Venture Capital for Financing Hydropower - Revision history

Lisafeldmann at 11:42, 11 June 2015

2015-06-11T11:42:20Z

Ranisha at 13:58, 25 August 2014

2014-08-25T13:58:21Z

Ranisha at 12:46, 19 August 2014

2014-08-19T12:46:17Z

Ranisha at 09:29, 14 August 2014

2014-08-14T09:29:32Z

Ranisha: /* Financial Institutes and Available Instruments for Micro Hydro */

2014-07-31T07:16:57Z

Financial Institutes and Available Instruments for Micro Hydro

Fungai Cecilia Sandamu: Fungai Cecilia Sandamu moved page Venture Capital to Venture Capital for Financing Hydropower without leaving a redirect

2013-07-12T11:13:51Z

Fungai Cecilia Sandamu moved page Venture Capital to Venture Capital for Financing Hydropower without leaving a redirect

Attigah at 15:42, 4 June 2013

2013-06-04T15:42:40Z

Fungai Cecilia Sandamu at 19:28, 14 May 2013

2013-05-14T19:28:27Z

Fungai Cecilia Sandamu at 07:55, 25 April 2013

2013-04-25T07:55:47Z

Anna Zinecker at 14:29, 4 September 2012

2012-09-04T14:29:42Z

@@ Line 1: / Line 1: @@
 [[Portal:Hydro|►Back to Hydro Portal]]
@@ Line 13: / Line 14: @@
 = Venture Capital for Financing Micro-Hydro in Rwanda (GTZ Case Study) =
-[[:File:Psp_hydro_rwanda_baseline_report_-_rwi2009.pdf|PSP Hydro”]] 6 Rwandan companies are being awarded a maximum subsidy of 50% of the total project costs to build and operate 6 micro-hydro plants and mini-grids supplying rural areas with electricity. Since the beginning of the second phase of the project in 2009, the construction of 2 hydropower plants has been completed and 3 projects are in the process of preparation and implementation. Previously, in preparation of '''PSP Hydro II''', possible future finance instruments and mechanisms were also identified. Many instruments were already available to project developers and it was recommended to include venture capitalists early in the selection procedure of new project developers.
+[[:File:Psp hydro rwanda baseline report - rwi2009.pdf|PSP Hydro”]] 6 Rwandan companies are being awarded a maximum subsidy of 50% of the total project costs to build and operate 6 micro-hydro plants and mini-grids supplying rural areas with electricity. Since the beginning of the second phase of the project in 2009, the construction of 2 hydropower plants has been completed and 3 projects are in the process of preparation and implementation. Previously, in preparation of '''PSP Hydro II''', possible future finance instruments and mechanisms were also identified. Many instruments were already available to project developers and it was recommended to include venture capitalists early in the selection procedure of new project developers.
 [[Venture Capital for Financing Hydropower#toc|►Go to Top]]<br/>
@@ Line 22: / Line 23: @@
 The traditional financial sector in Rwanda is composed of:
 *a national bank (Banque National de Rwanda, BNR),
 *a development bank (Banque Rwandaise de Developpement, BRD),
@@ Line 99: / Line 101: @@
 <references /><br/>
 [[Category:Rwanda]]

