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Jeroen Pool team 3
Jeroen Pool Hilversum, NL

Solar S3C for Schools and Home

Most of Africa has to do without power. S3C brings solar to these remote, rural areas, using schools as hub to the communities. S3C harvests the sun.

$55,261 INVESTED
100%
$55,261
Required
10% $552,610 Challenge valuation
Equity Valuation
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INNER CIRCLE


S3C harvests the sun for remote areas in sub-Saharan Africa. We use schools as hub to the huge groups of rural people. 75 to 85 % of the African population has no access to electricity, they use traditional inefficient energy sources. We intend to make an entry into Kenya and Ethiopia with a population of 45 and 80 million respectively. The market is insatiable, the communities are willing to pay for light; current avarage energy costs per year for rural communities is more than 50 USD whereas  a good quality solar lamp costs less than 30 USD. 



The challenge is making solar lamps available in the villages and offer high quality technology for PV installation in institutions like schools, health centers etc. S3C will be active in the rural areas, visiting schools to present the value proposition in local  tribal language and explain the added value; safe your money, safe your health, save the environment. Studies done have shown that this strategy will work; 'poor' rural dwellers can afford a goat to buy light, and  are willing to do so! 



Join this venture, to make impact! Empower rural villages, provide light to remote areas, assist rural enterprises to prosper and eliminate poverty, invest in S3C. 





 

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We have two main product lines:




  • we supply a series of small solars (lamps, home systems) to rural households,


  • and tailor made solar installations to rural, off grid institutions (schools, health centers, SME's, churches).



We use the best on the market: for lamps and SHS WakaWaka, Barefoot, d.light, for the institutions Ubbink Solar PV, Victron, SMA, DEKA, Hoppecke.



Quality is our brand, as well as accessibility: we train local technicians and assist them in setting up their own S3C franchise: close to the clients, with knowlegde of technology but also of local culture. And around the corner for maintanance and advice. S3C doesn't leave you alone, S3C helps out to harvest the sun.


The SSA solar off grid market is huge: the grid is extended along the main infrastructure, the rest is left without relaibale access to power. Some estimates:



Kenyan market is:



- 35 to 40 mio rural living people,  about 8,6 mio households. 



- 31.500 schools and 1.500 clinics



- numerous SME's and small rural shops



 



Ethiopian market is:



- 93 mio people, of whcih 83 % rural, or 78 mio, about 15 mio households



- 50.000 schools and about 3000 clinics



- abundant number of small businesses and shops



 



The market is willing to pay, because saving with regards to current energy expenses is very clear. MFI helps to bridge the finacing gap, with our coopetration with Equity bank. They also expand the market, by opening up their saving groups facilitation to S3C


Marketing and Sales analysis



Marketing is done by billboards, vernacular radio and other active approach to the market: the schools using our NGO contacts/contracts, the active presentation of products and giving free samples to groups to experience.



The sales force exists of a network of local S3C-entrepreneurs/franchisers, close to the market and very well integrated in the rural populations, speaking the tribal language, knowing the habits and thresholds to take. Training and upgrading of these entrepreneurs is core of our apporach; in a combination of tehcnical training and business skliis development and coaching.   





 


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Initial Investment



The founders of S3C have committed labour and expertise to the start up. In order to commence and sustain successful operations, S3C requires a initial cash out lay of 100,000 Euro. The founders are seeking prospective investors to provide funding as either equity participation or a low interest  long term loan.



The second phase (expansion stage 2014-2015) will require more investment, S3C will expand operations both in Kenya and Ethiopia, and to finance the expansion, S3C will require 150.000 Euro in 2014 and a similar amount in 2015.



Profit expectation

Based on realistic sales projections and internal efficiency improvement measures in place, S3C will attain profitability at the end of the 2nd phase (third year) of operation.

At the end of the first year of operation 2013 (phase one) will register a net loss after tax of € -19.400; the net loss after tax will be € -53.425 (11%) at the end of 2014 mainly due to expansion of operations and investments into new regions in Kenyan and Ethiopia (expansion- phase II).

In 2015, S3C will attain a net profit after tax of € 92.350 or 5% of sales this is attributed to economies of scale and internal efficiencies.

Significant net profit of €164,925 or 6% of sales is made in the fourth year, the net profits will rise to € 539.125 or 12% of sales in the fifth year of operation (growth phase), higher profits are foreseeable in years to follow.



 



EBITDA:



2013:  € -14.400  



2014:  € -67.425  



2015:  € 61.350  



2016:  € 166.925  



2017:  € 540.125



 



Cash flow and net worth

S3C is projected to register a steady growth in net worth from phase II (2014-2015) of operation onwards; net worth at end of 2014 is € 59.675, and projected to rise to € 972.075 in 2017.



The value of the company is growing with potential to grow at a higher rate if the internal and external sources of financing are optimized to finance expansion. Investors start to make returns at the end of the phase II (year 2015).



S3C being a social venture, will endeavor to create value to communities in areas of operation, S3C will procure logistics from local entrepreneurs (transport and warehousing). Good cash flow balance will be maintained for a successful growth strategy.



For detailled information please refer to the business plan.

 



Share value development



Initial share value at the curent emission is € 27,77



Based on net worth development, this share value is expected to rise to € 138,88 in 2017. 



Key Ratio 



Details / Year               2013        2014      2015      2016     2017

Gross Margin               35%          34%      32%         6%       12%

EBIT/Sales                    -8%           -7%         5%          6%      12%

Current Ratio                   7               4             3              3           4

Earnings Per Share      -1              -3              5           - 9         30

Return on Equity         100%        -69%       29%        34%      53%



 





 


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