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E+Co Final Report AREED: Africa Rural Energy Enterprise Development Program
April 1, 2000 – December 31, 2004
Prepared by Christine Eibs-Singer

Role of E+Co
  1. Development of Resource Tools
    1. Energy Entrepreneur's Handbook
    2. Renewable Energy Finance Handbook for Financial and Development Professionals
    3. Other Materials
  2. Institutional Development (Including lessons learned)
  3. Provision of Enterprise Support Activities
  4. Engagement of Financial Institutions
List of active and approved investments (as of 12-31-2004)
  1. Ghana
  2. Mali
  3. Senegal
  4. Tanzania
  5. Zambia
Lessons Learned
  1. Entrepreneur selection
  2. The art of pre-investment enterprise development assistance
  3. Enterprise development assistance: A marriage of confidence
  4. Post-investment enterprise development assistance
Monitoring and Evaluation


Background: The Africa Rural Energy Enterprise Development Program, known as AREED, was launched by UNEP early in 2000 with $2.1 million in funding from the United Nations Foundation to invest in the enterprise approach to building a sustainable energy future for the energy poor in countries of West and Southern Africa. The objective of AREED is to develop new sustainable energy enterprises that use clean, efficient, and renewable energy technologies to meet the energy needs of under-served populations, thereby reducing the environmental and health consequences of existing energy use patterns. The AREED approach offers rural energy entrepreneurs a combination of enterprise development services and start-up financing. This integrated financial and technical support allows entrepreneurs to plan and structure their companies in a manner that prepares them for growth and makes eventual investments by mainstream financial partners less risky. To augment the direct delivery of enterprise development services, a capacity building component was included in the program. This focused on increasing the skills and abilities of local organizations to provide enterprise development services, with the goal of integrating such activities within the strategic and programmatic frameworks of these organizations. A policy component was also included to allow a mechanism by which the AREED results could be shared with government and support provided that lays a foundation for increased policy focus on public-private solutions to rural energy needs.

Based on the experience of the first 12 months of implementation, in 2001, UNF approved an additional $2.3 million to strengthen the AREED program, specifically increasing the amount of funds available in the AREED Investment Facility and providing the increased resources necessary for to deliver enterprise development services (EDS) to energy entrepreneurs.

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Role of E+Co: The concept of AREED developed through consultations between E+Co and UNEP’s Energy group within the Division of Technology, Industry and Economics.

E+Co is the pioneer of the enterprise-centered model incorporated as the core of AREED. This approach is a particular hands-on form of enterprise development that is similar to venture capital on a smaller scale and with measurable social/environmental impacts.

E+Co had four specific areas of responsibility in the design and implementation of AREED:
  1. Development of Resource Tools
  2. Institutional Development
  3. Provision of Enterprise Development Services
  4. Manager of the AREED Investment Facility

The first three responsibilities, combined into one Agreement of Cooperation with the UNEP Collaborating Centre on Energy and Environment, Risø National Laboratory (Risø), (reference number 1215074-2) are the subject of this report. The Management of the AREED Investment Facility is covered under a separate Agreement with Risø.

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1. Development of Resource Tools

>>>A. The Energy Entrepreneur's Handbook: E+Co was tasked to take its experience and lessons learned from its work with more than 75 developing country energy enterprises, primarily in Latin America and Asia, and develop a resource tool that would assist entrepreneurs to develop concepts into business plans and subsequently operational entities. Local NGOs and others were to be involved in this activity so that practical experience from other regions is presented in a context appropriate for Africa. This became known as the Energy Entrepreneur Handbook or “Toolkit”.

Initial drafts were prepared in the 2000-2001 period and, based on feedback from peers and participants at training workshops, the AREED toolkit was refined. The final version consists of a set of three modules (fact finding, feasibility analysis and business planning) designed to help the user consider the various aspects of starting a business - ranging from evaluating business objectives through accessing financing to determining the type of insurance needed. These chapters are supplemented with annexes covering technologies, basic concepts of financial analysis, risk assessment, and examples of various energy business models.

