Opportunities in Sustainable Finance Workshop. Nairobi, August 23 rd, 2016

Transcription

1 Opportunities in Sustainable Finance Workshop Nairobi, August 23 rd, 2016 Organizer Partners

2 Opportunities in Sustainable Finance Workshop Nairobi, August 23 rd, 2016 Organizer Partners

3 Finance Workshop Welcome by Organizers and Keynote Addresses > David Rehahn Treasurer at the German Business Association Kenya (GBA) and Head of Healthcare & Scientific Division at Achelis Group > Joyce Njogu Head of Kenya Association of Manufacturers (KAM) Consulting > Denis Dressel Country Portfolio Manager at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Michael Derus Chargé d Affaires and Head of Economic Affairs of the Embassy of the Federal Republic of Germany in Kenya Organizer Partners Tuesday, August 23 rd, 2016

4 Finance Workshop Welcome by Organizers and Keynote Addresses > David Rehahn Treasurer at the German Business Association Kenya (GBA) and Head of Healthcare & Scientific Division at Achelis Group > Joyce Njogu Head of Kenya Association of Manufacturers (KAM) Consulting > Denis Dressel Country Portfolio Manager at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Michael Derus Chargé d Affaires and Head of Economic Affairs of the Embassy of the Federal Republic of Germany in Kenya Organizer Partners Tuesday, August 23 rd, 2016

5 Finance Workshop Welcome by Organizers and Keynote Addresses > David Rehahn Treasurer at the German Business Association Kenya (GBA) and Head of Healthcare & Scientific Division at Achelis Group > Joyce Njogu Head of Kenya Association of Manufacturers (KAM) Consulting > Denis Dressel Country Portfolio Manager at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Michael Derus Chargé d Affaires and Head of Economic Affairs of the Embassy of the Federal Republic of Germany in Kenya Organizer Partners Tuesday, August 23 rd, 2016

6 Finance Workshop Welcome by Organizers and Keynote Addresses > David Rehahn Treasurer at the German Business Association Kenya (GBA) and Head of Healthcare & Scientific Division at Achelis Group > Joyce Njogu Head of Kenya Association of Manufacturers (KAM) Consulting > Denis Dressel Country Portfolio Manager at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Michael Derus Chargé d Affaires and Head of Economic Affairs of the Embassy of the Federal Republic of Germany in Kenya Organizer Partners Tuesday, August 23 rd, 2016

7 Finance Workshop Welcome by Organizers and Keynote Addresses > David Rehahn Treasurer at the German Business Association Kenya (GBA) and Head of Healthcare & Scientific Division at Achelis Group > Joyce Njogu Head of Kenya Association of Manufacturers (KAM) Consulting > Denis Dressel Country Portfolio Manager at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Michael Derus Chargé d Affaires and Head of Economic Affairs of the Embassy of the Federal Republic of Germany in Kenya Organizer Partners Tuesday, August 23 rd, 2016

8 Finance Workshop 08:30-09:30 Session 1: GIZ and developpp.de Financing > Dorothea Kilb Project Manager developpp.de for Kenya at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Haijo Kuper Managing Director at Solinc East Africa Ltd. (former Ubbink) > Pierre Telep Advisor at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Marah Köberle Deputy Country Director at the Delegation of German Industry and Commerce in Kenya (AHK Kenya) Organizer Partners Tuesday, August 23 rd, 2016

9 Finance Workshop 08:30-09:30 Session 1: GIZ and developpp.de Financing > Dorothea Kilb Project Manager developpp.de for Kenya at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Haijo Kuper Managing Director at Solinc East Africa Ltd. (former Ubbink) > Pierre Telep Advisor at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Marah Köberle Deputy Country Director at the Delegation of German Industry and Commerce in Kenya (AHK Kenya) Organizer Partners Tuesday, August 23 rd, 2016

10 Development Partnerships with the Private Sector Private Sector Cooperation Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Dolly Kilb, , Kenya Page 10

11 Agenda 1) About GIZ 2) Development Partnerships with Rationale for cooperation the Private Sector 3) developpp.de Background and Method 4) Project examples Page 11

12 About GIZ Page 12

13 The GIZ is a federally owned corporation operating worldwide in the area of international cooperation for sustainable development. works on behalf of the Federal Government as well as other public and private, national and international clients. promotes complex reforms and processes of change in different sectors such as: Sustainable economic development, energy, transport, infrastructure management, health, environment, climate and biodiversity. The objective is to sustainably improve the living conditions and prospects for people in developing and transition countries Page 13

14 GIZ worldwide In 2015: More than 130 countries More than employees; nationals More than EUR 2 billion business volume GIZ Head Office, Eschborn, Germany GIZ Berlin, Germany GIZ Bonn, Germany GIZ Brussels, Belgium GIZ offices GIZ offices in German Development Cooperation Houses Page 14

15 Agenda 1) About GIZ 2) Development Partnerships with Rationale for cooperation the Private Sector 3) developpp.de Background and Method 4) Project examples Page 15

16 Development Partnerships with the Private Sector Page 16

17 What are Development Partnerships? Development Partnerships are partnerships between development agencies and the private sector on equal terms. aim to connect business management and development policy. minimize potential risks for both sides. Creation of win-win situations for companies and development cooperation. Common goals can be achieved faster and more sustainable Page 17

18 The Idea of Development Partnerships Private Sector objectives Development Partnerships Development Cooperation objectives Creation of growth opportunities, linkages and benefits for European businesses and local partners Piloting processes and technologies with potential to scale-up & replicate developpp.de as enabler and as innovative approach for sustainable development solutions Multi-stakeholder approach Above-average structural impact on the ground Page 18

19 GIZ s Partnerships with the Private Sector Page 19

20 Agenda 1) About GIZ 2) Development Partnerships with Rationale for cooperation the Private Sector 3) developpp.de Background and Method 4) Project examples Page 20

21 developpp.de Background and Method Page 21

22 What does developpp.de stand for? The developpp.de programme was initiated by the Federal Ministry for Economic Cooperation and Development (BMZ) and stands for cooperation between the private sector and development cooperation. In development partnerships (DPPs) companies and development organisations jointly plan, finance and implement projects. The implementing development organisations are GIZ, DEG and sequa. The innovativeness of businesses combined with the resources, knowledge and experience of development cooperation creates synergy effects Page 22

23 Leverage developpp.de, ( 09/2015) Total volume of EUR 429 million Public Funds 37,4% Private Funds* 62,6% *third-party contributions included Page 23

24 The GIZ developpp.de programme Development Partnerships Private partner Term German and European companies Max. 3 years Contribution Ideas Competitions Up to EUR 200,000 public share GIZ 50% Strategic Alliances At least EUR 750,000 total volume GIZ 50% Acquisition Through ideas competitions (deadline for each quarter end) Active acquisition (any time no deadline) Page 24

25 General criteria Compliance: Every Development Partnership has to comply with the development-policy principles of the German Government. Complementarity: Public and private contributions must be mutually complementary, i.e. cooperation must enable both partners to achieve their objectives more cost-efficiently, effectively and swiftly. Subsidiarity: Public support for the partnership measure is only given if the private partner would not otherwise implement the project and if the project is not a legal necessity. Competitive neutrality: The measure must not distort competition Page 25

26 General criteria Private sector's own contribution: The company has to make a substantial contribution to the measure that can be assessed in monetary terms. Commercial Interest: The company needs to have a clearly discernible commercial interest in the project. Exclusively charitable projects, however, cannot be supported within the scope of developpp.de. Sustainability: The developpp.de-project needs to be fundamentally embedded in a sustainable commitment of the company in the developing or emerging country. Special emphasis should be put on sustainability exceeding the project life cycle Page 26

