Corridors for Shared Prosperity Spotlight on India-Africa Inclusive Business Transfer technical notes Intellecap S H A P I N G O U T C O M E S PB | 1 This assessment was conducted and document written for the International Finance Corporation (IFC) by Intellectual Capital Advisory Services (Intellecap). disclaimer IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. This report was commis- sioned by IFC through its Inclusive Business Models Group, which is leading efforts to promote inclusive business across IFC by catalyzing ideas and innovation; convening IFC clients, investment professionals and leading thinkers on inclusive business; and communicating which models work, and generating and disseminating knowledge on best practices. The conclusions and judgments contained in this report should not be attributed to, and do not necessarily represent the views of, IFC or its Board of Directors or the World Bank or its Executive Directors, or the countries they represent. IFC and the World Bank do not guarantee the accuracy of the data in this publication and accept no responsibility for any conse- quences of their use. For more details about this study, please write to Pallavi Shrivastava (pshrivastava1@ifc.org) corridors for shared prosperity The Inclusive Business Transfer Framework presented in Corridors for Shared Prosperity was designed to guide small and medium inclusive businesses for systematic transfer to Africa. The framework was built based on a hypothesis of the drivers of successful transfer, and was then validated, improved and refined based on experiences of eleven Indian inclusive businesses that have replicated in Africa. The framework is currently focused on agriculture, healthcare and renewable energy as focus sectors, with country focus being limited to Kenya, Tanzania, Uganda, Nigeria and Ghana. Metrics used in the framework The Framework is able to provide insights to inclusive businesses as a result of quantitative and qualitative data fed into it, which are derived from a set of shortlisted metrics. The broad categories of the metrics are as follows:  Metrics to understand intent  Metrics to measure transfer-readiness  Metrics to compare the relative attractiveness of 5 African countries as transfer destinations Metrics to understanding intent Table 1: Metrics to understand Intent Metric Definition Sector A distinct subset of a market, society, industry, or economy, whose components share similar characteristics Sub Sector A distinct subset of a sector Product or Product: A tangible or distinct physical or virtual item that may be purchased to answer a specific Service model need or demand Service: A valuable action, deed, or effort performed to satisfy a need or to fulfil a demand B2B Trading between firms (and not between businesses and consumers), characterized by (1) relatively large volumes, (2) competitive and stable prices, (3) fast delivery times and, often, (4) on deferred payment basis. In general, wholesaling is B2B and retailing is B2C B2C Selling individual products to individual buyers, usually on cash payment basis; retailing Year of Year of incorporation of the organization establishment Profit A term used to describe a business that operates under the primary objective of making money. Orientation Although most commercial enterprises have some form of profit orientation to motivate employees to maximize revenues, the most successful producers also incorporate a customer orientation into their corporate philosophy to protect the company's reputation and facilitate client satisfaction with its products Asset-light or Asset-light: Business can be started and scaled with little investment in fixed assets such as land asset-heavy and machinery, or in assets such as a large field staff model Asset-heavy: Business operations necessitate high investments in fixed assets such as land and machinery, or in assets such as a large field staff Legal Organization framework legally recognized in a particular jurisdiction for conducting commercial Structure activities, such as sole-proprietorship, partnership, and corporation Metrics to measure internal readiness to transfer Metrics were identified across 3 areas of management capacity, financial capacity and operational capacity to measure transfer-readiness (Table 2, Table 3, Table 4). Each metric was awarded a binary score of 1 or 0 based on an inclusive business’s specific capacity in that area. For instance, while 2 measuring management bandwidth, availability of 20 percent or less bandwidth was given a 0 score, while availability of more than 20 percent bandwidth was given a score of 1. The binary score gates were adapted to suit the context of small and medium inclusive businesses. To establish readiness on a specific area (management, financial, operational); binary scores for each metric were weighted and summed. If the sum is greater than 60 percent of the total score, then an inclusive business is transfer-ready from that perspective. With the exception of knowledge sharing as a format, for all other transfer formats an inclusive business must score above 60 percent on management, financial and operational capacity in order to be deemed transfer-ready. The weightages awarded to different metrics were arrived at based on the experiences of the sample set and feedback from industry experts. Table 2: Metrics to measure management readiness Metric