Energy Kazakhstan Our sponsors:

1. Energy+KazakhstanOur sponsors: Greetings everyone. We are pleased to present to you our idea of transforming life in the steppes of Kazakhstan. Greetings everyone. We are pleased to present to you our idea of transforming life in the steppes of Kazakhstan.

2. 2 Kazakhstan Kazakhstan is a huge country that covers a territory equivalent to the whole of Western Europe. Kazakhstan has vast mineral resources and enormous economic potential. The two main contributors to the Kazakhstan economy are oil&gas and agriculture. However, modern life still borders with traditional way of living.Kazakhstan is a huge country that covers a territory equivalent to the whole of Western Europe. Kazakhstan has vast mineral resources and enormous economic potential. The two main contributors to the Kazakhstan economy are oil&gas and agriculture. However, modern life still borders with traditional way of living.

3. 3 Problem About half of Kazakhstan's population is made up of ethnic Kazakhs. Many families still lead a semi-nomadic lifestyle. They move with their cattle from wintering areas to rich summer pastures. Livestock is a primary source of food and income for nomad families. Their herds provide food such as meat and dairy products, wool and leather. About half of Kazakhstan's population is made up of ethnic Kazakhs. Many families still lead a semi-nomadic lifestyle. They move with their cattle from wintering areas to rich summer pastures. Livestock is a primary source of food and income for nomad families. Their herds provide food such as meat and dairy products, wool and leather.

4. 4 Solution Portable Our key target market is sheepherders that live in remote areas without any access to electricity.Our key target market is sheepherders that live in remote areas without any access to electricity.

5. 5 Target Market 7,500 families of sheepherders in Karaganda region live in remote areas without access to electricity use generators powered by gasoline that predominantly used for heating Our key target market is sheepherders that live in remote areas without any access to electricity.Our key target market is sheepherders that live in remote areas without any access to electricity.

6. 6 Needs, Applications, Benefits We believe that Energy+ will bring significant benefits to our target market. Quality of life. First of all, a low-cost solution of clean energy generation on a site will improve living and working conditions of local sheepherders, their families, and seasonal workers. According to energy experts, 2.5kWh produced by the wind turbine is enough to cover everyday need in electricity for one family (TV, refrigerator, lightning in the dwelling and cattle barns.) Communication tower. As some settlements are located within the radius of 100 kilometres from the closest village, the wind turbine may also serve as a communication tower for emergency situations. Fresh water. The access to natural sources of fresh water is limited due to long distances and droughts. Having a water tank on site is costly. A majority of sheepherders use a manual water pump for their wells. The wind turbine can be easily used for water pumping. Technical support. Negligence and misuse of equipment are common when end-users, with no technical skills, are left to install and operate the new equipment on their own. Therefore, we provide free technical service for a period of 2 years. A team of trained technicians will regularly visit installation sites for diagnostics and ongoing maintenance of equipment. Savings. Due to the fact that wind energy generation does not require fuel as conventional electricity generators, sheepherders will be able to save around $16,000 over 5 years..We believe that Energy+ will bring significant benefits to our target market. Quality of life. First of all, a low-cost solution of clean energy generation on a site will improve living and working conditions of local sheepherders, their families, and seasonal workers. According to energy experts, 2.5kWh produced by the wind turbine is enough to cover everyday need in electricity for one family (TV, refrigerator, lightning in the dwelling and cattle barns.) Communication tower. As some settlements are located within the radius of 100 kilometres from the closest village, the wind turbine may also serve as a communication tower for emergency situations. Fresh water. The access to natural sources of fresh water is limited due to long distances and droughts. Having a water tank on site is costly. A majority of sheepherders use a manual water pump for their wells. The wind turbine can be easily used for water pumping. Technical support. Negligence and misuse of equipment are common when end-users, with no technical skills, are left to install and operate the new equipment on their own. Therefore, we provide free technical service for a period of 2 years. A team of trained technicians will regularly visit installation sites for diagnostics and ongoing maintenance of equipment. Savings. Due to the fact that wind energy generation does not require fuel as conventional electricity generators, sheepherders will be able to save around $16,000 over 5 years..