27 Key facts at a glance - Ideas Competitions Participants German and European companies and their subsidiaries Financial support Up to 50% of costs (to a maximum of EUR 200,000) from BMZ funds Eligibility criteria Annual turnover of company must be over EUR 1 million Company must have more than ten employees Company must have been active in the market for at least three years Involvement in the partner country must be on a long-term basis Application Companies can submit project proposals as part of the quarterly ideas competition All information and documentation is available at Page 27

28 Key facts at a glance - Strategic Alliances Participants German and European companies and their subsidiaries Financial support Up to 50% of costs of total volume of the project (at least EUR 750,000) Qualitative criteria Above-average significance and beacon character Application Multi-stakeholder approach High level of innovation Potential for replication/ best practices Integration of meso- and macro-level stakeholders and aboveaverage structure-building and sustainable results Broad-based effectiveness and positive results for large sections of poor or disadvantaged population Links to bilateral TC priority area in at least one partner country Active acquisition, i.e. no deadline Page 28

29 Conditions of a Development Partnership The GIZ does not offer subsidies for companies core business export promotion stand-alone feasibility and market studies venture-capital measures low-interest loans implementation of activities that are legally obligatory for companies Page 29

30 What is the contribution of the partners? Private company GIZ Private investments Local employment and income Transfer of technology Entrepreneurial interest as the basis for sustainability of the projects Integrity, credibility and trust in the partner country Country-specific, sectoral and intercultural know-how Networks and contacts with governments, government agencies and NGOs Project planning & management as well as local infrastructure Financial and human involvement Page 30

31 Development Partnerships with the Private Sector by sector, (09/ 2015) 762 developpp.de projects (GIZ) with a total volume of EUR 429 million Water 8% Other 5% Education 4% Energy 7% Environnment 15% Health 10% Transport/ Communication 2% Agriculture 17% Sustainable economic development 32% Page 31

32 Development Partnerships with the Private Sector by regions, (09/2015) 762 developpp.de projects (GIZ) with a total volume of EUR 429 million Middle East, Maghreb 9% Central Asia/ Russia 4% Supra-regional 4% Sub- Saharan Africa/Africa 27% Eastern Europe 9% Latin America 19% Asia 28% Page 32

33 Agenda 1) About GIZ 2) Development Partnerships with Rationale for cooperation the Private Sector 3) developpp.de Background and Method 4) Project examples Page 33

34 Finance Workshop 08:30-09:30 Session 1: GIZ and developpp.de Financing > Dorothea Kilb Project Manager developpp.de for Kenya at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Haijo Kuper Managing Director at Solinc East Africa Ltd. (former Ubbink) > Pierre Telep Advisor at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Marah Köberle Deputy Country Director at the Delegation of German Industry and Commerce in Kenya (AHK Kenya) Organizer Partners Tuesday, August 23 rd, 2016

35 Kenya Solar Home Systems (SHS) for Kenyan households in rural and peri-urban areas Solinc (former Ubbink East Africa Ltd.) 04/ /2016 Volume: Public: Challenge The Kenyan Rural Electrification Authority has set itself the target of providing the country s entire rural population with electricity by 2030 Demand can be increased through improving quality products with service follow-up Often, the people cannot afford such solutions so micro-financing is to be put in place Approach To build a sustainable local value chain for solar home systems, and to develop the market for them in Kenya Impact Over 300 entrepreneurs have been trained on sales of solar home systems (SHS). Over 9,000 new households have access to electricity; 80 per cent of them have achieved this by taking a micro-credit. Several service and repair centers have been set-up across Kenya to be close to Page 35

36 Kenya PPP GIZ Solinc Experiences Knowledgeable about solar market Structured approach with reporting & feedback moments Opens network to other parties active in solar market Challenges Market support is non-branded as the German government wants to be impartial Find common ground where you want to develop something together Procurement process Page 36

37 Finance Workshop 08:30-09:30 Session 1: GIZ and developpp.de Financing > Dorothea Kilb Project Manager developpp.de for Kenya at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Haijo Kuper Managing Director at Solinc East Africa Ltd. (former Ubbink) > Pierre Telep Advisor at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Marah Köberle Deputy Country Director at the Delegation of German Industry and Commerce in Kenya (AHK Kenya) Organizer Partners Tuesday, August 23 rd, 2016

38 Kenya Solar Energy Service by Mini-Grids in Africa (SESMA) TRAMA TECNOAMBIENTAL S.L. (TTA) 06/ /2018 Volume: Public: Challenge Current electricity access rate in Kenya: 49% (target 100% by 2020) Grid extension is often highly costly and not feasible in far remote isolated rural areas Approach TTA will install a Multi user Solar-hybrid mini-grid (MSG), which will supply a community in in Marsaabit County with standard electricity A smart energy management system and prepaid metering based on the innovative EDA (Energy Daily Allowance) concept will be installed Local community and small and medium-sized enterprises (SMEs) will be involved through sensitisation and training in energy usage Intended Impacts Electricity availability as an output of the constructed solar plant in the project region is higher than 98% At least people in one community confirm that they have access to electricity 75% of the total connected customers (targeting 50% women, 50% men) confirm their satisfaction with access to electricity services Page 38

39 Contact Dolly Kilb Project Manager Kenya, Cameroon, Central African Republic, Gabun, SaoTomé and Principe, Tschad Group Private Sector Cooperation Division Economic and Social Development Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH T: +49 (0) F: +49 (0) Internet: and Page 39

40 Thank you for your attention! Page 40

41 Finance Workshop 08:30-09:30 Session 1: GIZ and developpp.de Financing > Dorothea Kilb Project Manager developpp.de for Kenya at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Haijo Kuper Managing Director at Solinc East Africa Ltd. (former Ubbink) > Pierre Telep Advisor at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH > Marah Köberle Deputy Country Director at the Delegation of German Industry and Commerce in Kenya (AHK Kenya) Organizer Partners Tuesday, August 23 rd, 2016

42 The Lab of Tomorrow Challenges meet Business Driven Solutions Marah Köberle, AHK Kenya

43 23th August 2016 Marah Köberle

44 23th August 2016 Marah Köberle

45 DESIGN THINKING Understand Observe Ideate Prototype Test 23th August 2016 Marah Köberle

46 UNDERSTAND AND OBSERVE 23th August 2016 Marah Köberle

47 IDEATE 23th August 2016 Marah Köberle

48 PROTOTYPE AND TEST 23th August 2016 Marah Köberle

49 RESULTS 2 developpp projects between German companies and Zambian Revenue Authority Partnership with MERCK to improve access to health in Kenya About 50 companies currently involved in implementation process Scoping Studies and testing and upscaling of business solutions in progress 23th August 2016 Marah Köberle

50 EXAMPLES 23th August 2016 Marah Köberle

51 CONTACTS The lab of tomorrow is run by GIZ on behalf of Germany s Federal Ministry for Economic Cooperation and Development. Contact at AHK Kenya Marah Köberle Deputy Country Director marah.koeberle@kenya-ahk.co.ke 23th August 2016 Marah Köberle

52 Finance Workshop 09:30-10:30 Session 2: German Development Finance Bank and CIM (Returning) Experts Program > Andreas Grenacher Regional Director East Africa of the German Development Bank KfW DEG > Jelle Pentinga Project Manager at the German Development Bank KfW DEG Organizer Partners Tuesday, August 23 rd, 2016

53 DEG: We finance opportunities. DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbh Financing and business solutions for the private sector Andreas Grenacher, Regional Director East Africa Jelle Pentinga, BSS & Upscaling

54 Content DEG at a glance Who we are DEG activities in East Africa DEG Our offering Appendix

55 DEG Facts and Figures 2015 Founded 1962 Employees 526 Headquarters Shareholder New business Portfolio Cologne KfW, Frankfurt EUR 1.1 billion EUR 8.0 billion Equity EUR 2.3 billion Balance sheet total EUR 5.8 billion KfW Ownership Federal Republic of Germany (80%) and the federal states (20%) Rating AAA/Aaa, 3rd largest bank in Germany Balance sheet 503 billion Global Finance Magazine s Ranking: World's Safest Bank 2015

