Terms of reference for the evaluation of the Productive Use Container (PUC) project

BUSINESS AND TECHNICAL ASSESSMENT

Background
The Productive Use Container project is funded by Nuon, The Dutch Ministry of Foreign Affairs (DGIS) and Novib as part of the Ministrys call for ideas Public Private Partnerships with this particular submission focussing on the WEHAB theme Energy. The project involves the implementation of six (6) productive use containers in the KwaZulu-Natal province, South Africa. The PUC concept was originally developed by Restio Energy (then RAPS Consulting) and E&CO for Greenpeace and was exhibited at the WSSD in 2002 and subsequently implemented in the Limpopo Province. The current PUC project, described in more detail below, draws on these experiences in a wider pilot project, a project which permits a more detailed and supported implementation approach allowing for greater learning, more diversified business opportunities and greater market partnering potential.

Introduction
The PUC project is drawing to a close, officially ending on the 31st August 2007. The partners have determined to undertake an independent evaluation of the PUC project before its conclusion, hoping to gain significant and useful insights into the successes, failures and potentials of the project and the concept itself. The evaluation proposed here will be in the form of a mid-term review rather than a terminal evaluation. The successful consultant will have to ensure that their approach, observations and insights are rendered useful not only in terms of evaluating the project and future opportunities but, in addition, that recommendations are made in such a way that the current project can directly benefit.

Aims of the evaluation

The project partners are interested in lessons that can be drawn from the pilot productive use container (PUC) project which will enable linking & learning. In the pilot context the PUC concept has revealed some of its strengths and weaknesses: What has worked and what has not in delivering the expected results regarding the technology, the new businesses and the surrounding community? This should provide lessons about opportunities and risks in further applying the PUC concept by project partners and/or others: What needs to be done to improve the overall success of the concept? What lessons can we learn? What needs to be done to successfully upscale the project? All these and similar questions need to be assessed within an evaluation which will inform the future of the concept as well as providing positive feedback into the existing PUC project. The evaluation approach should be that of a mid-term review as opposed to a terminal evaluation which will better enable the results of the review to positively influence the outcomes of the current project as well as future PUC projects.

The project and the PUC

The Productive Use Container (PUC) project is a micro-enterprise initiative designed to identify and overcome the range of barriers to promoting income generating opportunities in remote rural areas. These areas are characterised by high unemployment, poverty, a widespread prevalence of HIV/Aids and, worst of all, very few prospects of overcoming these conditions. The PUC has been designed and implemented to challenge these realities. Housed in a converted shipping container, the PUC is a micro-enterprise kit, including infrastructure, services, hardware and a series of softer services aimed at addressing a range of social, economic and infrastructural barriers to promoting sustainable income generating opportunities. A converted shipping container houses the micro-enterprises; all powered by Photovoltaic electricity (PV solar) system. As an integral part of the PUC kit, the container offers secure business premises which are strategically placed at identified [unelectrified] rural market nodes while the PV electricity is generated and delivered on site. The container is professionally converted according to the spatial requirements of the businesses which may vary from a large integrated workspace to accommodating up to five separate and partitioned micro-enterprises. Doors, security gates, lockable service hatches and guarded windows secure goods and personnel while offering a professional work environment. These material components of the programme are strongly complemented by a range of business centred services focusing on business skills training, enterprise development, identifying and developing market opportunities and mentoring entrepreneurs.

Project partners
Nuon is a leading energy company, which delivers its products and services to nearly three million customers in the Netherlands and abroad. Nuon is a frontrunner on the Dutch renewable energy market. The company aims to achieve balanced growth for all stakeholders: shareholders, employees, customers and the environment and society. Nuon sees it as a corporate social responsibility to use its finances and knowledge in developing countries to provide access to basic electricity and other energy means to those that live in rural off-grid areas. Novib Oxfam Netherlands works for poverty alleviation and sustainable development. Aiming to ensure sustainable livelihoods, its focus in South Africa is on income generation through corporate social responsibility, trade and access to markets. Selected partner organisations in the South are funded to achieve this, and support is generated in the Netherlands from both public and private sector and the general public. Novib has earlier been collaborating with Nuon in a rural electrification project in Mali. DGIS (Dutch Ministry for Foreign Affairs), including the Royal Embassy of the Netherlands in Pretoria. The DGIS issued a call for proposals for Public Private Partnerships between the Dutch Government and Dutch private sector concerns in November 2003. The PUC project is a product of a PPP including DGIS, Noun, Novib and Restio Energy (then RAPS Consulting).

Restio Energy (the new name for RAPS Consulting) is a leading energy for development consultancy, based in Cape Town, South Africa. The company was founded in 2001, and has since led or participated in a number of high profile consultancy projects, both in South Africa and in other African countries. Our focus has been on rural energy issues, where our project implementation, technical, financial, socio-economic and policy skills help contribute to the complex web of rural energy project development and implementation, and policy development. Restio Energy is the project manager of the PUC initiative. Winning Business Solutions (WBS); WBS is a South African based consulting and training company, specializing in entrepreneurship, business skills and rural development projects. WBS is responsible for managing and implementing the Rural Wealth Creation Project (RWCP), funded by Novib. The project is designed to contribute towards the alleviation of poverty in KwaZulu-Natal by developing sustainable microbusinesses and income generating activities. With a particular focus on women, the RWCP brings together the expertise and influence of business and development. The RWCP is a project partner on the PUC project.

