Climate action and social impact

How Inclusive Business can contribute and help build resilient communities

Financing the clean energy transition in India

Financing the clean energy transition in India

Interview with Ameya Bijoor, Partner, Encourage Capital

Encourage Capital is a thematic and research-driven impact investment firm. Encourage Solar Finance is a private equity fund that invests in specialized financial institutions in India that can develop and scale commercial rooftop solar finance solutions for micro, small and medium-sized enterprises.

How does Encourage Capital, by providing new financing models for clean energy for MSMEs in India, contribute to global climate change mitigation goals and to India’s NDC commitments? How do you assess this impact?

We believe that an inclusive and efficient financial sector can drive many of the UN Sustainable Development Goals, particularly those involving sustainability and climate change mitigation. To that end, we have raised a private equity fund (called “Encourage Solar Finance, LP”) which aims to invest in financial institutions in India and provide operational and strategic support to help scale the deployment of rooftop solar solutions for micro, small and medium-sized enterprises in India. We believe that financing can unlock this +15 GW market. We are focused on delivering both direct and systemic impact. Our direct impact is measured based on the aggregate MW of rooftop solar financed and the number of small business customers reached, while aligning our incentives with these targets. Our systemic impact is measured by our ability to help catalyze the +15 GW rooftop solar market and accelerate green lending.

Why did you decide to focus on rooftop solar financing for MSMEs in particular?

We decided to focus on this segment because MSMEs, which typically face challenges in accessing finance, were also overlooked in the clean energy transition. MSMEs are critical to India’s industrialization, accounting for 45 per cent of industrial output. They are also large, and often inefficient, consumers of energy for electricity and industrial processing – MSMEs account for 48 percent of the total energy consumed in India’s industrial sector. We believe that finance can unlock the MSME solar market and help drive India’s clean energy ambitions.

In addition to the climate impact, are many of the MSMEs that are benefitting inclusive businesses (IBs) that have a social impact on people living at the base of the pyramid?

MSMEs help drive several important social benefits, including economic democracy, social fairness, innovation, job creation and economic growth, thereby contributing to a more stable economy. Our first portfolio company in this new fund, Electronic Finance, has a +30-year track record of providing equipment finance to such entrepreneurs in India across a range of industries (machine tools, textiles, food processing / packaging, plastics, printing, woodworking, etc.).

solar panels
Image courtesy of Encourage Capital

Why is it important to identify and finance new solutions to environmental and social problems? How do you identify gaps where investments can provide high levels of impact?

In our view, there are many aspects of the clean energy transition that are both technologically and commercially viable today. However, financing solutions have typically lagged given a lack of focus and lack of comfort with these technologies amongst lenders. In order to prioritize our work in this recent fund, we started by surveying MSMEs around the country to understand their energy needs, financing needs and concerns to determine where we can be most impactful. We also focused on commercially viable solutions (like rooftop solar) which are best positioned to scale and now seek to partner with market leading financial institutions that can address the financing demand.

What are the main challenges you have identified for inclusive businesses working at the intersection between social impact and climate change mitigation, and how do you support these businesses?

The main challenges are typically around comfort with technology – both for end users and financiers. Thus, we manage a capacity building program which supports market development, product development, training and other operational support to help drive our initiatives. For example, this program has enabled us to develop technical capacity through staff training programs and processes for equipment/installer accreditation. In addition, we have also developed digital tools to improve the interaction between installers and lenders to drive efficiency and productivity, which we hope will ultimately improve the customer experience/adoption. We have also structured a risk mitigation facility, in partnership with US Development Finance Corporation, to help accelerate lending in this market.

Ameya Bijoor

Ameya Bijoor is a Partner with Encourage Capital. He co-leads the clean energy finance and financial inclusion team and has approximately 20 years of experience across private equity, corporate finance and development. Since joining Encourage Capital / Wolfensohn Fund Management (WFM) in 2008, Ameya has been actively involved in the firm’s investments in Electronica Finance, Development Credit Bank, National Stock Exchange of India, Repco Home Finance, Ujjivan Financial Services and Fabindia.


Improving livelihoods through solar solutions in rural India

Most of rural India has been connected to the power grid, but often the energy supply remains unstable. Off-grid solar solutions improve living conditions and benefit the environment, argues Tushar Devidayal, CEO of Devidayal Solar Solutions.
Katharina Münster
Table of contents

graphic summary


Learn more about Inclusive Business at the intersection between climate action and social impact by reading this eighteenth edition of the online magazine on Inclusive Business! The illustration was developed by Christopher Malapitan, a…

Christopher Malapitan


Let’s learn from local communities and step up more to create climate and social impact!

In her editorial, Susann Tischendorf discusses how we can all be inspired by local communities and inclusive business initiatives to play a role in mitigating climate change while creating social impact.

Susann Tischendorf

feature story

Climate action and social impact: How Inclusive Business can contribute and help build resilient communities

Climate threats are already altering the world as we know it. While the globe is reaching a tipping point, it is often vulnerable communities in developing countries that face the highest level of climate risk. Inclusive business approaches can play a pivotal role in both addressing climate change and creating a positive impact on low-income communities. This issue of CLUED-iN focuses on the intersection between climate action and social impact.

Alexandra Harris

Building resilience through climate-smart technologies for rice farmers in Thailand

Santikorn Pakdeesettakul and Tobias Breunig of the Thai Rice NAMA project explain how introducing climate-smart technologies to rice farmers in Thailand also improves the livelihoods and resilience of farmers.

Realizing a climate neutral and inclusive cacao business in the Philippines

In this interview, Simon Bakker explains how the inclusive cacao business Kennemer Foods has become climate neutral. He shares how climate finance can help inclusive businesses achieve financial sustainability while achieving their sustainability goals.

Integrated tourism in Guyana: Providing livelihoods and protecting nature

Surama Eco-Lodge in Guyana is a community based business developed, owned, and managed by Surama village, an Indigenous community. In her interview, manager Jackie Allicock tells us why integrated tourism is key to maintaining standing forests and providing employment and education for local communities.

Transforming waste into value: Engaging waste pickers in Zambia to reduce plastic waste and emissions

Girish Sharma is the CEO of a waste-to-value company in Zambia that recycles plastic bottles into packaging. He explains how his initiative supports the reduction of carbon emissions and how government could support the circular economy.

Integrating local communities in adaptation and resilience planning

Alex Basaraba, a climate adaptation specialist, discusses the need for adaptation planning. He describes how Adaptation International works with local communities to identify key resources and potential solutions to increase resilience.

Adaptation planning in action: The example of Corte Madera, California

Facing the dual risks of sea level rise and wildfire, the Town of Corte Madera decided to take action. Adam Wolff explains how it generated local strategies and feasible implementation measures to address climate change.

Zero waste innovations: The “wala usik” model in the Philippines

“Wala usik” means “nothing wasted” in the Hiligaynon and Bisaya languages. Dave Albao tells us how this local tradition enabled the PRRCI team to introduce new zero waste approaches in local convenience stores.

Financing the clean energy transition in India

In India, micro and small enterprises often lack financing support to transition to renewable energy. Ameya Bijoor elaborates on how Encourage Capital provided new financing solutions to help scale the clean energy transition.

Improving livelihoods through solar solutions in rural India

Most of rural India has been connected to the power grid, but often the energy supply remains unstable. Off-grid solar solutions improve living conditions and benefit the environment, argues Tushar Devidayal, CEO of Devidayal Solar Solutions.