Anjali SAINI

Renewable Energy and Adaptation to
Climate Technologies (REACT) Mozambique
Window
What is the AECF?
AECF is a fund of donor money available to the private
sector on a competitive basis
AECF is a special partnership initiative of the Alliance for
a Green Revolution in Africa (AGRA). AGRA is chaired
by Koffi Annan and funded by Rockefeller and Bill and
Melinda Gates
AECF is funded by a multi-donor consortium (Dutch,
DFID, DANIDA, SIDA, IFAD, CGAP). The donors form
the Governing Council of the AECF
AECF is managed by a KPMG led team (the Fund
Manager). Other partners include Triple Line Consulting,
and Y&R
Initial capital was US$36m; now US$200m
Aims and Objectives
Goal: accelerate pro-poor growth in Africa – increasing
employment, livelihood opportunities and income and reducing
poverty
Purpose: to make agribusiness, finance, renewable energy and
information market systems work better for the poor in rural areas
in Africa
Result: by improving the way market systems work, we aim to
have a positive impact (jobs and incomes) on large numbers of
people living in rural areas. Development impact.
Modus Operandi: The AECF works by supporting private sector
companies to develop and test new and innovative business
ideas
How the AECF Operates
“Bespoke” competitions to allocate funds to “best bids”
Provides financial support (grants and loans) for innovative
business ideas (using matching fund principles)
AECF “offer”: US$250,000 to US$1.5m mix of grants and
repayable grants. 6 year contracts, M&E.
Focus sectors: Agribusiness, rural financial services, renewable
energy, adaptation to climate change, information and media
services
Geographic: Africa (REACT Mozambique: Mozambique only)
Finding the Right Projects
We seek projects that are commercially motivated
& innovative to get systemic impact
Commercial Motivation: Scale required for
systems impact; scale will only be reached if
business model is (very) profitable
Disruptive Innovation: as a key indicator of
systemic change potential
• Upsetting the market such that others will
copy and replicate – the more innovative
the better
Principle: Start races rather than picking
winners
SCALE
VIABILITY
(SOCIAL)
IMPACT
Innovation and motivation – a starting point for considering
systemic change potential
Motivation
Potential for
systemic change
Businessoriented
Sociallymotivated
Company
Region
Conditions
Springfield Centre | Making
markets work
Field
AECF progress to date
Projects Approved
Business plans
Shortlisted for IC
Concept notes submitted
Registered companies
Performance to date
174
318
703
4456
7701
16 Rounds completed
5 June 2008 to
15 February 2013
What is the AECF REACT Window?
A special funding window for business ideas that are
based on renewable energy and adaptation to
climate technologies
Goal: to contribute to reducing rural poverty in
Mozambique
Objective: to catalyse private sector investment and
innovation in low cost, clean energy and climate
change technologies
Key Strands in REACT:
Increased access to low cost, clean energy for rural businesses &
households
Products and services that help small-holder farmers adapt to
climate change
Financial services that increase access to finance for low cost
clean energy and climate resilient technologies or catalyse
financial solutions
We are keeping broad definitions of the above, to “open the
box” and see what innovations come through
Project Examples
Renewable Energy
Adaptation to Climate
Technologies
Financial Services
•Micro solar PV solutions
for households &
businesses that have little
hope of grid access
•Drought resistant seeds
•Increased access to
finance for renewable
energy & adaptation to
climate technologies eg
through credit guarantees
•Power generation from
agricultural waste, with
excess supplied to local
households or grid
Lighting Africa
•Early weather warning
systems that increase
resilience and reduce
vulnerability
•Small scale irrigation
systems
ILRI
•Weather insurance for
smallholder farmers
ILRI
Simgas - Tanzania
New approach to production,
marketing and distribution of biogas
systems.