Final technical edits, graphic illustrations, and translation work on this toolkit were completed in 2002. The final AREED Toolkit is available online in English (**www.areed.org/training**). The Toolkit has proven to be a valuable enterprise development support tool. It is utilized as a standard working and reference document during all the AREED entrepreneur workshops. A number of major stakeholders have expressed an interest in using it for their own programmes, including the US Government. Through other E+Co program activity, supported by the US Agency for International Development, the Energy Entrepreneur Handbook is also available in Spanish. Through the B-REED and CREED programs, the Toolkit has been adapted and translated into Portuguese and Mandarin Chinese. Through an exchange with the Youth Employment Summit, a copy is also available in Russian.
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>>>B. The Renewable Energy Finance Handbook for Financial and Development Professionals: A second deliverable was the Renewable Energy Finance Handbook for Financial and Development Professionals. This handbook is specifically directed at finance and development professionals and was developed as a companion document to the Toolkit. Its purpose is to introduce finance and development professionals to the business of sustainable energy. This document is available via the AREED website.

>>>C. Other Materials: In addition to these required deliverables, E+Co also developed other resource tools and training materials to assist in the implementation of its Institutional Development responsibilities. This included:

  • AREED Trainers Manual and Training Program, to assist local partners in the implementation of entrepreneur training workshops (Attachment 1)
  • Project Officers Handbook, completed in December 2001, as a guide to local partner staff in the development of enterprise opportunities (Attachment 2);
  • New financial analysis tool (an excel spreadsheet for performing financial analysis of business proposals) first used in the September 2002 training workshop for local partners. The purpose of this tool was to help accelerate the pace and improve the quality of EDS delivery to entrepreneurs.
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Local Partner Capacity Building: The goal of this task was to assist selected NGOs in each of the five AREED countries to develop the capacity to provide enterprise development services (EDS) to market driven energy enterprises. The intent was to strengthen the NGOs over the life of the project, moving from a starting point of entrepreneur identification and market opening and transitioning to direct NGO delivery of EDS to entrepreneurs over the course of project implementation.

E+Co addressed this responsibility in two ways:

  1. Learning by Doing: E+Co Investment Officers (IO) worked on a one-on-one basis with specific staff of the local partners, referred to as a Project Officer (PO). Through joint meetings and continuing electronic communications, enterprise prospects would be assessed, comments shared with the entrepreneurs, business plans developed, finances analyzed. In essence, working together, the IO would lead the PO through the enterprise development, EDS, investment recommendation preparation process.
  2. PO Training Programs: Training programs were originally implemented on a country-by-country basis (institutional strengthening workshops in Zambia and Mali in October 2001). Given some of the similarities in the challenges being faced among the five AREED partners, beginning in February 2002, PO’s from all partners joined together for EDS training workshops. Workshops were also held in September 2002 and March 2003, (Attachment 3). A fourth PO training workshop, that was to focus on continuing post-investment EDS and the hand-off, was scheduled for September 2003. However, given the turnover level in Project Officers, this program was not implemented.
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Results: There are many lessons learned in the design and implementation of the AREED Institutional Development activities targeted to local partners, including:

  1. Building EDS activities in country—Getting the relationship right. Mainstreaming the AREED EDS activities into the organizational functions of the NGO partners requires first establishing a relationship of mutual trust, equality and respect, and making allowance for differences in cultural outlook. Thus, EDS capacity-building is a long-term process. The structure of AREED, as a four-year program, provided the beginnings of a foundation to develop EDS capacity and fully integrate it into the organizations operations and funding base. A longer-term horizon is necessary to achieve fuller capacity building.
  2. The PO workshops resulted in a marked improvement in the overall quality of proposals in the pipeline.
  3. Country partners are a major key to success; however, it’s important not to try and turn an organization into something that it isn’t. In this vein, country partners such as community development organizations and commercially oriented financial institutions need to take roles that are in tune with each organization’s capabilities and orientation. A mismatch between the development orientation of several NGOs and the commercial orientation called for by the REED approach
  4. Internal communications and knowledge exchange amongst partners has not been consistent and transparent, with weaknesses here within all partners, including E+Co.
  5. Despite continuing guidance and oversight, the “learning by doing” approach did not always produce results efficiently. This has been compounded by high rates of Project Officer (PO) turnover. There was a sense of duplication of effort; it was a time-consuming and expensive approach to service delivery. This contributed to some of the communication problems, as at times, E+Co staff felt it was just easier to “go it alone”.
  6. Following the Partners meeting in January 2004 (Accra), E+Co prepared and distributed an “Investment Process Self-Assessment” to enable Partner organizations to communicate on the areas they felt they continued to need improvement (Attachment 4). The results were to guide the relationship between E+Co and the partners for EDS delivery to entrepreneurs. Unfortunately, there was very uneven response to this, which prevented a clear statement of responsibilities and roles.
  7. In E+Co’s opinion, there has been an uneven level of capacity building among the local partners. Some of the organizations have embraced the energy enterprise centered approach and actively engage in pipeline development, enterprise development and investment preparation at both the PO and organizational management level; some of the partners are hampered by ineffective and inadequate staff capacity at the PO level; some partners are making significant contributions to energy enterprise development in certain phases of the process, rather than through the whole process as originally envisioned.
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3. Enterprise Support Activities