Definition Weightage Conditions for score of Conditions for score of 0 (not ready) 1 (ready) Senior The amount of time 50 percent  Less than 20 percent  More than 20 percent management that senior bandwidth available to bandwidth available to bandwidth management can focus on expansion focus on expansion allocate to expansion-  No second line of  Second line of centric activities leadership leadership groomed  No business verticals,  Senior management senior management have specific roles and share all responsibilities responsibilities, do not manage more than 3 critical areas Relationships Any relationships and 25 percent  No relationships in  Indian partners/clients and networks networks in Africa, Africa do business in Africa in Africa either at the  Institutional linkages organization of with African firms individual level  Individual team members have networks in Africa Senior The quantum of 15 percent  Less than 5 years of  Expansion experience in management experience that the average experience India experience senior management  No expansion  Expansion experience in has accumulated in experience overseas markets the sector as well as in expansion Talent Firm’s expertise in 10 percent  No specific talent  Have a talent management hiring and retained management practices management lead or practices skilled talent manager  Have experience in incentivizing skilled talent through fast track opportunities, ESOPs, and performance-linked variable salaries Table 3: Metrics to measure financial readiness Metric Definition Weightage Conditions for score of Conditions for score of 0 (not ready) 1 (ready) Profitability The state or condition 25 percent  Loss-making in the past 1  Profitable or shows of yielding a financial year surplus in the past 1 year profit or gain. It is 3 often measured by price to earnings ratio Gross profit The percentage of 10 percent  Less than 15 percent  More than 15 percent margins revenues left with a gross profit margin gross profit margin firm after covering the cost of delivering a product or service Access to Determines if a firm 25 percent  Do not have access to  Have access to funding funding for has access to funding for transfer for transfer (in-principle transfer sufficient capital to commitment from invest in transfer – external funders is either through included) internal capital reserves or external debt/equity funders Revenue The level of 15 percent  Irregular revenue cycle  Regular revenue cycle predictability predictable revenue  Less than 20 percent  More than 20 percent that a firm can sales conversion rate sales conversion rate generate on the basis  Less than 20 percent  More than 20 percent of predictable lead recurring sales recurring sales generation, revenue  One-time customer  Customers are engaged development engagement model with a multiple times systems, and single sale and no customer satisfaction subsequent follow-up Cash flows Incomings and 15 percent  Creditor days ratio is less  Creditor days ratio more outgoings of cash, than debtor days ratio than debtor days ratio representing the  High risk payment model  Low risk payment model operating activities of – product/service is – payment received an organization partially or completely ahead of or just after delivered before receiving delivery of payment product/service Presence of Past history of raising 10 percent  No history of raising  Have raised funding in an external capital from capital from an external the past from an external institutional a bank or an equity investor investor investor investor Table 4: Metrics to measure operational readiness Metric Definition Weightage Conditions for score of Conditions for score 0 (not ready) of 1 (ready) Decision- Measure of the level of 40 percent  No specific processes  Follow well- making model standardization in and policies documented processes and business  Decision-making is and policies standardization processes/operations, done by founders or  Have a quality control and the degree to senior management, strategy, such as which decision-making who cannot be specific department, approaches are relocated to Africa certification transferrable to a new  Operational model is  Operational model has market dynamic and has been stable for more changed within the past than 1 year years’ time Asset Measures what 25 percent Product: Product: utilization and percentage of fixed  Operating at less 40  Operating at more than efficiency assets (plant and percent utilization OR 40 percent utilization machinery in case of do not own assets  Stock outages are rare product companies  Frequent stock outages Services: and people in case of on account of internal or  Less than 30 percent 4 Metric Definition Weightage Conditions for score of Conditions for score 0 (not ready) of 1 (ready) services companies) external challenges of the team is benched are used for revenue Services: or on stand-by generation, and the  More than 30 percent of  Have a well-structured efficiency of assets the team is benched or training program on stand-by  Do not have a well- structured training program Competitive Measures whether the 15 percent  No specific competitive  At least one edge inclusive business has edge competitive edge built significant barriers to protect their market share and compete effectively, by – significant value addition, barriers for customers to shift to competing products/services, market