The Global Environment Fund (GEF) is a private equity fund focused on investments in environmental and energy solutions in both developed and developing markets. The fund is currently examining the strategy of one of its portfolio companies–NEOgás, a Latin American natural gas supplier–which is considering entering the Mexican distribution market. The case recounts two previous GEF investments in emerging markets, a South African forestry company and a Southeast Asian waste management business, as examples of successful management strategies for creating value in emerging markets.
Case No: F285
A reliable, safe, supply of drinking water is essential to the survival of communities. In many places the water supply is under stress—a condition that is expected to get progressively more challenging in the future. There are several ways that municipalities can improve their drinking water supply, including conservation, purchases from external suppliers, desalination, and recycling. Recycling wastewater into potable water is attractive in many situations. However, this alternative has not always been successful—in some cases, public opposition has defeated recycling plans, while public concerns have been successfully addressed in others.
This case gives an overview of water supply issues and examples of successful and unsuccessful attempts to implement recycling programs. Programs in Singapore and Orange County, California are profiled as examples of successful recycling efforts, while failures in San Diego, California, and Toowoomba, Australia are described.
Case No: P73
Based in Nairobi, Kenya, EcoPost manufactures construction posts out of the thousands of tons of plastic waste produced daily by the city. The posts, which are manufactured using second-hand industrial equipment, are frequently used to build fences, park benches, and other objects. Because lumber is very scarce in Kenya, and subject to theft and termite damage, the posts sell very well, and the company has trouble keeping up with demand. The company’s directors are seeking financing to purchase new equipment and scale and diversify their production.
Case No: IDE02
Venture capitalist Atul Kapadia was inclined to provide seed funding for Sujeet Kumar and Michael Sinkula to found Envia Systems, a lithium-ion battery company. Admittedly, Envia was little more than the founders’ vision of an affordable electric vehicle and the potential of playing in a very large market. But for Kapadia, it was precisely these two key ingredients that made Envia attractive and akin to other early-stage investments he had made at Bay Partners.
Case No: E407
Environmental stewardship was part of REI’s culture since the company was founded, and integral to its corporate purpose. In 2005, REI began carefully measuring its environmental impact, establishing aggressive sustainability goals, and implementing programs to achieve these goals. The corporate social responsibility group, which oversaw the environmental sustainability program, took the approach that social and financial objectives should not be viewed as tradeoffs. For instance, growth objectives (increasing the number of stores and sales per store) should not come at the expense of energy consumption objectives for flat or decreasing corporate energy usage. Insisting that both objectives be met would lead to creating thinking and innovative solutions.
Case No: SM196