Impact Investment is indeed a term that “covers all manners of sin”.
Investment can only create real impact if it is sustainable…. and by sustainable I mean first and foremost financially sustainable and only after it, all the other facets of sustainability.
As such, there are too many projects that have grown based on grants, subventions that languish or –in most cases- die when financial assistance concludes.
Likewise, to be sustained in time, Social Entrepreneurship must be first and foremost an enterprise, a term that implies financial risk. And as we all know, the only proven way to offset risks are profits. Indeed, a high probability of obtaining profits in the future is the only proven path to make individuals and companies risk their money and resources.
That is why at Yiitidi we prefer to use the term “Profit for Purpose”.
It shows that projects must be profitable, thus financially viable including remuneration of capital.
We prove our model making it profitable. We prove our purpose reinvesting the profits to expand our projects into more un-served areas.
In our case, Yiitidi is focused on delivering access to energy & communications to isolated communities in West Africa. We do it through standalone hubs integrating Mobile Tower facilities powered by Photovoltaic (PV) Micro-plants.
The financial model is based on the fact that Mobile Operators will be the major consumers of the electricity produced but their SLAs require overinvestment in CAPEX. The adequate return is obtained by selling the excess of generated electricity through a micro-grid to the community.
The model does not need grants or subventions. The only thing needed is a simplified licensing system with little limitations in tariffs…….. (See rest of the entry at http://lightup.yiitidi.com/2016/04/impact-investment.html )