entry barriers Technical Measure of the 20 percent  No specific technical  At least one technical prowess presence/absence/nee strengths strength d of an intellectual property ownership, research and development capacity, and technology partners Analysis of destination markets The relative attractiveness of 5 African markets, i.e. Kenya, Tanzania, Uganda, Nigeria and Ghana was analyzed using quantitative metrics as well as qualitative metrics using the following approach. Step 1 – Identifying Metrics: Quantitative metrics were considered only for the Sub Saharan African region, with a focus on 35 frontier markets only. Hence, South Africa was not considered as part of the data set. Metrics were then converted into standardized z-scores and checked for normal distribution. Metrics that were not normally distributed was replaced with metrics that were. Finally, the degree correlation between metrics was analyzed, and in cases where metric pairs showed a correlation of more than 0.6, only one metric deemed most relevant to the project was considered. As a result of this exercise, 37 quantitative metrics across 13 categories were identified to compare markets based on the overall macro-economic environment, ease of doing business, investment climate, and specific organization-level business dependencies. Step 2 – Creating a sector-agnostic ranking of countries: In order to consider the impact of all metrics together on a country’s suitability for transfer; each category was given a composite z-score. All categories were assigned weightages based on the relative importance that the 20 inclusive businesses analyzed for this project accorded to each for selecting target countries (Table 5). In cases where the z- scores were negative, the country was deemed “below the average” of the general Sub Saharan African trend and awarded a binary score of 0. In cases where the z-scores were positive, the country was deemed “above the average” of the general Sub Saharan African trend and awarded a binary score of 1. Binary scores across 13 categories were then summed to arrive at a relative ranking of countries. 5 Table 5: Weightage accorded to general market environment and business dependencies Category Weightage Macro-economic growth of destination country 5 percent Market Maturity – import reliance, informality, 10 percent size of private sector Strength of regulatory and judicial system 5 percent Corporate tax rate 2 percent Ease of doing business 10 percent Investment climate 15 percent Economic risk 5 percent Social and political risk 3 percent 1 Specific business dependencies 15 percent Overall weightage for general market 70 percent environment and business dependencies Step 3 – Bringing in sector-specific metrics: In the final step, quantitative and qualitative metrics to measure sector-specific business environments were added to the analysis to create sector-specific rankings of countries. Quantitative metrics were treated in the same manner as in steps 1 and 2. Qualitative metrics were identified on the basis of primary research done with inclusive businesses and industry experts. Each qualitative metric was also given a binary score based on whether the country was above the Sub Saharan African Average or below. Sector-specific metrics contributed 30 percent of the weightage for overall country ranking and prioritization. The long-list of all quantitative and qualitative metrics considered is as follows: Table 6: Metrics to measure state of general macro-economic environment Variable Definition Source Vintage GDP growth Annual percentage growth rate of GDP (2009-2013) at World 2013 (annual percent) market prices based on constant local currency Development Indicators Gini Coefficient Gini Coefficient (or index) measures the extent to which World 2012 the distribution of income or consumption expenditure Development among individuals or households within an economy Indicators deviates from a perfectly equal distribution Gross domestic Gross domestic savings are calculated as GDP less final World 2013 savings (as consumption expenditure (total consumption) Development percent of GDP) Indicators Bank non- Bank nonperforming loans to total gross loans are the World 2013 performing loans value of nonperforming loans divided by the total value of Development (as percent of the loan portfolio (including nonperforming loans before Indicators total gross loans) the deduction of specific loan-loss provisions) Uneven Economic This indicator measures the unevenness of the Fragile States 2014 Development government with regard to its social contract, in the Index presence of ethnic, religious or regional disparities. The 1 E.g. Inclusive business relies on specific technology infrastructure and hence can only thrive in countries with good tech infra, or needs access to ports etc. 6 factors taken into consideration include Gini Coefficient, income share of highest and lowest 10 percent of the population, urban-rural service distribution, access to improved services, and slum population Human Composite statistic of life expectancy, education, and UNDP Human 2014 Development income indices used to rank countries into four tiers of Development Index human development: low, medium, high, or very-high Index Import reliance - Imports of goods and services represent the value of all World 2013 Imports of goods goods and other market services received