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Business start-up

Construction and operating a micro hydropower plant at RUBAGABAGA River, Western province of RWANDA.

It consists in construction and operating the micro hydropower plant of an output power of 300 kW which will be sold to local clients through a private electric grid.

It consists in producing, transmission and distribution of electric power by a micro hydro power plant. Electric power is one form of the renewable energy of public utility which is materialized by its effects: thermal, lighting, magnetic, etc. The potential market is made by different trading centers, community-based institutions, households, villages.This project highly contributes to the socio-economic development of the region as it will create jobs and increase local incomes generating activities. Moreover, it will end up to health and environmental risks due to the use of fossil fuels for lighting purposes.

Facts

Legal status business
Formally registered
Year of establishment

2009

Sales (US$)
Two years ago: 0
Last year: 0
This year (forecast): 0
Year 2 (forecast): 417,429
Year 3 (forecast): 521,786
Net profit after tax (US$)
Two years ago: 0
Last year: 0
This year (forecast): -46012
Year 2 (forecast): 151,062
Year 3 (forecast): 182,102
Total number of Employees
Two years ago: 0
Last year: 0
This year (forecast): 68
Year 2 (forecast): 12
Year 3 (forecast): 15

Finance needed

Finance needed for fixed assets (buying of machines, buildings, ...) 864,146
Finance needed for working capital (salaries, stock, rental, leasing, transport, ...) 135,854
Total finance needed (US$) 1,000,000

How do you expect this to be financed? Please note: the total amount mentioned here should be equal to the total finance needed at the previous question.

Own Contribution in cash 300,134
Loans (debt) 249,866
Share capital that you seek from investors (equity) 450,000
Other sources 0
Total finance needed (US$) 1,000,000

The Business

What is your product/service?

CALIMAX Ltd aims the generation, transmission and distribution of the electric power by the micro hydro power plant for local consumers. This plant will be built on Rubagabaga River in Rwanda.
Electric power is an extremely flexible form of energy adapted to a high number of uses: lighting, heating, refrigeration, machines and appliances/devices operating, etc.

What customer need/problem do your products/services satisfy?

In Rwanda, there is a deficit of 50 Megawatts of electric power on the national electric grid. Only 5% of all Rwandans have access to electricity. In NYABIHU and NGORORERO districts, local community-based institutions use diesel-generators consuming diesel (expensive) which pollute the environment and has a small lighting time.Households use storms/ kerosene candles for lighting which are expensive, environment pollutant, ignition source for houses and source of respiratory diseases.In the region, there is no latest information technology for example, to charge a mobile phone one has to pay 0.5 USD to businessmen who have small generators. Incomes generating activities are still few due to lack of electric power.

How will you make the product/service?

To generate electric power, it will be built an intake on the River which heads to a canal on the right hill sides. Due to many falls, the canal will have the length of 0.5 Km till the basin. The intake, canal and basin will be made up in concrete. From this basin, it will be installed a penstock of the length of 45,5 meters which flows water to the power house, this penstock is a wide metallic pipe.The chosen turbine here is cross flow (BANKI type) because the water quality is clear with few sandy deposits and the power generator chosen is the synchronous one. These machines (turbine, generator, control board) will be located in a small power house. Used water will follow its natural way through a water trap. Electric power will be transformed by elevator transformers and be transmitted trough a medium voltage line till the localities of distributions (villages, centers) where buck transformers will be installed to convert the power into low voltage current and consumers will be connected by cables.
To set up this project, we need 3 following licenses: the building license to be issued by Nyabihu district (2 days to get it); an environmental impact assessment approval to be issued by the Rwanda Environmental Management Authority ( 14 days to get it) and an approval of the Rwanda Utilities Regulator Agency (it is 10 days to get it).

Explain how you will sell your product/service (marketing strategy) and how you will reach your customers (distribution strategy)?

It is planned the installation of medium voltage electric lines of 4,1 km to local electric grid. Low medium voltages lines will installed for close to clients. Clients will be connected upon payment of connection fees. As electric power is of public utility, everyone need it. CALIMAX Ltd is planning to work in partnership with micro finance institutions in order to facilitate local users to connect more clients

To whom are you selling, what is your market?

