Beyond Capital Fund, a public foundation that employs a traditional investment approach to social investing, recently completed a debt investment with the aid of pro bono legal counsel at McGuireWoods LLP. McGuireWoods’ legal due diligence resulted in Beyond Capital Fund lending $10,000 along with in-kind donations to Sanergy, a sanitation company based in Kenya. In total, Sanergy raised more than $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 percent 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 percent of whom 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 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,” said Eva Yazhari, executive director of Beyond Capital Fund.
Beyond Capital Fund and McGuireWoods established a pro bono partnership in 2011 in an effort to provide social businesses with top-tier legal counsel and contribute to a high standard of legal due diligence throughout Beyond Capital Fund’s investment process. Beyond Capital Fund’s legal partnerships play a crucial role in the organization’s investment decision-making process, which also includes a due diligence committee, board of directors, and advisors.
Sanergy was appealing to McGuireWoods because of the firm’s long and distinguished record of community involvement. McGuireWoods provides many hundreds of hours, worth hundreds of thousands of dollars, in free legal time to handle pro bono legal aid matters and court-appointed cases; and supports, with time and money, a variety of cultural, advocacy and recreational programs that benefit minorities.
Representatives from McGuireWoods are excited to continue their partnership with Beyond Capital Fund in order to further their community involvement to emerging markets, provide support to early-stage social businesses, and aid in the professionalization of due diligence within the impact investment sector.
About Beyond Capital Fund
Beyond Capital Fund is a nonprofit organization that uses a business approach to make social impact investments that improve the lives of people living below the poverty line, typically those earning less than $4 a day. The organization’s focus is on funding early-stage businesses in the water, energy and healthcare sectors. For more information, visit www.beyondcapitalfund.org.
Executive Director and Co-Founder
Beyond Capital Fund
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