from the rest of Development and services ( the world Indicators percent of GDP) Overseas aid Net official development assistance (ODA) consists of World 2012 reliance - Net disbursements of loans made on concessional terms (net Development ODA as percent of repayments of principal) and grants by official agencies Indicators of GNI of the members of the Development Assistance Committee (DAC), by multilateral institutions, and by non- DAC countries to promote economic development and welfare in countries and territories in the DAC list of ODA recipients Degree of Percentage of firms competing against unregistered or World Bank 2013 informality in informal firms Enterprise market Surveys Gross fixed capital Private investment covers gross outlays by the private World 2013 formation, private sector (including private non-profit agencies) on additions Development sector ( percent of to its fixed domestic assets. Indicators GDP) Maturity in Money inclusive of currency in circulation, travelers checks World 2013 payments and of non-bank issuers, demand deposits, and other Development transactions - M1 checkable deposits consisting primarily of Negotiable Indicators as percent of Order of Withdrawal (NOW) accounts at depository GDP institutions and credit union share draft accounts Age-dependency Age dependency ratio, young, is the ratio of younger World Bank 2013 ratio, young ( dependents--people younger than 15--to the working-age Population percent of population--those ages 15-64 Estimates and working-age Projections population) CPIA Transparency, accountability, and corruption in the public World 2013 transparency, sector assess the extent to which the executive can be Development accountability, and held accountable for its use of funds and for the results of Indicators corruption in the its actions by the electorate and by the legislature and public sector judiciary, and the extent to which public employees within rating (1=low to the executive are required to account for administrative 6=high) decisions, use of resources, and results obtained. The three main dimensions assessed are the accountability of the executive to oversight institutions and of public employees for their performance, access of civil society to information on public affairs, and state capture by narrow vested interests Profit Tax ( The time it takes to prepare, file and pay (or withhold) the World Bank 2013 percent) corporate income tax, the value added tax and social Ease of Doing security contributions (in hours per year) Business Access to Access to electricity is the percentage of population with World 2011 electricity ( access to electricity. Electrification data are collected from Development percent of industry, national surveys and international sources Indicators population) Improved water Access to an improved water source refers to the World 2012 source ( percent of percentage of the population using an improved drinking Development 7 population with water source Indicators access) Time required to Time required to build a warehouse is the number of World 2013 build a warehouse calendar days needed to complete the required Development (days) procedures for building a warehouse. If a procedure can Indicators be speeded up at additional cost, the fastest procedure, independent of cost, is chosen Logistics Eight markets are evaluated on six core dimensions on a World 2012 performance scale from 1 (worst) to 5 (best). The markets are chosen Development index: Quality of based on the most important export and import markets of Indicators trade and the respondent's country, random selection, and, for transport-related landlocked countries, neighboring countries that connect infrastructure them with international markets (1=low to 5=high) Mobile cellular Mobile cellular telephone subscriptions are subscriptions World 2013 subscriptions (per to a public mobile telephone service using cellular Development 100 people) technology, which provide access to the public switched Indicators telephone network. Post-paid and prepaid subscriptions are included Internet users (per Internet users are people with access to the worldwide World 2013 100 people) network Development Indicators Starting a This index evaluates the regulatory regimes for business World Bank – 2010 business- Ease of start-up. It focuses on the areas of requirements forcing Investing Across establishment the use of a third local party, possibility to expedite Borders index (0-100) establishment procedures through an official channel, requirement of an investment approval, minimum capital requirements etc. Cost of starting a Cost of starting a business is recorded as a percentage of World Bank 2013 business ( percent the economy’s income per capita. It includes all official Ease of Doing of income per fees and fees for legal or professional services if such Business capita) services are required by law Access to The number of days to obtain a permanent electricity World Bank 2013 electricity connection. The measure captures the median duration Ease of Doing that the electricity utility and experts indicate is necessary Business in practice, rather than required by law, to complete a procedure Baseline Baseline Profitability Index (BPI), helps predict the total World Bank 2012 profitability index pre-tax return investors might expect in countries around Ease of Doing the world: economic growth, financial