56 Part of a strong group DEG, a subsidiary of KfW Domestic Promotion We promote Germany We ensure internationalisation International Financing We promote development Business area Mittelstandsbank Promotion of SMEs, business start-ups Business area Privatkundenbank Promotion construction of new housing and modernisation as well as education Business area Kommunalbank Financing of municipal infrastructure projects and global loans Germany/Europe Agency Business for the Federal Government KfW IPEX-Bank International project and export finance Business area KfW Development Bank Developing and emerging-market countries: Public sector promotion DEG Developing and emerging-market countries: Private sector promotion Promotion of environmental and climate protection

57 DEG s Offices 14 offices worldwide, headquartered in Germany/Cologne Cologne Moscow Istanbul Beijing Mexico City New Delhi Bangkok Lima Accra Nairobi Singapore Jakarta São Paulo Johannesburg

58 New commitments 2015 by sector Financing for investments across all economic sectors Services 25 million euros (2%) Agribusiness and food industry 78 million euros (7%) Financial sector 413 million euros (39%) Total of EUR 1.1bn Manufacturing industry 294 million euros (28%) Infrastructure 255 million euros (24%)

59 Content DEG at a glance Who we are DEG activities in East Africa DEG Our offering Appendix

60 DEG s Commitment in East Africa Sectors and products Key financial figures Breakdown by product USD 600m commitments across 50 projects Financial sector: banks and insurance companies Project Finance / Infrastructure: Energy IPPs, Transportation Corporates: Horticulture and floriculture, food processing, Construction, Mineral resources, Regional Private equity funds All instruments: Senior Loans, Mezzanine/Hybrid Financing, Equity Additional Business Support Services, Upscaling, developpp 50% 50% Risk Capital 29% Breakdown by industry 20% 2% 49% Financial Sector / PE Funds Infrastructure Manufacturing Industries and Services

61 Project Examples Selekta Klemm Kenya, Kenya The challenge Expand the production capacities to supply the German holding company Selecta Klemm Build stable relationship with European companies Long term loan allowing to buy new machinery and equipment and strengthen the financial structure of Selecta Kenya The solution Contribution of a long term loan DEG provides a long term loan of EUR 3m to expand investments in Africa BSS measures in renewable energies and female workers peer-to-peer health education Securing of 1,025 existing and creation of 100 new local jobs Staff retention through benefits such as free medical treatment, meals, transport of staff and free HIVcounselling Value Added by DEG

62 Project Examples Kevian juice production, Kenya The challenge Expand the food processing facilities for growth in the local market and the export market Implement high quality standards The solution Long term loan allowing quality P&E investments Financing of the expansion project of a local juice producer DEG contributed a long term loan of USD 7.5m DEG measures on Resource Efficiency and ERP New German machinery increasing the output and introducing the production of concentrates (for the export) First DFI loan to Kevian Value Added by DEG In preparation: support to improve the supply chain with local small farmers

63 Project Examples Olkaria III power plant, Kenya The challenge Severe electricity shortage in Kenya High import bills for HFO and diesel The solution Experienced partners in renewable energies Long term PPA with the national distribution firm Financing of a 48 MW geothermal power plant DEG as lead arranger for a long term loan of USD 105m DEG contributed USD 40m EmeaFinance: Sustainable Project Award 2009 Long term loan (10 y) allowing a supple amortization of the heavy upfront investment Value Added by DEG Mandate for the DFI long term loan Knowledge transfer concerning social and environmental standards Pilot role for future power projects in the region

64 Content DEG at a glance Who we are DEG activities in East Africa DEG Our offering Appendix

65 DEG s Service: Financing + What we offer Financing: Long-term and in hard currency Provider of long-term capital for private companies Debt: Usually > 4 years up to 15 years (USD and EUR) Equity & Mezzanine FYI: Local banks typically provide only KSH loans with high interest and tenors up to 5 yrs only FYI: Risk capital important to facilitate growth but difficult to access from local banks/funds One dedicated BSS specialist in Nairobi (plus team in Cologne) to: Value add services: Business Support Services (BSS) Facilitate access to finance by improving bankability (i.e. development of financial model) Secure sustainable growth by mitigating risks (i.e. improve governance, E&S management) Stimulate performance by improving cost & turnover (i.e. energy efficiency, trainings) Advisory / Network Providing market intelligence and support with market entry and/or expansion plans + +

66 DEG s Scope of Support Broad range of solutions depending on clients needs Increasing financial commitment by DEG Corporate Finance / Project Finance Upscaling developpp (BMZ) SME facilities & SME Funds Direct: Single projects with European angle and development effect (up to EUR 200k) Indirect: Via partner banks and/or SME funds Direct: Single companies (up to EUR 500k) Direct: Single companies (up to EUR 100m for syndicated transactions) DEG financing solution Depending on Increasing size of business Increasing profitability Increasing financial needs

67 Financing Specifics Debt Size: Syndications up to USD 100m Tenor: Project finance up to 18 years Focus on industries with hard currency income Instruments: Senior debt, subordinated debt DEG financing max. 35% of total assets Sponsor s equity min. 35% of total assets Standard covenants: - DSCR - Equity Ratio - Interest Coverage Ratio - Debt-to-EBITDA Ratio Equity & Mezzanine Size: up to USD 30m DEG Role: significant minority (10-30%), joint control, strong information rights Sectors: sectors with growth linked to economic development, preferably traditional sectors Risk: moderate, later stage, no rescues Instruments: equity, mezzanine Transactions: prefer growth over buyout, alignment of interest, 5 7 year exit horizon, multiple & reasonable exit options, minority protection rights, risk/return balance

68 DEG's financing offer Broad spectrum of instruments Loans Guaranteed loan Locally secured loan Subordinated loan Quasi-equity loan Equity Hedged equity participation Risk participation Risk-taking by DEG

69 BSS, DeveloPPP and Upscaling Overview and criteria BSS: Business Support Services To support companies to enhance their sustainability - with respect to environmental & social as well as commercial best practices. Who: How: Funds: DEG Financing clients Grant; up to 50% co-financing, with max 200,000 EUR, for a project of 2-3 years. From DEG and BMZ DeveloPPP.de To support companies that invest in developing and emerging countries and are seeking ways to shape their corporate commitment in the long term. Who: How: Funds: Upscaling German / European companies or companies with European shareholding Grant; up to 50% co-financing, with max 200,000 EUR, for a project of 2-3 years. From BMZ To support SMEs that intend to scale up innovative business models with high developmental impact. Who: markets How: Funds: Early-stage SMEs in developing Repayable Grant: 500,000 EUR Grant needs to be matched. Pay back within 5 years, if successful. From DEG

70 APPENDIX

71 Operating in a network European Development Finance Institutions (EDFI) DEG, one of the leading European development financiers, is one of 15 members of the European Development Finance Institutions (EDFI), based in Brussels. The benefits Larger financing volumes Shared risks Harmonised standards Efficient, joint due diligence Structuring of complex finance Further strong partners, such as IFC and regional development banks

