The 180 Team Allison Arena Kat Lu Client Lead Engagement Lead - - PowerPoint PPT Presentation
180 Degrees Consulting Natfort Energy Bridges for Enterprise Final Presentation The 180 Team Allison Arena Kat Lu Client Lead Engagement Lead Economic Consulting and Finance and Business Public Policy Analytics Cole Tamondong Grayson
180 Degrees Consulting Natfort Energy Bridges for Enterprise Final Presentation
Allison Arena
Client Lead Economic Consulting and Public Policy
Kat Lu
Engagement Lead Finance and Business Analytics
Grayson Faircloth
Consultant Finance and Computer Science
Cole Tamondong
Consultant Economic Consulting and Business Analytics
Rachel Stuto
Consultant Finance and Accounting
Matt Begley
Consultant Economic Consulting and Public Policy
INTRODUCTION PAYGO FINANCING REVENUE PROJECTIONS CONCLUSION PARTNERSHIP
PAYGO Partnerships
Benchmark Pricing
Studies
Lifetime Value
Recommendation
Explaining Natfort’s Value-Add
Financing
Various developments modified our strategic trajectory. ECONET DEAL NETONE MEETING REQUEST FOR FINANCIALS AMPED INNOVATION EEP – NEW ROUND OF FUNDING
EcoNet, Zimbabwe’s largest mobile telecommunications corporation invests $250 million in solar power systems. Financials centering on potential revenue through PAYGO to enrich Natfort’s proposal to NetOne. Meeting with the NetOne Head of Innovation called for the creation of documents containing a brief introduction to PAYGO, partnership structure, Natfort’s value-add, and market sizing. Amped Innovation expresses interest in partnering, leading to a joint pilot product line. Energy and Environment Partnership Trust Fund “[provides] early stage grant and catalytic financing to innovative clean energy projects, technologies, and business models” which is a great fit for Natfort.
Entering PAYGO will afford Natfort access to beneficial partnerships and financing opportunities. Rural Zimbabweans don't have the capital for the high up-front cost solar installations require, but with the introduction of PAYGO, we can tap into a new market and improve overall QofL.
Launching PAYGO using a micro-utility and micro-grid model is the best way for Natfort to take advantage
low-income, rural
lead to word-of-mouth information transfer.
Partnering with NetOne not
mobile payments and track energy usage, but also allow Natfort to access NetOne’s existing customer base. Partnering with Amped Innovation to develop high- tech solar products is essential to improving product quality.
EEP provides early-stage grant and catalytical financing to companies that are similar to Natfort in mission.
Natfort installs equipment on a household scale, retaining ownership indefinitely.
Client pays incrementally throughout use. Natfort retains ownership of equipment. Natfort installs individual units.
Natfort removes installation if client ceases payment. Indefinite payment collection Ability to remove equipment Longer payment timelines for low-income clients Must track all client payments indefinitely Incur costs of equipment removal Client default risk
Natfort installs equipment on a household scale, ceding ownership upon client repayment
Client owns equipment following full payment. Client upgrades with a new installation and set of payments or the relationship ends. Client pays incrementally throughout use. Natfort installs individual units. No need to track client after repayment Encourage clients to upgrade equipment Client default risk Tighter timelines may discourage lowest-income households
Community-scale installations are accessed by individual customers in the area.
Households and businesses can pay for access to the base station. Clients purchase different amounts of energy based on need. Natfort installs a base station to support an entire community. Natfort controls energy flow via smart meter software system. Word-of-mouth demand increase Direct control over energy provision Single equipment installation serves many individuals Must utilize smart meter system Risk of low demand in community Highest upfront costs
A micro-utility model has several benefits that make it the most implementable and attractive method for Natfort. Payment Timeline Client Relationships Ownership
Natfort reaches the lowest- income customers with extended / indefinite payment schedules. Long-term installations lead to customers returning and upgrading to higher-priced bundles. Natfort retains its
and reuse it if a customer stops paying for the energy.
Client
Strategic pricing structures and product bundling should encourage customers to move up the value chain.
When implementing PAYGO, product packages incentivize customers to buy-in. Natfort should implement bundling “levels” and encourage customers to move up the value chain.
Strategic pricing structures and product bundling should encourage customers to move up the value chain.
Includes: Light Bulbs, Phone Chargers Down Payment: 5-8% of Total Price Markup (Above Cost): 5-15%
Inexpensive bundles are the most effective way to reach new customers. Lowest-level bundles are inexpensive, but still improve QofL.
