How PIDG use impact data to better evaluate projects across their portfolio

Traditionally investors rely on financial and operational data when making capital allocation decisions and to understand the effectiveness of their investments. The same logic is true for impact investors, who need to combine this with impact data in order to optimize for both financial returns and sustainable impact. 

High-quality, comparable impact data offers accountability and transparency, enabling investors to ensure funds flow to companies that are actually making a positive difference for people and planet. Impact data can also help investors and businesses identify areas for improvement, by learning what works and what doesn’t so they can potentially increase their impact and/or attract further investment.

We spoke to Saeed Ibrahim, Director, Sustainable Development Impact at PIDG, to find out more about how they use 60dB impact data to more effectively conduct impact measurement and management across their portfolio.

Can you give a quick introduction to PIDG for those who don’t know?

Saeed Ibrahim: PIDG stands for the Private Infrastructure Development Group. Our mission is clearly defined: we get infrastructure finance moving and multiplying – accelerating climate action and sustainable development where most urgently needed. Impact, defined as tangible positive changes to people’s lives while protecting nature and delivering climate resilient development is at the core of everything we do. Most of our investments are in least developed countries and in fragile and conflict-affected states.

PIDG was founded in 2002 to address market failures in sub-Saharan Africa and South and Southeast Asia, by demonstrating the commercial viability of private infrastructure investment in frontier markets.

Since then, we have been bringing public and private partners together to bridge financing gaps, directing capital and expertise to the countries and communities where they’re most urgently needed. Working throughout the project lifecycle, we have de-risked projects, transformed markets and built local capacity, creating a deep and lasting impact.

We have always worked in spaces that receive little or no attention – a large proportion of our activities take place, beyond the comfort zone of most infrastructure investors. Safety for all involved in our work, gender equality and climate considerations are at the very core of what we do.

How has 60 Decibels helped you manage impact? What can you do now that you couldn’t do before, with the data that we work on together?

Saeed: Over the last few years PIDG has evolved its approach to assessing the sustainable development impact of our investments. This includes a deeper assessment of direct impact on people – including assessments of who the expected end-users are and what difference the PIDG supported infrastructure is expected to make on their lives – with an emphasis on how underserved and vulnerable groups are benefitting, including women and girls, and those on low incomes among others.

As a result, the PIDG Learning strategy prioritised expanding our data collection to hear more directly from the people whose lives we aim to impact and to do so more often, with two broad aims:

• Help PIDG gather more evidence on our investments in terms of achieving impact against expectations and improve decisions and processes based on what we learn.
• Help our investee companies gather insights that enable them to do even better in serving their customers.

60 Decibels’ Lean Data capabilities enabled us to hear directly from people experiencing the impact, understand who they are and also crucially, what’s changing for them.

For example, hearing directly from the people who have been connected to an energy project or water project we have supported, and have them tell us that due to this investment ‘my quality of life has improved and in these ways’. It’s a capability that our work with 60 Decibels has enabled, that we did not have before – and that spoke directly to the needs that we had in our impact management system.

What are some key takeaways you’ve learned from the surveys we’ve done together?

Saeed: We’ve now spoken to more than 3,000 people in 12 countries, across multiple sectors, and identified a few insights. Firstly, PIDG projects surveyed are mainly serving low-income end-users. This was something we had assumed on those projects within our impact management system, but it’s been important to collect data that allows us to understand the extent to which this is the case. On average, we found that more than two-thirds of the customers surveyed lived on less than six dollars a day. Of course, contexts and thresholds will vary, but generally, we’re serving relatively low-income people in a sustainable way through the infrastructure projects we develop and invest in.

Secondly, our projects have predominantly provided first-time access to essential services that users previously did not have. For example, a survey of customers on a micro-grid project we developed in the Philippines found that 99% of respondents were accessing energy for the first time, which was above our expectations. Such first-time access to stable and reliable energy can have a life-changing impact.

Thirdly, the PIDG-supported projects surveyed are making a real difference to the quality of life of its end-users. Referring back to that earlier comment I made about the benefits of hearing from people directly, in the majority of our surveys a high proportion of respondents reported a quality of life improvement that was ‘very significant’ or the highest rate. For example, In Sierra Leone, where we surveyed customers of a mini-grid project we supported, two-thirds (66%) of respondents said their quality of life has improved ‘very much’. In our impact management system, we would consider that as evidence of a project having provided a significant positive change to end-users. If you think about what is the last service that you gained access to, that you could say significantly improved your quality of life – it’s a powerful thing for us to take away as an insight.

What are some changes or improvements you’ve made to your management strategy of these project companies from the data you’ve collected?

Saeed: As part of our rigorous approach to impact management at PIDG, one of the things that we do annually is review the impact assessment of each project and update the impact rating based on monitoring data collected. For instance, if we’ve made a certain assumption prior to investment about a project’s potential target demographic, and then the actual monitoring data shows us that it’s actually benefitting a much lower income group than we’d anticipated, this is evidence that the project is more impactful than we’d expected and we would increase the project impact rating accordingly. In several instances, the 60dB results have provided us with surprising findings, which we have used to adjust the project’s impact rating. 

We also have many stakeholders interested in our journey, and funders who often want to partner with us because of our impact mandate. So, if we can collect more data to evidence and substantiate our impact, this helps demonstrate our impact to those wanting to partner with us. We use this evidence in our various communications, such as our annual reports and case studies. 

Has your ability to collect accurate impact data influenced how you make future investment decisions?

Saeed: One of the main reasons we collect this data is to inform future investment decisions, and I can give an example.

In 2019, PIDG financially closed a project to deploy 100 solar-powered irrigation systems to smallholders and farmers in Senegal (Phase-one). In 2021 we were considering an expansion to deploy a further 2,050 irrigation systems (Phase-two).

We conducted phone interviews of customers supported during Phase-one. The survey enabled us to collect accurate impact data as well as evidence a broadly successful implementation of Phase-one. The Phase-two expansion investment was under consideration shortly after the results came in from Phase-one. The accurate impact data collected from Phase-one were used in the sustainable development impact assessment as part of the overall investment decision-making process for Phase-two, which itself went on to financially close in September 2021. Thus we were able to (almost in real time) use those results to inform the subsequent follow-on investment decision.

Finally, would you recommend 60 Decibels to other investors?

Saeed: I would recommend 60 Decibels to other investors. I’ve seen more and more investors using their services compared to when we first started working together – our track record and the data our clients have been able to collect, speak for itself.