Isenberg MBA Alumnus Helps Bring Energy to Developing Nations
October 24, 2019
For Mikael Karlsson, securing energy for developing nations is “enormously satisfying.” It also represents a market with a fantastic financial upside. A 1990 Isenberg MBA graduate, Karlsson is head of energy and infrastructure at the London-based investment firm Actis. (He is also a partner and member of the firm’s executive committee.) Actis—a leading investor in growth markets across Africa, Asia, and Latin America—comprises four businesses: private equity, energy, infrastructure, and real estate. Capital from its private investors supports 70 companies around the globe. “We are resolutely local,” notes the firm’s web site.
“Energy is an exciting market,” Karlsson observes. “We’re looking at $20 trillion in capital between now and 2040, of which developing nations need $14 trillion. That’s $1.7 billion every day, including half a billion in renewables.” The market, he emphasizes, is moving increasingly toward sustainable, renewable energy—clean, cost-effective energy that propels overall economic development. In addition to its 16 power company investments on four continents, Actis invests in high-growth utilities. That includes introducing cost-effective practices and capitalizing new sources of renewable energy and improved infrastructure. Examples include wind and solar farms in South Africa, Kenya, India, Brazil, and Mexico.
For Karlsson and Actis, assessing risk demands scrutiny of a country’s political climate and legal considerations as well as traditional financial modeling and forecasting. For a wind farm in Honduras, for example, Actis protects its investment with a 25-year purchase agreement that guarantees an annual payout secured by the Honduran government. In many investments, Actis spreads its risk by opting for a blended package of traditional and renewable energy sources.
Growing Into New Endeavors
Karlsson’s MBA from Isenberg complemented his earlier master’s degree in engineering from Linkoping Institute of Technology in Sweden. Isenberg, he said, helped him to broaden his repertoire of business and leadership skills. “I am innately curious. I have never stopped learning,” he confesses. After Isenberg, he joined ABB Energy Ventures, a prominent London-based developer and investor in power projects, where he held senior management positions. In 2002, he joined Globleq (formerly owned by Actis), serving as its CEO from 2009 to 2015. He has excelled in his present role at Actis since 2012.
In recent years, Karlsson has teamed up with fellow Isenberg MBA graduate Michael Philipp to advocate for creation of sustainability programming at Isenberg. The two plan to continue their conversations with the school’s new dean, Anne Massey. The proposed program, says Karlsson, is sure to motivate Isenberg students. “They need to get into things that unleash their passions—like making the world a better place,” he insists. “Focus on that as motivation… the financial side will come.”