stability, physical Business security, corruption, expropriation by government, exploitation by local partners, capital controls, and exchange rates Time(years) to The average time to close a business World Bank 2013 resolve Insolvency Ease of Doing Business Cost to resolve The average cost of bankruptcy proceedings. The cost of World Bank 2013 insolvency ( the proceedings is recorded as a percentage of the Ease of Doing percent of estate) estate’s value Business Business impact Measures the extent to which rules governing foreign World Economic 2013 of FDI rules direct investment (FDI) encourage or discourage it Forum – Global Competitiveness Index Foreign direct Foreign direct investment are the net inflows of investment World 2012 investment, net to acquire a lasting management interest (10 percent or Development (BoP, current $) more of voting stock) in an enterprise operating in an Indicators 8 economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments Strength of This index is an average of the Extent of Disclosure index, World Bank 2013 investor protection the Extent of Director Liability index, and the Ease of Ease of Doing index (0=low, 10 = Shareholder suit index. Business high) Extent of Disclosure index is a measure of the transparency of transactions has 5 components Extent of Director Liability index is a measure of liability for self-dealing by directors has 7 components Ease of Shareholder suit index is a measure of shareholders’ ability to sue officers and directors for misconduct has 6 components School enrollment, Gross enrolment ratio. Tertiary (ISCED 5 and 6). Total is World 2012 tertiary ( percent the total enrollment in tertiary education (ISCED 5 and 6), Development gross) regardless of age, expressed as a percentage of the total Indicators population of the five-year age group following on from secondary school leaving CPIA Gender Gender equality assesses the extent to which the country World 2013 Equality Rating has installed institutions and programs to enforce laws and Development (1=low to 6=high) policies that promote equal access for men and women in Indicators education, health, the economy, and protection under law Inflation, Inflation as measured by the consumer price index reflects World 2013 consumer prices the annual percentage change in the cost to the average Development (annual percent) consumer of acquiring a basket of goods and services that Indicators may be fixed or changed at specified intervals, such as yearly Prevalence of HIV, Prevalence of HIV refers to the percentage of people ages World 2013 total ( percent of 15-49 who are infected with HIV Development population ages Indicators 15-49) Measure of state The scale defines whether the countries are under a Political Terror 2012 sponsored political secure rule of law (or) limited political imprisonment (or) Scale violence (1 to 5, extensive political imprisonment (or) a high level of civil with 1 = low and 5 and political rights violations (or) if the terror has expanded = high) to the whole population Intentional Intentional homicides are estimates of unlawful homicides World 2012 homicides (per purposely inflicted as a result of domestic disputes, Development 100,000 people) interpersonal violence, violent conflicts over land Indicators resources, inter-gang violence over turf or control, and predatory violence and killing by armed groups Legitimacy of the The validity and legality of the government is measured by Fragile States 2014 State (scale of 0 to looking at corruption levels in the country, the Index 10) effectiveness of the government, political participation of the population, the country’s electoral process and levels of democracy. Others are illicit economy, trade in drugs, power struggles as well as protests and demonstrations External This indicator looks at internal Fragile States 2014 Intervention (scale pressures of a country that may lead to interventions by Index of 0 to 10) other states requiring Foreign Assistance, Foreign Military Intervention, Presence of Peacekeepers, Presence of UN Missions and Sanctions. The Credit Rating of the country is also taken into consideration 9 Table 7: Agriculture sector metrics Variable Definition Source Vintage Area equipped under irrigation refers to the area FAOSTAT 2010 equipped to provide water to crops, including areas Total area equipped equipped for full and partial control irrigation (surface, for irrigation ( sprinkler, localized), equipped lowlands (wetlands, inland percent of valley bottoms, mangroves, plains, etc.), and areas agricultural area) equipped for spate irrigation (diverted seasonal flood waters) Cereal yield, measured as kilograms per hectare of World 2012 harvested land, includes wheat, rice, maize, barley, oats, Development rye, millet, sorghum, buckwheat, and mixed grains. Indicators Cereal yield (kg per Production data on cereals relate to crops harvested for hectare) dry grain only. Cereal crops harvested for hay or harvested green for food, feed, or silage and those used for grazing are excluded Arable land (hectares per person) includes land defined FAOSTAT 2011 by the FAO as land under temporary crops (double- Arable land cropped areas are counted once), temporary meadows (hectares per for mowing or for pasture, land under market or kitchen person) gardens, and land temporarily fallow. Land abandoned as a result of shifting cultivation is excluded Fertilizer FAOSTAT 2010 consumption (tones Fertilizer consumed in tones per 1000 hectares of nutrients per 1000 Hectares) Pesticides FAOSTAT 2014 consumption per Pesticides consumed per hectare hectare Net Import of FAOSTAT 2011 Net import of Agricultural commodities (an agricultural Agriculture Commodity can be defined as grain, livestock, poultry, commodities( fruit, timber or any other items produced from agricultural Import-Export) (in activities) by a country. It is computed as import - export. 