United States African Development Foundation Off-Grid Energy Challenge 2018

The United States African Development Foundation (USADF) is an independent U.S. Government agency established by Congress to support African-owned enterprises which improve lives in poor and vulnerable communities in Africa. Our foreign assistance in Africa is an investment in local economic development for peace and security today and prosperous U.S. trading partners tomorrow.

We request for Proposals from suitably qualified candidates for:

Title: USADF-All On Nigeria Off-Grid Energy Challenge
 
Background on The Off-Grid Energy Challenge
The Nigeria Off-Grid Energy Challenge is a joint initiative of the United States African Development Foundation (USADF) and All On and is designed to achieve the following results:

• To increase electrical generation to unserved and underserved communities through sustainable business model solutions
• To expand electricity access - delivered through off-grid solutions such as home systems or micro-grids;
• To increase access to electricity for productive and/or household use - while this may include power to meet household consumer needs, emphasis is also given to the delivery of power to productive or commercial activities including agricultural production and processing, commercial enterprises, and others.
• The Off-Grid Energy Challenge is a key element of the Beyond the Grid sub-initiative of Power Africa, a U.S. Government-led partnership launched in 2013 to double access to electricity in sub-Saharan Africa by 2030 by increasing installed power capacity by 30,000 MW, and creating 60 million new connections. Of these targeted 60 million new connections, as many as 25-30 million are expected to be added through off-grid solutions.

Background on The USADF-All on Partnership  

• All On is an impact investing company established to stimulate the development of collaborative partnerships for innovative solutions that facilitate increased access to affordable, reliable and sustainable energy sources in Nigeria.
• All On seeks both financial returns and social impact to provide or improve energy access for millions of households and small and medium enterprises.
• In December 2017, USADF and All On signed a Statement of Intent to combine their respective and complementary strengths and areas of expertise to fund companies with a combination of grant dollars and loans and/or equity investments.

Introduction

• USADF and All On are excited to request proposals for the USADF-All On Nigeria Off-Grid Energy Challenge.  Proposals of up to US$100,000 in 50/50 blended grant/ debt or equity per award will be considered and approximately ten awards are anticipated.
• To be considered for the Challenge, applicants must be 100% African-owned, majority Nigerianowned and -managed private companies registered in Nigeria, and must be operating in Nigeria.
• Projects are to be focused on increasing sustainable energy access - specifically off-grid solutions – extending the delivery of electrification to un-served and underserved communities in Nigeria.  The type of clean energy technologies to be proposed may include, but are not limited to, solar, hydro, wind, biomass, biogas, gas, and hybrid systems. 

Winning Applicants will Receive:

• Seed capital in the form of grant funds
• An investment in the form of a convertible loan at an affordable interest rate and/or an equity investment
• Access to intensive local technical assistance and governance support

Eligibility Criteria

• USADF and All On will consider proposals from 100% African-owned and majority Nigerian-owned and Nigerianmanaged companies.
• Passports or other government-issued IDs of owners and senior managers must be submitted with the applications.
• The companies applying must be for-profit enterprises and must not be government-owned or operated in any way.  
• Applicants may be developers of their own technology and/or may be acquiring and implementing technology developed elsewhere.
• Applicants need to be legally registered in Nigeria, and demonstrate the capacity to track and manage the project resources and operate in good standing with the local governments in which they operate. 

Winning Proposals Must:

• Further develop, scale up or extend use of proven technologies for off-grid energy in Nigeria.
• Benefit marginalized or low income rural or urban populations currently underserved by utility companies, ideally with a particular focus on benefits to women and girls and operating in the Niger Delta.
• Demonstrate financial sustainability or the potential for financial sustainability.
• The proposed investment period must include approximately three months of generation of electricity (or generation of energy) and revenue/cash flow from sales. 
• Demonstrate a proven track record of experience or have project sponsors or partners with a proven track record of related experience.
• Propose a budget of no more than US$100,000. Proposals with budgets greater than US$100,000 must bring leveraged resources from one or more sources that meet the total financing requirements. Leveraged funds from other private sector and donor sources are encouraged.
• Demonstrate clearly whether and how many new connections will be added1, as well as potential for future replication.

Applications will only be considered if:

• They are 100% African-owned and passports showing citizenship are submitted; o All shareholders, members of the board and senior management must be citizens of a sub-Saharan African country and must reside in Nigeria; 
• They are majority Nigerian-owned and -managed (senior managers); 
• They express clearly how they will benefit marginalized, grassroots people in Nigeria, including also ideally showing demonstrable positive impacts for female beneficiaries and people living in the Niger Delta;
• They express clearly how they will achieve profitability;
• They are fully and legally registered in Nigeria and the registration is submitted;
• They document adequate expertise in the field they are proposing or document how they will acquire the necessary expertise;
• They plainly document how they will we use the USADF/All On investment funds to carry out their concept.

