How do you even measure the impact of an investment?

17 hours ago
2 min read

Impact investments are characterized by the fact that they take a much broader view of the traditional concept of return than conventional investments. Genuine impact investments achieve a measurable and tangible effect—and that is precisely what EWIA Green Investments aims to do: we want to generate financial, social, and environmental returns and offer investors the opportunity to participate in this.

EWIA wants to contribute to the development of clean energy supplies, economic stability, and sustainable development in sub-Saharan Africa—a region with enormous potential. But how can this actually be measured? It's a valid question, because there are many providers on the capital market who promise sustainability without being able to demonstrate any real impact.

EWIA Green Investments is committed to the sustainability goals of UN SDG 7 (clean and affordable energy) and UN SDG 13 (climate action), among others. Reducing and curbing CO2 emissions is crucial to achieving these goals.

Using the EWIA Impact Portfolio Ghana 1 project as an example, we explain how the environmental impact achieved per euro invested can be measured.

The methodology – try the impact check

Important determinants are the actual grid electricity saved, the grid emission factor (GEF), and the project duration.

First, the grid emission factor (GEF) is determined, which is calculated individually for each country by the independent IGES Institute in Berlin. The respective energy mix of the country is taken into account. Each megawatt hour (= 1,000 kWh) generated has a country-specific CO2 footprint.

A GEF indicates how “dirty” the electricity from a grid is on average – the higher the factor, the more fossil fuels are included in the mix. Countries that obtain most of their electricity from coal-fired or gas-fired power plants therefore have higher CO2 emissions per kWh than countries that generate most of their grid electricity from hydropower or renewable energies. Every kWh generated by photovoltaics reduces kWh consumption from the grid and thus saves CO2. Ghana's GEF is 0.479, which is higher than Germany's GEF (around 0.34).

Based on the CO2 savings over the entire term, the CO2 savings per euro invested can be calculated in conjunction with the project costs (we are assuming the full CAPEX here).

In the third step, the individually achieved CO2 savings can be calculated based on the amount of the investment.

EWIA Impact Portfolio Ghana 1 at a glance