Renewable Energy for India: A New Deal Could Impact 250 Million People
Recently, The Rockefeller Foundation and OMC Power closed a $4.5 million deal to finance OMC Power’s construction and retrofitting of 100 solar power plants in rural Uttar Pradesh, India to serve villages that do not have reliable access to power. This deal is an example of a foundation engaging in impact investing—making an investment that generates social impact as well as a financial return.
The deal with OMC is particularly interesting because it was done in the context of a program called Smart Power for Rural Development (SPRD), which seeks to promote economic development via the provision of power. The SPRD program is initially focused on India—where, shockingly, nearly 250 million people lack regular access to power—and is considering expanding to countries in sub-Saharan Africa and Southeast Asia. The program utilizes both grants and impact investments to achieve its social impact goals.
“By working together, whether to close an investment or electrify rural communities in India, we can generate more positive impact on the lives and livelihoods of some of the world’s most vulnerable people.”
The deal with OMC is innovative, to be sure, but it didn’t come easy—it took almost two years to close, and not due to lack of effort. From the first time the Foundation met with OMC, we sensed that we were kindred organizations with the potential for collaboration. Since then, we have worked together industriously, diligently, and well, employing ninja-like strategies to obliterate the various obstacles standing in our way. But the reality is that it is very difficult for foreign nonprofits, like The Rockefeller Foundation, to make investments in India—more specifically, the strategy of foreign non-profits making impact investments is not well-understood and thus the regulatory environment is still quite onerous. It also took a lot of time to align on what constitutes positive—and sufficient—impact in the context of the SPRD program.
We are excited to be working with OMC and, in many ways, all of the work we have done to date on the financing side has only solidified our partnership. By working together, whether to close an investment or electrify rural communities in India, we can generate more positive impact on the lives and livelihoods of some of the world’s most vulnerable people.[ssba]