7. 7 Needs, Applications, Benefits Additional Income. Access to electricity and refrigeration will allow families to generate additional income by selling dairy products, such as butter, curd, buttermilk, and cottage cheese into the local market. Also, access to electricity will give sheepherders an opportunity to power their electric shears on site. They can even act as a shearing station for neighbouring farms. Additional Income. Access to electricity and refrigeration will allow families to generate additional income by selling dairy products, such as butter, curd, buttermilk, and cottage cheese into the local market. Also, access to electricity will give sheepherders an opportunity to power their electric shears on site. They can even act as a shearing station for neighbouring farms.

8. 8 Needs, Applications, Benefits Additional Income. Access to electricity and refrigeration will allow families to generate additional income by selling dairy products, such as butter, curd, buttermilk, and cottage cheese into the local market. Also, access to electricity will give sheepherders an opportunity to power their electric shears on site. They can even act as a shearing station for neighbouring farms. Additional Income. Access to electricity and refrigeration will allow families to generate additional income by selling dairy products, such as butter, curd, buttermilk, and cottage cheese into the local market. Also, access to electricity will give sheepherders an opportunity to power their electric shears on site. They can even act as a shearing station for neighbouring farms.

9. 9 Total Social Benefit We calculated that on average a family can generate around $43,000 in additional income and savings over 5 years.We calculated that on average a family can generate around $43,000 in additional income and savings over 5 years.

10. 10 Cost Over Useful Life If compared to conventional electricity generators that are powered by gasoline, the wind turbine is priced higher. However, the total cost over useful life of the wind turbine is much lower. If compared to conventional electricity generators that are powered by gasoline, the wind turbine is priced higher. However, the total cost over useful life of the wind turbine is much lower.

11. 11 The wind turbine under consideration is an open source technology, which was designed by the Scottish engineer Hugh Piggott specifically for developing countries. This design has been successfully implemented by blueEnergy in Nicaragua and in other places. The original design of the wind turbine will be modified to fit the local environment and account for availability of local materials. The key modification will be a collapsible design to make the turbine mobile for nomads. Reliability. Simplicity of the design makes the turbine reliable. There are no electronics to tamper with and no parts that require a regular care. Rated wind speed is another factor that gives Energy+ an advantage over competing wind power technologies. The wind turbine under consideration is an open source technology, which was designed by the Scottish engineer Hugh Piggott specifically for developing countries. This design has been successfully implemented by blueEnergy in Nicaragua and in other places. The original design of the wind turbine will be modified to fit the local environment and account for availability of local materials. The key modification will be a collapsible design to make the turbine mobile for nomads. Reliability. Simplicity of the design makes the turbine reliable. There are no electronics to tamper with and no parts that require a regular care. Rated wind speed is another factor that gives Energy+ an advantage over competing wind power technologies.

12. 12 Product Cont�



15. 15 Rated Wind Speed Comparison The wind speed of 5 meter per second is enough for our turbine to generate 2.5 kWh a day, whereas the competing technologies require much higher wind speed. The wind speed of 5 meter per second is enough for our turbine to generate 2.5 kWh a day, whereas the competing technologies require much higher wind speed.

16. 16 Needs, Applications, Benefits Additional Income. Access to electricity and refrigeration will allow families to generate additional income by selling dairy products, such as butter, curd, buttermilk, and cottage cheese into the local market. Also, access to electricity will give sheepherders an opportunity to power their electric shears on site. They can even act as a shearing station for neighbouring farms. Additional Income. Access to electricity and refrigeration will allow families to generate additional income by selling dairy products, such as butter, curd, buttermilk, and cottage cheese into the local market. Also, access to electricity will give sheepherders an opportunity to power their electric shears on site. They can even act as a shearing station for neighbouring farms.

17. 17 Non-Cash Payment The primary means of exchange with sheepherders will be sheep, which would be further sold into meat distribution networks locally. We expect to exchange one wind turbine for approximately 26 sheep, with the average weight of one sheep of 30 kilograms. The primary means of exchange with sheepherders will be sheep, which would be further sold into meat distribution networks locally. We expect to exchange one wind turbine for approximately 26 sheep, with the average weight of one sheep of 30 kilograms.

