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UNFCCC Workshop on Innovative Options for Financing the Development and Transfer of Technologies 27-29 September 2004, Montreal, Canada. African Rural Energy Enterprise Development: A New Approach to Public-Private Partnership Youba SOKONA Executive Secretary

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African rural energy enterprise development a new approach to public private partnership

UNFCCC Workshop on Innovative Options for Financing the Development and Transfer of Technologies27-29 September 2004, Montreal, Canada

African Rural Energy Enterprise Development:

A New Approach to Public-Private Partnership

Youba SOKONA

Executive Secretary

Sahara and Sahel Observatory (OSS)

Boulevard de l’Environnement BP 31 – 1080 Tunis, Tunisia


Key challenges for african rural energy prospect

Key Challenges for African Rural Energy Prospect

  • Widening Access to Energy Services

  • Massive Self Sustaining Scale-up

  • Market Creation and/or Stimulation Within & Across Countries

  • Combination of Good Practices, Instruments & Technological Options


African rural energy enterprise development a new approach to public private partnership

Rural Energy Services Framework

Rural

Areas

Number

of

People

Urban

Areas

CBOs

SMEs

Utilities

$1/day

Poor

Wealthy

Income Levels


The areed approach

The AREED Approach

  • Focusing on the critical enablers: enterprise and entrepreneur

  • Combining services and capital

  • Bringing together resources from multiple sources

  • Targeted, customized tools and activities

  • Real time, working, evolving partnerships to plan, implement and improve

  • Cross platform learning


The a reed enterprise centered model the basics

The AREED Enterprise Centered ModelThe Basics

Investors

Donors

Charities

Public Purpose Specialty Organizations

Services

Capital

Entrepreneurs

Their Customers


African rural energy enterprise development a new approach to public private partnership

Demonstrating that needed energy services can be delivered on a sustainable basis by small/mid sized local enterpriseand multiple partnerships

MFC

Others

ENDA

E+Co NJ

UNEP Paris

UCCEE Risoe

UN Foundation

KITE

TaTEDO

Countries

Senegal

Mali

Ghana

Tanzania

Zambia

CEEEZ

E+Co Africa


African rural energy enterprise development a new approach to public private partnership

Multiple Partnerships

1. Finance

2. Program

3. Implementation

4. Enterprise

5. Service Delivery

www.areed.org/partners

UCCEE


African rural energy enterprise development a new approach to public private partnership

Finance partnerships: to bring together the “hard” and “soft” resources that must be blended to launch sustainable enterprises

e.g., United Nations Foundation

Investors

Donors

Charities

Public Purpose Specialty Organizations

Services

Capital

Entrepreneurs

Their Customers


African rural energy enterprise development a new approach to public private partnership

Program Partnerships: to bring together the governance, specialty expertise and local presence required

e.g., UNEP, E+Co, ENDA and KITE for AREED

Investors

Donors

Charities

Public Purpose Specialty Organizations

Services

Capital

Entrepreneurs

Their Customers


Implementation partnerships to deliver the services and capital to entrepreneurs

Implementation Partnerships: to deliver the services and capital to entrepreneurs

e.g., E+Co and ENDA in Senegal, KITE in Ghana, MFC in Mali,

TaTEDO in Tanzania and CEEEZ in Zambia

Investors

Donors

Charities

Public Purpose Specialty Organizations

Services

Capital

Entrepreneurs

Their Customers


Enterprise partnerships the creation and growth of sustainable businesses

Enterprise Partnerships: the creation and growth of sustainable businesses

e.g., Bagani, Ubwato, VEV, Anasset

Investors

Donors

Charities

Public Purpose Specialty Organizations

Services

Capital

Entrepreneurs

Ther Customers


African rural energy enterprise development a new approach to public private partnership

KBPS, Zambia

  • Business:Charcoal production from sawmill waste

  • AREED Support:$73,000 loan + Enterprise Development Support

  • Investment Activity:- Construction of 15 argentine brick kilns- Development of marketing and distribution network

  • Status:Construction of kilns completed. Production, distribution and sales of charcoal started Feb 2003

  • Using a waste product for fuel and a conversion process twice as efficient as traditional methods, KBPS is proving that a clean energy enterprise can both solve an environmental problem and be good business.


