F

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Fábio Luiz de Oliveira Rosa
Social Entrepreneur
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Today we will discuss

• THE PROBLEM Poverty in Brazil
• THE STRATEGY Fabio Rosas New Idea
• THE IMPACT Brightening the Lives of
• Poor and Rural Brazilians

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Overview Poverty in Brazil

• The Facts
• With a population of 180 million, Brazil is home
  to extreme contrasts of wealth and poverty
• The richest 10 consume 46.9 of the income,
  while the poorest 10 get by on 0.7
• 80 of the rural population (30 million people)
  live in conditions of poverty

The Recife area is marked by the highest income
inequalities in Brazil. These 2 pictures were
taken less than 1 mile apart.
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Interview First Hand Perspective on Poverty in
Brazil

• Could you generally describe how you saw the
  disparity between the rich and the poor in
  Brazil?
• The issue is not the size of the pie, but how it
  is distributed. The border between wealth and
  poverty is strikingly apparent.
• We are also focusing on the efforts made to get
  electricity in more homes in Brazil. How do you
  recall others struggle without electricity?
• I think this problem is more prevalent in the
  countryside. In the cities, most favelas
  illegally pull power cords down from the power
  network, so most houses have electricity for
  free. In the countryside, however, it would be
  much harder to do so, so most people do have to
  live without electricity.

Click here for full transcript of the interview
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Fábio Luiz de Oliveira Rosa

• WHO A social entrepreneur and businessman (STA
  IDEEAS)
• WHAT One of Rosas early successes has been the
  development of low-cost rural electrification
  models that improve the quality of life for the
  rural poor and slow urban migration
• WHY Surveys of poor rural Brazilians revealed
  that electricity was at the top of their list,
  even above better working conditions
• HOW In the late 1990s, Rosa realized an
  opportunity to provide affordable energy when
  Brazils electric utilities were privatized

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• I knew my work was important because two
  billion people still lacked electricity. I
  became convinced that solar energy would prompt
  economic activity, improve education and health,
  decrease carbon emissions and relieve stress on
  overcrowded cities.
• -- Fabio Rosa

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Why Focus on Electricity?
Electricity is a root cause of poverty in Brazil.
The use of electricity in rural areas can
enhance
Education
CAN FREE LARGE AMOUNTS OF TIME HUMAN LABOR
Safety
Health
Economic Wellbeing

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I D E A A S
S T A
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Agroelectric System of Appropriate Technology
(STA)

• For profit, for those who spend at least 11 per
  month
• Promote and sell solar energy systems
• Develop cost-effective solar systems at a low
  price
• Manufacturing of energy components
• Inform population about the benefits of solar
  energy
• Focus on poor rural areas

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Institute for Development of Natural Energy and
Sustainability (IDEEAS)

• Founded in 1997 as a non-profit organization, for
  those who spend less than 11 per month
• Promote and install renewable energy in
  low-income areas in Brazil
• Rural electrification
• Social business model
• Income generating schemes for those at the bottom
  of the pyramid
• Combining high-efficiency and low cost technology

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The Sun Shines For All (TSSFA) Business Model

• TSSFA A project under STA
• Market research with McKinsey
• Package deal
• One time US 150 installation fee
• Leased equipment
• Flexible contract

PBS Special on TSSFA and Rosa
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TSSFA - Supply Chain
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TSSFA - Basic Kit(US 10/ Month)
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TSSFA - Kit 2(US 16/ Month)
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TSSFA - Kit 3(US 24/ Month)
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TSSFA - The Future

• 12V appliance store
• Electronic bill pay kiosk
• Project Quiron

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Project Quiron
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Program Impact

• Triple Bottom Line
• Financial
• Break-even Analysis and projections
• Social
• Electric Power helps improve quality of life,
  offers opportunity for income generation, and
  helps reduce mass exodus to Brazils largest
  cities
• Environmental
• Reduction in carbon emissions

