Setting up of 20 Electrified Activity Zones in Mali

Energy

Type of project: Semi public
Region: Kayes
Investment amount (millions CFA francs): 5 248
Investment amount (Euro): 8 000 000
Investment amount (USD): 9 370 814

The project involves the promotion of a technological and socio-economic innovation that is Electrified Activity Zones. This solution brings together 4 key factors for the development of Small Businesses in rural areas: bioclimatic commercial buildings, access to energy in sufficient quantity and quality, support for entrepreneurship and facilitation for access to local finance.
In this model already tested in Mali on 2 existing sites, development of the infrastructure is based on a public/private partnership :

  • under the responsibility of the local authority,
  • and in management by a private operator.

Electrified Activity Zones are intended to be a tool for development and attractiveness of the territories

  1. by responding to the difficulties noted on the ground: lack of appropriate infrastructure, lack of energy, difficulties of management and access to funding for rural businesses;
  2. by contributing to a strong socio-economic impact, both in terms of value creation and also in terms of jobs.

Stakes:

Two pilot projects are being implemented in Konséguéla and Koury (Koutiala and Yorosso circles, Sikasso region). These experiences show that the conditions for success of an Electrified Activity Zone project are essentially based on the following pillars :

  • Sizing and construction of infrastructure adapted to the needs of rural SMEs to facilitate good working conditions and access to sufficient quality and quantity of energy on affordable terms;
  • Close entrepreneurial support for established SMEs (business plan, energy-efficient quality equipment, simplified management tools, technical and managerial training, access to the market, etc.);
  • Easier access to financial services (guarantee, duration, credit rate, etc.);
  • Strong involvement of local players (local authorities, notables, decentralized state services, local private sector including farmers, etc.).

Goals:

  • Make viable 20 Electrified Business Zones (ZAEs) dedicated to small rural businesses that would ""accelerate the development"" of 200 to 300 VSEs;
  • Give structure to a support system for TPEs allowing close and regular support;
  • Support the sustainability of a private management company for the ZAEs;
  • Facilitate access to financing for VSEs established in the ZAE.

Some results expected from 20 ZAEs based on the effects already observed on the pilot sites.

  • 1 billion CFAF in turnover generated by the VSEs of the 20 ZAE;
  • Local value added: between 30% and 50% of turnover;
  • Creation of local jobs: 600 to 800 direct jobs created and 3,000 to 4,000 jobs consolidated by the 20 Electrified Activity Zones;
  • Increase in local tax revenue: CFAF 40 million in tax paid by the small rural businesses supported each year;
  • Promotion and valorisation of local products;
  • Diminution of the rural exodus;
  • Development of the local supply of products and services;
  • Improvement of the local quality of life.

Needs:

Total budget for setting up 20 ZAEs over 10 years: EUR 8 Million /CFAF 5.25 Billion
Private financing estimated at 25%: EUR 2 million/CFAF 1.3 billion
Public funding estimated at 75%: EUR 6 million/CFAF 3.9 billion

  • 25% energy infrastructure
  • 25% building infrastructure
  • 50% support system for VSEs, management of the ZAEs and access to financing

Partnership sought at the Forum: Public/Private Finance, Capital, Debt MT/LT

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