Frank O. Atta-Owusu Snr. Projects Officer, KITE

1. DEVELOPMENT AND ENERGY IN AFRICA: REGIONAL WORKSHIOP 16th-18th October, 2007 The AREED Programme Presented by: Frank O. Atta-Owusu Snr. Projects Officer, KITE 1

2. 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 Start-up financing Gov’t Energy Rural clients Enterprise Energy Services NGOs FIs/Banks AREED Intermediaries

3. 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

4. Results cont. • Providing sustainable energy services to nearly 70,000 Ghanaians • Employs a total of 65 people

5. Results Cont. 5

6. Case Studies • Gladymanuel Enterprise Limited • Anasset Company Limited

7. 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 7

8. 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 8

9. 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. 9

10. 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. 10

11. 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. 11

12. Gladymanuel Ent. Ltd cont. • In 2006, a second stage financing of $50,000 was approved for the company 12

13. 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 13

14. 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 14

15. Anasset Company Ltd. 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 • 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 15

16. 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. 16

17. 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. 17

18. Financing -Anasset Company Ltd. 18

19. 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. 19

20. Anasset Company Ltd. 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 • 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 20

21. Questions

22. ThankYou 22