Jacqueline Novogratz

But we can solve this problem if we have the moral imagination to do two things.

First, we have to rethink how we approach risk.

And second,

we have to address the false binary between mitigation, or reducing emissions, and adaptation, or adjusting to the climate crisis.

Before we talk about that, though, let's look at what's at stake.

We know that the most vulnerable are disproportionately impacted by climate events.

Electricity is resilience.

It's agency.

It's light and irrigation and communications, and it's cooling.

It's also basic empowerment.

We live in an age where tech entrepreneurs are promising that every child on the planet will have their own AI tutor, unless you're a child without access to electricity.

The good news is that, as we've discussed, solar energy has been one of the great success stories of the 21st century.

When my organization, Acumen, started investing in off-grid electricity in 2007, 1.5 billion people on the planet had no access to electricity.

Today, that number's been cut in half.

And while off-grid can't claim full credit, it's been an important part of the story.

And I've had the privilege of investing in and witnessing the evolution of this extraordinary off-grid sector that started off with lights, and then we saw home systems with radios and cell phone chargers, and then emerged the adjacent possible.

solar televisions and cook stoves and solar irrigation and refrigeration and e-mobility, and today you can see thousands of electric motorbikes powering down the streets of Kenya and Rwanda.

I've also been able to talk to so many customers across the continent,

like Susan, who said that what surprised her when she got her solar system was that she no longer experienced deep fear every single night.

She said, I used to fear bandits, wild animals, men.

or going to the toilet, her external toilet, and being bitten by a snake.

She said, now I don't feel stress.

My children and I have more connection, and indeed, they'd finished watching a course on their solar television to learn sign language in Kiswahili so that for the first time in their lives, they were able to communicate with their deaf cousins.

Energy is independence.

and it has great economic impact.

The average family reduces energy spending by more than 50 percent, and this is a sector that has created more than 370,000 good jobs.

We as a world are on track to reach another 300 million people by the end of the decade.

That still leaves hundreds of millions living in the dark.

these are the hardest to reach.

In places like Burundi, with an 11 percent electrification rate, Malawi, 16, Chad, 12.

And those aren't just statistics.

Those are human beings.

And yet too often, we dismiss them as too poor, too risky, too hard.

So let me say this clearly.

This is about our shared human dignity.

If we believe that all human beings deserve dignity and we understand that the impact of climate will disproportionately impact the most vulnerable amongst us, then these are precisely the people on whom we need to focus.

because electricity isn't just about light.

It's about communication during floods, irrigation during droughts.

It's about cooling medicines during heat waves and pandemics.

It's about hospitals and schools, businesses, so that isolated communities, already fragile, can build resilience in an increasingly volatile climate.

Adaptation matters, but this story has equal urgency for mitigation.

Now today, the continent only contributes 3.5 percent of total global emissions, and the average African consumes about one-fifteenth the energy of an American.

But those are the wrong numbers to pay attention to.

What matters is future emissions.

The continent's population is expected to grow from 1.5 to 2.5 billion people by 2050.

And so the question is, what kind of energy will fuel it?

What we've learned from investing in off-grid is that once families are on the first rung of the solar energy ladder, they don't go back.

That's good news for the planet and for its people.

If we just brought electricity to 10 million families, basic level, we would avert more than 27 million tons of carbons looking forward and create about 10 billion dollars in direct economic benefit.

Multiply that, and you get transformation.

But how do we do it?

The companies are here, but the capital is not.

And one thing for certain is that money cannot be the constraint.

Because last year, the world allocated two trillion dollars to transitioning industry from fossil fuels to cleaner energy.

But less than 800 million want to off-grid solar.

That's less than 0.1 percent.

And it makes no sense.

Because climate finance isn't scarce.

It's scared.

And maybe at first glance, you can understand it.

Customers make a few dollars a day.

Macroeconomic headwinds, like inflation, depreciation, have pummeled markets.

Inequality, lack of jobs, in some places, uncertain leadership.

OK.

But if we focus only on narratives that talk about the problem, we miss the much bigger narrative of the opportunity.