This responsibility constituted the majority of E+Co’s focus and efforts over the project period.

    1. Work with NGOs in providing EDS to entrepreneurs. Deliverables: 250-300 entrepreneurs trained; enterprise opportunities with productive uses identified; EDS to 50-75 selected entrepreneurs; 25-40 selected entrepreneurs assisted with feasibility/business plans.

During the project period, E+Co assisted the local partners in developing and presenting 18 entrepreneur training workshops, which were attended by 312 participants. At year-end 2004, 29 enterprises were receiving EDS services from E+Co and the local partners, and the AREED Investment Committee had approved investments in 22 investments (Attachment 5), for a total of 51 enterprises receiving assistance in the development of business plans. Of the investments approved and currently receiving EDS for business plan development, 10 contain productive use/income generating applications.
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4. Engage Financial Institutions

In short, the goal of this responsibility was to engage local and regional financial institutions (FIs) in the financing of clean energy enterprises, specifically securing finance from 3-5 FIs in AREED investee companies.

At the beginning of the AREED program, during each of the market opening workshops in country, the AREED team met with representatives of the local financial institutions to introduce them to AREED and its objectives. This was followed by seminars in Ghana and Mali in February 2001, with a follow-up FI seminar in Ghana in November 2002. One-on-one meetings were held with FIs in the remaining AREED countries.

As a result of these meetings and workshops, it became evident that in order to truly engage local FIs, there must be specific businesses that are ready to be presented to them. This means that AREED has a “bankable” business plan, experience and records that are ready for investment.

In 2001, AREED advanced discussions with two banks under the first scenario – Credit Mutuel of Senegal and Kafo-Jiginew in Mali. In both situations the banks are active in the rural areas of the country and have as a priority strategies to support poverty alleviation and income generation. Both of the businesses AREED was considering funding were PV companies that wanted to offer solar home systems for credit. The AREED intervention was to determine what was necessary for the two banks to develop a credit facility whereby the banks would offer credit to the consumers and the PV companies would then install and maintain the systems. Due to the riskiness associated with renewable energy and rural households ability to pay, AREED was prepared to supply a guarantee to the banks for up to 50% of the credits offered during the first year. If successful, meaning customers do not default, the banks would then continue without the guarantee in the future. Unfortunately, despite significant EDS, both of these enterprises subsequently did not meet AREED due diligence analysis and investment criteria.

Along the same lines as just described, AREED did achieve success with another bank in Mali, Banque de Developpement du Mali (BDM). AREED worked with a local company, Eco'Home, which is an existing business selling CFL products since February 2003. There is a market opportunity for these products as a result of the high cost of electricity in Mali and the low level of income among the majority of the population. The business sells its products to hardware shops located in Bamako and other regions of Mali. Due to the high level of market acceptance, the business wanted to scale up its offer by purchasing more stocks, and therefore needed financing to purchase inventory and to implement marketing activities. The AREED financing was in the form of a 100% bank guarantee (~$135,000) so that the local bank (BDM) would then open a line of credit for Eco’Home. While relatively straightforward in design, this transaction was complicated in execution. Approved by the respective Investment committees in August 2004, the funds were not disbursed until March 2005 as a result of complications and delays in the development and execution of the guarantee mechanism.