18. 18 Business Model The key characteristic of our business model is an exchange transaction between Energy+ and sheep herders. Energy+ will maintain one stream of revenue. It will reflect cash inflow received for both wind turbine sale and sheep resale. We have additional cash inflow in forms of subsidies from the Global Environmental Fund of the United Nations Development Program for at least first three years of operation. UNDP will subsidize 50% of the turbine cost. It will allow us to reduce the selling price to sheepherders. We have virtually no physical infrastructure of our own. Production is outsourced to our manufacturing partner, who uses local materials and local labor.The key characteristic of our business model is an exchange transaction between Energy+ and sheep herders. Energy+ will maintain one stream of revenue. It will reflect cash inflow received for both wind turbine sale and sheep resale. We have additional cash inflow in forms of subsidies from the Global Environmental Fund of the United Nations Development Program for at least first three years of operation. UNDP will subsidize 50% of the turbine cost. It will allow us to reduce the selling price to sheepherders. We have virtually no physical infrastructure of our own. Production is outsourced to our manufacturing partner, who uses local materials and local labor.

19. 19 Sales By Year 3, Energy+ will gain enough capacity to grow revenue from sheepherders. It will result in our financial sustainability without subsidies and grants. We have also made a sensitivity analysis to show the impact of changes in key factors on the projected Net Income. By Year 3, Energy+ will gain enough capacity to grow revenue from sheepherders. It will result in our financial sustainability without subsidies and grants. We have also made a sensitivity analysis to show the impact of changes in key factors on the projected Net Income.

20. 20 As related to wind power generation, the market has a number of strong driving forces. The strongest driver is the willingness of local administrations to develop a wind power generation capacity. We have been working on this project with the local administration of Karaganda region. It gives us more credibility in promoting wind turbines to sheepherders. The key restraining factor is low awareness about benefits of wind energy generation among end-users. As related to wind power generation, the market has a number of strong driving forces. The strongest driver is the willingness of local administrations to develop a wind power generation capacity. We have been working on this project with the local administration of Karaganda region. It gives us more credibility in promoting wind turbines to sheepherders. The key restraining factor is low awareness about benefits of wind energy generation among end-users.

21. 21 Marketing Strategy Objective The key objective of our promotional campaign is to build trust towards the wind turbine technology and the company itself. The renewable energy market is relatively new. The majority of potential buyers do not know about advantages of electricity generation from wind. We believe that we can build initial trust towards technology by installing demonstration models at cafes, petrol stations, shearing stations, water-pumping stations and local markets. Free trials will allow end-users to try out wind power generation on their sites without any risks of investing money. Educational and information campaign is the key in creating awareness among end-users. We have already started working with the local administration of the Karaganda region on developing demonstration and educational campaigns for local sheepherders.The key objective of our promotional campaign is to build trust towards the wind turbine technology and the company itself. The renewable energy market is relatively new. The majority of potential buyers do not know about advantages of electricity generation from wind. We believe that we can build initial trust towards technology by installing demonstration models at cafes, petrol stations, shearing stations, water-pumping stations and local markets. Free trials will allow end-users to try out wind power generation on their sites without any risks of investing money. Educational and information campaign is the key in creating awareness among end-users. We have already started working with the local administration of the Karaganda region on developing demonstration and educational campaigns for local sheepherders.

22. 22 Promotional Campaign The key objective of our promotional campaign is to build trust towards the wind turbine technology and the company itself. The renewable energy market is relatively new. The majority of potential buyers do not know about advantages of electricity generation from wind. We believe that we can build initial trust towards technology by installing demonstration models at cafes, petrol stations, shearing stations, water-pumping stations and local markets. Free trials will allow end-users to try out wind power generation on their sites without any risks of investing money. Educational and information campaign is the key in creating awareness among end-users. We have already started working with the local administration of the Karaganda region on developing demonstration and educational campaigns for local sheepherders.The key objective of our promotional campaign is to build trust towards the wind turbine technology and the company itself. The renewable energy market is relatively new. The majority of potential buyers do not know about advantages of electricity generation from wind. We believe that we can build initial trust towards technology by installing demonstration models at cafes, petrol stations, shearing stations, water-pumping stations and local markets. Free trials will allow end-users to try out wind power generation on their sites without any risks of investing money. Educational and information campaign is the key in creating awareness among end-users. We have already started working with the local administration of the Karaganda region on developing demonstration and educational campaigns for local sheepherders.



