Post by Richard M. Ochanda
Last week I attended the AECF conference at the Sankara Hotel in Nairobi on 28th and 29th August 2014. The conference was a great eye opener for me. It exposed me to the finest business men and women of Africa. People with a turn over of over USD 1 million per year. Something about these businesses was the fact that they were all either in renewable energy or agriculture. I interracted with businesses of all kinds and acknowledged that there is potential for great innovations in Africa. Thanks AECF for this great opportunity and exposure be sure I am on the way to become one of your great partner and grantee..
The common question always asked is “why did the green revolution not happen in Africa?” This concern was the engine that inspired Maputo declaration on agriculture and food security in Africa in 2008. As a result of this AECF were founded on the premise that “Africa has something to offer the rest of the world. There is therefore a great promise for the potential of agriculture in Africa.” AECF collaborates very closely with AGRA. It supports projects working in the areas of agri-business and renewable energy.
Type of Support
AECF provides money to the private sector on a competitive basis. The aim being to accelerate corporate growth through investing in agro-business, renewable energy and strengthening market systems. It thus helps enterprises raise capital thus building scalable and sustainable businesses. AECF is concerned about the right type of business that is commercially motivated, having opportunity for growth, socially innovative, having great impacts on rural populations and showing aspects of disruptive innovation. A business such as this has the effect of affecting poor people and other businesses. AECF provides a matching fund. This means that AECF matches dollar per dollar. Their grantees are businesses that apply for over USD 250,000 to USD 1million.
At the moment the AECF has opened the following funding windows
Post conflict countries
Agri business window
· Mid October it will open another window
· Investments on Arid and Semi-Arid places
· It also has an innovation feeder fund facility known as AECF connect. The fund helps organizations with capacity problems to be able to scale up so as they may be at a position of benefitting from AECF in the future. This facility connects innovative businesses to potential investors helping them to overcome generic start-up business problems.
The typical projects
Some of the renewable energy projects supported were mega projects working on bio-diesel, solar based appliances, gas production,briquettes, clean energy, electricity production and innovation on cooking and lighting the rural areas. Accordingly as a result of AECF several innovations have been discovered on how to ensure that people can tap from whatever can be recycled to slowly help replace fossil fuels which are harzadous and take lots of time to be replaced.
The main projects on agri-business were supply chains, seeds, fertilizer, out-grower schemes, share cropping projects, information dissemination, education and contract farming. Also included were oil crushing, bio-diesel, TV programmes, chicken breeding, microfinance, supply/connectivity chains, seed making, animal products, vaccines against animal diseases, beverage industries, veterinary and extension services, money transfer services, micro insurance services and grain milling services.
From the interaction I came to realize that businesses that succeeded had clear business idea and were focused. They avoided the loss of control that made them each and every time involved in solving conflicts. They had a clear balance between the administrative and customer focus. They invited investors in their business however they also conducted a due diligence on their potential investors. Some clearly targeted social investment funds to grow their businesses. They also had an accountant and clear systems and structures. Most importantly, they understood well the value of their businesses. Well, I have made some realizations, the next thing is to see what to do with them.