Electricity is foundational.

And we can solve this problem, but we need the right kind of capital to open up new energy markets.

And a lot of people have been thinking for a long time about how to do that in ways that are more important today in a post-AID era.

My organization's been building on

our investing work for many years to create an initiative called The Hardest to Reach.

It's essentially a multilayered capital stack that's a blend of philanthropy, impact investing, funds from development finance institutions and a commercial bank.

It starts with 60 million dollars in philanthropy so that we can take early-stage, patient capital investments in those companies operating in the most challenging climates.

Philanthropy lets you go fast.

So already, we've invested 12 million dollars in eight companies in Sierra Leone, Benin, Malawi, the DRC, and most recently, Somalia.

Side by side,

is a debt facility that is impact-aligned.

It's anchored with funding from the Green Climate Fund and others.

And again, that allows us to bring in more institutional capital above, including Shinhan, the largest commercial bank in Korea.

Thus far, 21 different stakeholders across the capital continuum, from grants to impact to commercial, have come together to bring a quarter billion dollars in financing to Africa's most challenging energy markets.

Now, making this happen hasn't been easy.

It has relied on the leadership, the courage,

and the competence of a whole lot of people, including in big institutions.

But that is exactly the kind of moral imagination that we need to rethink the way we approach investing.

I want to share with you a plan to fix one of the biggest planetary market failures of our lifetime.

Because it is just not OK to let financial risk have the final word.

If we're smart enough and careful enough, we can offset financial risk.

But equally important, what is the risk of not daring?

Leaving hundreds of millions of people in the dark and watching instability, emissions and migration rise.

It means cutting off human potential, possibility, creativity.

You see,

Risk is not just a financial concept.

It's an environmental concept, a social concept, and it is most definitely a moral concept.

And so, yes, we can structure the right kind of capital, but we need all of the players to go from asking, am I getting the highest return, to what is the problem we're trying to solve, what is the capital that is needed, and where can I play a role?

It's been nearly 150 years since Thomas Edison invented the incandescent light bulb, ushering in the age of electricity.

And also, if you take a long-term investor's perspective, think about the hundreds of millions of new electricity consumers that will need new appliances and new innovations and new services.

Completely new markets will emerge.

We know this because we've seen this.

And though this is hard, it is eminently within our reach.

In history, there aren't that many chances to do something as big and important and as difficult as bringing electricity to everyone on the planet.

But I sometimes ask myself, in 100 years, what will that generation say about us?

Will they gasp in astonishment?

and say, we were the ones that finally brought electricity and possibility and human dignity to everyone.

Or will they wonder how could they have averted their eyes and left hundreds of millions behind?

I hope they say, we learned to control capital and technology and not be controlled by it.

So how can it be that 700 million people on this planet still lack access to electricity?

I hope they say we cared, that we did hard things, that we loved the world, and in doing so, we set ourselves free.

The poet Hafiz wrote, even after all these years, the sun never says to the earth, you owe me.

Look what happens with a love like that.

It lights the whole sky.

So let's get going.

Thank you.

When the sun goes down, they depend on dirty,

expensive, sometimes dangerous fuels for light.

And these are some of the most overlooked and underestimated people on the planet.

M-Pesa was founded in Kenya.

What's so extraordinary is this is 2007, which was the era of the iPhone and iPhones.

I think that's a great note to end on.

Also, that corporate CEOs like Bob, like you, my friend, Sitoyo, have a role to play in the world today to stand up for those who are overlooked, underestimated, and who we desperately need to be realizing their human potential.

When IBM introduced Watson, it was the year of Kindle and Airbnb.

It is such an honor to know you, to work with you.

To be accelerated by you.

Thank you.

Thank you very much.

Thank you.

And not enough people paid attention to this notion that cell phone banking could be a thing.

It would take years before the United States and China took it on themselves.

And now, when I'm in Nairobi, I can buy a banana or roasted corn on the street in ways that in New York, often at restaurants, I still can't.

I need my credit card.

And so it has fundamentally transformed society.

