An Executive Report December 2012
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Transcript of An Executive Report December 2012
An Executive ReportDecember 2012
The Gerset Development ProposalEritrea Sugar Company ESC
GERSET, Eritrea
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Contents
A. The Economic ProfileB. The LegacyC. The ChallengesD. The PropositionE. The StructureF. The CSR Initiative
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Eritrea
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The Economic Profile
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The Legacy
Wefri Warsay Yika'alo (WWY) or Warsay Yika'alo Program
A successful Government CommitmentOften compared to the Marshall Plan
A series of Government sponsored investments in economic, education, health, and transportation related infrastructure
A mixture of grants and loans from international organizations and from the Government of Eritrea
Practical transfer of skills is an important component of this program.
All planned 22 projects were completed except the construction of Keren Dam
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The Challenges
Demographics
Enthusiastic, Resilient and Young Population, with Competences
High Rates of Education, Healthcare and Physical Fitness
Low Urban Density and Facilities with Conventional Economic Sectors
Committed Government and Civic Service, Despite the Fierce Embargo
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The Challenges
Agriculture Production
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The Challenges
Agronomics & Food Security
Strategic Dams at Gerset, Fanko-Tsimue and Fanko-Rawi
Strategic Transit and Transportation Systems & Solutions
Formal Ambition towards Modern Farming and Agronomic Techniques
Strategic Need to Develop and Improve Agro Productivity for Domestic and Export Use
1.5 mln Capita are the Workforce for Rainfall based Agriculture
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The Challenges
Gash-Barka Region
Population of 567,000 or One Third of Eritreans
over 3.5 million Livestock
37,000 Square Kilometers or a Quarter of Eritrea
Rich in Marble, Minerals & Gold for 15% of GDP
The Breadbasket of Eritrea with 350,000 H. or 900,000 A.
Main Cities: Barentu, Agordat, Molki, Sebderat and Teseney
Life expectancy at birth is 59.5 years in 2008. Low Expenditure on health and Number of Physician
Illiteracy estimates as high as 70%. Student-teacher ratios are high: 54 to 1
2009 Real GDP $ 4.4 billion, and growth rate 3.6%
Nationally;
arable land of 565,000 hectares or 1,396,000 acres
Due to Droughts, Erosion and Deforestation; 70-80% of population depend on Food Aid
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The Challenges
Gerset Dam
20 Pivot Sprinklers are capable of watering 28 and 60 hectares
Reservoir of the Dam can accumulate 10,000 cubic meters
Furrowing and Installation of the Irrigation pipe systems
Leveling the land in blocks for smooth movement of machineries
Power supply runs from Alebu to Golij via Fanko-Tsimué and Gerset dams
Second Reservoir will hold 20,000 cubic meters
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Impressions
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The Proposition
Eritrea Sugar Company (ESC)
Government Commitment for land and Irrigation
Strategic Co-Generation of Electricity
Develop Strategic Sugar Industry
Co-Produce of Strategic Subsidiaries
Spearhead Development of Gash-Barka Region
Finance and Support Regional CSR Initiatives
Corporate & Capacity Building
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The Proposition
Gerset Sugar Project (GSP)
Sugarcane plantation on 5,000 to 10,000 Hectares
Co-Generation of 14MW (2-3MW for Plant use)
Annual 2,500 to 5,000 TCD of Sugar
Land & Irrigation Provided by Government
Investment Structure as per Feasibility Plan
CSR Programs at 10% of Projects Value
Project Management
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The Proposition
Gerset Development Initiative (GDI)
VOCATIONALVocational High School
Vocational Training Programs
EMPLOYMENTPriorities and Opportunities to
Local Human Resources
HOUSINGContributions to Local Housing
Improvement Program
URBANISMDeveloping a Local Integrated
Community Center
YOUTHSponsoring Sport, Camping and
Campaigning Activities
EDUCATIONSupport Local Schools
Support Local Teachers
HEALTHCAREDeveloping a Comprehensive
Local Healthcare Center
INFRASTRUCTUREContributions to Local Grids and
Networking
Development Management
Assets
Operations
Liabilities
No AssetsNo Title DeedsGov Approval for 5000 Hectares
No OrganizationNo Operations
No Direct Liabilities
Scope2,5000 TCD of Sugar Plant5,000 Hectares Sugarcane Plantation14 MW of Co-Generation
Transfer?