Methodology
The successful consultant will have to apply a number of different research/evaluation techniques in ensuring that sufficient insight and understanding of the PUC project is generated. The following techniques are proposed although consultants are encouraged to apply additional techniques where deemed appropriate; Open-ended and structured interviews; Interviews with representatives on the project management team, the beneficiaries, the beneficiary communities as well local community leaders will be necessary. A mix of open-ended and structured interviews will be required in order to gain broad-based reactions to the PUC as well as more in-depth insights from participants. Survey; It will be necessary to gauge the impact of the PUC on beneficiary communities as well as getting quantitative and comparable data from the entrepreneurs themselves. The survey method offers a controlled technique for recording broad-based information relating to particular features of the programme. Linking and learning; less of a technique than an approach the consultant will be required to offer firm recommendations that can both benefit the current project in terms of achieving its aims as well as informing future PUC related projects.

Outputs
The key outputs for the BUSINESS AND TECHNICAL evaluation are as follows;

Container conversion, practicability and location

The consultant will have to assess the conversion and placement of the PUCs. Key questions here are; o Whether or not the physical space(s) provided are appropriate for the businesses that occupy them.

Are the ergonomics appropriate in terms of equipment used, ease of customer interaction, etc? o Are the containers professionally and appropriately converted? o Are the containers safe both in terms of the entrepreneurs using them and from vandalism and theft? o Are the containers appropriately positioned with regard to the markets? o

Technology
The consultant will be required to review the energy technology, determining; o Whether the technology is appropriate, o whether it is functioning without any significant problems or inconvenience to the users o Whether the maintenance regime is adequate to support the energy system o whether the power output matches the business energy requirements o what plans are in place to accommodate potential business growth

Businesses
The consultant will have to undertake an evaluation of the businesses. The following issues should act as a guide to this evaluation; o o o o o o Was their adequate training provided upfront and sufficient enterprise development and support once established? Is the business service/goods offer appropriate to the market? Does the entrepreneur display the necessary commitment and enthusiasm for making the business a success? What are the future prospects of the business? What is the character of the businesss market? Is it local; are there market linkages between the local business and external service providers/markets? What recommendations would the consultant make with regard to the future direction of the business?

Project sustainability
The PUC programme will need to achieve sustainability on two levels; at the level of individual businesses where businesses need to generate a reasonable profit for entrepreneurs and at the level of the collective; where the PUCs remain functional in the face of potential technical faults, entrepreneur turnover and other environmental challenges. The sustainability of the individual businesses should be assessed under the business evaluation which is outlined above. With regard to the collective, a number of business management options were mooted in the original business plan and others have been put on the table subsequently. The consultant will be required to assess the sustainability plan(s) and other options, determining the viability of the existing plans and making recommendations to strengthen and improve the plan(s). o What plans have been put in place and how effective will they be?

o o

What are the costs involved in such a plan and how will this impact on its success? What kind of strategy is required to maintain and grow the PUC collective?

Future opportunities
Based on the preceding evaluation, the consultant will be required to make recommendations on future opportunities relating to the PUC. Such opportunities should consider the consolidation and expansion of the existing PUC programme in KwaZuluNatal and, importantly, other future opportunities for the PUC concept. Recommendations should not necessarily be limited to KwaZulu-Natal or South Africa. It needs to be said that the PUC concept is not necessarily best suited to South Africa given the high incidence of grid electrification and relatively low sense of acknowledged entrepreneurship. However, the location of the PUC pilot project was considered convenient in terms of effective management, access and familiarity with the region. The consultant should consider the successes and failures of the current project and make firm recommendations with regard to future opportunities.

Original project intent

The following matrix presents the original intents of the project. The consultant should use this matrix, in conjunction with the evaluation outputs described above, to guide the overall evaluation of the PUC project. Inputs Indicator PUCs ready to operate in off-grid areas Kwa Zulu Natal Entrepreneurs trained and business plans prepared Description/target 6 PUCs, including functioning solar energy systems in place with adequate community buy-in 30 candidates trained per PUC location; with 4-5 selected per PUC Responsible Restio/Nuon Remarks 3 PUCs in year 1, 3 PUCs in year 2, within budget 12-15 entrepreneurs selected in year 1; same number in year 2; min. 70% female

RWCP/OxfamNovib

Outputs Indicator Businesses established in PUCs

Description/target 24-30 businesses established, running on solar energy, serving a growing client base and making an operational profit At least 40% of

Responsible Restio/RWCP

Remarks 12-15 in year 1, plus additional 1215 in year 2

RWCP/Oxfam-

businesses link local productivity with external markets PUC entrepreneurs develoop into role models for underresourced areas Objectives Indicator Confirmation whether and how PUC operation can be profitable and sustainable in offgrid areas Sustainability Indicator PPP-experience informs both private initiatives and public policy aimed at replicating concept/ bringing it to scale Description/target PUC ownership transferred to a management agent

Novib

Responsible Restio/NUON

Remarks Comparison of PUCs performance; Preferred agent identified and transfer agreement reached Remarks 12-15 in year 1, plus additional 1215 in year 2

Description/target Business case and development case to replicate PUC concept Dialogue initiated with relevant line ministries to develop policies that promote the PUC concept in rural off-grid areas

Responsible Restio/RWCP

Restio/NUON/ Embassy