Beyond Capital Fund, a public foundation that employs a traditional investment approach to social investing, recently completed a debt investment in Sanergy, a sanitation company with a focus on Kenya slum dwellers. In total, Sanergy raised over $500,000 to pilot the company’s innovative model, which seeks to solve two critical issues facing urban slums – proper sanitation and affordable energy – by offering low-cost, high-quality sanitation services that turns the collected waste into renewable energy.
The market need for proper sanitation and affordable energy is large and growing rapidly. 40% of the world, or 2.6 billion people, lack access to adequate sanitation, the second largest cause of disease in the world. In Kenya, 10 million people live in slums, 80% of which lack access to basic sanitation. Sanergy seeks to solve both of these issues with its franchise business model, which has already established 12 franchises in two Nairobi slums, averaging 500 users per day. In addition to providing employment to Kenyan micro-entrepreneurs, Sanergy also facilitates daily cleaning and waste collection services. Collected waste is composted into organic fertilizer, which is then sold for agricultural use, with future plans to convert a proportion of the waste into biogas to generate electricity. Beyond Capital Fund believes Sanergy is well positioned to grow and scale its business within the Kenyan sanitation, energy and agricultural sectors. “We feel confident that we have invested in a strong management team and business model that will generate solid financial and social returns,” stated Eva Yazhari, Executive Director of Beyond Capital Fund.
Beyond Capital Fund decided to invest in Sanergy with help from pro bono legal partners, McGuireWoods, Baker & McKenzie, and Miller Buckfire. Beyond Capital Fund has partnered with four top-tier law firms in order to provide social businesses with high quality pro bono legal counsel and contribute to a high standard of legal due diligence throughout the investment process. These partnerships play a critical role in Beyond Capital Fund’s decision-making process, which also includes the Due Diligence Committee, Board of Directors, and Advisors. Stephen Brenninkmeijer, Beyond Capital Fund’s Director, supported the decision after a visit to Kenya, “I have met Sanergy operating their first project in the Kibera slum in Nairobi. I was enthused by the concept of providing clean, sustainable sanitation to people at the bottom of the pyramid, combined with the entrepreneurship aspects of creating business opportunities for the operator of those sanitation systems. Both the scalability of the concept, and the value that this project delivers for the user and the owner of the franchise, are particularly impressive.”