FRES does thorough research before a new FRES company is set up. We go through several steps in which we involve local stakeholders. We work with a standardised checklist that has to be complied with. After each step there is a formal go/no-go moment when the Board of Directors decides whether or not to go ahead. It takes about three years before a FRES company is operational.

• 1. Preselection of countries, in 3 ways

  On the basis of a study of market potential. This involves carrying out a SWOT analysis. Op basis van marktpotentie-onderzoek voert FRES een SWOT-analyse uit. An examination is made of the political, economic and social factors, such as legislation, government involvement, the stability of the country and the policy and laws relating to rural electrification. On the basis of requests received from countries. Governments and NGOs often hear about the activities of FRES and visit areas in which FRES is already operating. An official request is then received from the country concerned to set up a FRES company there. FRES participates in tenders issued by governments and other parties for rural electrification in developing countries.

• 2. Desk research

  FRES collects as much detailed information as possible legislation and regulations on electrification, imports and exports, concession areas, possible competitors and the economical situation per region.

• 3. Market research

  If the desk research shows that there are sufficient positive synergies, market research is carried out in the country itself. This involves further investigation locally of: the income level of the population and current lighting costs, per regoin, per regio the potential of the concession area: there have to be a minimum of 10,000 potential clients, with a long term potential of 50,000 clients the possibility to work together with companies, NGOs, local partners, etc the willingness of the government to undertake, prior to the start of the project, to make favourable arrangements for the future company, such as exemption from import duties, exemption from VAT or subsidies to reduce the costs for end-users, etc

• 4. Development of business plan

  If the findings in the country itself are positive and meet all our criteria, we adapt our standard FRES business plan to the local situation. The aim of this is to show the viability of the new FRES company. The following issues are involved: choice of partner, the region in which the company can operate, the expected number of customers, the target group of the future company, a timetable, a forecast of the results, income and expenditure in the first couple of years and a substantiated finance plan.

• 5. Decision-making and implementation

  Based on the business plan the Board of Directors decides if a new FRES company is to be set up. It puts forward its choice to the Supervisory Board, whose support is required for that choice. When we finalized budgetting, we appoint a Project Leader to start up the FRES company on site. We appoint a Supervisory Board, on which FRES is represented, to support the company where necessary and to monitor it. Every company begins on a small scale so as to sound out the local conditions and best practical prospects.On the basis of the initial experiences we then decide the expected rate of growth in the number of customers, and thereby also the expenditure. In this way the financial risk remains small.

• 6. Monitoring and adjustment

  A Supervisory Board supervises the FRES company. The Supervisory Board meets a few times a year to discuss the progress of the FRES company. In addition, it receives a monthly report of the main developments; this report is discussed by teleconference.

Do you want to know more? Please contact FRES!