AREED

Funder profile

Origin of funds

UNEP, UN Foundation and E & Co.

Goals/aims

AREED provides early-stage funding and enterprise development services to entrepreneurs, helping build successful businesses that supply clean energy technologies and services to rural African customers.

Main form of support

Investment

Typical budget size

50 000 to 120 000 Euro

Support type

Investment

Countries of operation

Botswana, Ghana, Mali, Senegal, Tanzania, Zambia

Main target groups

Entreprenures in developing countries

General conditions

AREED services include training, hands-on business development assistance and, for promising enterprises, early-stage investment and assistance in securing financing.

The AREED initiative also works to broaden the skills of organizations involved in the energy and investment sectors to nurture energy entrepreneurs.

AREED works with African NGOs and development organizations on clean energy enterprise development. This helps prepare them to identify potential energy projects and to provide follow-up business support services to entrepreneurs. Resource tools are also developed and disseminated that focus on business planning, management structuring, and financial planning for the rural energy sector.

AREED works with financial institutions to assess the rural energy business sector and integrate it into their portfolios. This is accomplished through 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 is considering starting or expanding a business to use 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 how collaborate with the AREED project, 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

AREED Enterprise Development Approach

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.

E+Co is a non-profit energy investment company created by the Rockefeller Foundation. With more than 58 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. 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. The 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.

Example projects

LPG Distribution for cooking - Ghana
Charcoal Briquetting - Mali
PV Rural Electrification - Mali
Manufacturing and Distribution of Efficient Cook Stoves - Zambia
Solar Crop Drying - Ghana
Cook stove manufacturer - Zambia
Solar Thermal Company - Senegal

Contact details

Webpage: http://www.areed.org/
Contact:
Email: ...

Sources

This profile, based on initial information contributed by Eco Ltd, was updated within the framework of the Sparknet project supported by the European Commission's Fifth Framework Programme.

Click here for the full list of donor, organisation, and project profiles from Sparknet.

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Page created: 12 March 2004; Last edited: 30 January 2007; Version: 2
Knowledge Bank text is available under the terms of the GNU Free Documentation License.

Pagename: AREED @HEDON: XUAA