Renewable Energy

Five things we learned from our partnership to end energy poverty

Renewable energy heroes like Josephat Mang’eni in Kenya are helping people in their communities afford a better life through the power of renewable energy. Photo credit: Acumen

Jolanda van Ginkel, Programme Manager, IKEA Foundation and Sarah Bieber, Head of Energy Partnerships, Acumen, reflect on key lessons learned.

Imagine having a great business idea that fulfils a much-needed social purpose. But when you try to attract finance to get your business off the ground, investors aren’t willing to take the risk because your customers are people on low incomes in an emerging market.

This was the challenge S4S Technologies faced. The India-based social enterprise created a portable, solar dehydrator that dries vegetables and spices while retaining the same levels of nutrients. The company partners with rural women, supplying them with a solar dehydrator to dry produce in their homes. This is low-grade produce purchased from local smallholder farmers, which would otherwise go to waste. Powered only by the sun, the women turn this into nutritious food, boosting both the farmers’ income and their own. 

Together, Acumen and IKEA Foundation believed that if we could help provide the financing needed to jumpstart innovative companies like S4S Technologies, we could accelerate universal energy access and the global renewable energy transition. At the same time, we could also offer vulnerable communities a pathway out of poverty. In 2017, to test this thesis, the IKEA Foundation committed to support Acumen’s Pioneer Energy Investment Initiative (PEII) over five years. 

According to Sarah and Jolanda, both organisations have learned some valuable lessons since then.   

  1. Strong partnerships can start as early as the idea stage if you share a north star. 

Sarah: A decade after our first investment in an off-grid energy company, energy was Acumen’s fastest-growing portfolio. We had a vision for building vibrant, competitive off-grid energy markets that could serve low-income customers living beyond the grid. In 2017 we asked IKEA Foundation to partner with us to build out our new strategy, while acting as a key stakeholder and thought partner to Acumen. 

We knew Acumen was not an isolated player working alone, and we wanted to bring renewable energy stakeholders together to understand what the sector needed. Five years later, we concluded a successful programme supported by a cohort of corporate, foundation, government and individual partners that invested US$13.5 million into 12 companies. These businesses reached over 1.25 million low-income customers with energy access, avoiding 110,000 metric tons of carbon emissions.  Our invested capital has leveraged an additional $128.38 million since 2017.

Jolanda: After our first conversations with Acumen, we soon realised that we shared a common conviction: investing as a means, not an end. We were both serious about tackling climate change and poverty. To do so we needed to support and invest in ground-breaking enterprises that were delivering off-grid renewable energy solutions to those who needed them most. 

The IKEA Foundation provided Acumen with a design grant before the launch of the PEII, which was essential for the success of the initiative. For us, this was a way to support the energy access sector with a focus on local entrepreneurs and talent, while encouraging collaboration rather than a siloed approach. IKEA Foundation became the anchor funder of the PEII, later joined by Autodesk Foundation, Signify Foundation, UK Aid’s Transforming Energy Access, FMO and other funders. By supporting Acumen we were able to reach a diverse group of innovative companies like S4S Technologies and RVE.SOL – a mini-grid developer expanding energy access to rural communities in Africa – to speed up solutions needed to end energy poverty. 

  1. A shared commitment to listening to unheard voices and taking capital to businesses and markets where others are falling short. 

Jolanda: As a philanthropic organisation, the IKEA Foundation has a person-centred approach. This means it makes grants to organisations that can address the needs of families and communities in a way that helps to build sustainable livelihoods while decreasing greenhouse gas emissions. It is crucial to constantly remind ourselves who we are trying to reach with our work. We put people who stand to benefit at the centre of innovative solutions and the development of the sector. By working in this way, we can promote affordable solutions that truly meet the needs of people, without compromising on efficiency or quality. This is part of the IKEA DNA, something IKEA calls democratic design. They recognise a solution is only good enough if it meets customer needs in quality, sustainability, form, function and price. At the IKEA Foundation, we apply this principle by focusing on how we can be there for the many people.

Sarah: At the beginning of the PEII programme, IKEA Foundation challenged Acumen to increase its commitment to local entrepreneurs, acknowledging the challenges that they face to access capital, especially in Africa. Most of our energy investments in Africa until that point had been directed to companies led by expatriates. Although many of them have carried out successful and impactful business models, we understood the need to tackle this systemic injustice. In 2018, we set a target of 40% of our new investees to have local founders. By the end of the programme, 60% of our portfolio had a local founder.