The third which we're going to get to is the moral imagination.

Sitoya and I share a belief that what we need in the world are social entrepreneurs who are using business

grounded in moral imagination.

In other words, they are fundamentally designed from the perspective of those they are here to serve, particularly the overlooked and the underestimated.

And M-PESA has done that like very few other social enterprises.

So thank you for this conversation.

And let's start at the beginning, Sitoyo.

And could you even go beyond jobs, Sitoyo, and talk about the overall stats, if you will, and the impact that M-Pesa has today?

I want to get into all of this stuff, but I just want to give the high line, which is what, $1.5 billion a day, 60 million customers.

So,

I want to get back to the moral imagination, because this is a massive company.

To go into the offices of M-Pesa, Safaricom, where it's housed, is like going into a central bank, 60% of GDP, and there's a lot of security to get it as well.

But you started off thinking you would be a non-profit, a true social enterprise that started off with a two million pound grant.

And it's a really important point for all the social entrepreneurs in this room and the philanthropists, because we need the right kind of capital to enable people like Sitoyo to build markets that have never existed, particularly for low-income people, and that takes experimentation and failures and starting over again.

You've continued with that sense of the moral imagination to see yourselves not just to make money, although you make plenty of money,

but to solve social problems and to really understand who your customers are, even though, especially because, they might make one or two or three dollars a day.

Could you give me some examples of where that has continued to fuel who you are and how you operate?

I am so excited to have this conversation with C. Toyo for so many reasons, but three that I'll start with.

In a moment of history where we have so little forgiveness seemingly, something I've learned in 40 years of working in and out of Africa is that quality of forgiveness.

And you've integrated that as well.

Just in 20 seconds or less, say something about the Financial Inclusion Fund.

We need this kind of thinking today.

I want to move to the adjacent possible because M-Pesa has essentially created economic rails, a whole platform on which many other industries can be built.

We've seen it in energy, in agriculture, in healthcare, and just want to have a conversation about how you've seen these adjacencies evolve.

First of all, he disrupted the first two industries I worked in.

Well, thank you.

It's actually an interesting story that needs to be told, especially in the world today as we're looking at so many frontier markets.

But the same year that M-Pesa started, a company called D-Lite started with a solar light and this dream of eradicating kerosene.

I started off in traditional banking and then in 1986 co-founded the first microfinance bank in Rwanda, both disrupted by M-Pesa.

At the time, people had to pay daily for kerosene.

Like M-Pesa, they had to build trust,

understand the technology, build distribution, etc., the big area of friction was financing.

And for four years, the company struggled.

2011 and PESA, for the first time, married mobile payments with off-grid solar electrification.

So now you could bring electricity into your house,

and pay for electricity the way you used to pay for dirty kerosene, except that you paid it through your phone every day, 50 cents, and if you didn't make your monthly payments by the end of the month, the solar company could call you and maybe offer you grace or shut down your unit.

That was game on, solar energy revolution, because of the railways,

of M-Pesa, and as Sotoyo said, our 40 companies have now brought electricity to 300 million people.

It wouldn't have happened without this pay-as-you-go mobile payment system.

For the last 25 years, I've been investing in social enterprises focused on solving problems of poverty.

You've also ...

Agriculture is also historically a cash-based industry where there's been a lot of what they call leakage, petty corruption.

And you've also significantly reduced that.

And through our agricultural investing, we've seen just massive changes.

And for the last 20, M-Pesa has fundamentally accelerated them.

So thank you for that work as well.

In the interest of time, because Sitoyo and I share a mentor and someone we have all been imprinted by, one of the great moral leaders of our time, a man named Bob Collymore who ran Safaricom.

And in this time where we keep looking around to say where are our leaders, Bob stands as a giant that we lost to him tragically far too young a few years ago.

Sitoyo...

You're an African.

You have built one of the most important companies in the world.

You see a continent that is going to comprise one in four of us with a median age of 19.

How do you think about AI, the future, Africa's contribution in the context of the kind of moral leadership that Bob

And the second reason is the unexpected.

demonstrate it for us?