Strategic pricing structures and product bundling should encourage customers to move up the value chain. Includes: Inexpensive Bundle + Radio, Box Fan, Television and Receiver Down Payment: 8-12% of Total Price Markup (Above Cost): 10-25%
Customers see increases in QoL and are more willing to purchase better bundles. Natfort’s revenue increases when clients purchase better bundles.
Includes: Light Bulbs, Phone Chargers Down Payment: 5-8% of Total Price Markup (Above Cost): 5-15%
Strategic pricing structures and product bundling should encourage customers to move up the value chain.
Includes: Standard Bundle PLUS Microwave, Hot Plate, Refrigerator, Freezer, Water Heater Down Payment: 12-20% of Total Price Markup (Above Cost): 15-40+%
Customers see increases in QoL and are more willing to purchase better bundles. Reaching the top of the value chain, Natfort should move its markup even higher, reaching up to 40 percent.
Includes: Inexpensive Bundle + Radio, Box Fan, Television and Receiver Down Payment: 8-12% of Total Price Markup (Above Cost): 10-25% Includes: Light Bulbs, Phone Chargers Down Payment: 5-8% of Total Price Markup (Above Cost): 5-15%
A Natfort and NetOne partnership is lucrative for both parties.
NetOne enters into a new market without being required to develop extensive technical expertise to install and maintain the equipment Natfort understands the Greater Harare market, giving NetOne a competitive advantage over other
NetOne provides the capital and infrastructure for Natfort to expand its
Natfort can tap into NetOne’s existing base of consumers that have demonstrated their ability to pay
Natfort is a critical piece to partnerships.
1 2 3 4
Natfort knows the skills and qualifications required for potential hires
Natfort is a critical piece to partnerships.
1 2 3 4
Natfort knows the skills and qualifications required for potential hires Natfort has a strong and positive reputation with customers, suppliers, and the government
Natfort is a critical piece to partnerships.
1 2 3 4
Natfort has a strong and positive reputation with customers, suppliers, and the government Natfort understands how to price a successful PAYGO Model Natfort knows the skills and qualifications required for potential hires
Natfort is a critical piece to partnerships.
1 2 3 4
Natfort knows the skills and qualifications required for potential hires Natfort has a strong and positive reputation with customers, suppliers, and the government Natfort understands how to price a successful PAYGO Model Natfort contributes to the community, making it ideal for grants and outside financing
Natfort has different options based on its market plan.
Suited For Micro-Grids Components Solar Panels and Meters Controlled Remotely Payment Pre- and Post-Pay Suited For Micro-Utility Components Solar Panel, Power Controller, and Accessories Controlled Remotely Payment Pre- and Post-Pay
Software facilitates communication channels.
950 1300 1800 2200 3500 4100
1000 2000 3000 4000 5000 January February March April May June
Kudzi uses the Internet to track power usage on the interactive dashboard and “requests” the corresponding amount. Customer pays via SMS.
Four criteria were used to evaluate potential financing partners.
Financing Amount Structural Fit Other Support Mission Fit
CrossBoundary provides an opportunity to partner in an untraditional way.
Capital Rural Clients Immediate Implementation of PAYGO
Natfort acts as a “contractor” and installs the panels. Natfort earns revenue and saves capital to launch PAYGO. CrossBoundary funds the cost of the solar panels.
Form Partnership Install Panels for CrossBoundary Implement PAYGO System 2018 2021
EEP funds projects relating to expanding renewables in Africa, making it a great fit for Natfort.
Capital Rural Clients Immediate Implementation of PAYGO
EEP provides a grant or a loan. Natfort uses the upfront capital to launch PAYGO. Natfort applies for funding in Call for Proposals.
May Apply for Funding Natfort Receives Funding Implement PAYGO June Call for Proposals Ends Customers Move Up Value Chain 2018 2021
EEP aligns best with Natfort’s short- and long-term goals.
Instant Capital
Grant
Immediate Access to PAYGO Benefits to Natfort
Financing Amount Structural Fit Other Support Mission Fit
Customers and Profitability Internal Operations Financing New Projects Key Considerations
Entering PAYGO will afford Natfort access to beneficial partnerships and financing opportunities. Rural Zimbabweans don't have the capital for the high up-front cost solar installations require, but with the introduction of PAYGO, we can tap into a new market and improve overall QofL.
Launching PAYGO using a micro-utility and micro-grid model is the best way for Natfort to take advantage
low-income, rural
lead to word-of-mouth information transfer.
Partnering with NetOne not
mobile payments and track energy usage, but also allow Natfort to access NetOne’s existing customer base. Partnering with Amped Innovation to develop high- tech solar products is essential to improving product quality.
EEP provides early-stage grant and catalytical financing to companies that are similar to Natfort in mission.