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Stories 7 mins Read 17 Apr 2024

candi solar: financial-engineering to power a more sustainable planet

In India’s burgeoning economy, a significant hurdle lies in ensuring that infrastructure and energy provision keep pace with rapid growth. While the electricity grid now reaches nearly every corner of the country, persistent power outages remain a pressing issue. And while larger corporations can afford alternative energy sources and invest in backup power solutions, small and medium-sized enterprises (SMEs) often face constraints in accessing funding. These businesses are frequently deemed too small and risky to attract financial support, exacerbating their challenges in navigating the energy landscape and ensuring their operational continuity.

candi solar founders recognised this large untapped market gap and armed with their technological and financial knowledge, they decided to develop the idea further. 

We invested in candi solar in 2020 and now, after almost 4 years, in which they grew from less than 10 MW to over 60 MW and got further investments from many reputable institutional investors we are exiting. We talked with Fabio Eucalipto, the co-founder and Finance Director of candi solar, about their beginnings, where they are now and the future.

Rodrigo Madrazo, CEO of EDFI MC

“Our collaboration with candi solar culminates with this exit. The story of our cooperation with candi solar perfectly aligns with our mandate and exemplifies our trail blazing role, wherein we shoulder the risk, foster company growth, and help them attract new investment partners, in this case two of our shareholders. This successful exit underscores our catalytic function. Most importantly, it ensures the longevity of our impact by engaging more risk-averse investors who will safeguard candi solar’s continuity and facilitate its expansion.”

The beginnings  – mutual trust and joint values

candi solar’s journey began with a shared vision among three driven investment officers: Rodrigo Weiss, Fabio Eucalipto, and Philippe Flamand. Through their work together, they saw that the Investment Committees didn’t approve investments into renewable energy for small businesses in India as that didn’t match the risk level they were willing to cover. “We used to work for investors. We were lucky enough to be well educated and to work in a sector that enabled us to experience fast personal growth, but at a certain point, you come to think – what’s the point if we cannot address the majority of businesses in emerging markets? How can we truly scale solar solutions and power a more sustainable planet? That’s where all of candi solar comes from.” – says Fabio. It was from this internal alignment that candi solar was born.


 

We started talking about the idea of founding a company in 2017 and “A C&I project (commercial and industrial)” became c and i, and then candi. That’s where the name comes from.


But before the name they defined the values. They were guided by the ethos of Empathy before ego. “One of our four values is: empathy before ego – and I honestly believe that is what makes us different.” – says Fabio. “We work on building the culture and culture attracts talent. The values are embraced first internally but our empathy goes to what our customers want.


These are the three critical risks they identified:

  1. The companies underserved with energy were mostly SMEs with a reduced access to financing.
  2. The logistical challenges in deploying decentralized energy solutions; installing a certain capacity in many small places is different than installing the same capacity in one place – managing this cost-efficiently is challenging.
  3. The scale of transactions was an issue – they were too small for big investment companies.

‘’We built trust through 12 years of working together. Being friends through work is not the same as friends that start to work together. Friends from working together are ideal as co-founders of a company.” – says Fabio.

Empathy in Action: Tailored Solutions

Many companies are offering power purchase agreements which is a traditional and a very unified way of selling energy. There are other ways that can mimic the same outcome, but with increased benefits for both the company and clients. What candi does is focused on understanding their customers’ needs and structuring the solution from a contractual point of view. The product offered is not the technical or solar solution itself, but a contract, which is tailored to the customer’s specific needs. This is what distinguishes them from other players. Fabio calls it – financial-engineering to power a more sustainable planet. Their empathetic stance towards customers drives them to structure holistic solutions, addressing not just energy needs but also financial viability. By offering “Save-to-Own” solar solutions, candi solar empowers SMEs to save up to 50% on electricity bills while owning their energy infrastructure, mitigating the risks posed by unreliable grids, power outages, and price fluctuations.

Mission: powering a more sustainable planet

  • offering services in India and South African republic
  • sector: Solar PV
  • business model: CPP (captive power plant)

GrowthMW installed capacity

  • 2020 – 7.5 MW;
  • Dec 2021 – 8.4 MW;
  • Dec 2022 – 24.5 MW;
  • Dec 2023 – close to 60 MW.

