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AREED: A New Approach to Private-Public Partnership

AREED: A New Approach to Private-Public Partnership. Presented by Ibrahim Togola, PhD. Mali-Folkecenter. Energy Services Framework. Rural Areas. Number of People. Urban Areas. CBOs. SMEs. Utilities. $1/day. Income Levels.

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AREED: A New Approach to Private-Public Partnership

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  1. AREED: A New Approach to Private-Public Partnership Presented by Ibrahim Togola, PhD. Mali-Folkecenter

  2. Energy Services Framework Rural Areas Number of People Urban Areas CBOs SMEs Utilities $1/day Income Levels

  3. Demonstrating that needed energy services can be delivered on a sustainable basis by small/mid sized local enterprise. MFC Others ENDA E+Co NJ UNEP Paris URC, Denmark UN Foundation KITE TaTEDO Countries Senegal Mali Ghana Tanzania Zambia CEEEZ E+Co Africa

  4. Enterprise Centered Model Enterprise Development Services Start-up Financing Entrepreneur Customers Energy Services

  5. Enterprises KBPS, Zambia Business: Charcoal production from sawmill waste AREED Support: $73,000 loan + Enterprise Dev. Support from CEEEZ, E+Co Investment Activity: - Construction of 15 argentine brick kilns- Development of marketing and distribution network Status:Construction of first kilns underway. 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.

  6. Enterprises VEV, Senegal • Business: Servicing of wind-powered water pumps in rural Senegal. • AREED Support: $17,000 loan Enterprise Dev. Support from ENDA, E+Co • Investment Activity: - Expanding inventory to shorten service times • - Offering short-term credit to qualified clients • Status:VEV has begun expanding its inventory and operations. • Together, these services should help to ensure that most wind • pumps in Senegal become - and remain - operational.

  7. Enterprises 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 Dev. Support from Mali Folkecenter, E+Co • Investment Activity: - Own and operate two platforms; eventually expand. • Status: • First commercial business and investment in a multi-functional platform in Africa.

  8. Enterprises Rasma, Zambia • Business: Efficient cookstove Manufacture and sales. • AREED Support: US$20,000 equity investment • Enterprise Development Support from CEEEZ, E+Co • Investment Activity: - open five retail outlets - marketing campaign • Status: • Support provided is not focused on refining the technology, but rather on commercialisation and market expansion.

  9. Deal Flow Pipeline Initial Go-No Go Investment Committee Other Approved Investments Solar Bakeries PV SHS LPG Fuel Switching Efficient Lighting Biogas Sawdust Briquetting PV Solar Crop Drying Salt Drying Solar Hot Water Butane Dist. Coffee Husk Pelleting Formal EDS Stage Entrepreneur Training Stage

  10. What’s New Here ? • Business As Usual • Project centered • Top-down, capital city driven • Large, politically visible • Planned in full, in advance – rigid • Govt to MDBs/RDBs to apex organizations to contractors for fixed time and cost • Essentially non-competitive once implemented • Alternative Model • Enterprise centered • Driven by local markets • Small, medium sized • Incremental, flexible and responsive • Partnerships of value adding entities, driven by bottom line of service delivery and sustainable market presence • Can be benchmarked against The Big Guys

  11. G8 RE Task Force Report THE BIG PICTURE:800,000,000 people = ~US $ 107,000,000,000 • Non-electricity improvements for 200 million • cooking fuels, cook stoves etc • enterprises like KBPS, Rasma, Ubwato (cookstove), Anasset (LPG). • Off-grid electricity to 300 million • lighting, motor power etc. • enterprises like Bagani • On-grid clean energy to 300 million • enterprises like AB Management (power factor correction), Gladymanual (efficient lighting).

  12. Connecting the DotsEnergy Investment Through SMEs Govt., MDBs/RDBs, donors, investors, MNCs, FIs Institutional Support, Concessional and Commercial Investment 50-100 Enterprise developers Services + Seed and Patient Capital $4 billion 16,000 Enterprises Modern Energy Services $107 billion 800 million people

  13. Connecting the DotsCreating Multiple Returns on Investment Govt., MDBs/RDBs, donors, investors, MNCs, FIs Social returns on investment (4-6%) 50-100 Enterprise developers Viable portfolios 16,000 Enterprises Sustainable transactions 800 million people Energy for sustainable development

  14. AREED Deepening • Current UNF Program funded at $3.7 million, including $1.4 million Investment Facility, through 2003. • $75,000 of investment from The Body Shop. • Estimated annual funding to “scale out” AREED in current 5 markets and prepare for expansion into new markets: $2.25 million

  15. A Platform for Private-Public Partnership Donors, Governments Social + Environment Investors Strategic Investors Finance Partnerships Finance Specialists Eg. E+Co Country NGOs Eg. Enda, Kite Enterprise Dev. Partnerships Utilities SMEs Energy Service Partnerships Energy Administrations, Govt Agencies Donors, UN Agencies, etc Replication Partnerships

  16. Thank You ! www.areed.org/partners UCCEE

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