1000 $) Crop production index shows agricultural production for World 2012 Crop Production each year relative to the base period 2004-2006. It Development Index includes all crops except fodder crops. Indicators Land under cereal production refers to harvested area, World 2012 although some countries report only sown or cultivated Development area. Cereals include wheat, rice, maize, barley, oats, Indicators Land under cereal rye, millet, sorghum, buckwheat, and mixed grains. production(hectares) Production data on cereals relate to crops harvested for dry grain only. Cereal crops harvested for hay or harvested green for food, feed, or silage and those used for grazing are excluded. Percent of FAOSTAT 2013 Population economically active Percent of Population economically active in agriculture in agriculture w.r.t w.r.t total economically active population. total economically active population Milk yield(Hg/An) The quantity of milk produced each year by an animal FAOSTAT 2011 Per capita milk Milk available per person in the country. It is computed FAOSTAT 2011 availability(in Kg) by milk production divided by total population 10 Arable land includes land defined by the FAO as land FAOSTAT 2011 under temporary crops (double-cropped areas are Arable land ( percent counted once), temporary meadows for mowing or for of land area) pasture, land under market or kitchen gardens, and land temporarily fallow. Land abandoned as a result of shifting cultivation is excluded. Percent net sown Net Sown area is the total area sown with crops in a FAOSTAT 2011 area/ total area country. Presence of Major Intellecap 2014 Significant presence of distribution companies in the Distribution Analysis country Companies (Y/N) Presence of Food Intellecap 2014 Significant presence of Food Processing Exporters in the Processing Analysis country Exporters (Y/N) Presence of Intellecap 2014 cooperatives and Significant presence of cooperatives and trade Analysis trade associations in the country associations(Y/N) Subsistence agriculture is self-sufficiency farming in FAO 2014 which the farmers focus on growing enough food to feed Level of Subsistence themselves and their families. Level of subsistence Farming (H/L) farming determines the percentage of farming population practicing subsistence farming Agricultural Losses ( FAO 2014 Post Harvest) Post-harvest agricultural losses" means a measurable (H/L)(anything more quantitative and qualitative loss in a given agricultural than 20 percent is produce high) Presence of Intellecap 2014 agricultural/dairy Analysis Organizations and Institutions which carry out research research and in agriculture sector industry organizations(H/L) Access to farm loans Intellecap 2014 Availability of farm loans to farmers for agriculture (Y/N) Analysis Input Subsidies Presence of government schemes and programs which Intellecap 2014 (Y/N) allows subsidies on agricultural inputs Analysis Presence of government regulations which states import Intellecap 2014 Import Duties (Y/N) duties on agriculture related commodities Analysis Table 8: Healthcare Sector metrics Variable Definition Source Vintage Out of pocket as a Level of out-of-pocket expenditure expressed as a WHO Health 2014 percent of private percentage of private expenditure on health Indicators expenditure Government Level of general government expenditure on health WHO Health 2014 expenditure on health (GGHE) expressed as a percentage of total Indicators as percent of total expenditure on health (THE) expenditure Hospital Beds per The number of hospital beds available per every 10 000 WHO Health 2014 10,000 inhabitants in a population. Indicators Density of Number of pharmaceutical personnel per 10 000 WHO Health 2014 11 Variable Definition Source Vintage pharmaceutical population Indicators person Doctors per 10,000 Number of medical doctors (physicians), including WHO Health 2014 generalist and specialist medical practitioners, per 10 Indicators 000 population. Density of nurses and Number of nursing and midwifery personnel per 10 000 WHO Health 2014 midwifery population Indicators Health Insurance Percentage of population covered under some Health Intellecap 2014 coverage in the security scheme in the country analysis country of Operations Mortality Rate of top 5 Measure of the number of deaths in a population, Qualitative, 2014 Communicable/NCD scaled to the size of that population, per unit of time. WHO Health Diseases This metric is measured for both: communicable Indicators diseases (which spread from one person to another or from an animal to a person) and non-communicable diseases (NCDs, also known as chronic diseases, are not passed from person to person) Extent of public Analysis of the extent to which public healthcare Intellecap 2014 intervention in the infrastructure is used by BoP populations in order to analysis healthcare market determine if there is a