Transcript Title of Slide

DEVELOPMENT AND ENERGY IN AFRICA: REGIONAL
WORKSHIOP
16th-18th October, 2007
The AREED Programme
Presented by:
Frank O. Atta-Owusu
Snr. Projects Officer, KITE
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The AREED Model
AREED SUPPORT


Training and tools to help
entrepreneurs start and develop
energy businesses
Start-up
financing
Energy
Enterprise start-up support in
areas such as business planning,
structuring and financing
Enterprise


Services
Seed capital for early stage
enterprise development
Partnerships with banks and
NGOs involved in rural energy
development
Energy
NGOs
FIs/Banks
AREED Intermediaries
Gov’t
Rural
clients
Results
The results to date have been significant:
 More than 220 entrepreneurs trained in
business planning/enterprise
development
 About $1,023,OOO invested in 13
enterprises- covering modern energy
products and services
Results cont.
 Providing sustainable energy services
to nearly 70,000 Ghanaians
 Employs a total of 65 people
Results Cont.
Investment Name
1
2
3
4
5
6
7
8
9
10
11
12
13
LPG
Anasset Enterprise
Translegacy Limited
M38 Ventures
RKA Limited
Lambark Gas
Fee Hi Ventures
Bansim Binara Enterprise
Abara Gas
Energy Efficiency/ Renewable Energy
AB Management
Gladymanuel Limited
Wilkins Engineering
Power World Ltd
Toyola Ltd
Overall Total
Amount (US$)
Core Activity
38,[email protected]% over 4yrs
20,000@5% over 4yrs
59,000@8% over 4yrs
104,080@8% over 4yrs
109,946@8% over 4yrs
33,500@8% over 4yrs
46,000@8% over 4yrs
102,990@8% over 4yrs
LPG retail/Marketing Company
LPG stove fabrication and retail
LPG retail
LPG stove manufacturer
LPG retail and transporter
LPG retail
LPG retail
LPG retail
122,400@12% over 5yrs
120,[email protected]% over 3yrs
127,000@8% over 4yrs
77,912@8% over 4yrs
100,000@8% over 4yrs
1,060,828
Energy efficiency
Energy Efficiency
PV Solar
Energy Efficiency
Energy efficiency (EE stoves)
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Case Studies
 Gladymanuel Enterprise Limited
 Anasset Company Limited
Gladymanuel Ent. Ltd

Gladymanuel Trading Enterprises approached AREED in
November 2001 for a loan to distribute energy efficient
lamps and Solar PV systems.
 The proposal was a 10 page typed document largely devoted to
technical features, with an arbitrary request for
$200,000 to enable the business to maintain
adequate stocks for consistent availability of products on
the market.
 AREED encouraged the entrepreneur to work electronically
(using the computer/internet), both in terms of business plan
preparation and also communications with the programme
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Gladymanuel Ent. Ltd

Adherence to this advice has had a positive
impact in communications with suppliers,
clients and freight forwarders,
 Leading to cost saving on communications.
(transport, telephone and fax)
 The proposal was prepared from the
perspective of the entrepreneur and did not
reflect issues related to the requirements of
the AREED program
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Gladymanuel Ent. Ltd cont.
 The
proposal was prepared from the
perspective of the entrepreneur and did
not reflect vital indices such as marketing
& financial analysis that are critical for
investment decision
 AREED provided guidance to allow the
entrepreneur to define, segment and
specify the product types that would
allow him to operate profitably.
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Gladymanuel Ent. Ltd cont.
 AREED
guided the entrepreneur
through:
 Preparation & analysis of the pro-forma
financial statements of the business
 Demonstration of the impact of different
assumptions such as the impact of cash
and credit sales on the cash flow
situation of the business etc.
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Gladymanuel Ent. Ltd cont.
 Through a series of dialogues on the current
operations of the company the entrepreneur was able
 to restructure and streamline the activities of the
firm to ensure accountability and efficiency
 In October 2002, a loan of $70,000 was approved to
provide working capital to allow increased inventory
for sale into the market.
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Gladymanuel Ent. Ltd cont.
Description
Fixed assets
Own
contribution
AREED
Other
Total
0
5 016
0
5 016
70 000
11 536
86 849
168 385
Debtors
0
5 697
0
5 697
Bank & cash
0
13 399
0
13 399
70 000
35 648
86 849
192 497
36,4%
18,5%
45,1%
100,0%
Stock
TOTAL
 In 2006, a second stage financing of $50,000 was
approved for the company
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Gladymanuel Ent. Ltd cont.
 Since the AREED investment in 2002, this enterprise has been
growing very fast and has opened distribution points in 8
out of the 10 regions in Ghana
Currently Gladymanuel supplies PV systems to institutions
such as the Ghana Telecom under the eCARE project
 The entrepreneur is meeting business plan projections and is
on schedule with the loan servicing
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Anasset Company Ltd.
 On 11 June, 2002, Anasset approached the
AREED programme for financial support for
sales and distribution of LPG
 The initial proposal submitted to AREED was
very ambitious intending to establish
four (3) LPG refilling plants at the same
time.
 The proposal submitted was basically full of
figures with no consideration for the other
critical elements of the business
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Anasset Company Ltd.
 The entrepreneur was supported to
painstakingly undertake feasibility access
for the business in all the four sites for the
proposed business
 The result was that only two sites were viable
for sitting LPG refilling plants
 Based on the results of the feasibility study, the
entrepreneur was advised to set up only one
refilling plant and also advised to phase the
expansion of the business
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Anasset Company Ltd.
 On the 19th of December, 2002, an mount of US$
38,000 was approved for Anasset
Company Limited.
 AREED support for the business enabled it to
acquire its own bulk storage tank and an
auto dispenser for vehicles that run on LPG.
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Anasset Company Ltd.
 The acquisition of these equipments
translated into an increased margin and
client patronage for Anasset.
 Today, Anasset Company Limited has established
three refilling plants in Accra and Aflao
 And has acquired a license to operate as an LPG
Marketing Company.
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Financing -Anasset Company Ltd.
Financing
Financing Amount – Equity
Financing Amount – Debt
Total Financing
Amount ($)
38,000
38,000
% of Total
100
100
Payment Terms
Grace Period
Term
Interest Rate
6 Months
4 years(16 repayment quarters)
7.5%
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Anasset Company Ltd.
 Today, Anasset Company Limited has established
two other refilling plants in Accra and Aflao
using internally generated resources
 And has acquired a license to operate as an LPG
Marketing Company.
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Anasset Company Ltd.
 In 2007 a second stage financing of
$250,000 was approved for Anasset
for the purchase of stock and haulage
trucks
Anasset has completed servicing the initial
loan of $38,000
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Questions
Thank You
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