Industrial production of plastic biogas
systems; distribution networks similar
to those of water tank distribution
AECF funding US$750,000
(US$562,000 grant, US$188,000 loan)
Simgas investment US$2,488,000
AECF funding to help scale up
production and distribution, build
partnerships with MFIs
10,000 rural households expected to
benefit
Teita Estate - Kenya
Power generation from sisal waste (both
biogas and steam) – approx 10MW
Power for own operations, sales to grid and
distribution to local villages through minigrid
AECF funding US$1,000,000 (US$250,000
grant, US$750,000 loan). M-Kopa
investment US$3,500,000
Similar business models:
AECF funding to help with the riskiest
elements of the project: mini-grid
distribution network
Cummins Co-generation (Kenya)
6,000 rural households expected to benefit
Husk Power - Tanzania
Small-scale power production and
distribution using agri-waste
Gasifiers use rice husk as feedstock to
produce the power, 32 – 250kW in size
Power distribution through mini-grids –
already well established technology in India
AECF funding US$750,000 (US$500,000
grant, US$250,000 loan). Husk Power
investment US$4,120,000
Similar business models:
SODEA SARL (Burundi)
La Terre (Kenya)
Cummins Co-generation (Kenya) – large
scale 10MW
AECF funding to help transfer technology,
develop local assembly capacity and build
Tanzanian operations for the business
100,000 rural households and small
businesses expected to benefit
La Terre - Kenya
(i) Biomass processing zone using rose
waste to create high density briquettes (ii)
manufacture of down-draft biomass
gasification systems. Operations based in
Naivasha, access to 35ton/day flower farm
waste.
AECF funding US$250,000 (US$50,000
grant, US$200,000 loan). LT investment
US$292,000
Similar business models:
SODEA SARL (Burundi)
Husk Power (Tanzania)
AECF funding to help establish
manufacturing facilities and penetrate local
charcoal markets
2,000 rural households expected to benefit
African Power Initiative, Uganda
Biodiesel production in N. Uganda, blending
mandate in Uganda, distribution through
Tamoil / Commercial contracts
AECF funding US$1,123,320 (US$374,440
grant, US$748,880 loan). API investment
US$1,700,000
AECF funding to help establish outgrowers,
expand processing and secure supply
logistics chain
Similar business models:
Biossal (Kenya)
CleanStar Energy (Mozambique) –
RIB II
3,000 rural households expected to benefit
Additional examples
Small hydro: 10MW E A Power (Tanzania)
Power generation from Agri-Wastes / Biomass: 8MW sisal waste
(Kenya); 10MW from prosopsis juliflera (Kenya)
Microfinance: consumer products distribution (solar, cookstoves);
carbon credits (EAC)
Charcoal and firewood substitutes from biomass and agri-wastes
(maize, flower wastes) – Kenya, Rwanda
Supply chain and end user financing for solar and human powered
energy products (Rwanda, Kenya)
Sustainable forestry products and carbon credits (Tanzania, Kenya)
Biofuels from candlenut (Uganda, Kenya)
Biogas: mass produced biogas systems using plastic
How much is available?
The competition is funded by the Royal Netherlands
Embassy in Mozambique – €10m size of fund (approx 10 –
15 projects)
Companies may be from Mozambique or domiciled outside
of Mozambique, but all projects must take place in
Mozambique.
Application process goes live on 18th March, 2013. Window
remains open up to 18th May, 2013
Eligibility Criteria
Same as for all AECF competitions (for profit private
sector; trading track record; implementation in
Mozambique etc);
Applications must be for new and innovative business
ideas
Request range from US$250,000 to US$1.5m,
companies must match the funding requested in cash &
kind
Project must contribute to environmental sustainability,
including climate change aspects
Application Process
Same as for all AECF competitions: online; two stage
process
We are at Stage 1
Stage 1
Stage 2
Selection Criteria for Stage 1
Criterion
Weighting
Capacity of company
20%
Strength of business case
20%
Development impact
35%
Innovation
15%
Environmental sustainability
10%
How much can I apply for?
Applications can be for a mixture of grants / loans
Minimum amount US$250,000 maximum amount
US$1.5m
Remember:
You must at least match the amount requested
We are also looking for leverage – scores a better mark
Applications for a higher % of loan compared to grant –
scores a better mark
How do I apply?
Go to www.aecfafrica.org
Online application process – companies must
register first
Download the guidance notes – essential for
completing application form
Online application form or PDF version
Extra information (attachments etc) will not be read
Visit our website www.aecfafrica.org
General enquiries: [email protected]
REACT Advisor: Anjali Saini
[email protected]