  1. The importance of constantly generating insights from our work for our mutual learning and exchange.

Sarah: Following the suggestion of the IKEA Foundation, Acumen formed the PEII Advisory Council. This was a group of Acumen partners that were supporting our work financially and wanted a front-row seat to what we were learning from our investments. The council became an invaluable forum for us to discuss the challenges our portfolio companies were facing, where we were seeing strong progress on impact, where we could do better, and where the overall sector was headed. It was this two-way dialogue among true partners that helped underpin the success of the PEII. It was also the petri dish for experiments – concepts that we wanted to test out, research questions that we thought we could dive deeper into. The result was a dozen investors and practitioners in energy access working together to clear the runway for growth in the sector.

Jolanda: As the PEII came to an end last year, we supported Acumen to jointly develop a PEII Lookback to evaluate the initiative’s investment process. Through this, we gathered feedback from PEII company CEOs and other energy access sector stakeholders, including PEII partners and industry leaders, to gain perspective on the initiative’s overall impact. We found huge value from Acumen’s insights throughout the programme, especially those from the Productive Use of Renewable Energy (PURE) ecosystem that helped inform our new energy strategy.

  1. Audacity to think outside the box and engage with other energy access stakeholders to catalyse an unprecedented collaboration in the sector. 

Sarah: Without the IKEA Foundation’s support to the PEII, Acumen would not have been in the position it was at the start of the pandemic. As governments began shutting down their economies to stop the spread of COVID-19, we were able to inspire the Energy Access Relief Fund. 

Jolanda: Leveraging the partnership with IKEA Foundation and other PEII partners, Acumen, a relatively small nonprofit, played a leading role in convening stakeholders and drumming up investment for what became the Energy Access Relief Fund. This was an unprecedented concessional debt fund for the energy access sector supported by a global coalition of 16 governments, foundations and investors. It was launched in September 2021 with a target of $90 million and a first close of $68 million to protect energy access for at least 20 million people in sub-Saharan Africa and Asia during the COVID-19 pandemic.

  1. Transparency and trust are key components for success in any partnership. 

Sarah: Truth-telling isn’t always easy but it leads to trust-building. And mutual trust can open other avenues for collaboration. With the PEII Lookback, we were able to acknowledge some of the challenges that our work faced as well as areas of improvement. For example, both our Portfolio Managers and investees agreed that our investment processes take longer than others in the space, which creates tension with the urgency of tackling poverty. While the early-stage nature of these investments typically necessitates a longer time horizon, it is something that we continually evaluate internally. We are working to improve transparency on realistic timelines with entrepreneurs and co-investors alike.

We also learned that while Acumen’s signaling power is high, and our companies were able to raise $128.38 million in follow-on capital from external investors, follow-on and bridge loans were needed faster and more often than we expected. We followed on in 38% of our companies while over 50% requested this type of funding. This is the result of the lack of equity in the energy access sector, at all stages of a business’s life cycle. In response, our new Pioneer Energy Investment Initiative (PEII+), which launches this year with a focus on building the PURE sub-sector, will conduct fewer deals with more follow-on capital available per company. 

Jolanda: Acumen’s clarity on its strengths and weaknesses is something they share openly with the IKEA Foundation. This allows us to work together effectively and complement each others’ capacities. It also takes a level of humility that is often missing, especially in donor-grantee relationships.

If we want to achieve SDG7 by 2030, we need to increase collaboration between governments, forward-thinking foundations, multilateral institutions, investors and corporations. By working together, we can develop and co-invest in financial structures that offer low-income countries the space to finance a future powered by renewable energy.

Acumen and IKEA Foundation have created innovative financial instruments to invest in solutions that improve the livelihoods and resilience of low-income communities in the world’s riskiest markets, supporting their pathway out of poverty. We must act with urgency and have the creativity and flexibility to identify the challenges in the energy access sector and use the right kind of capital to tackle them. 


With support from IKEA Foundation and others, Acumen invested $13.5 million into 12 energy access companies over the five past years. These businesses have since impacted more than 1.25 million people on low incomes and cut 110,000 metric tons of CO2 emissions. Acumen has published the PEII Lookback Report that you can download here.