In summary, the established targets for enterprise co-financing by FIs have remained largely unrealized. AREED partners have observed that the majority of enterprises are not yet mature enough to attract co-financing/2nd stage investment by mainstream financial institutions – that their balance sheets, risk profiles, collateral options and size were just not in line with the investment criteria of these FIs. In two instances, AREED has made a second “growth” capital investment into companies that it had placed seed capital (Gladymanual, Ghana; Mona-Mwanza, Tanzania) because even after that experience, these companies could not meet the FI requirements.
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  • Gladymanuel: Energy Efficient lighting; $70,000 loan in 2002; $50,000 loan in 2004; accounts are current.
  • AB Management: Energy Efficiency Company, focused on power factor correction; $120,000 loan in 2001; account is current.
  • Anasset: LPG distributor; $38,000 loan in 2003; account is current
  • Translegacy: LPG stove manufacturer; $20,000 loan in 2003; account is current.
  • Lambark: LPG distributor; $109,945 loan in 2004; account is one-month in arrears.
  • M-38: Woman entrepreneur; LPG distributor; $58,000 loan in 2004; account is current.
  • Fee Hi Ventures: LPG distributor; $33,500 loan in 2004; account is four-months in arrears.

Mali: (all loans in local currency)
  • USISS: Solar drying of fruits and meats; $19,665 loan in 2002; account is current.
  • Sodigaz: LPG importer and distributor; $183,088 loan in 2003; account is current.
  • Eco’Home: Energy Efficiency products; $112,782 approved in 2004; dispersed March 2005

Senegal: (all loans in local currency)

  • VEV: Wind water pumping installation and maintenance; $22,393 loan in 2002; payments are 11 months in arrears.
  • AME: solar water heating installation and maintenance; $41,563 loan in 2001; loan was fully repaid in January 2005.
  • ProSoleil: solar water heating manufacturer; $24,063 loan in 2004; loan is one month in arrears.
  • Foyers Ameliorés; manufacturer of fuel-efficient stoves; approved in August 2004; $22,384 disbursed in 2005.
  • Motagrisol: manufacturer of solar grinding machines; $117,551 approved in December 2004.
  • Energie R: manufacture of electronics for solar photovoltaic; $37,233 loan approved in December 2004.


  • BETL: Fuel substitution with biomass; $50,000 loan in 2003; account is current.
  • Mona Mwanza: solar PV distributor; $100,000 loan, $50,000 of AREED funds, in 2004; account is current.


  • RCI: Jatropha fuel oil production; $8,430 loan in 2003; recently restructured; account in arrears.
  • TSADC: Solar Bakeries; $20,000 loan in 2003, $10,000 of AREED funds; recently restructured; account in arrears.

Despite the formal ending of this contract at year end 2004, both E+Co and the local partners have continued to reach out to prospective entrepreneurs and plans continue for training workshops, provision of EDS by the partners, via the SIDA program and E+Co, at its own expense and in expectation of closing the BMZ-KfW facility.[1]. At year-end, approximately 50 enterprises are in the pipeline of the local partners.
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Significant lessons were derived from this experience, across all levels of interaction with the entrepreneurs. These include the following [2]:

Entrepreneur Selection

  1. A good entrepreneur is one who is willing to invest “hurt” money and time to turn a viable core idea into a successful enterprise. Such an entrepreneur is less likely to walk away when the going gets tough. Early in the relationship with the entrepreneur, persuade the entrepreneur to invest as mobilize as much “hurt” resources as possible.
  2. Develop a keen ability to quickly assess the willingness of an entrepreneur to co-operate in the enterprise development process. Non co-operative entrepreneurs do not qualify for assistance - full stop!
  3. A non co-operative entrepreneur during the Business Plan and Due Diligence phase is almost invariably non co-operative and difficult to work with during the implementation phase.
  4. Do not waste time with “entrepreneurs” who persistently view their proposal as being “too confidential” to be circulated in the form of a business plan.
  5. Beware of “entrepreneurs” that travel the “cocktail circuit”.
  6. Be extra careful when dealing with a business proposal requiring skills that are drastically outside the promoter’s area of expertise. This is often the case if the promoter intends to make a dramatic switch from his/her background and/or field of expertise.
  7. From experience, the following attempts usually don’t work:
    • Trying to turn a grant-funded programme or project into a business. Approach such proposals with extra caution.
    • Struggling to make a good entrepreneur out of a grant programme worker, or government employee. View them with extra caution.
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The Art of Pre-investment Enterprise Development Assistance