25. 25 Current Status Preliminary survey conducted; Registered non-profit company; Pilot project to start end of March 2007: Translated manual into Russian; Found a machine shop; Priced materials, tools and equipment; UNDP proposal pre-approved; Started working with local administration and our manufacturing partner. We are planning to expand in other regions of Kazakhstan which have a good wind potential at lower heights. Our further product modifications will include a solar panel. We are also planning to expand into new segments such as ecotourism sites, military workers, and frontier guards. If we are successful with low cost wind generation project in Kazakhstan, we can transfer our expertise in building local energy generation capacity to other countries with similar needs. We are planning to expand in other regions of Kazakhstan which have a good wind potential at lower heights. Our further product modifications will include a solar panel. We are also planning to expand into new segments such as ecotourism sites, military workers, and frontier guards. If we are successful with low cost wind generation project in Kazakhstan, we can transfer our expertise in building local energy generation capacity to other countries with similar needs.

26. 26 Expansion Plan Geographic expansion; Product modification; New segments; Rest of the world. We are planning to expand in other regions of Kazakhstan which have a good wind potential at lower heights. Our further product modifications will include a solar panel. We are also planning to expand into new segments such as ecotourism sites, military workers, and frontier guards. If we are successful with low cost wind generation project in Kazakhstan, we can transfer our expertise in building local energy generation capacity to other countries with similar needs. We are planning to expand in other regions of Kazakhstan which have a good wind potential at lower heights. Our further product modifications will include a solar panel. We are also planning to expand into new segments such as ecotourism sites, military workers, and frontier guards. If we are successful with low cost wind generation project in Kazakhstan, we can transfer our expertise in building local energy generation capacity to other countries with similar needs.

27. 27 Thank You

28. 28 Two Businesses in One Market is not developed No notion of personal selling, marketing, delivery and customer service as we know it Business is based on relationship and contacts It adds credibility to sales people when they know all facets of sheep herding Living and working conditions Needs in electricity Slaughtering seasons Sheep sale to markets Sales people only deliver sheep to wholesalers For installation, there are two sales people traveling to settlements We are planning to expand in other regions of Kazakhstan which have a good wind potential at lower heights. Our further product modifications will include a solar panel. We are also planning to expand into new segments such as ecotourism sites, military workers, and frontier guards. If we are successful with low cost wind generation project in Kazakhstan, we can transfer our expertise in building local energy generation capacity to other countries with similar needs. We are planning to expand in other regions of Kazakhstan which have a good wind potential at lower heights. Our further product modifications will include a solar panel. We are also planning to expand into new segments such as ecotourism sites, military workers, and frontier guards. If we are successful with low cost wind generation project in Kazakhstan, we can transfer our expertise in building local energy generation capacity to other countries with similar needs.

29. 29 Open Source Technology

30. 30 Why Not Financing Option We want to have a clean transaction to avoid the risk of uncollectible accounts Financing option would increase transportation cost for Energy+ and sheepherders themselves Sheepherders do not have alternative investment opportunities Sheepherders can afford to sell up to 50 sheep in a single transaction We are planning to expand in other regions of Kazakhstan which have a good wind potential at lower heights. Our further product modifications will include a solar panel. We are also planning to expand into new segments such as ecotourism sites, military workers, and frontier guards. If we are successful with low cost wind generation project in Kazakhstan, we can transfer our expertise in building local energy generation capacity to other countries with similar needs. We are planning to expand in other regions of Kazakhstan which have a good wind potential at lower heights. Our further product modifications will include a solar panel. We are also planning to expand into new segments such as ecotourism sites, military workers, and frontier guards. If we are successful with low cost wind generation project in Kazakhstan, we can transfer our expertise in building local energy generation capacity to other countries with similar needs.