72 DEG is your partner beyond financing BSS To address our customers specific needs, DEG via its Business Support Services (BSS) offers non-repayable cofinancing for projects that help companies to enhance their sustainability - with respect to environmental & social as well as commercial best practices. Our BSS team offers conceptual and financial assistance to prospective and existing customers. It connects companies with external experts to implement tailor-made advisory solutions and helps customers to design coherent development projects. DEG s BSS can support projects that: help to make our customers projects bankable and/or support our customers growth, risk management or performance and/or have a significant development / sustainability impact The related costs can be co-funded up to 50% (DEG-contribution max. EUR 193,000) for a project duration of up to 2 years. Facilitate access to finance by improving bankability Support for the development of a business plan or financial model Support for the creation of transparent group structures / intercompany relations Capacity building for meeting specific lender or investor requirements Possible areas for BSS: Secure sustainable growth by mitigating risks Improvement of compliance, corporate governance structures, internal control processes Improvement of financial management & controlling, organizational structure & processes Support for the design & selection of software / IT-systems to improve business processes Mitigation of environmental & social risks via studies, certifications, E&S management systems, E&S advisory, stakeholder engagement, community development (CSR) Stimulate performance by reducing costs & increasing turnover Support human resource development through HR strategy design and training of staff Support for Supplier trainings / Analysis of supply chain optimization potential Identification of resource and energy efficiency potential / Design of renewable energy projects Support for product development / Quality management measures 72

73 Health Break 10:30-11:00 Opportunities in Sustainable Finance Workshop Nairobi, August 23 rd, 2016 Organizer Partners

74 Finance Workshop 11:00-12:00 Session 3: International (Development) Finance Institutions > Hiren Mehta Member of the Office of the President at the Italian-Kenyan Chamber of Commerce and Director of Powerlite Electrical > Abubakar Lewano Senior Investment Manager, Food & Agribusiness, of the Norwegian Investment Fund (Norfund) > Audrey Obara Investment Manager at Swedfund International AB Organizer Partners Tuesday, August 23 rd, 2016

75 Finance Workshop 11:00-12:00 Session 3: International (Development) Finance Institutions > Hiren Mehta Member of the Office of the President at the Italian-Kenyan Chamber of Commerce and Director of Powerlite Electrical > Abubakar Lewano Senior Investment Manager, Food & Agribusiness, of the Norwegian Investment Fund (Norfund) > Audrey Obara Investment Manager at Swedfund International AB Organizer Partners Tuesday, August 23 rd, 2016

76 Finance Workshop 11:00-12:00 Session 3: International (Development) Finance Institutions > Hiren Mehta Member of the Office of the President at the Italian-Kenyan Chamber of Commerce and Director of Powerlite Electrical > Abubakar Lewano Senior Investment Manager, Food & Agribusiness, of the Norwegian Investment Fund (Norfund) > Audrey Obara Investment Manager at Swedfund International AB Organizer Partners Tuesday, August 23 rd, 2016

77 Norfund Investing in development Abubakar Lewano Senior Investment Manager

78 NORFUND: STATE-OWNED INVESTMENT FUND MANAGED BY THE MINISTRY OF FOREIGN AFFAIRS 78 Instrument in development aid policy Profitable investments to alleviate poverty through economic growth Financial instruments Equity, loans and guarantees Operation Investment on commercial terms, always with partner(s) and normally with a 20-30% stake, never a majority holding Portfolio Investments of up to 1.9bn USD as of end Mandate: «assist in developing sustainable business and industry in developing countries. The object is to establish viable, profitable undertakings that would not otherwise be initiated because of the high risk involved.» The Norfund Act

79 THE EUROPEAN BILATERAL DFIS THE 3RD PILLAR OF DEVELOPMENT COOPERATION 79 Sustainable Economic Growth Bilateral aid Multilaterals Bilateral DFIs Donor financing projects and programs for development Disaster mitigation or long term development Build institutions and civil society World Bank, Regional Dev. banks and UN Donor financed projects and programs Investing in fewer and often large-scale projects Concentrate on governments and public services The 15 European EDFI members A diverse group of investors substituting for lack of private investors Concentrated in Africa and other LDCs Mobilize home country skills and industries

80 NORFUND S MANDATE Additional Two dimensions: Contributing to more investments in poor countries because Norfund is willing to take on board more risk and costs than most private investors. Contributing to better investments, because Norfund gives priority to projects with a strong development effect and enhances these effects through active ownership and support for the development of the enterprises Catalytic Mobilizing private capital and expertise that would not otherwise have been available in poor countries

81 A SOCIALLY RESPONSIBLE INVESTOR Viable companies: Financial sustainability Only profitable businesses survive in the long run and can provide long-term, reliable jobs; tax revenues; export income; technological development etc. Responsible and well-run companies: Social and environmental sustainability - Compliance to local laws and international standards - Environmental and social considerations - Good working environment: occupational health and safety standards - Good corporate governance and internal controls Norfund s investments must adhere to high standards, e.g.: - Zero tolerance for corruption - National laws and regulations - ILO s core conventions - The IFC Environmental and Social Standards - HSE guidelines (World Bank/IFC) - EDFI s exclusion list and Corporate Governance Development Framework Norfund does not expect perfect enterprises at the time of investment, but require that they have an action plan to improve standards over time.

82 SECTORS WITH PARTICULARLY STRONG DEVELOPMENT EFFECTS 82 Clean Energy Agribusiness Financial Institutions SME funds Energy - a precondition for economic growth and poverty alleviation Lack of and unreliable electricity supply - key obstacle to growth Increased agri productivity fundamental to early economic transformation Development through large scale employment and poverty alleviation Financial infrastructure is fundamental for economic growth Offer financial services to SME and bottom of pyramid Shortage of risk capital especially pronounced for SMEs Investing through funds enables outreach far beyond Norfund s own capacity constraints

83 STRATEGY: CONCENTRATION WHERE WE CAN SUCCEED AND MAKE A DIFFERENCE 83 Geography: Sector focus: Instruments: Four regions, priority to Africa and LDCs, local presence Clean energy, financial institutions, agribusiness and SME Funds Preference for equity/ direct investments where we have direct influence and responsibility MUSD 450 MUSD 1000 San José, Costa Rica MUSD 110 MUSD 450 Bangkok, Thailand MUSD 70 Nairobi, Kenya MUSD Maputo, Mozambique Johannesburg, South Africa Strategic investment areas Norfund s regional offices

84 PORTFOLIO AND RESULTS IN EAST AFRICA

85 EAST AFRICA 85 NORFUND INVESTMENTS $438 million (3.500 mill NOK) SME Funds $52m Industrial Partnerships $87m Clean Energy $69m 24% of Norfund s total portfolio Financial Institutions $230m 25 direct investments

86 KENYA 86 NORFUND INVESTMENTS $230 million SME Funds $33m Industrial Partnerships $11m Clean Energy $36m - Kenya a regional economic power with a diverse economy, - Focus for Norfund is clean energy, the financial sector and agriculture Financial Institutions $150m 7 direct investments

87 Kenya Portfolio 87 Kinangop Wind Power Lake Turkana Wind Project Housing Finance Kinangop Wind Power project is a planned wind park of 60 MW The wind project will contribute app. 4% of Kenya s current installed power A PPA was signed in 2013 with the Kenyan government Norfund is participating with 19% shareholding in a consortium of several partners Lake Turkana Wind Power is a planned wind park of 300 MW The wind park will contribute app. 20% of Kenya s current installed power A Long term PPA was signed on March 2014 Norfund is participating with 12.5% shareholding in a consortium of several partners Housing Finance Company (Kenya) Ltd (HFC) is a provider of longer-term mortgages. Institutions offering this type of long term loans to their clients also need long term debt from investors. Norfund provided a loan in order for HF to improve the access to finance and affordable housing for middle income families in Kenya.

88 Kenya Portfolio 88 Equity Group Holding Ltd Equity Bank is Kenya s second largest bank and the leading inclusive bank in Africa with over 9 million customers. Targeting SME s and previously unbanked. Scalable and cost effective model becoming a strong regional bank. Operations also in South Sudan, Uganda, Rwanda and Tanzania. Norfund and Norfinance (subsidiary of Norfund) acquired 12% equity stake in Basecamp Explorer Expansion of a medium size tourism operator with 60 beds in 3 lodges in Naboisho Conservancy North of the Masai Mara Reserve Entered into 15 yr lease with 500 Maasai landowners Presents a model for sustainable natural resource management Investment creates both employment and income for the Maasais Norfund has a 40% shareholding of the company.