@@ Line 1: / Line 1: @@
 [[Portal:Hydro|►Back to Hydro Portal]]
@@ Line 16: / Line 15: @@
 [[:File:Psp_hydro_rwanda_baseline_report_-_rwi2009.pdf|PSP Hydro”]] 6 Rwandan companies are being awarded a maximum subsidy of 50% of the total project costs to build and operate 6 micro-hydro plants and mini-grids supplying rural areas with electricity. Since the beginning of the second phase of the project in 2009, the construction of 2 hydropower plants has been completed and 3 projects are in the process of preparation and implementation. Previously, in preparation of '''PSP Hydro II''', possible future finance instruments and mechanisms were also identified. Many instruments were already available to project developers and it was recommended to include venture capitalists early in the selection procedure of new project developers.
-[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]<br/>
+[[Venture Capital for Financing Hydropower#toc|►Go to Top]]<br/>
 <br/>
@@ Line 34: / Line 33: @@
 It can be summarized that the PSP Hydro project contributed making micro hydro an interesting possibility to finance for the majority of financial institutions. So far, several disbursements have been made and commercial banks continue to be involved in the financing of new projects. At this stage, conditions offered to project developers in micro hydro are in line with long term finance conditions in other segments of the economy.
-[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#toc|►Go to Top]]
 == Perspectives on Finance and Bottlenecks in Micro Hydro ==
@@ Line 48: / Line 47: @@
 It seems that venture capital can contribute to solve problems for many parties. From the perspective of the banks it is real equity and gives direct comfort (lower gearing). Therefore the requirement for loans might be lower. The venture capitalist will make sure that the developers will put in sufficient money themselves. Moreover their VC contribution and the PSP Hydro II contribution will generate extra capital. The developers will have business development support for financial planning on board from the venture capitalist. This is preferable compared to an external advisor. The ministry and donors can leverage their money each investment cycle. The subsidy can be used more efficiently and more often.
-[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#toc|►Go to Top]]
 == Bottlenecks Related to Project Developers Capacity and Skills ==
@@ Line 58: / Line 57: @@
 From different perspectives it is mentioned that the early involvement of venture capitalist will contribute to strengthen the management of projects and will also help to build local capacity within these venture capital firms to guide future investors and financiers. As soon as the two venture capital funds have done a few investments, this expertise will sustain within these organizations. Moreover it will be easy for the VCs to communicate with the banking sector on their specific requirements and concerns.
-[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#toc|►Go to Top]]
 <br/>
-== General Conclusions from the Case Ctudy ==
+== General Conclusions from the Case Study ==
 *Besides the subsidy, venture capital, loans and guarantee instruments are available to micro hydro project developers in Rwanda.
@@ Line 68: / Line 67: @@
 *The mission visited two venture capital funds. GROFIN has a track record in Africa, works with reputable investors and good management. GROFIN has experience with the pro’s and con’s of matching its own finance with finance form local banks. The management of GROFIN has been contacted and expressed an interest to further explore co-investments in micro hydro. The second venture capital fund visited was REIC. It has also reputable, mainly local investors. Project portfolio is young. Senior project staff, but not yet national management, has expressed an interest to explore future cooperation with PSP Hydro II. Their appetite and competence needs to be explored further.
-[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#toc|►Go to Top]]
 == Recommendations on Finance for Next Steps of PSP Hydro ==
@@ Line 84: / Line 83: @@
 In the table the use of venture capital is expected to have similar positive contribution over the investing period as compared to the selection stage. The difference is that venture capital itself is expected to generate a higher leverage of the subsidy. If the project developer and the venture capitalist and the PSP Hydro project would bring in equal amounts of money, the leverage of the PSP Hydro II component would be at least two times. Moreover the money is also leveraged with debt and finally, the money is repaid and ready to be used again<ref name="Review of micro hydro financing instruments in Rwanda. Support mission to the GTZ PSP hydro project, by René Magermans">Review of micro hydro financing instruments in Rwanda. Support mission to the GTZ PSP hydro project, by René Magermans</ref>.
-[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#toc|►Go to Top]]
 == Status in PSP Hydro Rwanda in 2012 ==
@@ Line 90: / Line 89: @@
 Due to the limited capacity of the project developers regarding the preparation of business plans during the early stages of the project, no MHP developer has finalized a contract with a venture capital provider in Rwanda so far. One company is still in the process of negotiating the modalities for investment.
-[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#toc|►Go to Top]]
 = Further Information =
@@ Line 100: / Line 99: @@
 <references /><br/>
 [[Category:Financing_and_Funding]]

