Financing Social and Environmental Impact:

Yansa L3C and Yansa Investments

During the next two decades, a growing number of communities will be faced with the option of either giving away control over their land and renewable energy resources, or building community projects involving substantial investments. A community-led transition to renewable energy will therefore require a considerable financial capacity, and a self-sustaining economic approach.

We are building an investment platform to finance Yansa’s community projects and technological and productive capacities. The Yansa Group will offer primarily a return in the form of social and environmental impacts, but it will also offer a financial return. The profile of our investors will be organizations and individuals that are interested in ensuring positive social and environmental effects through their investments, while obtaining a modest but safe return.

In order to be able to work with different kinds of investors and attract a sufficiently large pool of capital, Yansa Investments will create two investment funds:

Yansa L3C (Low-Profit Limited Liability Company) will be designed to offer attractive conditions to US-based foundations and philanthropic organizations. The L3C will provide low-interest capital to the Foundation and the CIC. The low financial returns will be outweighed by large social and environmental impact, and by the option to count 100% of their investment in the L3C towards the amount that they are legally required to devote to social programs. The legal format of the L3C and its advantages for foundations are described in greater depth in the box below.

Yansa Investments will be designed for institutional investors (such as sustainability-oriented investment funds, pension funds, ethical banks, etc) as well as for the public at large, in the form of an ethical investment fund. Yansa Investments will pay a regular market-based return on the investments of the Foundation or the CIC, but the contracts with all private investors will specify that a portion of that return will be automatically donated, on their behalf, to the Yansa Foundation. Investors in this ethical fund will therefore receive tax-deductible donation certificates for a portion of their investment, as well as a safe return on their investment.

The Foundation and the CIC will present only safe projects to Yansa Investments. This security will be provided by safe long-term power purchase contracts for the electricity produced, and also by a favorable context for the wind farms due to the direct involvement of local communities and the wider positive impacts of Yansa projects at regional and national level. We will back up the investment in R&D with public subsidies, and the investments in production facilities will take place in the context of a secured demand for the wind turbines.

Yansa L3C and Yansa Investments will work as regular investment funds, with the important difference that their main purpose will be to have a positive impact in terms of sustainable and equitable development. They will provide loans to the Foundation and the CIC, receiving a low but very safe financial return, and a very high social and environmental return. They will support the community projects and the technological and productive capacities, without owning them. Investors will retain ownership and management rights in the funds, but not over the CIC or Foundation.

Over time, we expect the Yansa Foundation and CIC to build up sufficient assets to be able to play a major role in project financing.