Overview of the AECF: Key Results and Future Plans Hugh Scott - AECF Director
Dec 14, 2015
Overview of the AECF: Key Results and Future Plans
Hugh Scott - AECF Director
Presentation Outline
Overview of the AECF
Introducing the AECF
Finding the right projects
Funding Innovation
Market Systems
Key Results – Progress to date
Windows and Competitions
Applications and awards
Results and Impact
The Future?
Overview of the AECF
Introducing the AECF (1)
Goal: to accelerate pro-poor growth in Africa
Purpose: to make agribusiness, finance, renewable energy and information market systems work better for the poor in rural areas in Africa
Result: Increased jobs and incomes for large numbers of people living in rural areas in Africa
Modus Operandi: The AECF works by supporting private sector companies to develop and test innovative business ideas in agri-business, rural financial services and renewable energy in Africa
Introducing the AECF(2)AECF is – a fund of donor money available to the private sector on a
competitive basis
AECF is – a ‘special partnership’ initiative of the Alliance for a Green
Revolution in Africa (AGRA). – AGRA is chaired by Strive Masiyiwa and funded by Rockefeller
and Bill and Melinda Gates
AECF is - a fund whose initial capital was US$34m in 2008 and is now US$244m and growing (figure as at August 2014)
Finding the Right ProjectsWe seek to support business ideas 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
VFM: Provide minimum amount of money to make business happen that otherwise would not happen
SCALE
(SOCIAL) IMPACTVIABILITY
SUPPORTING FUNCTIONS
RULES
LawsIn
form
al ru
les
&
norm
s
Standards
Regulations
Information
Infra
stru
ctur
eRelated
services
Informing & communicating
Setting & enforcing
rules
Making Market Systems work paradigm
Membership organisations
GovernmentPrivate sector
Not-for-profit sector
Informal networks
MARKET PLAYERS
Demand SupplyCORE AECFAECF
Key Roles of the AECF
Competitions: The Challenge Fund Mechanism is an effective, open and transparent way to find large numbers business ideas and capable entrepreneurs
Finding and funding innovative business ideas that are commercially viable should have impact on large numbers of rural households. Providing capital to “buy-down” risk
Instill sound business/financial management to get businesses more “investment ready”. Actively operate as a feeder fund for next level, more commercial, financial service providers and, Achieve even more impact on even more people
Developing a pipeline of
business ideas
Funding the best business
ideas (that others will not)
A feeder fund for next level
financiers
Raising Further CapitalNew service being offered to AECF grantees
Supporting grantees raise equity and debt
Scaling up post your AECF grant
Made available ‘free of charge’ but– Limited availability
What can we do?– Structuring fundraising process– Introducing investors and lenders– Reviewing investor market materials– Helping negotiate terms with investors and lenders
Contact Seb McKinlay – [email protected] or aecfafrica.org/connect
Key Results To Date
Fund Size Growth
2009 2010 2011 2012 2013 2014
37.6M
75.6M
130.8M
183.6M203.4M
244M
8 Funding Windows 19 Competitions so far
South Sudan Window (SSW)
R1-2
Research Into Business (RIB)
R1-2
REACT WindowR1-3 + Moz
Tanzania Agribusiness
Window (TZAW)R1-R3
Agribusiness Africa Window
(AAW)R1
Zimbabwe Window (ZW)
R1-3
Post-Conflict Window (PCW)
R1
General Window (GW)
Early Bird / R1-3
AECF WINDOWS
AECF WINDOWS
AECF Applications Summary
191
372
812
4,788
11,154
Business plans
Shortlisted for IC
Concept notes submitted
Registered companies
18 Rounds completed 5 June 2008 toAugust 2014
Performance to date
Projects Approved
Portfolio Growth – No. of Projects
2009 2010 2011 2012 2013
39
58
91
178191
Portfolio Distribution – By Window
Funding and Geographical Spread
Development Impact 2013
Trends in Development Impact
Development Impact by Primary Beneficiary
Cumulative DRR by Sector
What is the Future?
The Future – Operational Process/Operational Improvements:
Reduce time from competition closure date to contract sign-off
Reduce time from report submission to disbursements of funds
Improve business compliance through more active portfolio management (not less compliance)
Introducing the AECF Grantee Network
AECF Connect playing a bigger role
Strengthen monitoring and results measurement
Ongoing and Forthcoming Competitions:TZAW R3 at Business Plan Stage
REACT R3 – currently “live”
AAW R2 – October?
The Future – StrategicAECF likely to become an independent legal entity (Trust/CLG)
Board of new AECF entity to decide how AECF will be managed and
by whom
More predictable funding – long term (10) year strategy to grow to
US$500m
A funder of innovation or a feeder fund for others (or both)
More windows v fewer, larger, windows (two flagships)?
More or less financial products – grants v loans v ….?
External evaluation and monitoring unit (EMU company)
• :+254 20 269 9137/8/9
• : www.aecfafrica.org
• : www.facebook.com/AecfAfrica
•
• : www.twitter.com/AecfAfrica
CONTACT DETAILS