  1. How much enterprise development assistance to provide, and how strict the “handholding” should be, must match the entrepreneur’s experience, business track record and performance.
  2. In assisting with business planning and due diligence, 70% - 80% of effort must focus on understanding the market and developing a marketing strategy.
  3. Ensure that an effective communication channel exists with the entrepreneur before commencing business development assistance. Good communications must be maintained throughout the duration of the enterprise development work (pre and post investment).
  4. In developing the business plan, the entrepreneur and Project/Investment Officer must share a common understanding about what is achievable and how to make it work. They must work as a team that’s on the same page.
  5. Make every effort to get the entrepreneur committed to an agreed implementation plan and a written business plan; beware of an entrepreneur who treats the business plan simply as a device to keep the financier happy and extract financing.
  6. Ensure that cash flow is sufficient for implementation and start up time, as well as for any eventualities. A general formula: add at least 3 months to the projected period between start-up and first sales.
  7. Cash flow must be based on conservative sales estimates not unrealistic figures.
  8. Keep in mind that problems with financial projections are not limited to sales. Always scale down the estimated gross profit (even if well motivated or operating in a controlled environment such as petrol). Also, increase operating costs and add a healthy “unforeseen costs” item.
  9. Cash flow projections tend to forget non-core items (typically in first 2 – 3 months), the omission of which can negatively impact implementation in the start-up phase. Some common items include:
    • Deposit for electricity
    • Telephone connection
    • Rent deposit
    • Legal costs
    • License fees
    • High cost of initial stationery
    • Hiring of personnel
    • Computer software and LAN
    • Signage
  10. Due Diligence is effective if it ensures that monies requested are indeed required. Nevertheless, avoid falling into a situation where due diligence deprives the venture of critical funds required to ensure a sufficiently capitalized start-up.
  11. Business development assistance enhances the overall effectiveness of the entrepreneurs’ business structuring and start-up decisions.
  12. Business development assistance works best if you add value while going through each step as a partner.
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Enterprise Development Assistance: A Marriage of Confidence

  1. Work only with those you want to work with. Enterprise development assistance entails a 3 to 5 year “marriage” that has everything against it. Choose the right partner. At the same time, do not let personal preferences cloud your judgment. The “right partner” is a good business partner, though he/she might not be your next best buddy.
  2. As much as possible, avoid delays in delivering enterprise development assistance. Wasting time puts the entrepreneur under unnecessary stress bordering on torture. Be prepared to take calculated risks and move on with the investment, or say an early “no.”
  3. In helping to structure a management for the enterprise, a basic rule to keep in mind: The set of management skills must be representative of all essential business functions.
  4. Funds should not be disbursed as long as the entrepreneur fails to close a gap between the management structure and business operations (see points 32 – 37 for more lessons directly related to fund management).
  5. Key questions to ask about collateral: Does it mean something? Can it be turned into money to make up for a part or total loss?
  6. A general procedure for evaluation collateral: Determine the actual value, then scale it down to a forced sale scenario. To do this, be sure to understand the difference and application of the following 4 values:
    • Cost price
    • Market value
    • Replacement value
    • Forced sale value
  7. Work towards a fair sharing/splitting of risks with the entrepreneur.
  8. Ensure that reliable management accounting procedures are in place. This is the single biggest problem in the SME development environment. Ensure, whatever it takes, that the systems, procedures and infrastructure are in place before the doors open. As a general rule: if you are not confident that the management accounting procedure will function properly, do not recommend approval of the investment.
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Post-investment Enterprise Development Assistance

  1. Post-investment “hand-holding” is often required to ensure implementation proceeds according to the agreed plan.
  2. The ‘right’ person to assist the entrepreneur with post-investment or implementation problems should be the financier’s operations person. In AREED, this is either the Project Officer or the Investment Officer.
  3. Agree to a regular and reliable reporting schedule with the entrepreneur.
  4. Do not allow the entrepreneur to deviate from the implementation and business plan without prior discussion and agreement on what needs to be done.
  5. Follow implementation of an approved investment on a daily/weekly basis during start-up. The frequency can be reduced to a monthly or quarterly basis during the rest of the loan or investment term.
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E+Co actively supported the AREED investee companies during the program period, and continues to do so, at its own expense. At the end of the reporting period, AREED had 16 active investments and five investments that had been written-off. In addition, four investments had been approved by the AREED Investment Committee, but not yet disbursed.