31. 31 Cost Over Useful Life Savings. Our key competition is conventional electricity generators fuelled by gasoline. The most popular companies supplying Kazakhstan with such electricity generators are Yamaha (Japan), �Staber� (Russia) and some Chinese producers. Prices for these conventional sources of energy are much lower than for wind turbines, but their cost over useful life is very high due to fuel consumption. For example, a conventional unit will have a cost 14,345 USD over its useful life, whereas the Energy+ cost over its useful life is 1,650 USD, which includes maintenance and two replacement batteries. Energy+ is planning to make a special effort in explaining economics to end-users, as there is an irrational and incorrect perception of the value of money among locals. We calculated that one sheepherder�s household could save around 16,000 USD over the product�s lifetime. Savings. Our key competition is conventional electricity generators fuelled by gasoline. The most popular companies supplying Kazakhstan with such electricity generators are Yamaha (Japan), �Staber� (Russia) and some Chinese producers. Prices for these conventional sources of energy are much lower than for wind turbines, but their cost over useful life is very high due to fuel consumption. For example, a conventional unit will have a cost 14,345 USD over its useful life, whereas the Energy+ cost over its useful life is 1,650 USD, which includes maintenance and two replacement batteries. Energy+ is planning to make a special effort in explaining economics to end-users, as there is an irrational and incorrect perception of the value of money among locals. We calculated that one sheepherder�s household could save around 16,000 USD over the product�s lifetime.

32. 32 Risks Action plan Risks and Action Plan Negligence Negligence and failed equipment are common issues for outright sales of new technologies when end-users, with no technical skills and knowledge of the equipment, are left to install, operate and maintain new equipment on their own. Energy+ will have to provide support services and maintain tight control over its equipment to ensure its proper operation in order to create initial trust among sheepherders towards the new technology. Negligence Negligence and failed equipment are common issues for outright sales of new technologies when end-users, with no technical skills and knowledge of the equipment, are left to install, operate and maintain new equipment on their own. Energy+ will have to provide support services and maintain tight control over its equipment to ensure its proper operation in order to create initial trust among sheepherders towards the new technology.

33. 33 Sensitivity



36. 36 Lamb Meat Market Trends Most meat exported Deficit of meat supply locally Growing demand due to return of national traditions to slaughter a sheep for family and religious holidays Growing prices for lamb meat due to increasing prices for feed and inflation rate of 10%

37. 37 Energy+ has a strong team, which includes professionals with a wide variety of expertise and skills. The two founders of the venture are professional engineers. They will be supervising Research and Development and production. A team of three students from the Bang College of Business is responsible for marketing research and business planning. Our support group includes a designer of the technology from Scotland and managers of blueEnergy in Central America among others. With this, I would like to finish our presentation. We would be happy to answer any of your questions.Energy+ has a strong team, which includes professionals with a wide variety of expertise and skills. The two founders of the venture are professional engineers. They will be supervising Research and Development and production. A team of three students from the Bang College of Business is responsible for marketing research and business planning. Our support group includes a designer of the technology from Scotland and managers of blueEnergy in Central America among others. With this, I would like to finish our presentation. We would be happy to answer any of your questions.

38. 38 Manufacturing Partner Selection criteria Reliability Commitment to wind technology History of joint projects with founders of Energy+ Technical skills One of the oldest electro-mechanical plants in the region Experience in producing wind technology Current installations Management skills Ability to work in teams on small and medium size projects Organization of production and scheduling skills Flexibility Capacity can be added modularly Contract Anti-damping law Cost of marketing

39. 39 Technical Sales Personnel Hired locally Sales person, technician and installer in one Requirements include: Own vehicle (a light truck or a pickup) Basic knowledge of electro-mechanics Knowledge of sheep-growing sector Familiar with lamb meet distribution network Experience of working with local authorities Willingness to travel Good people�s skills Training provided: Knowledge of E+ technology and its advantages over competing technologies Installation skills Troubleshooting and ongoing maintenance Customer care