@@ Line 14: / Line 14: @@
 = Venture Capital for Financing Micro-Hydro in Rwanda (GTZ Case Study) =
-In the project, “'''PSP Hydro'''” 6 Rwandan companies are being awarded a maximum subsidy of 50% of the total project costs to build and operate 6 micro-hydro plants and mini-grids supplying rural areas with electricity. Since the beginning of the second phase of the project in 2009, the construction of 2 hydropower plants has been completed and 3 projects are in the process of preparation and implementation. Previously, in preparation of '''PSP Hydro II''', possible future finance instruments and mechanisms were also identified. Many instruments were already available to project developers and it was recommended to include venture capitalists early in the selection procedure of new project developers.
+[[:File:Psp_hydro_rwanda_baseline_report_-_rwi2009.pdf|PSP Hydro”]] 6 Rwandan companies are being awarded a maximum subsidy of 50% of the total project costs to build and operate 6 micro-hydro plants and mini-grids supplying rural areas with electricity. Since the beginning of the second phase of the project in 2009, the construction of 2 hydropower plants has been completed and 3 projects are in the process of preparation and implementation. Previously, in preparation of '''PSP Hydro II''', possible future finance instruments and mechanisms were also identified. Many instruments were already available to project developers and it was recommended to include venture capitalists early in the selection procedure of new project developers.
-[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]<br/>
+[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]<br/>
 <br/>
@@ Line 34: / Line 34: @@
 It can be summarized that the PSP Hydro project contributed making micro hydro an interesting possibility to finance for the majority of financial institutions. So far, several disbursements have been made and commercial banks continue to be involved in the financing of new projects. At this stage, conditions offered to project developers in micro hydro are in line with long term finance conditions in other segments of the economy.
-[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
 == Perspectives on Finance and Bottlenecks in Micro Hydro ==
@@ Line 48: / Line 48: @@
 It seems that venture capital can contribute to solve problems for many parties. From the perspective of the banks it is real equity and gives direct comfort (lower gearing). Therefore the requirement for loans might be lower. The venture capitalist will make sure that the developers will put in sufficient money themselves. Moreover their VC contribution and the PSP Hydro II contribution will generate extra capital. The developers will have business development support for financial planning on board from the venture capitalist. This is preferable compared to an external advisor. The ministry and donors can leverage their money each investment cycle. The subsidy can be used more efficiently and more often.
-[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
 == Bottlenecks Related to Project Developers Capacity and Skills ==
@@ Line 58: / Line 58: @@
 From different perspectives it is mentioned that the early involvement of venture capitalist will contribute to strengthen the management of projects and will also help to build local capacity within these venture capital firms to guide future investors and financiers. As soon as the two venture capital funds have done a few investments, this expertise will sustain within these organizations. Moreover it will be easy for the VCs to communicate with the banking sector on their specific requirements and concerns.
-[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
 <br/>
@@ Line 68: / Line 68: @@
 *The mission visited two venture capital funds. GROFIN has a track record in Africa, works with reputable investors and good management. GROFIN has experience with the pro’s and con’s of matching its own finance with finance form local banks. The management of GROFIN has been contacted and expressed an interest to further explore co-investments in micro hydro. The second venture capital fund visited was REIC. It has also reputable, mainly local investors. Project portfolio is young. Senior project staff, but not yet national management, has expressed an interest to explore future cooperation with PSP Hydro II. Their appetite and competence needs to be explored further.
-[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
 == Recommendations on Finance for Next Steps of PSP Hydro ==
@@ Line 84: / Line 84: @@
 In the table the use of venture capital is expected to have similar positive contribution over the investing period as compared to the selection stage. The difference is that venture capital itself is expected to generate a higher leverage of the subsidy. If the project developer and the venture capitalist and the PSP Hydro project would bring in equal amounts of money, the leverage of the PSP Hydro II component would be at least two times. Moreover the money is also leveraged with debt and finally, the money is repaid and ready to be used again<ref name="Review of micro hydro financing instruments in Rwanda. Support mission to the GTZ PSP hydro project, by René Magermans">Review of micro hydro financing instruments in Rwanda. Support mission to the GTZ PSP hydro project, by René Magermans</ref>.
-[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
 == Status in PSP Hydro Rwanda in 2012 ==
@@ Line 90: / Line 90: @@
 Due to the limited capacity of the project developers regarding the preparation of business plans during the early stages of the project, no MHP developer has finalized a contract with a venture capital provider in Rwanda so far. One company is still in the process of negotiating the modalities for investment.
-[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
+[[Venture Capital for Financing Hydropower#Overview|►Go to Top]]
 = Further Information =
-*[[Portal:Financing_and_Funding|Financing and Funding portal on energypedia]]
+*[[Portal:Financing and Funding|Financing and Funding portal on energypedia]]
 = References =
@@ Line 100: / Line 100: @@
 <references /><br/>
 [[Category:Rwanda]]