89 TANZANIA 89 NORFUND INVESTMENTS $100 million Financial Institutions $8m SME Funds $4m - Key country for Norfund - Oil and gas sector can be an engine for growth - Agriculture a key sector for Norfund in Tanzania Clean Energy $22m Industrial Partnerships $66m 10 Direct investments

90 Tanzania Portfolio 90 Green Resources Agrica Yara Tanzania Ltd Dar es Salaam Serena Green Resources is Africa s largest forestation company. Has 41,000 ha of standing forest in Mozambique, Tanzania and Uganda and has invested over $ 250 million in its African operation. Green Resources is the African (ex RSA) leader in FSC certified plantations forestry Norfund has invested USD 20.1 million 3,000 ha fallow land recultivated for rice farming in Kilombero Valley. With 30,000 of rice produced the farm will lead to increased selfsufficiency to Tanzania. The farm is cooperating on small scale rice growers on improved rice seeds and improved cultivation. Norfund an equity investor with USD 13.2 million 13,000 m 2 custom built fertilizer terminal in Dar es Salaam for increased efficiency in offloading and bagging fertilizer for the local and regional market. Yara is the leading supplier of fertilizer providing extension and advice to small scale farmers. Total project cost USD 25 million where Norfund provided a loan. The terminal came in full operation in January The 230 room Dar es Salaam Serena hotel was acquired and re-branded. The hotel will be upgraded to Serena standard. Serena has a long term perspective Will increase local value creation and prolong stay of tourists. Norfund invested USD 10 million in the company

91 Tanzania Portfolio 91 Africado An avocado plantation at the foot of Mt. Kilimanjaro in Tanzania. Delivers fresh fruit to the European market at a time of year when avocados are in short supply because of the different harvest seasons in South Africa, South America and Europe. Norfund investment is 3M EUR. Exim Bank The bank ranks fifth in the country in terms of total assets and total deposits as of The bank has positioned itself as the most innovative institution in the country pioneering various services like exclusive financing scheme to women Exim Bank has an Outstanding Balance of a loan by Norfund of 1.1M USD African Century Infrastructure Company The company provides operational rentals of handling and lifting equipment such as forklifts and portable heavy duty cranes to companies in Tanzania and Mozambique. Norfund has an investment of 8M USD with 30% equity stake and an additional loans to the company.

92 Regional Portfolio 92 Asilia (African Spirit Group) Asilia is a safari operator with 12 destinations with operations in Kenya and Tanzania. Asilia is the first safari company in Africa to receive a 5-star GIIRS rating for its sustainability and impact performance. Norfund made an investment of 5 mill USD in Sunripe (Vertical Agro) Engaged in primary production of fruits and vegetables, packaging and wholesale/marketing Kenya s largest exporter of organic vegetables Produces in different climate zones in Kenya, Tanzania and Ethiopia Norfund have a convertible loan of USD 5,2 mill. Freight In Time Freight in Time (FiT) is the freight and logistics arm of Sunripe Group FIT has created a large regional footprint and has an office network in 8 countries within the East African region including Tanzania, South Sudan, Ethiopia and Djibouti. Norfund invested in 2016 USD 10 million in the company to fund capital expenditures for new warehouses and specialized equipment.

93 UGANDA 93 NORFUND INVESTMENTS $76 million SME Funds $9m Industrial Partnerships $2m Clean Energy $6m - Key country for Norfund, - Focus has been Clean Energy and Financial Institutions, - Agriculture sector in focus as well Financial Institutions $58 m 4 Direct Investments

94 Uganda Portfolio 94 DFCU Limited DFCU is particularly addressing the growing need in the Ugandan market for longer-term funding in key areas such as commercial mortgages, home loans, leases and SME loans. Norfund's holding was in 2014 transferred to Norfinance AS of which Norfund owns 48.8 per cent worth app 14 MUSD Bugoye Hydro Power Plant Ltd 13 MW hydropower plant in Uganda completed by Norfund and TrønderEnergi in 2009 This was the first Norwegian privately financed hydropower project in Africa. Bugoye Hydropower electricity supplied 7% of Uganda s electricity consumption at the time of investment Norfund invested 6.7M USD in the form of equity

95 RWANDA 95 NORFUND INVESTMENTS $16 million SME Funds $5m Industrial Partnerships$ 4m - Small economy but making great economic strives, - Focus on clean energy and hospitality Financial Institutions $3m Clean Energy $4m 2 Direct Investments

96 Rwanda Portfolio 96 Scatec Rwanda The 8.5 MW solar plant in Rwanda at the Agahozo-Shalom Youth Village in Rwanda is the most recent addition to Norfund s portfolio and the first utility scale solar PV power plant in East Africa Its output is close to 10% of the maximum capacity of Rwanda s power grid and the plant is making a significant contribution to meeting the growing demand for power in the country. Norfund has invested 6.8 MUSD in the company TPS Rwanda TPS Rwanda Ltd presently has two properties, Kigali Serena Hotel (148 rooms) and Lake Kivu Serena Hotel in Gisenyi (66 rooms).the company is also establishing a lodge in the mountain gorilla viewing area in Ruhengeri area in the north-eastern corner of Rwanda. Norfund has provided an equity investment of 4.7 MUSD to the company

97 SOUTH SUDAN 97 NORFUND INVESTMENTS $21 million - Post-conflict or in-conflict economy, - Selected investment in SMEfunding and clean energy Financial Institutions $12m Industrial Partnerships $8m Clean Energy $1m 3 Direct Investments

98 South Sudan Portfolio 98 Kinyeti Venture Capital UAP Properties Fula Rapids Hydro Power Plant Norfund established in 2012 the investment company Kinyeti Venture Capital Ltd. with a capital of 4.5 MUSD SMEs have limited access to finance in South Sudan and Kinyeti offers companies loans and equity The facility has since established approved 14 loans ranging from to USD to companies involved in trading, lodging and small health clinics Equatoria Tower is a 15 storey, modern, landmark commercial office development in Juba, South Sudan Good standard office accommodation is difficult to find in Juba and Equatorial Tower will contribute to more companies having a permanent presence in and grow their business in South Sudan UAP Holdings Ltd who is the developer received a 5 MUSD loan from Norfund for completing the project Norfund has been engaged in the development of 42MW hydropower plant at Fula Rapids in Nimule close to the border of Uganda A transmission line between Nimule and Juba is projected The power plant will be able to supply Juba with clean power Norfund has developed the project from inception However the project is now on hold due to the troubled security situation in the country.

99 East Africa Fund Portfolio 99 Fanisi Venture Capital Fund Aims for investments in Kenya, Rwanda, Tanzania and Uganda. Norfund initiated the fund and started the work to establish it in Norfund is Fanisi s principal investor, with an investment of USD 15 million.. Ascent Rift Valley Fund Ascent Rift Valley Fund is a new SME fund that makes investments in companies in Ethiopia, Kenya and Uganda. The most important sectors are healthcare, FMCG, processing of agricultural products and financial services. Norfund has made an investment of 10M USD which gives an equity stake of 21%. Grofin Fund GroFin Africa Fund offers loans and equity capital in local currency to small enterprises in South Africa, Kenya, Uganda, Tanzania, Rwanda, Nigeria and Ghana. Norfund s co-investors include IFC, CDC, FMO, the African Development Bank (AFDB), Shell Foundation, EIB and Proparco, in addition to GroFin itself.