Prior to the write-off of these five investments, E+Co staff worked closely with the entrepreneurs to attempt to rectify the situation.

  • RASMA, Zambia: in March of 2003 E+Co and local partner CEEEZ worked with the entrepreneur in an attempt to rectify a serious marketing problem. A terms of reference for a new marketing manager was agreed on; AREED provided a $2509 loan to assist the company in implementing an agreed-to marketing plan to increase the exposure and reach of the company. Despite this, the company was unable to meet its business plan projections. E+Co acted on the shareholders agreement and claimed ownership of the company truck, which was sold for US$3000.
  • Ubwato, Zambia: in mid-2003, it became evident that this company was significantly under performing. Through investigation, E+Co learned that the entrepreneur was engaged in other commercial and business activities and had left Ubwato basically on its own with no management. Numerous efforts to track down the entrepreneur finally succeeded. Per US accounting procedures, the loan was written-off. However, acting on the loan agreement, E+Co continues to seek repayment and thus far has received repayment of one-third of the principal.
  • KBPS, Zambia: in March 2003, the KBPS facility in Ndola was a highlight of the AREED Partners meeting. However, approximately 5 months later, through its follow-up, E+Co discovered that the truck, purchased with the proceeds of the AREED loan, had been used for non-KBPS related business transactions (a violation of the agreement) and had been in an accident, rendering it un-drivable. Without transport, the business died as there was no way to ship the charcoal to buyers. The entrepreneur became unreachable. Lawyers were engaged, with no success. The only asset available to claim was the truck. In May 2005, E+Co reached an agreement to sell the truck to the auto repair shop where it has been residing since the accident for ~$10,000.
  • Chavuma, Zambia: this enterprise was also the subject of visits and good impressions from the March 2003 AREED partners meeting. However, over the course of the next year, difficulties arose in the ability of the company to collect payment for installations and due to the fact that some orders received were not appropriately processed within the buying companies. This left the company in a dire financial position. Efforts were made to assist the company in marketing. Two AREED loans were provided, for a total of $62,800. The first loan, $22,300, has been written off. Efforts are still underway to receive payment on the outstanding loan of $40,500.
  • Bagani, Mali: a motorbike was financed as part of the investment. A few months transpired between disbursement of the funds and follow-up by E+Co on the implementation status. By that time, 11,000km had been put on the motorbike and a whole season of jatropha collection was missed, resulting in inadequate fuel supply. The entrepreneur lost his commitment. On behalf of E+Co, the local partner, Mali FolkCenter, repossessed the equipment. It was as a result of this investment that E+Co began requiring “implementation plans” with entrepreneurs, and incorporated immediate and regular follow-up after disbursement.

For each of the AREED investments, E+Co has completed at minimum of one Monitoring and Evaluation (M&E) reports. The timely completion of M&E reports has been a challenge for the E+Co Africa staff, which has undergone two major staffing changes over the course of the project period. However, the data that has been received is presented in the Triple Bottom Line Report, (Attachment 6). It should be noted that four AREED enterprises are included in the November 2004 report on “Social and Environmental Impacts of ‘Clean Energy’ Enterprise Development”, prepared by independent consultants for UNEP as part of its proposal to the GEF to establish a clean energy enterprise development facility comprising a number of seed and patient capital support mechanisms and corresponding enterprise development services. In addition, in December 2004 E+Co received a contract from UNDP to undertake an independent and critical evaluation of three models and approaches for energy enterprise development: on grid-hydropower, off-grid photovoltaic systems and fuel substitution. Included in this study were two AREED investments in Tanzania (Attachment 7).
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E+Co’s responsibility was to identify potential AREED co-financing partners and facilitate, as appropriate, the development of funding proposals, with a goal of securing additional grant or low-cost funding, targeting US$250,000-500,000 of third party co-financing during the project period. As detailed below, ~$1,045,000 was secured with direct benefit to energy enterprise development in the five AREED countries.

