presentation sample2
TRANSCRIPT
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Social Impact Fund in CubaThursday, August 6, 2015
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Manufacturing and distributing drip irrigation systems
Biomass electricity generation
Cardboard packaging manufacturing
Production of vegetal charcoal (Scrub biomass)
Pharma packaging
Executive Summary
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Herzfeld criteria Macro criteria
Potential return Encouraged by Cuban government
Social impact Positive global trends
Capital requirement FDI encouragement
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Drip Irrigation Manufacturing and Distribution
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Drip Irrigation Manufacturing and Distribution
PROBLEM
• 80% of basic consumer food imported
• Low productivity – crop yield
• Only 21% farmed land with irrigation
• Water scarcity
BEING A PART OF THE SOLUTION
• Equity investment into drip irrigation system manufacturing and distribution to small and medium farmers in Cuba.
• Association of Small Agriculture Farmers in Cuba (ANAP)
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Social Impact
Community
Environment
Project in Pakistan Projections in Cuba
Crop yields by 40%
Input costs by 30%
Dependency on flood irrigation
Reached more than 20,000 farmers
Crop yields by 10 -30%
Input costs by 30 - 60%
Daily income by USD 4
• 40-70% water saving• 90% water use efficiency• Reduce overexploitation of groundwater• Minimizes erosion
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Benchmark: Indian Project
Comparison Cuba x India
Project
• Manufacturing and distributing systems• Fund Investment: 1m• 30% Equity • Project Breakeven: 3 years• Average return: 33%
Low labour cost / qualified people
Low irrigation access: India (35%), Cuba (21%)
Other financial evidence
Jain Irrigation Systems LTD. – IndiaGross margin: 33.9%EBITDA margin: 15%IRR for typical irrigation project = 11.16%
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Biomass Electricity Generation
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Biomass Electricity Generation
PROBLEM
• Shortage of electricity of 8-10h a week
• Oil energy dependency (96%)
• Decrease high cost of energy
• Contribute to environmental sustainability (sugarcane waste)
• Outdated technology
BEING A PART OF THE SOLUTION
• Equity (joint-venture) in biomass electricity generation
• Easy access input materials (Marabu, Bagasse)
• Priority in Gov. development plan
• 24% renewable energy by 2030
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Social Impact
Community
Environment
Access to energy
Reduce number of power shortagesJob offer increase between 35-46%Development of supporting industries (plantations, transport)
• CO2 emission reduction by at least 30%
• Waste reduction by 50% (agricultural)
• Renewable energy source
• Sustainable forest development
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Benchmark: Cuban project
Benchmark Project
• Stage I 2008-2014• Fund Size 1.28m• FDI by Swiss Agency for Development and Cooperation• Energy supply alternatives from biomass in rural areas• Project IRR 7.4%• Investment recovery in 2 years• Net profits of stage I 1.82m
Other financial evidence
Projects with different sizes in Cuba:• Macurije: 32.3m• Minas de Matahambre: 14.4m
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Cardboard Packaging Manufacturing
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Cardboard Packaging Manufacturing
PROBLEM
• 226m spent on packaging imports in 2014.
• 50% of demand is imported
• 50% local products lack proper packaging
BEING A PART OF THE SOLUTION
• Equity investment in cardboard packaging manufacturing
• 42% projected increase in Cuban per capita consumption of packaged products
• Possibility to export to nearby markets
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Social Impact
Community
Environment
Food waste
Project in the UKIncreasing the shelf-life by 2 days reduced 4% of waste disposal cost and avoided 800,000 strawberries to be wasted.
Tomatoes StudyCardboard increased the useful life by 3 weeks
• Made from easy and fast-growing trees• Cardboard is recyclable • Energy-efficient
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Benchmark: Belarus Project
Comparison Cuba x Belarus
Project
• Production of corrugated board packaging (2012)• CAPEX: 6-8m• Project Breakeven: 2-3 years• Average return: 25-28%
High imports
Main demanding industry is food and beverage
Other financial evidence
• Global revenue is estimated to be over 1 trillion
• Paper and board represent 39% of consumption
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Next Steps
Specific companies to invest1
2 Use the knowledge acquired
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1.71.3
7.0
4.1
5.430.5
Manufacturing and distributing drip irrigation systems
Biomass electricity generation
Cardboard packaging manufacturing
Production of vegetal charcoal
Pharma packaging
Other projects and rounds
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Questions?Thursday, August 6, 2015
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BACK UP
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Next steps in Energy sector:Production of vegetal charcoal from marabù scrubCUBAN Project
Investing into equipment for • harvesting and transportation of marabuensuring sustainable supplies of the biomass required for charcoal production and for forest replanting
In • Granma, Holguin, Camaguey and Ciego de Avila
Cuban party: • Empresas Forestales Integrales
Investment Amount: • 4.1 million USD
Vegetal Charcoal • produced– 3000 metric tons annual
Project available at: http://www.caribbean-council.org/wp-content/uploads/2014/11/Cuba-foreign-investment-projects-Nov-2014-official.pdf
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Next steps in Energy sector:Benchmark: Biomass Plantations
Project available at: http://www.eq-cap.com/wp-content/uploads/Investment-Opportunities-in-Biomass-Energy-Clark-Binkley-Ph.D-GreenWood-Resources.pdf
Project in Poland
• Phase I development –10,000 hectares on low-quality agricultural lands to supply
• Long-term take-or-pay contract with International Paper-Kwidzyn for a 50 MW coal CHP facility converted to biomass
• Projected returns: 10-15% real (USD unlevered)
Project in Chile
• Phase I development - 7,000 hectares on marginal agricultural lands
• 3,000 to 5,000 trees per hectare
• Projected returns: 9%-15% real (USD unlevered)
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Drip Irrigation System Manufacturing and Distribution
558,000
2,087,800
3,696,600
Land with irrigation
Primary market (farmed land without irrigation)
Secondary market (idle land)
Cuba Calculation provided for the chart: (hectares)Agricultural Land6,342,400
Agricultural land being farmed2,645,800
Land with Irrigation558,000
% of farmed land with irrigation21.09%Primary Market (farmed land w/o irrigation)2,087,800
Secondary market ( idle land)3,696,600
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4% 5% 6%
2%
10%
27%
7%4%
12%
2005 2006 2007 2008 2009 2010 2011 2012 2013
Biomass Industry Growth Rate
Biomass Electricity Generation