100 East Africa Fund Portfolio 10 0 Novastar ventures Business Partners Voxtra Agribusiness Novastar is a venture catalyst firm assisting the next generation of exceptional entrepreneurs who are designing and executing innovative business models to profitably serve East Africa s aspiring mass market. Norfund had a commitment of approximately 9.7M USD as at of 31 st December 2014 The fund provides integrated investment and added-value solutions for small and medium entrepreneurs, from single-owner businesses to partnerships and multi-owner ventures They are promoters of sustainable development in local communities through supporting wealth creation for family entrepreneurs Norfund made an investment of 6M USD in the fund Voxtra is a Fund that invests in growth capital to commercially viable but capitalconstrained agribusinesses that reach out to smallholder farmers. They invest in companies whose success is tightly linked to improving the livelihoods of smallholder farmers. Norfund has invested approximately 5.4M USD in the fund.

101 GLOBELEQ 10 1 PLATFORM FOR ENERGY IN AFRICA Eight power plants - 1,234 MW Energy mix: 74% natural gas, 16 % solar/ wind power and 10 % HFO Strategy: build 5,000 MW over the next ten years

102 . Clean Energy 5,400 MW capacity installed or under development* 18 TWh electricity produced in equivalent to the annual consumption of 25 million people 4.3 million tonnes of CO 2 emissions avoided *Excluding Globeleq 10 2 Investing in development 382,000 jobs in Norfund s portfolio companies in % of jobs held by women 5% job growth since billion NOK paid in taxes SME Funds 40 active SME funds 660 enterprises financed 92,000 jobs in SMEs Food and Agribusiness 16,000 jobs in direct investments 12,000 associated farmers 1.2 billion NOK in domestic purchases 125,000 tonnes food produced Financial Institutions 69,000 jobs in financial institutions 37 million loans provided to clients 32 million bank accounts held by clients

103 WHAT WE LOOK FOR A business plan outlining the investment requirement and potential returns. A management team that has expertise in the proposed project s area of focus, which we normally count towards the technical competence of our potential partner. Technical competence in the proposed project. Financially capable co-investors who can contribute their portion of the requirement to support the project s continued growth. Equity ownership that is meaningful (more than 20% but less than 40% typically), fairly valued. Co-investors who have unquestionable integrity and who, typically, are not politically exposed

104 THE END 10 4 THANK YOU

105 Finance Workshop 11:00-12:00 Session 3: International (Development) Finance Institutions > Hiren Mehta Member of the Office of the President at the Italian-Kenyan Chamber of Commerce and Director of Powerlite Electrical > Abubakar Lewano Senior Investment Manager, Food & Agribusiness, of the Norwegian Investment Fund (Norfund) > Audrey Obara Investment Manager at Swedfund International AB Organizer Partners Tuesday, August 23 rd, 2016

106

107 FIGHTING POVERTY THROUGH SUSTAINABLE BUSINESS

108 The Swedish Development Finance Institution for sustainable investments in least developed countries Totally 38 employees at the head office in Stockholm and the regional office in Nairobi, Kenya 230 investments since inception in 1979

109 Our Mission & Focus INNOVATION PARTNERSHIP CLIMATE DECENT WORK GENDER ENTREPRENEUR- SHIP

110 Our Three Pillars Impact on society Sustainability Financial viability Jobs Tax Private sector development Environment Employment terms Business ethics and anticorruption Growth Profitability Return on equity

111 Swedfund, SDGs & Indicators Our mission: Fighting poverty through sustainable business Our strategic focus: Manufacturing and Services Energy Gender Equality: # female employees, % female board directors, % female in management positions Decent work: Fullfillment of ILO Core conventions and ILO Basic terms of employment Environment: Implementation of Environmental and Social Management System (ESMS) Financial Institutions

112 Regional Distribution Distribution per Instrument Africa 62,5% Asia 20% Latin America 0,4% Eastern Europe 10,1% Equity 33,5% Loans 42,7% Funds 23,8% Other regions 7% 65 investments in 25 countries 400 MUSD in contracted investments

113 Financial support/grant finance - Swedpartnership Swedfund (40%) Swedish SMEcompany (60%) Local company Distributor, Supplier Joint-ventureand/or Subsidiary Size: Project financing (18 months), Max. 200 TEUR/project Geography: Countries included in the threelowest categories of the DAC-list Supported activities: Transfer of know-how and investments in machinery& equipment Sector focus: Production, sales and supply of bothgoods and services

114 DEVELOPMENT RESULTS EXCERPTS FROM SWEDFUND S INTEGRATED REPORT 2014

115 STRATEGIC SUSTAINABILITY GOALS 1. Impact on society 2. Sustainability 3. Financial viability 4. Anti-corruption Swedfund shall contribute to the creation of jobs with a good working environment and good employment terms. Swedfund shall contribute to the creation of longterm sustainable companies in the world s poorest countries. Swedfund shall contribute to the creation in the world s poorest countries of long-term financially viable companies. Swedfund shall make proactive efforts to tackle corruption internally and within portfolio companies.

116 25% Percentage of female employees Gender equality Number of females in management positions Job creation 1,5 % Average job growth in portfolio companies 108,221 Taxes MUSD 41 Total taxes paid by portfolio companies 840,000 Number of female board directors Total number of employees in portfolio companies Patients treated at portfolio companies

117 Sustainability Goal for ESG ES Management System

118 Sustainability Goal for Anti-corruption Management System Anti-corruption (degree of implementation) Management System Anti-corruption (implementation per component)

119 INVESTMENT PROCESS

120 Swedfund Portfolio Company Strategic partner Financial partner

121 Size: Average size of investments MUSD 7,0 Equity share: Always minority, normally 25-35% Equity and Loans Geography: Focus on Sub Saharan Africa, least developed countries Sectors: Manufacturing and service, Financial institutions and energy

122 Investment Criteria Mandate Geography: Africa, Asia, Latin America & Eastern Europe Focus on Africa (goal 65% ofportfolio) DAC list Least developed countries, Other & Lower Middle Income Countries and Territories Instrument: debt, equity or quasi-equity Focus on equity and equity-related instruments, e.g., subordinated loans. No trade finance Ticket size: MUSD 4-12 / investment Limit risk exposure Share of investment: always minority Usually 25-35% of total investment amount Risk exposure Equal or lower than co-investor/partner Reliance on strong strategic/industrial partner Investment horizon 5-10 years Swedfund Strategic partner Financial partner Portfolio company

123

124 TECHNICAL ASSISTANCE #WOMEN4GROWTH

125 Women4Growth Project Rationale Positive relationship between female participation in the workforce and health and education of her children Structural challenges

126 Women4Growth project outline July August 2014 September 2014 April 2015 September April 2016 Inception Implementation Follow up Brainstorm TA committment Study trip to Nairobi Company selection: Deacons: Retail Company Java House: Café chain Project design Communication Local management commitment (Jan) Workshop 1 (March) Workshop 2 (April) Advocacy dialogue with portfolio companies on change initiatives Participant survey Management interviews

127 Participant survey Did the project live up to your expectations? Yes, the Project even exceeded my expectations to some extent. 87,5 % Yes, exceeded my expectations extensively. 12,5 % Have you advanced your career since your participated in the project? Positive, 37 % To what extent has your participation in the project helped you to develop new career milestones? To some extent 37.5 % To a large extent 62.5 %

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129 Finance Workshop 12:00-13:00 Session 3: Additional Finance Instruments > Femi Fadugba Senior Associate at CrossBoundary LLC > Joseph Nganga Deputy Chief Executive Officer & Project Director at responsibility Renewable Energy/ responsibility Investments AG > David Muthee Maina Investment Manager at AlphaMundi Group Ltd. Organizer Partners Tuesday, August 23 rd, 2016

130 Finance Workshop 12:00-13:00 Session 3: Additional Finance Instruments > Femi Fadugba Senior Associate at CrossBoundary LLC > Joseph Nganga Deputy Chief Executive Officer & Project Director at responsibility Renewable Energy/ responsibility Investments AG > David Muthee Maina Investment Manager at AlphaMundi Group Ltd. Organizer Partners Tuesday, August 23 rd, 2016