Corporate?
Engagement?
Farming?Methanol?Waste Water?
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Status 2012
Analysis, Risk & Actions
ESC
GSP
Developer
Operator
Recovery Plan
No Practical DeliverablesTraded Assets in Recovery Agreement
No Confined Role
Ivory Capital Took over liabilities for US$ 10 mln+
Government Approval on ProposalCommitment to provide 5,000 Hectares
Penalties?
Procurement?
Jurisdiction?
2nd Party?
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Investment 2012
Status, Sectors & Action
ESC
EngagementInvestment
Operation
Sugar Farming OperatorSugar Processing Operator
Investment & Development PlanOperating Policies & Guidelines
Sugarcane FarmingSugar Plant and Subsidiaries
Commitment
Corporate ActivationProduction & Processing
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GSP Project GDI DevelopmentESC Corporate
Project PlanningFeasibility Review Development Planning
Compliance Report 2012Project Plan
Resources Management
ESC Audit Report 2012Investment Structure
Engagement Management
Partnership
Development/Impact InvestorEPC for Grids
Deliveries
CSR Programs
National Alignment ReportDevelopment Plan
Communication Management
Orientation
Comprehensive Plan
Engagement
Investment
Operation
ESC Associated DeveloperSugar Farming & Processing OperatorDevelopment/Impact Investor
Strategy & Feasibility StudyInvestment & Development PlanOperating Policies & Guidelines
Sugarcane FarmingSugar Plant and SubsidiariesCSR Programs
CommitmentCorporate ActivationProduction & Processing Corporate Social Contribution
RRM &Parties?
InvestmentModel?
Corporate Model?
ComprehensiveAudit?
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Recovery Plan
Domain, Goals & Actions
Commitments
ESC Corporate & Capacity Building
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GSP Production & Processing
Corporate Social Contribution Plan
Year -2 Year -1 Year 1 Year 2 Year 3 Years 4-30
Corporate Structure, Policies & Guidelines
Corporate Staffing,
Training & Liaison
Procurement of Developers, Operators & Suppliers
EPC of Farms &Plants
Farming
Sugar Production
Electricity, Methanol & Waste Water Treatment
Operations
Marketing & Sales
CSR Programs
EPC of Grids
Initial Engagement
Scope of Initial Engagement
ESC Corporate & Capacity Building
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GSP Production & Processing
Corporate Social Contribution Plan
H1/Year -2 H2/Year -1 H2/Year 1
OrganizationStrategy & BD
Finance
LogisticsEngineering
Quality
Procurement of Contractors, Operators & Suppliers
EPC of Plants
Farming Operations & Production
Sugar Production
Company Operations
Marketing & Sales Operations
Implementing CSR Programs
EPC of Grids (Electricity, Ethanol, Potable Water)
H1/Year 1H1/Year -1H2/Year -2
HRLegal
Procurement
SalesMarketing
Internal Audit
EPC of Farms
Planning CSR Programs
Kick Off
Project ConsortiumGov Company
CSR Initiatives
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The Structure
Operating System
(IDM) Investment & Development Mgr
Investor(s)
Full ExitSurrender
Back to Public
Partial ExitDesign &
Build Parties
Partnership
Long Term Operations
30 Y
ears
3 Ye
ars
Laun
ch
Operator(s)
EPC Contractor(s)
RecoveryProjects &Operations
Assets
Equity
Equity
Supplies
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The CSR Initiatives
Integrated Structures
CSR FrameworkPartnership Framework
Gov Liaison Co
Gov Ownership
Special Purpose Vehicle
PPP Product/Service
Asset Based Value
Partnership Form
Operating Company
Local Authority
CSR Initiatives
CSR Programs
Development Targets
Local Development Plans
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Gerset Development Proposal
References
Interim Country Strategy Paper for Eritrea, 2009-2011
Sugar industry in Eritrea: Business Report 2012
Sugar Engineers.com
FEASIBILITY STUDY REPORT for 10 000 TCD CAPACITY SUGAR FACTORY PROJECTS prepared by THE FEDERAL MINISTERY OF AGRICULTURE INVESTMENT DEVELOPMENT AGENCY (IDeA) Sudan
India-Eritrea Relations, Ministry of Foreign Relations, India
UNICEF HUMANITARIAN ACTION
Wefri Warsay Yika'alo
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Gerset Development Proposal
Thank You..!