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Renewable Energy and Adaptation to Climate Technologies (REACT) Funding Window: Round 3 May 2014
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Renewable Energy and Adaptation to
Climate Technologies (REACT) Funding
Window: Round 3
May 2014
What is the AECF?
The AECF is a fund of donor money available to the private sector on a competitive basis
It 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
Funded by a multi-donor consortium (Dutch, DFID, DANIDA, SIDA, IFAD, CGAP). The donors form the Governing Council of the AECF
Managed by a KPMG led team (the Fund Manager). Y&R is the marketing partner. Triple Line services provides M&E support.
Initial capital was US$36m; now over 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
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
Finding the Right Projects
SCALE
(SOCIAL) IMPACT
VIABILITY
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 East
Africa
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 rural people 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
REACT so far…
In context of overall AECF: – AECF total fund size is US$200 Million
– REACT total size is US$70 million (donor commitments)
REACT R1/R2 (EAC) already complete – 32 companies awarded approximately US$25 million in grants and interest free loans
REACT Mozambique complete – currently bringing 12 companies to contract
“Clusters” of companies: geographic / thematic / technology spreads - with exciting business models to address some of the most pressing challenges facing energy access & adaptation to climate change for low-income consumers
Companies that cross-cut across REACT
thematic areas
REACT R3: LAUNCHING SOON!!!
The competition is funded by the UK Department for
International Development (DFID) and the Swedish
International Development Agency (SIDA) – approx. $20m
funds available (approx. 25 companies)
Substantial portion of funds ring fenced for Tanzania –
would also like to encourage investment in arid and semi–
arid areas / climate adaptation
Companies may be from the EAC or domiciled outside of
the EAC, but all projects must take place in one or more
countries within the EAC.
REACT R3!
Application process goes live by the end of June. Window remains
open for applications for 2 months (min).
Pre window launch period: marketing and outreach activities
1st ISC meeting to determine companies that go to business plan stage
(~ 50) in November/December 2014
2nd ISC meeting for selection of “winning” companies (~ 25) in end
March / early April 2014
REACT R3 cont.
Renewable Energy Adaptation to Climate
Technologies
Financial Services
•Micro solar PV solutions
for households &
businesses that have little
hope of grid access
•Power generation from
agricultural waste, with
excess supplied to local
households or grid
•Drought resistant seeds
•Early weather warning
systems that increase
resilience and reduce
vulnerability
•Small scale irrigation
systems
•Increased access to
finance for renewable
energy & adaptation to
climate technologies eg
through credit guarantees
•Weather insurance for
smallholder farmers
Project Examples
Lighting Africa ILRI 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 mini-
grid
AECF funding US$1,000,000 (US$250,000
grant, US$750,000 loan). Teita Estate
investment US$3,500,000
AECF funding to help with the riskiest
elements of the project: mini-grid
distribution network
6,000 rural households expected to benefit
Similar business models:
Cummins Co-generation (Kenya)
Suma Hydro (Tanzania)
E A Power (hydro) Tanzania
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
AECF funding to help transfer technology,
develop local assembly capacity and build
Tanzanian operations for the business
50,000 rural households and small
businesses expected to benefit
Similar business models:
SODEA SARL (Burundi)
La Terre (Kenya)
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
AECF funding to help establish
manufacturing facilities and penetrate local
charcoal markets
2,000 rural households expected to benefit
Similar business models:
SODEA SARL (Burundi)
Husk Power (Tanzania)
Off-grid Electric - Tanzania New mobile payment and distribution
technology
Helps low income consumers to access
electricity services by using solar home
systems.
Customers pay for service and not to own
the system. They pay by using mobile
money transfers. The technology allows the
systems to be monitored and
connected/disconnected from a distance
AECF funding US$1,100,000 (US$100,000
grant, US$ 1,00,000 loan). OGE
investment US$ 17,169,000
AECF funding to support purchase of new
systems, to expand distribution and sales
100,000 rural households expected to
benefit
Similar business models:
Mobisol (Tanzania), Eight19 and M-
KOPA BBOXX (Kenya)
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 and other trees/crops (Uganda, Kenya)
Biogas: mass produced biogas systems using plastic
MORE INFORMATION ON THE
APPLICATION PROCESS
Eligibility Criteria Same as for all AECF competitions (for profit private
sector; trading track record; implementation in the EAC
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
The competition launches at Stage 1
Stage 1 Stage 2
Likely Selection Criteria for
Stage 1 Criterion Weighting
Capacity of company 20%
Strength of business case 20%
Development impact 35%
Innovation 10%
Environmental sustainability 15%
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
Sample of application process below (S2C for R3)
Visit our website www.aecfafrica.org
General enquiries: [email protected]
REACT Tanzania Advisor: Eliguard Dawson
REACT EAC Advisor: Anjali Saini