Results were produced on a number of fronts:

  • In 2002, a partnership agreement was signed with the Development Bank of South Africa whereby for $40,000 to support capacity development activities within the programme, including training workshops and one on one enterprise development activities.
  • E+Co provided $85,000 of co-investment to three AREED investee companies. E+Co sourced this financing through a loan from The Body Shop.
  • The AREED Investee company entrepreneurs invested $486,000 in their companies alongside the AREED investment capital.
  • IN 2000, E+Co secured a contract from USAID to implement programs and activities to facilitate financing for renewable energy enterprises. This program was designed around the training of energy entrepreneurs, the provision of EDS and the engagement of local financial institutions, all leading to the creation of sustainable renewable energy enterprises. Initially, this program focused exclusively on Central America, and thus was called FENERCA, (Spanish acronym for “Financing RE in Central America”). In 2003, at the request of USAID, E+Co expanded FENERCA into Zambia, followed in 2004 by expansion into Ghana and Tanzania. For these three AREED countries, USAID provided ~$425,000 of support for E+Co staff, travel and workshop expenses. This program ended in April 2005.
  • In 2001, E+Co was successful in receiving a contract from the US Department of Energy (DOE) that included resources for energy enterprise development in Tanzania. The DOE program was a technical assistance project to facilitate the deployment of clean energy services in South Africa, Tanzania, and Ethiopia. E+Co, in partnership with US renewable energy equipment suppliers, trained entrepreneurs in business planning and technical applications, contributed to local partner capacity building, and offered individualized enterprise development services to catalyze the creation of renewable energy enterprises. Approximately $34,000 of the $102,000, multi-year program was allocated to Tanzania.

In addition to the above results that directly impact AREED, in June 2004, at the International Renewable Energy Conference in Bonn, E+Co signed a Memorandum of Understanding with the German Federal Ministry for Economic Cooperation and Development (BMZ) and the KfW Bankengruppe (KfW) for the implementation of a “Public Private Partnership for Sustainable Energy in Sub-Sahara Africa”, which will make EUR 2,000,000 available for a first phase of a partnership for investments in and services to small and medium energy enterprises in Sub-Sahara Africa. On hand for the signing ceremony were two Ghanaian entrepreneurs who benefited from services and investment from AREED.
There is a direct link of this program with AREED, as the intent of BMZ is to build on the AREED/E+Co experience and track record. While it is not a direct contribution to AREED, it is directly related to energy enterprise development in Africa and the investment capital will be available for appropriate transactions developed by the local AREED partners.

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Attachment 10 contains the final budget report for the resources managed by E+Co under this contract. The total contract amount was $1,703,460. A summary of the use of funds follows:

Payment to five local AREED Partner Organizations

E+Co US Labour

E+Co Local Labour

Travel/other exp E+Co US

Travel/other exp E+Co Local


E+Co’s auditor, Lutz and Carr, will submit the required audit certificate on the full program directly to Risø.

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  1. AREED Trainers Manual and Training Program (Program Agenda)
  2. Project Officers Handbook (Table of Contents)
  3. Project Officer Training Workshop Reports
  4. Local Partner: Investment Process Self-Assessment
  5. AREED Investment Facility Report, through 31 December 2004
  6. Triple Bottom Line Report, as of Oct 2004
  7. “Business Models within The E+Co Portfolio”, report prepared for UNDP (not yet cleared for public distribution).
  8. AREED Proposal to the USAID Global Development Alliance, April 2003
  9. E+Co Presentation to UN Global Compact, June 2002
  10. AREED Final Financial Report

In June 2003, at the International Renewable Energy Conference in Bonn, E+Co, BMZ and KfW executed an MOU whereby BMZ/KfW committed to an Euro 8 Million program for energy enterprise development in Africa. The finalization of this commitment and disbursement of funds has not yet been realized, although BMZ has confirmed as late as 17 May 2005 its commitment and fund availability.
Covering the 2000-2003 period, this list was compiled by UNEP based on input from E+Co and the local partners.