The $13 billion Church Pension Fund (CPF), a financial services organization that serves the Episcopal Church, has invested $17 million in the Social Investment Managers & Advisors (SIMA) Off-Grid Solar and Financial Access Senior Debt Fund I.
The $75 million fund will provide loans to microfinance institutions, distribution companies, and manufacturers in the off-grid solar sector located in sub-Saharan Africa, as well as in South Asia.
“This investment will enable customers of solar energy to lease on an affordable installment basis and will impact the lives of more than 1 million people while reducing carbon dioxide by 4 million tons,” said Asad Mahmood, CEO of SIMA, in a statement.
According to SIMA, off-grid solar is growing at 55% per year, and as much as 85% of people in Asia and sub-Saharan Africa do not have electricity and have to burn fossil fuels for light. It also said that compared to burning kerosene, solar lighting results in improved health, longer business and educational hours, improved safety and quality of life, and deep environmental impact.
The SIMA transaction follows recent investments made by the CPF into socially responsible funds such as the Cheyne Social Property Impact Fund, the Avanath Affordable Housing Fund, and the Developing World Markets’ Off-Grid, Renewable and Climate Action Impact Note.
CPF said its socially responsible investing (SRI) strategy focuses on investments that offer attractive risk-adjusted returns, while at the same time providing a positive social impact. The fund said it currently has approximately $1 billion of invested or committed capital in socially responsible investments spread out among 25 countries. CPF’s SRI-related investments focus on economically targeted initiatives such as urban redevelopment, affordable housing, sustainable agriculture, and microfinance, as well as environmental programs such as sustainable forestry, clean technology, and green buildings.
“This investment represents our second investment focused on the off-grid solar sector as market conditions in this space remain extremely strong,” said Roger Sayler, CIO of CPF.
“This investment offers us the opportunity to provide funding for much-needed financing while also earning a competitive rate of return,” he said, adding that “today more than 2.2 billion people across the world still live without reliable access to energy, and the underlying need for off-grid renewable energy still far outpaces the availability.”