@@ Line 1: / Line 1: @@
 = Overview =
@@ Line 13: / Line 15: @@
 In the project, “'''PSP Hydro'''” 6 Rwandan companies are being awarded a maximum subsidy of 50% of the total project costs to build and operate 6 micro-hydro plants and mini-grids supplying rural areas with electricity. Since the beginning of the second phase of the project in 2009, the construction of 2 hydropower plants has been completed and 3 projects are in the process of preparation and implementation. Previously, in preparation of '''PSP Hydro II''', possible future finance instruments and mechanisms were also identified. Many instruments were already available to project developers and it was recommended to include venture capitalists early in the selection procedure of new project developers.
 <br/>
 == Financial Institutes and Available Instruments for Micro Hydro ==
@@ Line 31: / Line 34: @@
 It can be summarized that the PSP Hydro project contributed making micro hydro an interesting possibility to finance for the majority of financial institutions. So far, several disbursements have been made and commercial banks continue to be involved in the financing of new projects. At this stage, conditions offered to project developers in micro hydro are in line with long term finance conditions in other segments of the economy.
-<br/>
+[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
 == Perspectives on Finance and Bottlenecks in Micro Hydro ==
@@ Line 46: / Line 48: @@
 It seems that venture capital can contribute to solve problems for many parties. From the perspective of the banks it is real equity and gives direct comfort (lower gearing). Therefore the requirement for loans might be lower. The venture capitalist will make sure that the developers will put in sufficient money themselves. Moreover their VC contribution and the PSP Hydro II contribution will generate extra capital. The developers will have business development support for financial planning on board from the venture capitalist. This is preferable compared to an external advisor. The ministry and donors can leverage their money each investment cycle. The subsidy can be used more efficiently and more often.
-<br/>
+[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
 == Bottlenecks Related to Project Developers Capacity and Skills ==
@@ Line 55: / Line 57: @@
 From different perspectives it is mentioned that the early involvement of venture capitalist will contribute to strengthen the management of projects and will also help to build local capacity within these venture capital firms to guide future investors and financiers. As soon as the two venture capital funds have done a few investments, this expertise will sustain within these organizations. Moreover it will be easy for the VCs to communicate with the banking sector on their specific requirements and concerns.
 <br/>
@@ Line 64: / Line 68: @@
 *The mission visited two venture capital funds. GROFIN has a track record in Africa, works with reputable investors and good management. GROFIN has experience with the pro’s and con’s of matching its own finance with finance form local banks. The management of GROFIN has been contacted and expressed an interest to further explore co-investments in micro hydro. The second venture capital fund visited was REIC. It has also reputable, mainly local investors. Project portfolio is young. Senior project staff, but not yet national management, has expressed an interest to explore future cooperation with PSP Hydro II. Their appetite and competence needs to be explored further.
-<br/>
+[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
 == Recommendations on Finance for Next Steps of PSP Hydro ==
@@ Line 80: / Line 84: @@
 In the table the use of venture capital is expected to have similar positive contribution over the investing period as compared to the selection stage. The difference is that venture capital itself is expected to generate a higher leverage of the subsidy. If the project developer and the venture capitalist and the PSP Hydro project would bring in equal amounts of money, the leverage of the PSP Hydro II component would be at least two times. Moreover the money is also leveraged with debt and finally, the money is repaid and ready to be used again<ref name="Review of micro hydro financing instruments in Rwanda. Support mission to the GTZ PSP hydro project, by René Magermans">Review of micro hydro financing instruments in Rwanda. Support mission to the GTZ PSP hydro project, by René Magermans</ref>.
-<br/>
+[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
 == Status in PSP Hydro Rwanda in 2012 ==
 Due to the limited capacity of the project developers regarding the preparation of business plans during the early stages of the project, no MHP developer has finalized a contract with a venture capital provider in Rwanda so far. One company is still in the process of negotiating the modalities for investment.
-<br/>
+[[Venture_Capital_for_Financing_Hydropower#Overview|►Go to Top]]
 = Further Information =
-<br/>
+*[[Portal:Financing_and_Funding|Financing and Funding portal on energypedia]]
 = References =
@@ Line 96: / Line 100: @@
 <references /><br/>
 [[Category:Hydro]]
 [[Category:Financing_Hydropower]]
 [[Category:Financing_and_Funding]]

