

sheet and Recomm.

CIO/CEO

Submits investment for

IC approval

CIO

Approves Investment

IC

Updates Funder in GMS and Forecast File

FM

Reviews & Uploads IC Meeting minutes

and investment history in GMS,

CIO

Marks inst approved in GMS, enters approval

date, uploads Fact sheet and print for file

CIO

Perform Due Diligence and

prepare environmental

checklist

IO

Consolidates Intro sheet

comments and uploads to GMS

CIO

Invoke Term Sheet

Approval Process

Enters Lead in GMS

IO

Creates code for Time tracking

FA

Assign Funder

Fin Mgr

Prepares IC Meeting Minutes

Comm.Team

7

Prepares repayment

schedule in an excel

Reviews and approves legal

documents, prepare legal

review checklist

Reviews and approves legal

documents and signs checklist

Perform Quality control on legal

documents

Prepare Legal Documents,

Incorporate Terms in Term sheet

Investment Approved

Process Complete

LawyerIO IO

RM CIOSends legal

documents to Entrepreneur for

signature

IO

Disbursement Processing – Legal Documents Approval

Send term sheet to Lawyer

Signs final documents and informs Fin Spec

Signs final documents, sends

docs to IO/legal counsel

Sends docs to CEO for signature

Returns signed docs to lawyers

Files copy of documents

(physical copy)

Handle post signature

requirements (e.g. collateral

registrations)

Send final registered copies to Reg. Office/Fin

Spec

No

Yes

Re-evaluate (EDS, if needed)

IO

CP met in short term?

IO

Ent IO/Leg C

CEO Fin Spec Fin Spec Lawyer Lawyer

E+Co Investment Process

• Client Identification• Prepare Introduction Sheet• Provide Business Development Services• Undertake due diligence• Prepare Term Sheet• Present Investment Recommendation

– To E+Co Senior Management up to $100,000

– to E+Co’s Investment Committee $100,000+

• Execute Legal Documents • Disburse funds

E+Co Legal Support•Local Lawyers have vetted E+Co’s Loan documents.•E+Co staff sends Term Sheet to Lawyers once the investment is approved.•Lawyers prepare legal documents and communicate with client’s lawyers. •Lawyers oversee execution of documents, including registration of collateral and signed agreements. •If client defaults, E+Co engages local legal counsel to assist with collection. •E+Co Headquarters works with Weil, Gotshal on a pro bono basis for other matters

Thank you!

Anne MurraySenior Development

Officer, E+Co

www.EandCo.net