300 kW of generated electric power will be sold through a private grid to local community based institutions (2 health centers, 1 hospital, 26 cooperatives, 10 secondary schools, 11 churches, 7 offices of the administration, 15 primary schools, 2 vocational schools), to 1216 small businesses of NGORORERO district (southern province), NYABIHU district (western province) and to 3,111 households.

Describe your competitors?

There are no competitors in the region and there is no other company which is planning to compete with us as on the national electric grid there is an enormous lack of electric power.

What makes your business different/better than your competitors (competitive advantage)?

Till now there are any other competitors to our project especially as there is no other company which has already connected or is planning to connect the region with electric power in the future.

What makes your business, your product or service innovative?

It is an innovative service in Rwanda since it was the monopole allover RWANDA of the RECO(Rwanda Electricity Corporation) and this monopole has been abolished by 1999. private companies are encouraged by the Rwandan government to invest in rural electrification i.e production, transmission and distribution of electric power.This project is innovative, profit making and long lasting as it will maintain itself and aims the public utility service.

How will you ensure the growth of your business?

New customers will be connected as a long as the need comes(new households or villages being continuously built) also new electric lines will be installed on the profit of other villages and commercial centers.It is also planned that with the increase in demand, the existing turbine may be replaced with the powerful other one with a great out put power in order to generate more profit. It is planned to replace the existing turbine of 300 kW by the one of 500 kW after 5 years to allow further connections to clients and to do the interconnection to the national electric grid by selling to the Rwanda Electric Corporation as new investments funds will be availed.

The Entrepreneur & Management

Describe the entrepreneur & management

The owner is CALIMAX Ltd, a company working in rural electrification.it has 5 shareholders. It is managed by Mr. François d’Assise Nezerwa, B.Sc in Environmental Chemistry and part time student of a M.Sc in Energy Engineering program. He is the owner of Dassy Enterprise specialized in water, biogas and solar energy since it has executed so many relevant works. He has much technical skills in renewable energy technologies. The manager will coordinate all activities of construction of the power plant and he will lead its management. He will coordinate a team made of civil engineers, electromechanical engineers, technicians, logisticians during the construction, and then, he will lead a team of accountants, operating technicians during the period of managing or operating the hydro power plant.

What specifically makes you and (if relevant) your management team most qualified to build this business?

CALIMAX Ltd has a M.O.U with the Rural Energy Foundation(Netherlands)for technical assistance.The entrepreneur is experienced in works energy installation works.Moreover to his academic studies, the manager has done many technical training in Hydro power plants and Solar systems sizing and in Water quality survey.He has taken a visit tour in 6Dutch renewable energy companies. CALIMAX Ltd has been selected by the GTZ/DGIS in their PSP hydro power program in order to carry out construction works and management of the GASUMO micro hydro power plant, and it is the entrepreneur who leads these works. In the team, there are re known technicians like:
-RAMPOLA Dasun Chinthaka, B.Sc. in electro mechanics who has successfully installed 4 micro hydro power plants in Sri Lanka and Burundi;
-MANIRAGABA Emmanuel, B.Sc. in electricity, has a working experience of 5 years as the in charge of electric power stations in Rwanda electricity corporation (RECO);
-NDAGIJIMANA Tharcisse, B.Sc. in civil engineering has a working experience of 5 years as a foreman for many building sites.
During the construction period (first year), we will employ 62 employees(15 bricklayers, 30 help builders, 11 technicians, 6 guards, etc) and during the operating phase of the plant(following years), we will employ 12 employees( 4 operating and maintenance technicians, 5 accountants/sales agents, 3 guards) but they will increase as long as new customers are connected.

How much time do/will you expect to spend per week in the business?

I am committed with 9 hours per day i.e. 45 hours per week in this business as the manager working on a full-time capacity.

Development

How does your business improve the local living standards (social and environmental)?

The electric power will end up to health and environmental threats due to greenhouse gases emissions rejected by kerosene storms/candles for households and to diesel generators. There will anymore be risk of environment pollution and of houses ignition/burning.The education will be improved as schools will be lighted on and health institutions will be lighted on, medical equipments will be operated.Many income generating activities will be created in information technology (computer literary, communication facilities, mobile phone charging, internet café, photocopy and public secretariat), mills, barber shop, cinema halls, workshops, etc) and people will be able to upgrade their houses.