5The Legacy Wefri Warsay Yika'alo (WWY) or Warsay Yika'alo Program A successful Government CommitmentOften compared to the Marshall PlanA series of Government sponsored investments in economic, education, health, and transportation related infrastructureA mixture of grants and loans from international organizations and from the Government of EritreaPractical transfer of skills is an important component of this program.All planned 22 projects were completed except the construction of Keren Dam
6The Challenges Demographics Enthusiastic, Resilient and Young Population, with CompetencesHigh Rates of Education, Healthcare and Physical FitnessLow Urban Density and Facilities with Conventional Economic SectorsCommitted Government and Civic Service, Despite the Fierce Embargo
8The Challenges Agronomics & Food Security 1.5 mln Capita are the Workforcefor Rainfall based AgricultureStrategic Dams at Gerset, Fanko-Tsimueand Fanko-RawiStrategic Transit and TransportationSystems & SolutionsFormal Ambition towards Modern Farming and Agronomic TechniquesStrategic Need to Develop and Improve Agro Productivity for Domestic and Export Use
9The Challenges Gash-Barka Region Nationally; 37,000 Square Kilometers ora Quarter of Eritrea2009 Real GDP $ 4.4 billion, and growth rate 3.6%Population of 567,000 orOne Third of EritreansIlliteracy estimates as high as 70%. Student-teacher ratios are high: 54 to 1over 3.5 million LivestockLife expectancy at birth is 59.5 years in Low Expenditure on health and Number of PhysicianRich in Marble, Minerals & Gold for 15% of GDParable land of 565,000 hectares or 1,396,000 acresThe Breadbasket of Eritrea with 350,000 H. or 900,000 A.Due to Droughts, Erosion and Deforestation; 70-80% of population depend on Food AidMain Cities: Barentu, Agordat, Molki, Sebderat and Teseney
10The Challenges Gerset Dam Reservoir of the Dam can accumulate 10,000 cubic metersSecond Reservoir will hold 20,000 cubic meters20 Pivot Sprinklers are capable of watering 28 and 60 hectaresFurrowing and Installation of the Irrigation pipe systemsLeveling the land in blocks for smooth movement of machineriesPower supply runs from Alebu to Golij via Fanko-Tsimué and Gerset dams
12Corporate & Capacity Building The PropositionEritrea Sugar Company (ESC)Corporate & Capacity BuildingDevelop Strategic Sugar IndustryGovernment Commitment for land and IrrigationCo-Produce of Strategic SubsidiariesStrategic Co-Generation of ElectricitySpearhead Development of Gash-Barka RegionFinance and Support Regional CSR Initiatives
13The Proposition Gerset Sugar Project (GSP) Project Management Annual 2,500 to 5,000 TCD of SugarSugarcane plantation on 5,000 to 10,000 HectaresLand & Irrigation Provided by GovernmentCo-Generation of 14MW (2-3MW for Plant use)Investment Structure as per Feasibility PlanCSR Programs at 10% of Projects Value
14The Proposition Gerset Development Initiative (GDI) Development ManagementVOCATIONALVocational High SchoolVocational Training ProgramsEMPLOYMENTPriorities and Opportunities to Local Human ResourcesHOUSINGContributions to Local Housing Improvement ProgramURBANISMDeveloping a Local Integrated Community CenterYOUTHSponsoring Sport, Camping and Campaigning ActivitiesEDUCATIONSupport Local SchoolsSupport Local TeachersHEALTHCAREDeveloping a Comprehensive Local Healthcare CenterINFRASTRUCTUREContributions to Local Grids and Networking
15Status 2012 Analysis, Risk & Actions ESC Assets Operations Liabilities No AssetsNo Title DeedsGov Approval for 5000 HectaresTransfer?OperationsNo OrganizationNo OperationsCorporate?LiabilitiesNo Direct LiabilitiesEngagement?GSPScope2,5000 TCD of Sugar Plant5,000 Hectares Sugarcane Plantation14 MW of Co-GenerationFarming?Methanol?Waste Water?
16Investment 2012 Status, Sectors & Action ESC Government Developer Approval on ProposalCommitment to provide 5,000 Hectares2nd Party?DeveloperNo Practical DeliverablesTraded Assets in Recovery AgreementPenalties?OperatorNo Confined RoleProcurement?RecoveryPlanIvory CapitalTook over liabilities for US$ 10 mln+Jurisdiction?
18Recovery Plan Domain, Goals & Actions Commitment Engagement Investment Corporate ActivationProduction & ProcessingCorporate Social ContributionComprehensiveAudit?EngagementESC Associated DeveloperSugar Farming & Processing OperatorDevelopment/Impact InvestorRRM &Parties?InvestmentStrategy & Feasibility StudyInvestment & Development PlanOperating Policies & GuidelinesInvestmentModel?OperationSugarcane FarmingSugar Plant and SubsidiariesCSR ProgramsCorporateModel?
19Commitments Initial Engagement Year -2 Year -1 Year 1 Year 2 Year 3 Years 4-30ESC Corporate & Capacity BuildingCorporate Structure, Policies & GuidelinesCorporate Staffing,Training & LiaisonOperationsMarketing & SalesGSP Production & ProcessingProcurement of Developers,Operators & SuppliersEPC of GridsElectricity, Methanol & Waste Water TreatmentEPC of Farms &PlantsSugar ProductionFarmingCorporate Social Contribution PlanCSR Programs
20Scope of Initial Engagement H1/Year -2H2/Year -2H1/Year -1H2/Year -1H1/Year 1H2/Year 1ESC Corporate & Capacity BuildingOrganizationStrategy & BDFinanceHRLegalProcurementLogisticsEngineeringQualitySalesMarketingInternal AuditCompany OperationsMarketing & Sales OperationsGSP Production & ProcessingProcurement of Contractors, Operators & SuppliersEPC of Grids (Electricity, Ethanol, Potable Water)EPC of PlantsSugar ProductionEPC of FarmsFarming Operations & ProductionCorporate Social Contribution PlanPlanning CSR ProgramsImplementing CSR Programs
21(IDM) Investment & Development Mgr The StructureOperating SystemCSR InitiativesPartnershipGov CompanyLong Term OperationsFull ExitSurrenderBack to PublicProject ConsortiumOperator(s)RecoveryProjects &OperationsInvestor(s)30 YearsPartial ExitDesign & Build PartiesEquitySupplies(IDM) Investment & Development Mgr3 YearsAssetsEquityEPC Contractor(s)Kick OffLaunch
22Partnership Framework Special Purpose Vehicle Local Development Plans The CSR InitiativesIntegrated StructuresPartnership FrameworkCSR FrameworkGovLiaison CoGov OwnershipOperating CompanyLocal AuthorityPartnership FormCSR InitiativesAsset Based ValueDevelopment TargetsSpecial Purpose VehicleLocal Development PlansPPP Product/ServiceCSR Programs
23Gerset Development Proposal ReferencesInterim Country Strategy Paper for Eritrea,Sugar industry in Eritrea: Business Report 2012Sugar Engineers.comFEASIBILITY STUDY REPORT for TCD CAPACITY SUGAR FACTORY PROJECTS prepared by THE FEDERAL MINISTERY OF AGRICULTURE INVESTMENT DEVELOPMENT AGENCY (IDeA) SudanIndia-Eritrea Relations, Ministry of Foreign Relations, IndiaUNICEF HUMANITARIAN ACTIONWefri Warsay Yika'alo