131 A platform approach to C&I solar finance in Africa Femi Fadugba, CrossBoundary Energy 23 rd August 2016 PRIVILEGED ANDCONFIDENTIAL

132 SolarAfrica solar carport at Garden City Mall, Nairobi

133 The challenge a fragmented case by case financing environment PRIVILEGED ANDCONFIDENTIAL

134 Currently most financing for C&I projects is case by case Common finance arrangements for renewable independent generation Direct loan to Implementer Partnership Renewable Implementer Local Banks Renewable Implementer Local Bank Install equipment; possible maintenance contract Makes upfront payment Write loanto SME Interest payments, 100%+ collateral C&I Customer Install equipment; possible maintenance contract Makes upfront payment C&I customer Many distributors provide no finance options at all; or provide installment plans from their own balance sheet Best scenario is generally partnership between bank and implementer to issue loans for asset PRIVILEGED & CONFIDENTIAL

135 Case by case funding for C&I solar creates three barriers to adoption High transaction cost Concentrated risk Lack of standardization and information exchange PRIVILEGED & CONFIDENTIAL

136 Our approach a platform to aggregate and standardize PRIVILEGED ANDCONFIDENTIAL

137 CrossBoundary Energy is a recently launched pilot fund for Commercial and Industrial Solar in Africa CrossBoundary is a finance firm focused on advising and investing in frontier and developing markets Started in 2011, focused on sub-saharan Africa US-based; operational headquarters in Nairobi, Kenya CrossBoundary recently raised CrossBoundary Energy Fund I: US$9m equity investment fund (c. US$20-25m of projects after debt) Mandate to finance (invest in) captive, commercial and industrial scale solar projects in sub-saharan Africa CBE financing is accessible to projects through the SolarAfrica platform Partnership between CrossBoundary Energy, NVI Energy and local solar developers and contractors Platform provides solar developers with an integrated finance product for C&I solar PRIVILEGED & CONFIDENTIAL

138 How SolarAfrica PPAs work SolarAfrica collects your site info You receive a solar quote and proposal within 7 days SolarAfrica prepares a long-term PPA contract You review and approve SolarAfrica installs the solar system at your facility You pay nothing upfront When contract ends, SolarAfrica removes the system Oryou can extend at lower rate ` SolarAfrica fully maintains the system over the contract term You take no technical risk SolarAfrica issues a monthly bill You only pay for solarpower produced and get cleaner, cheaper energy PRIVILEGED & CONFIDENTIAL

139 PPA in a Box gives developers an integrated package including equity, debt, structuring and insurance arranged at scale Standardized PPA and Lease Agreements A PPA in a Box Equity and debt raised at scale, ready to deploy All internal contracts standardized (O&M, Transfer, Etc) Financial Structuring and Tax structure optimized Insurance Pre-arranged including Asset, Political risk and other Automated Proposal tool Can deliver Developer branded proposals PRIVILEGED & CONFIDENTIAL

140 Pilot fund formally closed in 2015 Click on images to open web links PRIVILEGED & CONFIDENTIAL

141 CBE portfolio (sample projects) PRIVILEGED ANDCONFIDENTIAL

142 2 Garden City: First project in portfolio is largest Solar Carport in Africa and largest PPA-type agreement with a private customer in Sub-Saharan Africa Quick facts: Installed largest solar carport in Africa and the largest solar system in Nairobi at 858kWp Produces 1,450 MWh of solar electricity annually enough to power 550 homes in Nairobi Comprises 3,364 solar panels and already powering residencies and mall stores Reduces Garden City s CO 2 emissions by ~18,750 tonnes over system life Demonstrates private sector investment in carbon mitigation projects is financially viable PRIVILEGED & CONFIDENTIAL

143 Case Study: Our first major project is the Garden City Mall 858kWp solar carport Top-tier client Multinational private equity firm with strong East African presence Effective project partnership Developed and financed through SolarAfrica Delivery by a leading UK solar EPC PRIVILEGED & CONFIDENTIAL

144 3 Loisaba Conservancy: Completed Innovative Solar-Battery Solution at Kenyan Eco-lodge Quick facts: Operates completely off-grid with solar-hybrid + storage system providing cleaner, quieter and costeffective electricity for lodge guests 74kWp solar kwh storage Landmark project deploying Acquion battery made of non-hazardous, nontoxic material: Fully recyclable & sustainable Innovative battery technology also has excellent calendar and cycle life, high efficiency, no thermal or battery management system requirements, which lowers costs Following final technical review, operation expected to begin in this month (April 2016) PRIVILEGED & CONFIDENTIAL

145 QUESTIONS? Femi Fadugba CrossBoundary Energy Kenya: +254 (0) PRIVILEGED ANDCONFIDENTIAL

146 Finance Workshop 12:00-13:00 Session 3: Additional Finance Instruments > Femi Fadugba Senior Associate at CrossBoundary LLC > Joseph Nganga Deputy Chief Executive Officer & Project Director at responsibility Renewable Energy/ responsibility Investments AG > David Muthee Maina Investment Manager at AlphaMundi Group Ltd. Organizer Partners Tuesday, August 23 rd, 2016

147 responsability Renewable Energy Holding Investing in African Renewable Power Generation responsability Renewable Energy Holding

148 Introduction responsability Renewable Energy Holding responsability Renewable Energy Holding (rareh) was established in December Anchor Investor: KfW (German DFI) Managed by responsability AG, a Swiss Asset Manger with close to $3 billion under management. (Co) Develops, Invests, Owns and Operates renewable energy power projects. 5 to 60 MW. Active throughout the project life cycle, including early to mid stage. Initial focus on Kenya, Rwanda, and Uganda. Now looking to expand into other countries across SSA, including Mozambique and Zambia. Nairobi based in-house technical, development and investment specialist with local and global expertise and established track records. responsability Renewable Energy Holding

149 Who we are Founded in 2003 in Zurich Over USD 2.9 billion assets under management 14 different investment solutions 238 employees 10 office locations (Zurich, Geneva, Oslo, Paris, Lima, Nairobi, Mumbai, Hong Kong, Luxembourg, Bangkok) Authorized by the Swiss Financial Market Supervisory Authority FINMA responsability Management Company SA in Luxembourg is authorized as an Alternative Investment Fund Manager (AIFM) responsability Investments AG

150 responsability Africa Outreach in Africa Assets under management: USD 250M Total number of countries invested: 25 Investees in Africa: Direct investees 56 Indirect investees 99 Total investees Investment Sectors: Agriculture Financial Institutions Renewable Energy Direct Investments Direct Prospective Indirect Exposure Team Members: Agriculture 4 Financial Institutions - 6 Renewable Energy 9 Management 1 Administration 5 responsability Renewable Energy Holding

151 rareh Typical Partners -rareh s Value Added Local Promoter Local Developer Interntl. Established Developer Interntl. Developer (Other) Financial Investor 1. Capital. 2. Technical & Financing Expertise. 3. Economies of Scale 1. Capital. 2. Technical & Financing Expertise. 3. Economies of Scale 1. Capital 2. Local Expertise 3. Community Relations & Local Net Work 1. Capital. 2. Technical & Financing Expertise. 3. Economies of Scale 1. Capital 2. Local Expertise 3. Community Relations & Local Net Work Payments based upon Milestones and/or Carried (Minority) Interest Payments based upon Milestones and/or Carried (Minority) Interest Minority Equity Stake Payments based upon Milestones and/or Carried (Minority) Interest Minority Equity Stake responsability Renewable Energy Holding

152 Project Case Studies 2.6MW Hydropower Plant - Rwanda General Location Generation Type Installed Capacity Annual Output Rwaza-Muko Area; Rwanda Run-of-the-river Hydropower 2.6 MW 20.7 GWh Financial Total Project Cost USD 12.4M USD / kw Tariff Expected Gearing USD 4,770 / kw 13 USc/kWh levellized tariff 100% Equity Target IRR 18 % Technical Turbines Net Head Design Flow Construction Period 2 x 1,300 kw 25.7 m 12 cumecs 24 months Milestones Feasibility Study Signed PPA EPC and O&M Selection Project Finance Arranged Equity Documentation Yes Yes In Progress N/A In Progress Expected Financial Close Q responsability Renewable Energy Holding

