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Programme Information
AREED provides early-stage funding and enterprise
development services to entrepreneurs, helping build successful
businesses that supply clean energy technologies and services to to rural
and peri-urban African customers.
AREED services include training and hands-on business development assistance.
For the enterprises that show the best commercial potential, AREED also
provides early-stage investment and assistance to secure additional finance.
The AREED initiative also works to broaden the skills of organizations
involved in the energy and investment sectors to help them nurture energy
entrepreneurs.
AREED works with African NGOs and development organizations,
helping them to identify potential energy projects and provide follow-up
business support services to entrepreneurs. Resource tools are also available
which focus on business planning, management structuring, and financial
planning for the rural energy sector.
AREED also works with financial institutions, helping them to
assess and integrate the rural energy business sector into their portfolios.
AREED provides workshops and specific hands-on tools centered on rural
energy markets and enterprises, appropriate project finance models, financial
analysis and risk management issues. Opportunities for co-financing are
also explored.
If you are an entrepreneur who would like to start or expand a business
using solar, wind, water, biomass or some other sustainable energy technology
to provide energy services in these countries, or if you are an NGO or
financial institution interested in learning more about collaborating
with AREED, please contact
us
What AREED has to offer:
- 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
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AREED Enterprise Development Approach
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AREED applies a particular hands-on form of enterprise development
used by E+Co that is similar to venture capital on a smaller scale
and with social/environmental ends. The approach is best explained
by example. The first AREED support to an energy entrepreneur might
be a modest loan (e.g., $5,000) to support preparation of a business
plan. If this looks promising, a second financing could be arranged
to assist in the company's start-up - this time possibly the purchase
of an equity share in the company.
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E+Co is a non-profit
energy investment company created by the Rockefeller Foundation.
With more than 87 enterprise investments in 27 countries, E+Co has
demonstrated that sustainable and profitable enterprises are an
effective vehicle for expanding the provision of clean energy services
to rural populations.
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Once the business is operating, a working capital loan might be
provided on a cost-sharing basis with the owner(s). In this initial
period, significant in-kind support is provided including an AREED
representative working closely with the company's management. This
support increases the probability that a more "bankable" project
can eventually be presented to financial investors and partners.
Total AREED support to a company typically ranges from $50,000 to
$120,000, although it can reach $250,000. Once other partners are
committed to a new company, AREED's role diminishes. The intervention
is considered successful once AREED experience is no longer needed
and the enterprise has reached sustainability, or is capable of
attracting outside investment.
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