Another Funder That Wants to Bring Energy to the World's Poor: The Shell Foundation

The other day, we wrote about how the energy issue connects up with just about every problem that poor countries face—health, education, economic development, women's empowerment, etc.—and how funders are wise to focus on this leverage point. But, as we noted in the article, not many funders work in this space. The Rockefeller Foundation is one, and it's ramping up its commitment to electrifying rural India. 

Related: Smart Power: Rockefeller Steps Up Its Fight Against "Energy Poverty" in India

The Shell Foundation is another funder keyed in to energy. 

Established in 2000, the foundation of the giant oil and gas company has been directing its giving to the energy sector, zeroing in on populations living on less than $2.50 per day. Using a social impact investment model rather than strictly traditional methods of grantmaking, Shell tends to establish long-term relationships with its grantee/partners. Though this sounds like impact investing, the foundation calls it an "enterprise-based" model, and has been using this approach since the early 2000s.

Related: Shell Foundation: Grants for Global Development

The principal goal of Shell’s giving is to provide working capital to energy companies servicing low-income consumers. Shell’s investments aim to help these companies build capacity, while at the same time keeping an eye on sustainability.

In 2011, the foundation partnered with the OPEC Fund for International Development to launch a pilot program to explore the notion that makers of low-cost energy products could grow faster if they were provided flexible credit. The pilot was an overwhelming success and resulted in driving the sales of over 800,000 solar lights and 100,000 clean cookstoves in less than two years.

The success of the pilot program led to a lightbulb moment for the Shell Foundation and its partners—why not come up with a sector-wide solution to solve the working capital complications in the off-grid energy value chain? The result of that notion was the responsAbility Energy Access Fund.

I know: Your antennae are surely up by now, given how this fossil fuel colossus has often been accused of greenwashing over the years by environmental groups. We'll leave it to others to judge how Shell's philanthropic efforts may or may not fit into the endless effort by Big Oil to slow efforts to address climate change and confuse public opinion on the issue. What we can say is that this particular effort is on the cutting edge of growing efforts to address "energy poverty" in poor countries and that there is real money available to groups working in this space. 

The Shell Foundation is making a capital commitment of $30 million to the new energy fund, which is devoted to backing manufacturers and distributors of off-grid energy solutions around the world, but with a main focus on Africa and Asia. ResponsAbility offers working capital loans ranging from $500,000 up to $3 million to energy enterprises that have viable commercial business models, are growing quickly, and need the money to help further that growth.

That's real money, as we said. And with well over a billion people in the world living without electricity, it's worth paying attention to any funder thinking about this problem.