Proposals
Winning proposals will do the following:

• Provide off-grid energy to rural or urban areas and populations currently lacking energy access. Distance of the site from the grid is to be included.  An explanation on why grid connection is not feasible is necessary, including an estimate of the cost to connect to the grid.  Best understanding of how long it will take for the area to connect to the grid to be stated. If the proposal is for an urban area or an area with grid connections, a justification is to be included.
• Focus on reaching un-served, underserved or marginalized populations.
• Make clear any female ownership/management.
• Explain all tangible improvements to lives of women and girls, including whether and how company targets women for capacity building/employment.
• Make clear any current or planned operations in the Niger Delta.
• Clearly state whether and how many new connections will be added.
• Include power for economic activities, for example small-scale value-added agriculture processing. The actual or potential business impact is to be addressed in the proposal.  
• Demonstrate the potential for financial sustainability. Some measure of projected financial return on investment and payback period is to be included in an attached comprehensive three to five year financial model in Excel or similar format. The application must demonstrate the potential to operate as a commercially viable business.
• Be driven by demand: is the proposal meeting a clearly known and unmet demand?
• (Preferred) Leverage financing from sources in addition to Challenge funds. 
• Operate within Nigeria.

The following technologies will be considered:

• Productive use:
  • Off-grid energy solutions for mechanization of processes such as grain milling, oil expelling, refrigeration, transport, etc. Solutions are to explain clearly how they will be commercially viable. It is expected that use of the power will address a business solution(s) that will generate ongoing revenue and profits to sustain the enterprise. This must be clearly explained in the proposal.   
• Mini-/micro-grids:
  • Small-scale power generation systems which provide an alternative to, or an enhancement of, national/regional grid connected electric transmission.
• Products/Home systems: 
  • Products or systems installed directly in the homes of off-grid households, which supply energy directly to marginalized populations currently (and in the foreseeable future) lacking access to energy.
  • Focus must be on distribution systems which are scalable and can be replicated, in addition to being affordable. 
• Innovations:
  • o Proposals need not necessarily be for power generation only – they may also include provision of innovative metering, payment systems or other enabling technology, especially if they are an innovation in Nigeria. 
  • If it is an innovation, then a clear and simple explanation is needed of why the innovation is important and what it will do for the sector or the population.

Application Proposal Template

• Name and ownership details. Passport verification of citizenship.
• Business Certificate of Incorporation
• Certified Copies of Corporate Affairs Commission (CAC) Forms 2 and 7
• Certificate of Occupancy for Business Address (if available)
• Tax Clearance Certificate 
• Applicant history, legal address and contact information

• Current Activity
• Past Track Record of Accomplishments 
• Past Financial performance including 3 years of audited financial statements (if available)
• 3 Business References

• Summary of concept
• Location and target market/population.
• Document showing legal right to work in site will be required prior to disbursement of funds.
• Distance of proposed site to national grid
• Documentation that site is selected, land is purchased or leased, or documented evidence that the applicant will be able to able to purchase/lease the land by the date the grant is signed. No changes will be possible with the proposed site. 
• Description of the problem the concept addresses
• Description of concept:
  • Brief description of proposed activities
  • Goals, objectives and intended impact
  • Intended number of new connections
  • Clean energy technology type
  • Plans for future replication
• Key risks and plans to mitigate
• Environmental, health, safety and security compliance
• Senior management and technical team and background including verification of citizenship 
• Ownership and governance
• Relevant expertise
• Proposed timelines/milestones
• Financial Sustainability
• Financial Estimate
• Estimated return on investment
• Total project cost o Status of other investors/funders

Proposed Use of Funds:

• Description/narrative for the use of funds  
• Budget line details, including budget categories and budget estimates
• Budget justification (line by line justification of each budget item):
  • A detailed budget justification is to be included. The narrative should describe why the proposed equipment is appropriate in size and scope for this plan. This is to show why each budget item proposed is required and why each budget item is needed at that level.  Examples: Why are these sizes of solar panels required? Why is this size of generator required?
  • Three quotes are to be included for all items over US$3,000. Contact information for the quotations is to be included. Quotations should provide specifications of items being proposed, for example size and type of solar panels. During the due diligence phase, all costs for budget items over US $3,000 will be verified.
• Cost verification of the equipment to be purchased will be an important element for approval.  In addition to the three quotes submitted as part of the application for all items over US $3,000, during the due diligence phase for shortlisted applicants, three competitive quotes are to be submitted for each item over US $1,000 and less than $3,000. Selected quotations should identify a vendor for items between US $1,000 and $3,000 with contact information as well as an explanation of why the item’s cost is reasonable.

Application Closing Date
1st March, 2018.

How to Apply
Interested and qualified candidates should submit their completed proposal template along with the required documentation by mail to: [email protected]

Click here for more Information on the Energy Challenge (PDF)

Click here to download the Business Proposal Template (Ms Word)

Attachments

• Nationality verification documents of owners and senior management (passports)
• Proof of registration (registration document)
• Referral letters
• Financial model
• Prior audited financial statements (up to three years where available)
• CV's of key management and technical personnel
• 3 quotations with contact information for all items over US $3,000
• The Application is not to exceed fourteen pages (with font size not be to smaller than 10 points).

Timeline

• Proposals will only be accepted at the above e-mail address
• Proposals received after the closing date will not be accepted. 
• Applications will be reviewed and evaluated by a panel of judges with expertise in the field.
• Shortlisted applications will be contacted in March, April and May for due diligence purposes and for clarification of project concept and details.
• Applications that are not shortlisted will not be contacted. 
• Winners are expected to be announced by June 2018
• General inquiries can be directed to: [email protected] and will not be accepted at other e-mail addresses.