Overview of the AECF: Key Results and Future Plans

1. Overview of the AECF: Key Results and Future Plans Hugh Scott - AECF Director

2. Presentation Outline Overview of the AECF • Introducing the AECF • Finding the right projects • Funding Innovation • Market Systems Key Results – Progress to date • Windows and Competitions • Applications and awards • Results and Impact The Future?

3. Overview of the AECF

4. Introducing the AECF (1) • Goal: to accelerate pro-poor growth in Africa • Purpose: to make agribusiness, finance, renewable energy and information market systems work better for the poor in rural areas in Africa • Result: Increased jobs and incomes for large numbers of people living in rural areas in Africa • Modus Operandi: The AECF works by supporting private sector companies to develop and test innovative business ideas in agri-business, rural financial services and renewable energy in Africa

5. Introducing the AECF(2) • AECF is • a fund of donor money available to the private sector on a competitive basis • AECF is • a ‘special partnership’ initiative of the Alliance for a Green Revolution in Africa (AGRA). • AGRA is chaired by Strive Masiyiwa and funded by Rockefeller and Bill and Melinda Gates • AECF is - a fund whose initial capital was US$34m in 2008 and is now US$244m and growing (figure as at August 2014)

6. Finding the Right Projects We seek to support business ideas that are commercially motivated & innovative to get systemic impact • Commercial Motivation: Scale required for systems impact; scale will only be reached if business model is (very) profitable • Disruptive Innovation: as a key indicator of systemic change potential • Upsetting the market such that others will copy and replicate – the more innovative the better • Principle: Start races rather than picking winners • VFM: Provide minimum amount of money to make business happen that otherwise would not happen

7. Making Market Systems work paradigm SUPPORTING FUNCTIONS MARKET PLAYERS Private sector Government Demand Supply Membership organisations Informal networks RULES Not-for-profit sector Information Infrastructure Related services Informing & communicating CORE AECF AECF Setting & enforcing rules Regulations Informal rules & norms Standards Laws

8. Key Roles of the AECF Developing a pipeline of business ideas Competitions: The Challenge Fund Mechanism is an effective, open and transparent way to find large numbers business ideas and capable entrepreneurs Finding and funding innovative business ideas that are commercially viable should have impact on large numbers of rural households. Providing capital to “buy-down” risk Instill sound business/financial management to get businesses more “investment ready”. Actively operate as a feeder fund for next level, more commercial, financial service providers and, Achieve even more impact on even more people Funding the best business ideas (that others will not) A feeder fund for next level financiers

9. Raising Further Capital • New service being offered to AECF grantees • Supporting grantees raise equity and debt • Scaling up post your AECF grant • Made available ‘free of charge’ but • Limited availability • What can we do? • Structuring fundraising process • Introducing investors and lenders • Reviewing investor market materials • Helping negotiate terms with investors and lenders • Contact Seb McKinlay – sebastian@aecfafrica.org or aecfafrica.org/connect

10. Key Results To Date

11. Fund Size Growth

12. 8 Funding Windows 19 Competitions so far General Window (GW) Early Bird / R1-3 Agribusiness Africa Window (AAW) R1 Zimbabwe Window (ZW) R1-3 AECF WINDOWS Post-Conflict Window (PCW) R1 Tanzania Agribusiness Window (TZAW) R1-R3 South Sudan Window (SSW) R1-2 REACT Window R1-3 + Moz Research Into Business (RIB) R1-2

13. AECF Applications Summary 191 372 812 4,788 11,154 18 Rounds completed 5 June 2008 to August 2014 Performance to date Projects Approved Business plans Shortlisted for IC Concept notes submitted Registered companies

14. Portfolio Growth – No. of Projects

15. Portfolio Distribution – By Window

16. Funding and Geographical Spread

17. Development Impact 2013

18. Trends in Development Impact

19. Development Impact by Primary Beneficiary

20. Cumulative DRR by Sector

21. What is the Future?

22. The Future – Operational Process/Operational Improvements: • Reduce time from competition closure date to contract sign-off • Reduce time from report submission to disbursements of funds • Improve business compliance through more active portfolio management (not less compliance) • Introducing the AECF Grantee Network • AECF Connect playing a bigger role • Strengthen monitoring and results measurement Ongoing and Forthcoming Competitions: • TZAW R3 at Business Plan Stage • REACT R3 – currently “live” • AAW R2 – October?

23. The Future – Strategic • AECF likely to become an independent legal entity (Trust/CLG) • Board of new AECF entity to decide how AECF will be managed and by whom • More predictable funding – long term (10) year strategy to grow to US$500m • A funder of innovation or a feeder fund for others (or both) • More windows v fewer, larger, windows (two flagships)? • More or less financial products – grants v loans v ….? • External evaluation and monitoring unit (EMU company)

24. CONTACT DETAILS • :+254 20 269 9137/8/9 • : www.aecfafrica.org • : info@aecfafrica.org • : www.facebook.com/AecfAfrica • : www.twitter.com/AecfAfrica