Our last post treated the intermediaries who got us a few new investment opportunities. We now move our focus to the investment opportunity itself, and this is a particularly exotic addition to our portfolio, obtained through Ecoligo Investments.
The platform focuses on sustainable investments in developing countries, some of the recent ones in Latin America and in Africa. Generally projects offer crowdlending of subordinated debt paying around 5 to 7% per year to support renewable energy plants in the destination country. For those keen to see investment impact in local communities and climate change, this is a valuable startup.
Ecoligo’s strengths
- Our investment was extremely easy and quick to execute through their website, so if you’re interested in checking it out, have the funds you want to invest ready;
- My interest in international investments is obvious to anyone reading this blog, and Ecoligo allows DS to expand the horizons in terms of markets it’s working with, while both interface and currency are here in Europe and Euros;
- If sustainability is an important topic for you, it doesn’t get much more sustainable than renewable energies in a developing country. Investment destinations really need non-polluting sources of energy and most often cannot finance them on their own, so this is really enabling something good to take place.
Downsides of this platform
- As much as the rates and tenors offered in Ecoligo are not bad, interests are at the lower end of our portfolio, and tenors actually mean we are locked into the investment for longer than most other investments. Sure, it’s probably a down side of investing for a good purpose, that’s why we accept those terms;
- Ecoligo Invest GmbH might be a German company, but the project itself is based in Kenya and sources water for a flower production plant, so risks are hard to assess. As we mentioned above, the rates are actually comparable with with real estate investments in Europe while tenors are longer, so the risk shouldn’t be higher, let’s hope we can confirm that as the payments become due;
- Even with references available, we didn’t consider the selection of project manager sufficient, so there is an assumption of trust that the quality of project management will be adequate.
Financials
- Initial investment amount of 1000 Euros in 50 kWp Solaranlage – Live Wire Wasserversorgung;
- Interest rate of 5,5% annual interests plus 0,5% early bird bonus and tenor is 5 years;
- Project repayment schedule starts with a small interest payment in January 2019, then 5 years worth of increasing amortization in yearly payments.
DS has also a few more investments in sight, so come back soon for more investment FinTech posts!