@@ Line 15: / Line 15: @@
 <br/>
 == Financial Institutes and Available Instruments for Micro Hydro ==
@@ Line 26: / Line 27: @@
 Two years ago three parties started within the banking sector to offer leasing products (BRD, BRC and BK) and they formed the leasing association of Rwanda. Also guarantee mechanisms are in place: the African Solidarity Fund (ASF) operates from Niger and the African Guarantee Fund and Economic Cooperation (FAGACE) operates from Benin.
-Further, two venture capital funds to support the private sector have been recently opened their doors: Rwanda Enterprise Investment Company ([[REIC|REIC]]) and [[GROFIN|GROFIN]]. They both had contacts with project developers.
+Further, two venture capital funds to support the private sector have been recently opened their doors: Rwanda Enterprise Investment Company (REIC) and GROFIN. They both had contacts with project developers.
 It can be summarized that the PSP Hydro project contributed making micro hydro an interesting possibility to finance for the majority of financial institutions. So far, several disbursements have been made and commercial banks continue to be involved in the financing of new projects. At this stage, conditions offered to project developers in micro hydro are in line with long term finance conditions in other segments of the economy.
 <br/>
 == Perspectives on Finance and Bottlenecks in Micro Hydro ==

@@ Line 6: / Line 6: @@
 Venture capital is a type of private equity that refers to equity investments made, typically in less mature companies, for the launch, early development, or expansion of a business. Venture investment is most often found in the application of new technology, new marketing concepts and new products that have yet to be proven.
-Venture capital is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns<ref name="Definition by Investopedia ">Definition by Investopedia </ref>.
+Venture capital is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns<ref name="Definition by Investopedia">Definition by Investopedia </ref>.
 <br/>
@@ Line 82: / Line 82: @@
 == Status in PSP Hydro Rwanda in 2012 ==
-Due to the limited capacity of the project developers regarding the preparation of business plans during the early stages of the project, no MHP developer has finalized a contract with a venture capital provider in Rwanda so far. One company is still in the process of negotiating the modalities for investment. However, no detailed analysis regarding the precise underlying causes of the failure to conclude any agreements so far has been undertaken.
+Due to the limited capacity of the project developers regarding the preparation of business plans during the early stages of the project, no MHP developer has finalized a contract with a venture capital provider in Rwanda so far. One company is still in the process of negotiating the modalities for investment.
 <br/>
@@ Line 94: / Line 94: @@
 <references /><br/>
 [[Category:Rwanda]]

