Frank O. Atta-OwusuSnr. Projects Officer, KITE

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DEVELOPMENT AND ENERGY IN AFRICA: REGIONAL WORKSHIOP

16th-18th October, 2007

The AREED Programme

Presented by:

The AREED Model

Training and tools to help entrepreneurs start and develop energy businesses

Enterprise start-up support in areas such as business planning, structuring and financing

Seed capital for early stage enterprise development

Partnerships with banks and NGOs involved in rural energy development

AREED SUPPORT

EnergyStart-up financing

Enterprise

Energy

Services

NGOs

AREED Intermediaries

FIs/Banks

Rural clients

Gov’t

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

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Results Cont. Investment Name Amount (US$) Core Activity

LPG 1 Anasset Enterprise 38,000@7.5% over 4yrs LPG retail/ Marketing Company 2 Translegacy Limited 20,000@5% over 4yrs LPG stove fabrication and retail 3 M38 Ventures 59,000@8% over 4yrs LPG retail 4 RKA Limited 104,080@8% over 4yrs LPG stove manufacturer 5 Lambark Gas 109,946@8% over 4yrs LPG retail and transporter 6 Fee Hi Ventures 33,500@8% over 4yrs LPG retail 7 Bansim Binara Enterprise 46,000@8% over 4yrs LPG retail 8 Abara Gas 102,990@8% over 4yrs LPG retail Energy Efficiency/ Renewable Energy 9 AB Management 122,400@12% over 5yrs Energy efficiency 10 Gladymanuel Limited 120,000@7.5% over 3yrs Energy Efficiency 11 Wilkins Engineering 127,000@8% over 4yrs PV Solar 12 Power World Ltd 77,912@8% over 4yrs Energy Efficiency 13 Toyola Ltd 100,000@8% over 4yrs Energy efficiency (EE stoves) Overall Total 1,060,828

Case Studies

Gladymanuel Enterprise Limited

Anasset Company Limited

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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 communicationswith 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.

In 2006, a second stage financing of $50,000 was approved for the company

Description AREED Own

contribution Other Total

Fixed assets 0 5 016 0 5 016

Stock 70 000 11 536 86 849 168 385

Debtors 0 5 697 0 5 697

Bank & cash 0 13 399 0 13 399

TOTAL 70 000 35 648 86 849 192 497

36,4% 18,5% 45,1% 100,0%

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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

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.

Payment Terms

Grace Period 6 Months

Term 4 years(16 repayment quarters)

Interest Rate 7.5%

Financing Amount ($) % of Total

Financing Amount – Equity Financing Amount – Debt 38,000 100 Total Financing 38,000 100

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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

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

Questions

Questions

ThankThank YouYou

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