Evercity platform for impact measurement, management and investment demonstrated at COP25
Summing up its tech R&D experience since 2016, Evercity team has built an MVP of a digital platform which solves the main problems of impact investment market: inaccurate impact measurement, inefficient portfolio management & limited liquidity and profitability of investments. At COP25, we demonstrated some platform features and blockchain-based issuance of RECs from a small-scale solar power plant in rural Chile which gives small scale renewable energy projects new funding opportunities.
Selected as Ecosystem Best Practice by ITU earlier this year and presented at a range of international events, such as Young ICT Leaders’ Forum in Busan, GCF Private Summit in Songdo and COP25 in Madrid, Evercity Platform arouses interest of various stakeholders — impact investors, DFIs and private companies — all seeking for innovative and efficient solutions for monitoring, managing and financing SDG-aligned infrastructure projects.
What SDG problems digital technologies may solve ?
According to UNCTAD, attainment of SDGs by 2030 will take between US$5 to $7 trillion, with an investment gap in developing countries of about $2.5 trillion. This gap could be covered by impact investments — a market which is currently estimated at $502 billion with potential investors’ appetite as high as $26 trillion. However, rapid market growth is hindered by several obstacles:
- Transparency and accountability of impact measurement
Imagine a development bank which is based in the USA and invests in rural renewable energy projects in Chile. Managers rarely get an opportunity to visit the project site, but need to obtain accurate and precise information of what is really going on there.
Digital technologies provide transparent project monitoring at all stages of its implementation — from environmental impact assessment using satellite data to drone monitoring at construction and operation phases for measuring resource consumption and detecting flaws at an early stage.
- Legacy practices in project management
Portfolio management is a big challenge of impact investors. Most of them still use spreadsheets and get the project data in the form of pdf/word documents which is inefficient and time consuming. This problem could be solved by automation of data processing using AI analysis of project impact and performance data, CRM systems, blockchain ledgers and smart contracts.
- Questionable liquidity and profitability of SDG-related investments
Liquidity and profitability is often referred to as the “original sin” of impact investment, being by far the most important issue. This problem can be solved by development of new types of blended finance instruments and impact derivatives as well as by significant reduction of their issuance and transaction costs.
The recent HSBC report mentions that issuance of green bonds is not cost-effective for small and medium enterprises considering the need to have a broker, a listing agent etc. Automating various processes, from auditing and bidding to payments processing, blockchain can reduce costs of green finance issuance and thus make them more accessible.
“Climate change is a disruptive issue, and it requires disruptive solutions. Combination of some of the new emerging technologies such as IoT, distributed ledger and AI allow to build a value chain of data and have the potential to bring change that has not previously been possible in this area of climate change. We really believe that combination of some of these digital technologies can bring disruption to our capability to undertake climate action, as well as disruption in climate policy making”. —
said Massamba Thioye, Manager of Regulatory Development Unit of UNFCCC at UNFCCC and Climate Chain Coalition COP25 side event “How Digital Technologies Can Support Climate Action”
Single window for impact measurement, management and investment
Evercity team has maintained digital impact tech R&D since launch of DAO IPCI in 2016. DAO IPCI is an open-source public blockchain protocol for the global green finance market which disrupted the industry with the world’s first carbon credit transaction on blockchain in 2017. This historical milestone has been officially acknowledged by the World Bank and UNFCCC.
DAO IPCI was widely represented at the international UN climate conferences since 2017. Our team members together with many international scientists co-authored a chapter in the book «Transforming Climate Finance and Green Investment with Blockchains», co-founded Blockchain Climate Institute and became founding members of the Climate Chain Coalition.
Based on the above-mentioned experience Alexey Shadrin and Liza Romanova (co-founder of the Russian Carbon Fund who has led sustainability and climate agenda in Russia since 2011) founded Evercity — digital platform for impact measurement, management and investment. MVP and one of the use-cases were presented at COP25 at Climate Chain Coalition Morning Meeting on Dec 12, 2019.
“Industry 4.0 revolution is ready to deliver new generation tools to evaluate and distribute the Earth’s resources more efficiently with unprecedented transparency, building trust and putting down walls between globally distributed actors. These technologies enable us to create and test new socio-economic models and blended finance instruments with UNFCCC and Climate Chain Coalition.“ —
said Evercity CEO Alexey Shadrin at COP 25.
Evercity platform aims at increasing transparency and liquidity of impact investment to accelerate finance flows into projects and innovations needed to attain Sustainable Development Goals. Under the hood it combines WEB 3 technologies (Ethereum, Substrate, DAO IPCI, IPFS and Robonomics) that provide distributed finance features with advances Industry 4.0 solutions for impact measurement (aerial and aquatic drones, satellites and IoT devices).
Evercity is created to cover the whole impact investment lifecycle while raising value at each step. The platform firstly focuses on the business logic and user experience of impact investors while also taking care about projects:
- Impact measurement module allows collecting and verifying on-site data in an automated or semi/automated mode online. It serves as a gateway to third-party services and impact monitoring solutions providers by open API integration with global IoT standards. Once collected, the data is put on public or private blockchain to ensure transparency and immutability.
- Distributed finance module enables investors to invest in projects either online or offline. It provides for issuance of digital shares/debt/revenue sharing instruments as well as blockchain impact derivatives. The investment process is performed using built-in stablecoin, and the funds are stored with a custodian bank that verifies the transactions. The opportunity to invest offline is supported by the data room and e-signatures integration.
- DAO module allows to digitize and automate corporate and investment process as well as voting and dividend distribution with the help of self-executing smart contracts. In the future it will support all management and investment actions of impact funds including their own fundraising.
- AI module will allow matchmaking between projects and investors according to investment criteria, as well as scoring projects and forecasting their outcomes using multiagent technologies. This module will be added at the later stages with the assistance of our ecosystem partners.
View platform demo: http://bit.ly/2t3MxA1
Blockchain-based REC issuance in Chile
Pilot IoT and blockchain-based issuance of renewable energy certificates from a solar power plant in Chile was carried out with a local partner EnorChile S. A. on a small-scale 60 kW concentrated photovoltaic power plant Cazadores located in a rural area near the city of Iquique.
It turned out that certification of REC issuance by globally accepted standards is not cost-efficient for such a small power plant, which is why blockchain and IoT became the best available solution — reducing the cost and the need for auditing, it allows issuance at RECs at very little cost. We plan to develop and scale this case further in 2020 with our international partners.