One key factor to success

We asked Fabio what is their secret sauce, one thing that makes them different. He gave the answer that seemed so simple yet so structural: “Standardising processes to enable scalability – We even have a “Process Designer” full time job title in the company.

“Conversion of pipeline into action takes time. For a business at the stage of candi, time is truly money and the innovation must be primarily focused on the processes to deliver the product rather than the product itself.  Our ability to combine Swiss expertise and quality with local insights and execution capabilities, and a sophisticated back-end with world-class systems monitoring enables us to maximize efficiency for our customers.” Basically by streamlining processes and embracing digitalization, they accelerate deployment and enhance accountability.

Impact

Amount of electricity generated in 2023 – MWh/year
57,673
GhG emissions saved/avoided/displaced in 2023 – tons of CO2-equivalent/year*
34,501

Challenges

candi solar’s growth hasn’t been without challenges. As they chart a course for expansion, their primary hurdle remains people – attracting, retaining, and developing talent amidst fast-paced growth. Yet, their commitment to building a culture of excellence and empathy sustains them through these trials.

Additionally, securing capital in this landscape remains a challenge. “We were lucky to secure the investment from ElectriFI in 2020, at the time when nobody knew what the future would bring given the ongoing COVID-19 crisis. After that, it was easier to access funding and we secured debt investments from BIO and responsAbility.

We often talked about how your investment officer Jean-Denis Collin was able to embrace both technical understanding and empathy for what we were trying to build. His ability to understand our position alongside our challenges, and then, of course, your investment committee and the whole EDFI Management Company support, meant a lot to us.

EDFI MC – ElectriFI did indeed play a catalytic role in our growth trajectory.

Funding:

  • 2018 – Seed funding from Gaia Impact, Persistent and business angels
  • December 2019 – Series A equity round with FPCI Energy Access Ventures in the lead
  • October 2020 – ElectriFI funding – $3m – junior loan
  • December 2021 – $10m debt facility with responsAbility Investments AG and BIO, $5m each
  • September 2022 – Series B equity round with STOA in the lead, as well as Energy Entrepreneurs Growth Fund, a Swiss Private Bank and existing shareholders
  • February 2023 – $14m debt facility with responsAbility Investments AG and BIO, $7m each
  • December 2023 – $5m debt facility from Symbiotics
  • 2024 – In the process of raising $110m in debt and equity

Future outlook: Navigating growth with prudence

With a firm foothold in India and South Africa, candi solar remains cautious yet ambitious in its expansion plans. While the allure of new markets beckons, their focus remains on consolidating their presence and leveraging existing networks. By sourcing projects in neighbouring countries and nurturing relationships with multinational clients, they tread the path of sustainable growth, prioritizing impact over expedience.

candi solar exemplifies the transformative power of empathy-driven entrepreneurship in the renewable energy sector. And as Fabio concluded our meeting “Willingness to understand our customers is what drives us – and that’s what you did for us and what helped candi in 2020.” As they continue to illuminate the path towards a more sustainable future, their journey makes us, the EDFI Management Company a proud catalyser among the first investors, which is our mission.

Rodrigo Weiss has a wealth of experience in the renewable energy space. After starting his career at a nanotech startup and as a consultant at First Climate, Rodrigo has since focused on renewable energy as an investor. He has worked in Latin America and throughout Europe. Before candi, he built the Latin America investment practice of EEA, headed the renewable energy investment division of SUSI Partners in Switzerland, and after a short stint at responsAbility, he was a Partner at Persistent Energy, a venture builder in the off-grid sector.

Fabio Eucalipto is an entrepreneurial finance professional with a proven track record in both investment management and executive operational roles. His ‘on the ground’ experience encompasses developed, emerging as well as frontier markets. Before candi, Fabio was the CFO of Persistent Energy, a venture builder in the off-grid sector. Prior to this, he was a Vice President at SUSI Partners, a Swiss investment manager specialised in financing sustainable infrastructure where he was responsible for the renewable energy infrastructure investment practice.

Philippe Flamand brings over a decade of experience within the finance and renewable energy space, and a global breadth from Asia to Europe to Africa. Prior to candi he spent several years in investment banking working at Morgan Stanley and Goldman Sachs, across London and Hong Kong, before focusing on his passion for renewable energy with SUSI Partners and responsAbility out of Zurich, managing various equity and debt funds investing into the sector globally.