Trine Review – A Crowdfunding Platform for Impact Investors
Trine is a Swedish crowdfunding investing platform, connecting solar off-grid communities with individual investors looking to generate a positive impact in developing communities.
In this post we will review Trine, Trine, a Swedish-based investing platform that connects communities in need of solar off-grid energy solutions with small to medium investors looking for sustainable options.
With a minimum investment of 25 EUR investors can invest for impact, by lending money to solar projects and as a result, generate profit from interests, improve the social conditions of local communities and avoid CO2 emissions.
The start-up was established in 2015 by the founders Sam Manaberi (CEO), Andreas Lehner (COO), Christoffer Falsen (CFO) and Christian Genne (CTO). According to Crunchbase, the company has received a total of USD 7.4 million, out of which 6 million EUR were invested by Gullspång Invest in June 2017 and about 0.5 million USD from an undisclosed angel investor in Jan 2016.
Trine in numbers
The company has provided solar electricity to more than 2.1 million people, through 10,688 registered investors, resulting in a total CO2 avoidance of 200,304 tons.
- Minimum investment: 25 EUR
- Average annual interest rate: 7.8% p.a.
- Default rate: 1.2%
- Number of investors: 10,688
- Total amount invested: 34.5 million EUR
- Principal & interest repaid to investors: 10.7 million EUR
- Market presence: 13 countries
- Loans issued: 86
- Top 3 markets by outstanding capital: Kenya (36%), Nigeria (25%), Guatemala (8%)
- Top 3 solar partners by outstanding capital: Daystar Power (25%), Greenlight Planet (24%), BBOXX (15%)
If you want to go deeper into Trine’s performance, you can access a live dashboard where Trine discloses outstanding capital per partner and country, status of funded loans, default indicators and repayment status per solar partner, among other statistics.
How does Trine work
Loans: All investments made through Trine are loans that finance SHS (solar home systems). The systems are comprised of small solar cells, batteries, light sources, and power connections to charge electronic appliances. Once the amount requested in each loan is achieved, Trine then sends the money to their borrower, also referred to as “solar partners”, which will then sell and install the SHS in the local community.
Frequency: Investors can choose to work with a “one-time investment” or setup a “monthly investment”. The “one-time investment” works manually by selecting one loan at a time and transferring the money each time. The “monthly investment” setup is automated and it will invest based on the amount and selected criteria (number of months, minimum interest rate and risk level).
Interest rates: The loan’s interest rates vary from 3% to 11% per year. However, some projects have progressive interest rates, meaning that higher amounts invested will have higher returns. This applies to investments equal to or above 1,000 EUR for “one-time” investments or equal to or above 500 EUR for “monthly”. It is important to read the Terms & Conditions of each loan to understand the specific details of each project.
How does Trine do due diligence
Trine performs a very thorough due diligence when selecting its solar partners. The process is divided into four phases: initial screening, phase one, phase two and a final decision by an investment committee.
- Screening: It is the first contact with the company to understand their products, financial situation, and ambitions.
- Due Diligence Phase One: At this phase, Trine investigates the company track record, equity structure and volume of sales. Once all documents are provided, Trine will run their risk assessment and provide a company rating.
- Due Diligence Phase Two: Now it is time for Trine to meet the management team in person and assess their operations on site. Factors evaluated are company culture, customer services and quality of product and installations.
- Investment Committee: As part of the final decision, all partners are presented to the Investment Committee, which will then decide if a loan is approved, its size and contractual details.
What are the risks and guarantees when investing with Trine
The loans made through Trine are supporting the “solar partners”, which will then sell SHS (solar home systems) to local communities. Trine targets off-grid communities which are mostly farmers and small local businesses. The “solar partner” revenue is dependent on several risk factors including local infrastructure, access to mobile payments, income stream, currency risk and financial stability of customers.
Trine entered an agreement with the Swedish International Development Agency (SIDA).