African rural energy enterprise development a new approach to public private partnership

VEV, Senegal

  • Business: Servicing of wind-powered water pumps in rural Senegal.

  • AREED Support: $17,000 loan + Enterprise Development Support

  • Investment Activity:- Expanding inventory to shorten service times

  • - Offering short-term credit to qualified clients

  • Status:VEV has expanded its inventory and operations.

  • Together, these services should help to ensure that most wind pumps in Senegal become - and remain - operational.


African rural energy enterprise development a new approach to public private partnership

Bagani, Mali

  • Business:Own and operate multi-functional platforms in the Kita area of Mali. Platforms powered on Jatropha oil, derived from Pourghere nuts.

  • AREED Support:$14,500 loan + Enterprise Development Support

  • Investment Activity:- Own and operate two platforms; eventually expand.

  • First commercial business and investment in a multi-functional platform in Africa.


African rural energy enterprise development a new approach to public private partnership

Anasset, Ghana

  • Business: LPG distribution

  • AREED Support: $ 38,000 loan Enterprise Development Support

  • Investment Activity: - Purchase plant & equipment

  • - Increase sales

  • Status:Bought new bulk LPG tank and installed car dispenser. Increase in sales and profit margins

  • The upgrading of infrastructure increase the delivery and service levels and makes the product more accessible to the community, decreasing dependence on traditional fuels


African rural energy enterprise development a new approach to public private partnership

Service Delivery Partnerships: to deliver modern energy to the under-served…to create choices for services and income generation

e.g., Village and its six farmer-customers


Enterprise centered model how organizations working together add value

Enterprise Centered ModelHow Organizations Working TogetherAdd Value

Investors

Donors

Charities

Specialized

Funds +

Programs

Public Purpose Specialty Organization

Program Partners

Implementation

Partners

Co-finance

Services

Capital

Government

+ Policies

Entrepreneurs

Their Customers

Independent

Evaluators +

Best Practices

Dissemination


How specialized organizations working together add value

How Specialized OrganizationsWorking TogetherAdd Value

UN Foundation

UNEP

AREED

Ghana

UNEP

KITE

Services

Capital

Entrepreneurs

e.g., Gladymanual

Their Customers


What s new here

What’s New Here

  • Partnership of value adding entities, driven by bottom line of service delivery and sustainable market presence

    • Small/Medium energy enterprise development

    • Local partner capacity building

    • Financial institution linkages

    • Policy linkages

  • Targeting two levels sustainability

    • Enterprise

    • Enterprise developer


African rural energy enterprise development a new approach to public private partnership

Donors, Grant-

Makers and Contract

Service Providers

Energy Enterprise

Social + Strategic

Investors

Local Financial

Institutions +

Specialized

Funds

Services

Pre- and Post Investment

Capital

Seed and Growth

Enterprise-Centered Model – Value Chain

Specialized Intermediaries

Energy Services

Customers


African rural energy enterprise development a new approach to public private partnership

AREED Deal Flow

Initial

Go-No Go

Investment

Committee

Solar Bakery

Solar Dryers

PV SHS

Efficient Lighting

Fuel Switching

Water

Pumping

Solar Crop Drying

Concept Stage

Solar Hot Water

Salt Drying

Butane Dist.

Biomass fuels

Coffee Husk Pelleting

Sawdust Briquetting

Formal EDS Stage

Financed Stage

Entrepreneur

Training Stage


Why is this important

Why is this important?

  • Network of partnerships need to link together different levels presently disconnected

  • Different levels of “go between” value adding services are needed:

    - Specialized public purpose intermediaries,

    - Local intermediary organizations

    - Local SMEs

    - Customers

The point of REED is to leave behind the discussions of “projects”, move to the creation of “portfolios” and reach the point where we are discussing “systems” of capital, products and services that are self-supporting. The key to getting there are sets of VALUE-ADDING PARTNERSHIPS


Thank you and for more information www areed org partners

Thank youand for more informationwww.areed.org/partners


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