@@ Line 1: / Line 1: @@
-= Definition =
+= Overview =
 Venture capital is a type of private equity that refers to equity investments made, typically in less mature companies, for the launch, early development, or expansion of a business. Venture investment is most often found in the application of new technology, new marketing concepts and new products that have yet to be proven.
-Venture capital is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns.
+Venture capital is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns<ref name="Definition by Investopedia ">Definition by Investopedia </ref>.
-''Definition by [http://www.investopedia.com/terms/v/venturecapital.asp Investopedia] ''<br/>
+<br/>
 = Venture Capital for Financing Micro-Hydro in Rwanda (GTZ Case Study) =
@@ Line 12: / Line 14: @@
 In the project, “'''PSP Hydro'''” 6 Rwandan companies are being awarded a maximum subsidy of 50% of the total project costs to build and operate 6 micro-hydro plants and mini-grids supplying rural areas with electricity. Since the beginning of the second phase of the project in 2009, the construction of 2 hydropower plants has been completed and 3 projects are in the process of preparation and implementation. Previously, in preparation of '''PSP Hydro II''', possible future finance instruments and mechanisms were also identified. Many instruments were already available to project developers and it was recommended to include venture capitalists early in the selection procedure of new project developers.
-== Financial institutes and available instruments for micro hydro ==
+<br/>
 The traditional financial sector in Rwanda is composed of:
@@ Line 26: / Line 30: @@
 It can be summarized that the PSP Hydro project contributed making micro hydro an interesting possibility to finance for the majority of financial institutions. So far, several disbursements have been made and commercial banks continue to be involved in the financing of new projects. At this stage, conditions offered to project developers in micro hydro are in line with long term finance conditions in other segments of the economy.
-== Perspectives on finance and bottlenecks in micro hydro ==
+<br/>
 The bottlenecks are presented from different perspectives: banks, venture capitalists, developers, ministry and donors. It is interesting to note that these bottlenecks differ with the perspectives of those parties. A classical example is the difference between bankers and venture capitalists.
@@ Line 34: / Line 40: @@
 The Table below presents the above perspectives and also how the parties have put instruments in place to overcome the challenges or mitigate the risks involved (this is written under the heading Actual Instruments). A potential alternative instrument is presented in the last column in line with a future possibly more market oriented approach to help to overcome the bottleneck.
-[[File:Bottlenecks related to finance.jpg|thumb|center|200px|Perspectives on bottlenecks related to finance]]
+[[File:Bottlenecks related to finance.jpg|thumb|center|300px|Perspectives on bottlenecks related to finance]]
 It seems that venture capital can contribute to solve problems for many parties. From the perspective of the banks it is real equity and gives direct comfort (lower gearing). Therefore the requirement for loans might be lower. The venture capitalist will make sure that the developers will put in sufficient money themselves. Moreover their VC contribution and the PSP Hydro II contribution will generate extra capital. The developers will have business development support for financial planning on board from the venture capitalist. This is preferable compared to an external advisor. The ministry and donors can leverage their money each investment cycle. The subsidy can be used more efficiently and more often.
-== Bottlenecks related to project developers capacity and skills ==
+<br/>
 Different bottlenecks on the implementation capacity and the skills of the project developers were identified by a selection of interviewed stakeholders. These bottlenecks are presented in the next table.
-[[File:Bottlenecks related to project developers capacity and skills.jpg|thumb|center|180px|Perspectives on bottlenecks related to project developers capacity and skills]]
+[[File:Bottlenecks related to project developers capacity and skills.jpg|thumb|center|300px|Perspectives on bottlenecks related to project developers capacity and skills]]
 From different perspectives it is mentioned that the early involvement of venture capitalist will contribute to strengthen the management of projects and will also help to build local capacity within these venture capital firms to guide future investors and financiers. As soon as the two venture capital funds have done a few investments, this expertise will sustain within these organizations. Moreover it will be easy for the VCs to communicate with the banking sector on their specific requirements and concerns.
-== General conclusions from the case study ==
+<br/>
 *Besides the subsidy, venture capital, loans and guarantee instruments are available to micro hydro project developers in Rwanda.
@@ Line 52: / Line 62: @@
