Figure 8: Perceived key challenges of current sources of energy in the agri sector based on 20 startups interviews Anatomy of PV Startups in the Agriculture Sector Startups, firms younger than 5 years of age, have contributed to about 90% of Egypt’s currently operating PV systems. It is important to understand these key players if more systems are to be brought to PV market throughs startups and future firms entering the market. The aims to demonstrate the role of startups in the market and the opportunities or challenges they face. Startups can play an important role in catalyzing clean technology adoption through new business model development, accessing new customer segment, and stimulating market level change. While large firms are constrained by their existing products, technologies, skills and organization, firms that are small and young can more easily work outside dominant paradigms. Startups are better disposed than large firms to the type of innovative entrepreneurship required to address some of the challenges of climate change. They have the flexibility to experiment and take risks, and are not discouraged by small markets of early technology adopters. The people behind the startups PV startups in Egypt come from various backgrounds. Based on the surveyed sample, PV startup founders can be classified into three main groups; fresh graduates inspired by solar energy opportunities, more experienced founders with 5 to 10 years of experience in international corporations, successful entrepreneurs who have already established mature enterprises and decided to change the line of work or venture into the emerging PV industry. In line with the Egyptian entrepreneurial scene, the founders are mostly young (25- 35 years old) with University degrees. While many fresh graduates attempt to start companies in Egypt, few of them succeed. Based on a study carried out by Cleantech Arabia in 2017 of 65 clean tech startups, gaining business and market experience in established firms before starting an entrepreneurial endeavor increases the chances of success. Interviewed startups rely on the founders in multiple activities including both managerial and technical roles to grow their firms. This lack of focus can limit the capacity of growth where decision making excessive reliance on founders create bottle necks. Startups with a team of 4-5 members usually play multiple roles in the business: managerial roles, technical input, procurement, sales, business development, and project management (). Figure 9: Roles played by founders as indicated by the 20 interviewed startups
Financial Institutions Commercial banks SFD Leasing companies Micro Finance Institutions Angel investors VCs Financing entities who provide loans – or soft loans – as well as other financial service to either the or startups to utilize solar energy applications. Moreover, non-profits, NGOs, and associations provide support to farmers through different schemes. Government and Public Entities MoERE – NREA MALR MoTI – IMC, ENCPC Ministry of Irrigation FEI Public institutions who are in charge of regulations and monitoring of either the agricultural activities, SMEs or renewable energy generation. International Organizations and Donors UNIDO RCREEE WB / IFC GIZ ILO JCEEE MED-ENIC Agricultural directorates International organizations and donors who support the RE transition in Egypt. On the local level, agricultural directorates provide farmers with technology updates and business support. Academic Institutions Research Institutions Private and Public Universities Academic institutions who provide technical support to startups working in the PV / Agri sector. Entrepreneurship support entities Cleantech Arabia GESR HU entrepreneurship center NM Supporting startups
S., 2015. The Solar Company Making a Profit on Poor Africans. Bloomberg. Feller, J., Boustani, E., Faycal, T., Giorgetti, E., 2016. FINTECH IN MENA: Unbundling the financial services industry. Wamda & PayFort. GIZ, and Cleantech Arabia. 2017. “GROWTH MANAGEMENT FOR SUSTAINABLE ENERGY SMALL GROWING BUSINESSES (GM4SESGB) Program: The Seed for a Sustainable Energy Cluster in Egypt Planting the Seed for a Sustainable Energy Cluster in Egypt – Final Report.” Unpublished Report. Cairo, Egypt: GIZ. GoE. 2015. “Integrated Sustainable Energy Strategy to 2035 - Volume 1.” Arab Republic of Egypt. GTS 2017. “GTS Solar.” July 31, 2017. . Hardie, S., Wood, J., Denise, G., 2016. 2017 Fintech Disruptors Report. Innovation, Distributed. MagnaCarta Communications. Huzayyin, A., 2017. Support entrepreneurship development – coaching & mentoring Activity – Progress Report I – D2. ENCPC, Cairo. IEA. 2012. “Electricity Purchase from Small and Medium Scale Renewable Energy and Excess Power.” International Energy Agency. 2016. “Solar Pumping for Irrigation: Improving Livelihoods & Sustainability.” Abu Dhabi: The International Renewable Energy Agency. Ismail, A., A., Barakat, S., Ghalwash, S., 2016. GEM Egypt National Report 2015/16. The American University in Cairo, Cairo. Kakade, R.H., H. Das, and Shaukat Ali. 2010. “Performance Evaluation of a Double Drum for Potato Flake Production.” Journal of Food Science and Technology. . “Knowledge Economy Foundation.” 2017. Statistics. Rural Economy. 2017. http://kef.com.eg/About-Us/Why-Agriculture. Lakshmiprasad C N, Aashish R, and Syed Muzaffar J. 2014. “Smart Irrigation in Agriculture.” IOSR Journal of Electrical and Electronics Engineering. Minnies. n.d. “Minnies Dried Fruits and Vegetables.” Accessed July 25, 2017. . MoP. 2015. “Sustainable Development Strategy: Egypt’s Vision 2030.” Cairo, Egypt: Ministry of Planning, Monitoring and Administrative Reform.
Final Products Solar thermal egg incubators Required Inputs Material and equipment Competing Products Electric and gas heaters Process Type of Process Moderate - mechanical design and machining Technology Design, manufacturing and assembly Equipment & Material Heat storage unit, saturated salt solution, 3 V battery Human resources Manual labor, technical labor, engineers Economic Features Revenue Stream and maintenance of systems to farms CAPEX Low - working capital OPEX Moderate - salaries, maintenance Considerations Key Challenge High initial cost of system for consumer Advantages Payback is constantly decreasing due to the increase of butane tanks/ diesel/ gas prices Impact Environmental CO2 emission reduction Social More affordable and sustainable source of energy Business Opportunity Factsheet 16: PV pump for cattle watering Market Final Products Solar energy operated pump for cattle
Ali Abo Sena Key factors to the customer are: Payback time Quality of product/Service Why don’t we manufacture for other markets (other than the local market) since we have a competitive advantage? Banks are not supporting the PV market Who is responsible for the quality control of the market? GOEIC and EOS are responsible for ensuring the quality of components Cooperation of suppliers is a must to ensure quality of components, but a block chain is susceptible to conflict of interest The regulating entity must be independent and should have enough technical knowledge Dynergy Possible business models for PV plug and play devices Usually the customer is not even aware of the presence of PV plug and play devices They require large efforts for marketing Usually these devices have low revenue as their sole purpose is, quoting, “to spread the idea of using solar energy” Cash-and-Carry is the only business model There is a large possible market for these devices FEI Role of NGO NGOs can help easing the access to finance to small and medium farmers Aya Zanaty De-risking solar applications Large companies often certify local distributors in villages and rural areas to decrease the risk of supplying individual informal companies or individuals directly Sun of Ayman Elkhlewy Micro-financing schemes As a local person, knowing the cropping seasons in his region, he sometimes collected a portion of late payments from farmers in the form of crops, livestock, etc.… and using a network of relatives and friend who trade in this sort of goods he could earn his money back Annex IV: Mapping of PV Supporting Entities Table 7: Major players in the clean-tech entrepreneurship ecosystem (excluding investors and financial institutions)
MIT Enterprise Forum General NA Seed and Startup Country wide Hult Prize General NA Seed and Startup Country wide Cleantech Arabia tech Agriculture, Renewable Energy, Water, n & Energy Efficiency Seed and Growth Country wide ENCPC Government Clean tech Agriculture, Renewable Energy, Water & Energy Efficiency Seed and Startup Country wide