Business in a Box
Africa Power has pioneered a robust model for Productive Power which we call “businesses in Boxes” (BinB). Each BinB comprises 5 essential components, all of which must be present:
1. High efficiency; high quality, typically DC, end-use equipment and/or appliances.
2. A renewable power system, sized to match the duty cycle of the equipment.
3. Access to any required business inputs at an economical cost.
4. A full maintenance, refurbishment; training and business support service plan, which is included in the price.
5. An economical model which demonstrates the increased sales profits is at least twice the rental cost (or purchase price) as well as providing a suffcient economic return for the distributor/installer/renter/micro-financier.
Business in a Box example:
Drip-feed Irrigation for 2 acres of a small holder farm
1. In this example, the equipment consists of a high-efficiency DC pump, plus the water tank, piping, drip-feed hose and appropriate shut off valves.
2. This is coupled to a solar power system. In this case, with a water storage tank, we can couple the panels directly to a suitable pump.
3. Farmers need to switch from drought-tolerant seeds to high yield varieties (which need regular watering) and from pelleted fertiliser to liquid fertiliser. We ensure local agri-shops stock the required seed and fertiliser.
4. We rent the combined Productive Power System and thus undertake all the required preventative maintenance, repairs and refurbishment. On installation, our technical team teaches the farmer how to operate the system and undertake simple maintenance (clearing blocked pipes, replacing drip irrigation hoses etc). We also provide access to an agronomist to advise on the best seed, fertiliser, soils improvements, etc. We sub-contract this from local NGO’s; companies and/or via Government agronomists.
5. We have created a financial model showing the added-value of growing various crops. Typically, drip irrigation allows 3 or occasionally 4 planting cycles of high-added-value market garden produce – Tomatoes; onions; peppers; etc and to crop before or after the main rain-based harvests when prices are higher. Based on local prices, the income from additional crop sales is calculated and the business input costs (seed fertiliser, transport to market etc) are subtracted. The resulting profit should be at least 2 times the rental price for us to consider this a viable product. In turn, the rental price must cover our depreciation, and costs of maintenance, repair and the agronomist and other business support, and then provide sufficient profit to meet our financial hurdles. Finally, we check that the absolute profit for the farmer provides a fair living.