40. 40 Generation of great volumes of electric power from wind � 100 times higher than modern electricity consumption; At the height of 10 meters wind power is 4,000kWh/m2; More than 10 regions with average wind speed 8-10m/s; Chilikski Corridor and Dzungarian Gates � wind power capacity 17,000kWh/m2 Wind Potential

41. 41 Wind Map of Kazakhstan

42. 42 Target Market Sheepherders Live in remote areas No access to electricity Average number of sheep: 1000 per flock Typical family size: 5 people 10 including seasonal workers Travel with their livestock Our key target market is sheepherders that live in remote areas without any access to electricity.Our key target market is sheepherders that live in remote areas without any access to electricity.

43. 43 Additional Social Benefits there are some additional benefits that are hard to measure light bulbs, fridge light in barns communication tower, radio-set this is not a technologically superior wind turbine as the initial design was based on needs of underserved communities in developing countries little training needed through workshops and seminars use of local materials, developing local knowledge base and local know-how, project run locally through adapting the wind turbine to the local environment through cooperation between students of business and technical disciplines towers of the wind turbine will be used for measuring annual wind potential and creating a wind map of the region there are some additional benefits that are hard to measure light bulbs, fridge light in barns communication tower, radio-set this is not a technologically superior wind turbine as the initial design was based on needs of underserved communities in developing countries little training needed through workshops and seminars use of local materials, developing local knowledge base and local know-how, project run locally through adapting the wind turbine to the local environment through cooperation between students of business and technical disciplines towers of the wind turbine will be used for measuring annual wind potential and creating a wind map of the region

44. 44 Social Return on Investment Our Social Return on Investment is around 30. It means that for every dollar we spend on this project we get USD 30 back in social benefits. Our Social Return on Investment is around 30. It means that for every dollar we spend on this project we get USD 30 back in social benefits.

45. 45 Implementation Plan

46. 46 Financial Snapshot Main assumptions for financial projections: No sales on credit; Growing demand; Constantly growing economy without any major recession or boom Access to capital and financing sufficient to maintain our financial plans Energy+�s sales will grow from $75,000 in Year 1 to $594,000 in Year 5 due to the increased revenue from sheep herders. Transportation, salaries and R&D expenses are major expenses that will grow over time. We do not intend to take any profits out of the venture. Profits remain after the �investment debt� payments will be used to finance growth, through the investing in R&D and expansion NPV is calculated at $57,074. Payback period is 3.18 years. IRR is calculated at 38.95%. Break-even point in sales is $150,000, or 60 units We anticipate our capital need to be $119,473 in Year 1, which will be financed from Global Environmental Fund grant of $50,000 and our operating profitMain assumptions for financial projections: No sales on credit; Growing demand; Constantly growing economy without any major recession or boom Access to capital and financing sufficient to maintain our financial plans Energy+�s sales will grow from $75,000 in Year 1 to $594,000 in Year 5 due to the increased revenue from sheep herders. Transportation, salaries and R&D expenses are major expenses that will grow over time. We do not intend to take any profits out of the venture. Profits remain after the �investment debt� payments will be used to finance growth, through the investing in R&D and expansion NPV is calculated at $57,074. Payback period is 3.18 years. IRR is calculated at 38.95%. Break-even point in sales is $150,000, or 60 units We anticipate our capital need to be $119,473 in Year 1, which will be financed from Global Environmental Fund grant of $50,000 and our operating profit

47. 47 Expenses Technician salaries Management salariesTechnician salaries Management salaries

48. 48 Capital Use

49. 49 Management Team

50. 50 Market Size To estimate the size of our market, we developed screening criteria. Our potential market is around 7,500 sheepherders� settlements in the Karaganda region alone. To estimate the size of our market, we developed screening criteria. Our potential market is around 7,500 sheepherders� settlements in the Karaganda region alone.

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Energy Kazakhstan Our sponsors:

Energy Kazakhstan Our sponsors:

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