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Financial Projections
2006 2007 2008 2009
Total Number of Kits Leased 1,000 1,500 1,740 1,880
Accumulated Number of Kits 1,000 2,500 4,360 6,100
The Sun Shines for All (TSSFA) estimates it will
break-even at the end of 2009 with over 6,000
customers GOAL FOR FUTURE YEARS Reach over
100,000 rural customers
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Social Impact

• People are more likely to stay in their local
  village instead of migrating to overcrowded
  cities or shantytowns

• Solar-powered electricity eliminates the need for
  dangerous and unhealthy lighting products
• Sourcing components of the energy kit from within
  Brazil benefits the local economy

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Environmental Impact

• The Agroelectric System of Appropriate Technology
  (STA) estimates that providing solar energy to
  12,900 families (52,000 people) would save

• - 9 million liters of kerosene
• 4.6 million kilos of liquefied
• petroleum gas
• - 46.4 million wax candles
• - 9.3 million radio batteries
• 23.2 million liters of diesel
• fuel

• Reduce global warming

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The Social Enterprise Spectrum The Social Enterprise Spectrum The Social Enterprise Spectrum The Social Enterprise Spectrum
Mostly Philanthropic Hybrids Mostly Commercial
Alleviating Poverty Malnutrition Successful Models Financing and development aid, Nutrition and Food Fortification, Food Production Distribution Alleviating Poverty Malnutrition Successful Models Financing and development aid, Nutrition and Food Fortification, Food Production Distribution Alleviating Poverty Malnutrition Successful Models Financing and development aid, Nutrition and Food Fortification, Food Production Distribution Alleviating Poverty Malnutrition Successful Models Financing and development aid, Nutrition and Food Fortification, Food Production Distribution
General Methods Appeal to goodwill Non-pecuniary rewards Mission driven Mixed motives Some subsidy Impersonal exchange Arms-length bargaining Market driven
Key Stakeholder Relationships Key Stakeholder Relationships Key Stakeholder Relationships Key Stakeholder Relationships
Primary beneficiaries Unclear or needy Not required to pay Subsidized pricing Price discrimination Third-party payers Customer able to pay Priced for profit
Capital sources Philanthropic Donations/grants Mixed debt donations or subsidized investments Capital market rate Equity and debt
Work force Volunteers with high Commitment to social mission Mixture of volunteers, professionals, paid staff or below-market wages Paid employees, focus on financial rewards
Suppliers In-kind donations Discounts, or mixture of in-kind and full price Charge market prices
Governance Mission-constrained Self-perpetuating Board stewardship Mixtures of representation and self-selection Balancing constituencies Board elected by owners Property rights Fiduciary responsibilities
Fabio Rosa, STA, IDEAAS, TSSFA, Quiron
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For Profit Non-Profit Social Alliance
Incorporating the Strengths of Both
For-profit STA TSSFA NGO IDEAAS Quiron
Strength Breakeven in 4 years Alliances/understanding of local community and politics Poor as employeessustainability Empowering
Weakness Size Lack of experience compared to utility companies in the area Currently a start-up (challenges of a young business)
Opportunity New technology can further reduce costs Culture of constant innovation Can improve income and living conditions Opportunity to reach the most poor Social and environmental impacts
Threat Powerful utility cos may extend grid into target area Default risk Political obstacles Reliance on livestock/ agriculture risk of natural disaster or disease Micro-lending (credit risk)
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Fabios Strategy A Better Mousetrap

• Not simply a one size fits all strategy
  different
• business models to target different segments
• Social alliances incorporating
• benefits of nonprofits and for profits
• Culture of innovative thinking creativity
• Passion and drive of Fabio Rosa
• Research strong understanding of
• demographics and communities
• Prevents thefts
• Ease un-installation FREE
• Perseverance, patience, quality, and
  attention to detail

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• Fabio has changed my life. He
• has allowed my family to not
• only survive, but to thrive. He
• is changing the lives of
• every rural community
• here in Brazil.

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Questions?