153 Project Case Studies 8.5MW Hydropower Plant - Kenya General Location Generation Type Installed Capacity Annual Output Kirinyaga County; Kenya Run-of-the-river Hydropower 8.5 MW 48.7 GWh Financial Total Project Cost USD 21.0M USD / kw Tariff Expected Gearing USD 2,470 / Kw 8.6 USc/kWh levelized tariff 70:30 Debt:Equity Target IRR 18 % Technical Turbines Net Head Design Flow Construction Period 2 x 4,250 kw 125 m 8 cms 24 months Milestones Feasibility Study Signed PPA EPC Selected Project Debt Arranged Joint Venture Negotiations In Progress In Progress In Progress In Progress In Progress Expected Financial Close Q responsability Renewable Energy Holding

154 Project Case Studies 5MW Commercial Solar PV Kenya General Location Generation Type Installed Capacity Annual Output Commercial Rooftops, Kenya Solar PV 5 MW 7.5 GWh Financial Total Project Cost USD 9.4M USD / kw Tariff Expected Gearing USD 1,880 / Kw 16.5 USc/kWh commercial 70:30 Debt:Equity Target IRR 18.% Milestones Feasibility Study Signed PPA EPC Selected Project Debt Arranged Joint Venture Negotiations N/A In Progress Yes In Progress In Progress Expected Financial Close 2016 responsability Renewable Energy Holding

155 Investment Opportunity Market Landscape Country Recent Market Developments Senegal Kenya Review of Power Purchase Agreement procedure due to bankability issues. Expression of Interest procedure has changed. Nigeria Ghana Côte d'ivoire Cameroon Liberia Zambia DRC Uganda Kenya Rwanda Tanzania Malawi Ethiopia Uganda Rwanda Tanzania Review of Power Purchase Agreement procedure due to bankability issues. Expression of Interests have been revoked. Global Energy Transfer Feed in Tariff (GET FiT) New market entrants. Feed in Tariff policy for small hydro. Tariff for small hydro under review. New market entrants. Revision of Standardized Power Purchase Agreement New market entrants. Sierra Leone Namibia Botswana Source: responsability research / Climatescope 2014 Zimbabwe Mozambique South Africa Country with ongoing rareh project development Country with renewable energy policy in place Other countries responsability Renewable Energy Holding

156 Name: Joseph Nganga Position: Deputy CEO & Project Director responsability Investments AG responsability Renewable Energy Holding

157 Legal Disclaimer This document information was produced by responsability Renewable Energy Holding (hereinafter Financial Product ). The Information (hereinafter information ) contained in this document is based on sources considered to be reliable. However, responsability provides no guarantee with regard to the correctness and completeness of this Information. The Information is subject to change without notice and without obligation to notify the recipient of this Document (hereinafter Recipient ). Unless otherwise indicated, all figures are unaudited and not guaranteed. Any action taken based on the Information is the responsibility of the Recipient and taken at his/her/its own risk. This Document is provided for information purposes only. It does not constitute an official confirmation of any terms. If additional shares of the Financial Product are issued based on the final approval of the competent authorities, their terms will be found entirely in the final documentation, this Document may not be used to construe such terms and will be superseded in its entirety by the final documentation to the exclusion of all prior written and oral communications. The assessment of an investment and the resulting returns are not guaranteed. Changes in the assumptions may have a substantial impact on the return. The Information does not release the Recipient from making his/her/its own assessment. In particular the Recipient is recommended to check that the Information provided is in line with his/her/its own circumstances with regard to any legal, regulatory, tax or other consequences, if necessary with the help of a professional advisor. The Financial Product does not have an operational track record. Therefore, no assertions can be made as to the future development of the Financial Product. In particular there is no guarantee that it will be possible to distribute income or capital gain. The description of the risks in this Document is not exhaustive. Please ask your investment advisor about further risks. responsability and/or the members of its board of directors and employees may hold shares in the Financial Product (or the related investments) mentioned in this Document and increase or sell these positions from time to time. Additionally, the members of the board of directors and employees of responsability may serve as members of boards of directors of the investments in which the Financial Product is invested. This Document is not intended for public offering. It is expressly not intended for persons who, due to their nationality or place of residence, are not permitted access to such information under applicable law. The shares of the Financial Product have not been, and will not be registered under the United States Securities Act of 1933 ( US Securities Act ) or the securities laws of any of the states of the United States. For this reason shares in this Financial Product may not be offered or sold directly or indirectly in the United States, except pursuant to an exemption from the registration requirements of the US Securities Act. This Document may not be reproduced, stored in a filing system or disseminated, in part or in full, in any form or by any means, whether electronically, mechanically, photocopied, or otherwise, without the written consent of responsability. Copyright responsability Renewable Energy Holding AG, All rights reserved. responsability Renewable Energy Holding

158 Finance Workshop 12:00-13:00 Session 3: Additional Finance Instruments > Femi Fadugba Senior Associate at CrossBoundary LLC > Joseph Nganga Deputy Chief Executive Officer & Project Director at responsibility Renewable Energy/ responsibility Investments AG > David Muthee Maina Investment Manager at AlphaMundi Group Ltd. Organizer Partners Tuesday, August 23 rd, 2016

159 Investment Solutions for People and Planet PRESENTATION ALPHAMUNDI GROUP SocialAlpha Bastion Impact Debt Fund August 2016

160 ALPHAMUNDI OVERVIEW Founder Mission Investment Thesis SAIF-Bastion Strategy Tim Radjy, formerly at UBS for 7 years, with experiences in portfolio management, emerging markets analysis, high-end donor philanthropy, microfinance Reduce poverty & preserve the environment Finance scalable social businesses in stable emerging markets where low-income consumers are underserved and with increasing purchasing power Multi-Sector Latin America & East Africa Market leaders that can scale nationally or internationally 80%+ senior loans Rigorous financial & impact screening

161 WHO WE ARE AlphaMundi Team Board of Directors Tim Radjy Founder & Managing Partner On the Road Lisa Willems Managing Director Washington, DC David Muthee Investment Manager Nairobi Valentina Echeverry Investment Manager Washington, DC Tim Radjy Founder & Managing Partner Veronica Berbers Impact Investor Amsterdam Investment Committee Christoph Gosdenoz Chairman Zurich William Githui Investment Analyst Nairobi Arthur Crespo Operations Analyst Cali Luz Bosmediano Investor Relations Switzerland Georgette Wamboi Social Media Nairobi Donald Peck Chairman London Marlene Hormes DFI Investor Germany Tim Radjy Founder & Managing Partner

162 WHAT MAKES US DIFFERENT Open-ended fund investing across regions and sectors Short duration, max. 2.5 year lock-in for investors 6 year track record with no write-offs to date Average gross interest rate of 10% FY 2015 performance 3.9% Platinum impact rating from GIIRS in 2015, ranked 2 nd of 28 Emerging Market impact funds Full investor transparency with quarterly reporting Partial USAID-SIDA guarantees on 25%+ of loan portfolio Option to co-invest 100% of fund commitment

163 BASTION PORTFOLIO Assets of USD 15M +USD 5.5M in co-investments Investments in 15 companies across 7 countries Average exposure of approximately USD 1 million 76% growth-stage and 22% venture-stage 3.5% in minority equity stakes, 5%+ additional equity options 30 June 2016 Sector 3% 3% 2% Region 2% Countr 15% 27% 15% 35% MFI Agriculture Energy Education Health Housing 52% 46% Africa Latin America Cash 1 10 Cash