 *The mission visited two venture capital funds. GROFIN has a track record in Africa, works with reputable investors and good management. GROFIN has experience with the pro’s and con’s of matching its own finance with finance form local banks. The management of GROFIN has been contacted and expressed an interest to further explore co-investments in micro hydro. The second venture capital fund visited was REIC. It has also reputable, mainly local investors. Project portfolio is young. Senior project staff, but not yet national management, has expressed an interest to explore future cooperation with PSP Hydro II. Their appetite and competence needs to be explored further.
-== Recommendations on finance for next steps '''of PSP Hydro''' ==
+<br/>
 Based on the above described experiences and conclusions, a mix of available market instruments for the next phase of PSP II can be presented. These instruments (venture capital, loans and guarantee instruments) are suitable to support a more autonomous development of the sector.
-[[File:Mix of financial instruments.jpg|thumb|center|180px|Mix of financial instruments]]
+[[File:Mix of financial instruments.jpg|thumb|center|300px|Mix of financial instruments]]
 The participation of the venture capitalist has a potential positive effect on the leverage of the subsidy later on in the process (+), assuming that the VC will stay in, they will also bring money to the table. VC involvement can also have a positive effect (+) on screening the developers for their business credentials and trustworthiness. This is VC core business and therefore a realistic expectation. The VC involvement in the selection procedure has a positive effect on market distortion (it does not distort the market). Project developers are driven by their plans and intentions and not by the subsidy.
@@ Line 64: / Line 76: @@
 It is unclear yet how much the connection costs per household will be affected. One could argue that less subsidy makes the total costs (for an investor) higher. However the costs related to borrowed money might induce a more efficient use of funds and end up in lower total investment costs per project. Therefore the score is presented as neutral (+/-).
-In the table the use of venture capital is expected to have similar positive contribution over the investing period as compared to the selection stage. The difference is that venture capital itself is expected to generate a higher leverage of the subsidy. If the project developer and the venture capitalist and the PSP Hydro project would bring in equal amounts of money, the leverage of the PSP Hydro II component would be at least two times. Moreover the money is also leveraged with debt and finally, the money is repaid and ready to be used again.
+In the table the use of venture capital is expected to have similar positive contribution over the investing period as compared to the selection stage. The difference is that venture capital itself is expected to generate a higher leverage of the subsidy. If the project developer and the venture capitalist and the PSP Hydro project would bring in equal amounts of money, the leverage of the PSP Hydro II component would be at least two times. Moreover the money is also leveraged with debt and finally, the money is repaid and ready to be used again<ref name="Review of micro hydro financing instruments in Rwanda. Support mission to the GTZ PSP hydro project, by René Magermans">Review of micro hydro financing instruments in Rwanda. Support mission to the GTZ PSP hydro project, by René Magermans</ref>.
 <br/>
@@ Line 74: / Line 84: @@
 Due to the limited capacity of the project developers regarding the preparation of business plans during the early stages of the project, no MHP developer has finalized a contract with a venture capital provider in Rwanda so far. One company is still in the process of negotiating the modalities for investment. However, no detailed analysis regarding the precise underlying causes of the failure to conclude any agreements so far has been undertaken.
 [[Category:Hydro]]

@@ Line 72: / Line 72: @@
 == Status in PSP Hydro Rwanda in 2012 ==
-Due to the limited capacity of the project developers regarding the preparation of business plans during the early stages of the project,&nbsp; no MHP developer has finalized a contract with a venture capital provider in Rwanda so far. It could be speculated that because of the appearance of these obstacles early on interest of VCs in financing MHP projects has decreased and no new attempts at concluding any agreements have been made. However, no detailed analysis regarding the precise underlying causes of the failure to conclude any agreements so far has been undertaken.
+Due to the limited capacity of the project developers regarding the preparation of business plans during the early stages of the project,&nbsp; no MHP developer has finalized a contract with a venture capital provider in Rwanda so far. One company is still in the process of negotiating the modalities for investment. However, no detailed analysis regarding the precise underlying causes of the failure to conclude any agreements so far has been undertaken.
 [[Category:Rwanda]]
 [[Category:Financing,_promotion_schemes_and_subsidies]]
 [[Category:Hydro]]