“SIDA is a government agency working on behalf of the Swedish parliament and government with the mission to reduce poverty in the world. Through our work and in cooperation with others, we contribute to implementing Sweden’s Policy for Global Development (PGU).”Swedish International Development Agency (SIDA)
The fact that Trine is implementing third party guarantees from respected sources is a good governance step . However, be aware that SIDA’s guarantee is not available for all loans, and when applicable, it does not cover the total outstanding capital. We recommend that you look at each loan page, search for the SIDA logo and carefully read the terms and conditions of the guarantee to make sure that a specific project has the financial guarantee.
Trine has a very detailed process to assess the risk of each “solar partner”. The ratings range from A+ to D, where A+ is the lowest risk and D is the highest. To reach the final rating Trine assesses six categories and applies different weights for each one:
- 30% Financial Performance: at least one year of historical performance, including sales, profit margins, liquidity and leverage ratios, and debt situation
- 25% Portfolio Quality: number of systems installed, default rate, repayments, and delayed payments
- 15% People & Management: experience and competence of key management team, decision-making process, communication skills, and organizational culture
- 10% Financial Management: sources of debt and equity, cash flow, financial audits, business model and refinancing risk
- 10% Process Control & Systems: customer management and customer acquisition process, commission payment structure, insurance over assets and recycling measures
- 10% Market & Environment: competition, enabling regulatory framework, mobile money penetration, and local currency fluctuations
Once the categories are assessed the total score is calculated and ratings from A+ to D are assigned:
Impact investing metrics
Trine’s business model and slogan are a clear indication that they are focusing on triple bottom line impacts (TBL). Their mission is to create businesses “for the people, for the planet and for profit” and this is reflected in how they measure their impact. The impact metrics used are the avoidance of CO2 emissions and social impact. Below we describe how those impact metrics are calculated:
Trine has two types of projects – SHS (solar home systems) and C&I (commercial & industrial installations). However, the majority of the projects in the platform are SHS type.
For SHS projects, Trine follows the GOGLA methodology which is a standard impact calculation methodology approved by the Global Off-Grid Lighting Association. The GOGLA metrics are part of the IRIS catalog, an initiative of the Global Impact Investing Network.
In summary, the methodology estimates the avoided CO2 emissions using the following formula:
Avoided CO2 Emissions = S x R x (1-DL) x (1-DR) x C x W,
where S is the number of solar systems, R the replacement rate of kerosene lamps, DL the discounted losses, DR the discount of repeated sales, C the savings in emissions per lantern measured in carbon dioxide and black carbon (tons of CO2e) and W the estimated product lifetime.
For Commerical and Industrial installations (C&I) projects, Trine follows the American CLEER or Clean Energy Emission Reduction methodology from the USAID (United States Agency for International Development) when estimating the avoided CO2. According to the CLEER website “CLEER uses up-to-date methodologies and emissions factors from the IPCC, the GHG protocol, and other internationally-accepted guidance for estimating GHG emissions and reductions.”, which refers to a globally and extensively accepted methodology.
When assessing emissions for C&I projects, Trine considers the carbon intensity of the local grid, fuel being offset, MWh produced by the solution and type of installation (on-grid centralized or micro-grid).
When accessing social impact Trine estimates the number of people impacted by the solution based on household size. More importantly, it indicates at each loan page which Sustainable Development Goals are being impacted when investing in the projects.
Overall, we can conclude at this Trine review, that the comapny has a very neat platform with transparent information about each project and financial guarantees (when applicable) supported by reliable financial partners. Financial return can be considered attractive when compared with other impact investment options and aligned with the expected risks. Impact metrics on CO2 avoidance are properly assessed using well-known international methodologies.
If you would like to invest for impact Trine and put your money to work on important causes that support the economy of local communities, Trine’s platform can be a good option to diversify your green investment portfolio.
By using our affiliate link, you get 10 EUR off your first investment with Trine
COVID-19: Trine is aware of the potential implications of the COVID-19 outbreak into it’s businesses. They are closely monitoring the impacts for investors, partners and off-grid solar energy industry. Additional information about how the industry is mitigating those risks can be found at the GOGLA website
Not investment advice: The information provided on this website is intended for general information purposes only and does not constitute investment advice, financial advice, trading advice, or any other sort of advice. You should conduct your due diligence and, if necessary, consult a qualified independent financial advisor before making any investment decision.
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