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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 SOKONAExecutive Secretary
Sahara and Sahel Observatory (OSS)
Boulevard de l’Environnement BP 31 – 1080 Tunis, Tunisia
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
Number of
People
Income Levels$1/day
Rural Areas Urban
Areas
CBOs SMEs Utilities
Poor Wealthy
Rural Energy Services Framework
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 AREED Enterprise Centered ModelThe Basics
Investors Donors Charities
Services
Entrepreneurs
Capital
Their Customers
Public Purpose Specialty Organizations
Demonstrating that needed energy services can be delivered on a sustainable basis by small/mid sized local enterprise and multiple partnerships
ENDAMFC
KITE
TaTEDO
CEEEZ
E+Co Africa
E+Co NJUNEP ParisUCCEE RisoeUN Foundation
Others
CountriesSenegalMaliGhanaTanzaniaZambia
UCCEE
www.areed.org/partners
Multiple Partnerships
1. Finance2. Program
3. Implementation 4. Enterprise5. Service Delivery
Finance partnerships: to bring together the “hard” and “soft” resources that must be blended to
launch sustainable enterprises
Investors Donors Charities
Services
Entrepreneurs
Capital
Their Customers
Public Purpose Specialty Organizations
e.g., United Nations Foundation
Program Partnerships: to bring together the governance, specialty expertise and local presence
required
Investors Donors Charities
Services
Entrepreneurs
Capital
Their Customers
Public Purpose Specialty Organizations
e.g., UNEP, E+Co, ENDA and KITE for AREED
Implementation Partnerships: to deliver the services and capital to entrepreneurs
Investors Donors Charities
Services
Entrepreneurs
Capital
Their Customers
Public Purpose Specialty Organizations
e.g., E+Co and ENDA in Senegal, KITE in Ghana, MFC in Mali, TaTEDO in Tanzania and CEEEZ in Zambia
Enterprise Partnerships: the creation and growth of sustainable businesses
Investors Donors Charities
Services
Entrepreneurs
Capital
Ther Customers
Public Purpose Specialty Organizations
e.g., Bagani, Ubwato, VEV, Anasset
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.
KBPS, Zambia
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.
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.
Bagani, Mali
Business: LPG distribution
AREED Support: $ 38,000 loan Enterprise Development SupportInvestment 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
Anasset, Ghana
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 ModelHow Organizations Working Together
Add Value
Investors Donors Charities
Services Capital
Entrepreneurs Their Customers
Specialized Funds +Programs
Public Purpose Specialty Organization
Program PartnersImplementation
PartnersCo-finance
Government+ Policies
IndependentEvaluators +
Best PracticesDissemination
How Specialized OrganizationsWorking Together
Add Value
AREEDGhana
UN FoundationUNEP
Services Capital
Entrepreneurse.g., Gladymanual
Their Customers
UNEP KITE
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
Donors, Grant-Makers and Contract
Service Providers
Social + StrategicInvestors
Local Financial Institutions + Specialized
Funds
CapitalSeed and Growth
ServicesPre- and Post Investment
Specialized Intermediaries
Energy Enterprise Energy Services Customers
Enterprise-Centered Model – Value Chain
Solar Bakery
Solar Crop Drying
Efficient Lighting
Solar Hot Water
Solar Dryers
Salt Drying
PV SHS
Investment Committee
Initial Go-No Go
Fuel Switching
Coffee Husk Pelleting
Butane Dist.
Formal EDS Stage
Entrepreneur Training Stage
Financed Stage
Con
cept
Sta
ge
Biomass fuels
Sawdust Briquetting
Water Pumping
AREED Deal Flow
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