The Arc Approach

Arc Finance identifies, implements and documents innovative business models to promote end-user finance for clean energy and water. We specialize in providing services, tools, capital, and technical expertise to help create, reinforce and scale-up partnerships between financial institutions and energy and water enterprises. Arc identifies investment opportunities for impact investors. We offer creative and collaborative solutions to address the dilemma of energy and water access and climate impacts and deploy catalytic investment and technical assistance to advance financing mechanisms that make energy and water affordable and accessible for all. Below is a breakdown of the Arc approach:

Technical Assistance

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Arc Finance provides tailored advisory services and technical expertise to financial institutions, particularly microfinance institutions, as well as to energy and water enterprises focused on serving the poor.

We offer a comprehensive package of services to financial organizations interested in introducing energy-lending programs. These services include market research and energy needs assessments, technical assistance for designing business models and energy loan products, facilitation and development of partnership arrangements with energy enterprises, and design and evaluation of pilot programs. Arc also assists financial institutions with building the capacity of staff and management, client training and awareness-raising, and establishing monitoring and evaluation systems. For those financial institutions with some experience in lending for energy services, Arc offers a comprehensive scale-up package aimed at identifying obstacles, refining processes, diversifying product offerings, and reaching scale.

Advisory Services

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As more microfinance institutions and financial institutions around the world recognize the business case for energy lending, donors, governments, and investors are looking to Arc Finance as a resource for best practices in end-user and enterprise financing for clean energy. Our advisory services focus on assisting these stakeholders in planning energy-financing programs, identifying end-user financing investment opportunities, and building linkages with local stakeholders, including small and growing energy businesses and microfinance institutions.

Linkages

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Arc Finance aims to benefit poor populations by linking end-user finance with enterprises that offer clean, modern, and sustainable energy systems and products. Arc provides critical support in building trust and capacity among the players, enabling them to understand both the lending models and energy products that are appropriate and available. Arc facilitates each group’s awareness of after-sales service arrangements, investment options, and the policy issues at stake. By aligning with Arc’s solid foundation of knowledge and experience, financial institutions and enterprises are often willing to experiment with new partnerships that they might have been wary of before — and with Arc’s support, they are getting results.

Innovation Funding

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Arc Finance provides financial support to microfinance and other finance institutions, in addition to energy/water enterprises, to both spur product innovation and to support business incubation for energy and water lending.

Despite recent progress, a clear need exists for innovation in products and business models to reach significant scale in energy lending. Small, local businesses in both the energy and water sectors often lack the resources to experiment with products and processes that will be more affordable or accessible to their customers. A lack of appropriate financing mechanisms forces most energy and water enterprises to use scarce working capital to innovate products that will meet the needs of lower-income populations.

Arc Finance provides innovation funding, or seed capital, to microfinance institutions and energy/water enterprises to develop new products, business models, distribution, and payment mechanisms that will increase access to clean energy and water. This innovation funding is aimed at developing and testing new approaches that have both the potential for rapid scale and are replicable.

Knowledge Products

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Arc Finance offers clients a knowledge platform of practitioner experiences and cutting-edge innovation on end-user finance and energy/water services for the poor. Arc is in a unique position as a global institution with a network of practitioners that are pursuing innovations in microfinance and energy/water services to underserved communities. Arc collects and analyzes data from its partners, clients, the industry, and academics to identify new trends and new focus areas. The Arc team conducts research on key topics related to Arc’s engagements, providing distilled, high-quality information undergirded by practitioner experience to create Arc publications and knowledge pieces and to inform Arc’s field work.

Arc’s approach reflects our philosophy that practitioners have rich, unique expertise and knowledge that is profoundly valuable and pertinent to their counterparts in the rest of the world. Arc’s knowledge platform promotes practitioner-to-practitioner-based learning by providing these experts with a forum where they can exchange innovative ideas, lessons learned, and best practices. As the facilitator, Arc distills the shared information to create knowledge products. These knowledge products can then be transformed into training modules and courses, bringing global best practices and experience to local audiences.