Rwanda country of opportunities The start of a program investing over Euro 500 Million in the Private sector of Rwanda. Based on the ambition of GOR, as well as the objectives of EII, as investing partner. As RCF we accompany EII that is preparing a major investment in Rwanda in three clusters of projects: energy, housing / construction, and in the agrofood complex. Find more information on www.rwandachamber.org Hub Rwanda
Projects and requirements Before investing in a program, there is an number of general requirements, related to the objectives of Erasmus Investment International (EII), which reflect also the ambition of GOR: - Contribution to the prosperity, welfare and stability of the country, creating economic growth and employment (creation of jobs) - Sustainable and contributing to the development of communities - For agri- and horticulture: contribution to the food security and the export power of the country. Added value also from (food) processing, storages, packaging and distribution. Chain optimization is a key-item - Synergy between the projects within the 3 clusters of projects: Energy, Housing, AgriFood. (example: cultivation of agriculture areas plus creating small communities including affordable housing, schools. Or, a power-plant plus a high-tech greenhouse using the heat and the CO2 of the plant) - Private sector parties involved in the projects, being able to take over management and expand the activities in the future. These parties should Show (potential) management power and leadership. Being able to create added value and future growth. Build excellent and trusted relationships with stakeholders
â€œRules of the game areâ€? -66% up to 100% of the equity is coming from international (country) banks, funding a humanitarian channel of projects - Based on a co-investment of 15% - 20% this platform will expand to 100% -Money is not the limiting factor (within boundaries) but good projects are - The platform will not pre-finance business cases and investigations. That is up to the potential foreign co-investors, Rwandan private parties, and international suppliers. They must present to the platform: -A SWOT analysis about Rwanda (work for RCF and RDB) -Clusters of feasible projects with a positive business case -Projects must be do-able: proposing a good legal structure within the requirements, sustainability, employability, private sector involved who can take over the management - After a positive decision of the platform they will get their pre- investment back or they will get shares for it with a good leverage - The invested money from the financing platform stays in the country (no exit strategy) and most of the dividend of 66% of the shares also stays in the country
EII structure by example
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By example: how it might work (1) 1. SWOT analysis Rwanda: why it is save to invest in the country and will it realy make a difference for the country? 2. Feasibility what we need early July are project proposals to grow an existing private business or a proposal for a new initiative in the market, a new business. This in a couple of pages. This preliminary proposal should contain at least: - what business, background of the initiative / propopsal? - history, Who = Who ? - what purpose should be achieved and by when? - where is the market? - Indication of ROI first 3 years? - Sum of the total investment (new equity) in terms of (new) assets on the balance sheet - Risks? Scenarioâ€™s? - Other companies involved?
By example: how it might work (2) 3. Structure In Rwanda EII will works with a new legal entity: Erasmus Investment Rwanda (EIR)
-EIR might create a new legal local entity (Ltd. / JV) per project of cluster and local private parties and foreign investors can get or may buy max. 33% of the shares. The private party (with foreign investor) will manage the company, not EII -EIR might create a new legal local entity and give shares and a salary to a private party who commits and is capable to manage the new company -EIR might buy 66% - 100% of the shares of a local company. The owner(s) / management team can cash or get shares, and will take the responsibility for the company at a salary and a bonus construction -The local private company might become a â€˜independentâ€™ business unit or Ltd. under a Holding of EIR
Further explanation Normally a foreign investor with a majority in a local company takes over the lead in management. They run the organization. EIR will NOT take over the management. Local management (and partners) will lead the company and might be supported by EIR with training & coaching. The only reason EIR wants to keep 66% of the shares is staying in controll of the investment in assets and to re-invest dividends in Rwanda The total investment in equity stays in the country and EIR has no exit strategy. The local party and / or co-investor with max. 33% of the shares is free to exit after some time and will be paid for the shares
Tentative structure, just one out of many options
Summarizing EII will finance what Banks do not finance (taking more risks and financing side investments like communities, houses, schools, training, infra, ICT, without any direct ROI). There is no exit strategy. EII is after a profit on projects to cover project costs and being able to pay some bonus to foreign suppliers and co-investors, and to finance the side program If an investment makes, by example, $900,000 net profit EII will, with a team of an international accountant prepare a proposal for the general meeting of shareholders, based on the agreements as described in the statutes of the company. This might have the outcome that the Board propose to keep $500,000 in the company for further investments and $400,000 will be paid, to the shareholders as a dividend. The (max.) 33% of the shareholders will receive this in cash or in shares or both. The 66% shareholder (EII) will cover costs, might pay a bonus and will re-invest the rest of the dividend in the company or the country again.
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Process for a final decision on projects to be financed
We all do better when we work together. Our differences do matter, but our common humanity matters more. Bill Clinton
Q&A Contact Folkert Castelein or Chris van de Plasse firstname.lastname@example.org email@example.com firstname.lastname@example.org
Where does the money come from? Erasmus Investment International (EII) works for a humanitarian channel owned by a platform of international (country) Banks. An example of a program financed through this channel is Macedonia, â‚Ź 1.5 B ( http://www.foodhubmacedonia.com/erasmus-investment-macedonia-new-company-responsable-fordevelopment-of-food-hub/ ) The final decision financing a program starts with a SWOT analysis Rwanda, feasible projects within the requirements and 20% co-investors / bank guarantees. The co-investor(s) transfers their money (>$100M) to a (London) bank (AAA). With this money a trading process starts, leveraged by the funding platform. How it works: the money from the co-investor(s) stays always at the bank. No one can and will touch this. No risks. It must stay there for 12 month. In month 13 he gets 200% back and he can wirhdraw his money again. Find more information on the updated website www.erasmus-group.com and the principles of trading in the attachment.
The banking platform leverages the money from co-investors by quantitative easing based on the SWOT analysis and the program proposal delivered by RCF and approved by EII. That is how we can invest $1B - $2B in Rwanda. Remark: As explaned we have 2 types of co-investors. One as mentioned above, a one year investment in the total program. Second type of co-investors are investing in the projects against shares, for a longer period being a partner of local companies.