Most challenges are bigger than philanthropy alone. Building an energy infrastructure in parts of the world that have never had reliable power is one of them. The Rockefeller Foundation, established with the wealth of petro-energy tycoon John D. Rockefeller more than 100 years ago, is redoubling its philanthropic commitment to energy with the recent announcement of a three-year, $1 billion plan to catalyze private and public investment in green/renewable energy systems in undeveloped parts of Africa and Asia.
But nearing the end of what may be philanthropy’s strangest year, many big-picture grantmakers can’t help but take the coronavirus pandemic into account. Part of the $1 billion will fund initiatives to build up healthcare as the people in these regions recover from the health and economic stresses of COVID-19. Rockefeller is calling its plan a “Green Recovery” from the pandemic.
Until this year, approximately 800 million people worldwide didn’t have access to electricity, Rockefeller Chief Financial Officer Dominick Impemba told Inside Philanthropy. “COVID obviously highlighted a lot of issues globally, with the lack of access to power being one of them,” he said, adding that the pandemic pushed another 100 million into energy poverty.
Power for Progress
Rockefeller’s leadership believes that access to electricity is about more than simply turning on a light; it’s about access to economic opportunity—about plugging that bottom billion into a modern economy. How the efforts to end energy poverty and speed pandemic recovery fit together may not be completely obvious, but the foundation says both issues are a matter of equity and access to the benefits of a modern economy that support broad aspects of society.
“Without power, there’s not a lot you can do, including healthcare,” said Impemba. “We’re using ‘green’ in the sense of the climate crisis around all of this—it’s the existential threat of our time, it endangers lives, communities, impacts food security, deforestation and even COVID issues.”
Rockefeller has long addressed climate change and promoted greener energy systems for vulnerable people around the world. We have written about the foundation’s work, including its SPEED initiative (Smart Power for Environmentally sound Economic Development), which promoted the development of small, decentralized clean energy plants in rural India, where hundreds of millions of people lack access to power. For that matter, Rockefeller has also been an active voice in COVID-related issues, funding and advocating for testing and other public health measures in response to the virus.
The new funding commitment will continue Rockefeller’s ongoing Smart Power Initiative, which has established distributed solar power systems serving about 500,000 people in India, Myanmar, and parts of sub-Saharan Africa. Creating regional and national energy infrastructure is above philanthropy’s pay grade so Rockefeller is aiming with its grantmaking to catalyze investment from other potential investors and stakeholders, private and public.
Catalyzing Bigger Investments
Sparking wider public and private investment has been the foundation’s primary approach since Rajiv Shah took over as president three years ago. “We’re not the biggest checkbook anymore, so working together with public and private investors allows us to reach these goals.” The foundation aims to run the investment program over the next two to three years, with the hope that the energy systems it helps to install will remain functioning long after Rockefeller’s direct involvement ends—with a goal to end energy poverty over the next 10 years.
For the initiative, Rockefeller has opted for the first time to use a charitable bond rather than to dig into assets. It raised $700 million of the planned $1 billion from large institutional investors. The rest of the promised funding millions will come out of the foundation’s pockets. Because interest rates are currently low, and because the foundation’s endowment has historically returned 9% or 10%, it made financial sense to keep its $4.1 billion endowment appreciating in place and pay off the bond over several years, thus better protecting the foundation’s long-term stability.