viable market for private healthcare services Table 9: Renewable Energy sector metrics Variable Definition Source Vintage Gap in Electricity Difference in the quantum of electricity generated in U.S. Energy 2013 Production and the country and the quantum of electricity Information Demand ( percent) demanded/required by the population Administration Percentage spend on Quantum of a household’s spend on energy needs U.S. Energy 2013 energy consumption Information Administration Percentage of energy Electricity production from renewable sources World 2012 production from includes hydropower, geothermal, solar, tides, wind, Development renewable sources biomass, and biofuels. Indicators Transmission and Electric power transmission and distribution losses World 2011 distribution losses ( include losses in transmission between sources of Development percent of output) supply and points of distribution and in the Indicators distribution to consumers, including pilferage Presence of Whether a destination country in Africa has as part of Intellecap 2014 renewable energy its policies or national/regional/local development analysis portfolios targets or plans, targets for achieving higher level of renewable quotas energy output as part of its installed power capacity Presence of RE Presence of networks/associations in the country Intellecap 2014 sector industry that direct efforts for strengthening the RE sector in analysis associations the country with regard to production and adoption Availability of 3rd Presence of firms/organizations in African countries Intellecap 2014 party distribution that have the capacity to function as a channel analysis partners or platforms between RE producers and end-consumers Commercial financing Presence of banks, NBFCs, private equities, impact Intellecap 2014 for RE sector investors, venture capital funds, angel investors and analysis companies other actors that have the ability to finance RE sector companies in focus African country 12 Availability of raw Presence of an a substantive amount of raw Intellecap 2014 materials materials for different sectors: solar PV panels, analysis inverters etc., for solar energy; animal waste and construction materials for biogas generation etc. Consumer awareness Whether the focus product/service has a significant Intellecap 2014 presence in the country and the end-users are aware analysis of the benefits/drawbacks of the product/service, or would efforts needed to be directed at building consumer awareness Feed-in tariffs An economic policy created to promote active Multiple 2013 investment in and production of renewable energy sources – sources. Feed-in tariffs typically make use of long- country term agreements and pricing tied to costs of official production for renewable energy producers. By releases offering long-term contracts and guaranteed pricing, producers are sheltered from some of the inherent risks in renewable energy production, thus allowing for more diversity in energy technologies Presence of Presence of policies that encourage activity in the Intellecap 2014 facilitative policies at sub-sectors: biomass/biogas, solar, hydro etc. analysis the sub-sector level 13 World Bank Group The World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. It consists of five institutions: the World Bank, including the International Bank for Reconstruction and Devel- opment (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Working together in more than 100 countries, these institutions provide financing, advice, and other solutions that enable countries to address the most urgent challenges of development. International Finance Corporation IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries. Established in 1956, IFC is owned by 184 member countries, a group that collectively determines our policies. Our work allows companies and financial institutions in emerging mar- kets to create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. Intellecap Intellecap is a pioneer in providing innovative business solutions that help build and scale profitable and sustainable enterprises dedicated to social and environmental change. Our unique positioning at the intersec- tion of social and commercial business sectors allows us to attract and nurture intellectual capital that combines the business training of the commercial world with the passion and commitment of the social world to shape distinctive solutions. We seek to build institutional capacity and channel investments in the development sector through consulting services, investment banking services, and knowledge and information services. Examples include innovative and focused initiatives such as capital advisory services, intermediating impact investment capital, innovation management, strategy design, market research, stakeholder engagement and policy advocacy. Founded in 2002, Intellecap has grown into a Group with more than 600 employees and 300 engagements across 23 countries around the world. For more details about this study, please write to Pallavi Shrivastava (pshrivastava1@ifc.org) International Finance Corporation Intellecap Maruti Suzuki Building, 3rd Floor, 13A, Techniplex II IT Park, 6th Floor Nelson Mandela Road, Off Veer Savarkar Flyover, Goregaon West, New Delhi - 110070, India Mumbai - 400062, India Phone: +91 11 4111 1000 Phone: +91 22 6195 2700 Website: www.ifc.org Website: www.intellecap.com