**Expanded Funding Sources & Financial Goals: Boaz Trading PLC**

*Strategic Capitalization for Sustainable Growth*

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### **1. Funding Sources**

#### **A. Equity Investment**

**Types & Strategies:**

- **Angel Investors**: Target high-net-worth individuals in Ethiopia’s diaspora community (e.g., Ethiopian-Americans) seeking tech/social impact opportunities.

- **Terms**: Offer 15–20% equity for $500k–$1M, with board representation.

- **Venture Capital**: Partner with pan-African VCs (e.g., *Partech Africa*, *Novastar Ventures*) focused on renewable energy.

- **Terms**: Series A round (2024) of $2M for 25% equity, valuing Boaz at $8M post-money.

- **Crowdfunding**: Launch an equity crowdfunding campaign on *Shekulo* (Ethiopian platform) to engage local retail investors.

**Pros**:

- No repayment obligations; access to investor networks.

- Aligns with long-term growth in Ethiopia’s $2B tech sector.

**Cons**:

- Dilution of ownership; investor expectations for 25%+ IRR.

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#### **B. Debt Financing**

**Options & Terms:**

- **Commercial Loans**:

- *Commercial Bank of Ethiopia*: Secure $1M loan at 12% interest over 5 years, backed by equipment/assets.

- **Development Bank Loans**:

- *Development Bank of Ethiopia*: Green energy loan at 8% interest for solar projects under CRGE Strategy.

- **Microfinance**:

- *PEACE Microfinance*: Short-term $100k working capital loan for SME contracts.

**Pros**:

- Retain full ownership; interest tax-deductible.

**Cons**:

- Debt servicing risks amid ETB volatility (forex hedging recommended).

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#### **C. Grants & Subsidies**

**Ethiopian Opportunities:**

- **Ethiopian Innovation Fund**: $200k grant for AI-driven predictive maintenance tools in healthcare partnerships.

- **UNDP Climate Resilience**: $500k for rural solar microgrid deployments in Oromia.

- **EU-Ethiopia Energy Initiative**: Grants covering 50% of renewable project costs.

**Pros**:

- Non-dilutive; enhances CSR profile.

**Cons**:

- Competitive; stringent reporting requirements.

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### **2. Financial Goals**

#### **A. Market Share Expansion**

**Objective**: Achieve **30% market share** in Addis Ababa’s residential electrification by 2025.

**Strategies**:

- Target *Condominium Housing Program* contracts (50,000 units by 2024).

- Launch *Boaz Home Solar Kits* for off-grid households.

**KPI**: Secure 15+ contracts/month via digital lead gen.

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#### **B. Service Offering Expansion**

**Objective**: Introduce **3 new services** by 2025:

1. IoT-enabled smart home installations.

2. EV charging stations for commercial hubs.

3. Battery storage leasing for industries.

**Funding**: Allocate 20% of Series A proceeds to R&D.

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#### **C. Profitability Improvement**

**Objective**: Increase net margin from 15% (2023) to **25% by 2026**.

**Strategies**:

- Automate procurement via *SAP Ariba* (15% cost reduction).

- Negotiate bulk pricing with *Schneider Electric* (10% discount).

**KPI**: EBITDA margin of 30% by 2025.

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#### **D. Financial Resilience**

**Objective**: Maintain liquidity ratio >2.0 and debt-to-equity <0.5.

**Strategies**:

- Reserve $300k cash buffer for ETB volatility.

- Diversify revenue: 40% govt contracts, 30% private sector, 30% grants.

**KPI**: Quarterly stress tests for forex/interest rate shocks.

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### **3. Risk Mitigation**

| **Risk** | **Mitigation** |

|--------------------------|----------------------------------------------|

| **Equity Dilution** | Cap investor equity at 35% via phased rounds. |

| **Debt Servicing** | Hedge 50% of USD loans via NBE forex swaps. |

| **Grant Compliance** | Hire grant manager for reporting/audits. |

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### **4. Funding Allocation**

| **Use of Funds** | **Equity (%)** | **Debt (%)** | **Grants (%)** |

|---------------------------|----------------|---------------|----------------|

| Equipment & Tech | 40 | 30 | 10 |

| R&D (Solar/IoT) | 30 | – | 70 |

| Marketing & Expansion | 20 | 50 | – |

| Working Capital | 10 | 20 | 20 |

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### **5. Financial Projections**

| **Metric** | **2024** | **2025** | **2026** |

|---------------------------|----------------|----------------|----------------|

| **Revenue (ETB)** | 2.5M | 4.0M | 6.5M |

| **Net Margin** | 18% | 22% | 25% |

| **ROI (Investors)** | 12% | 18% | 25% |

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### **Conclusion**

Boaz Trading PLC will deploy a hybrid funding model—$2M equity (40%), $1.5M debt (30%), and $1.5M grants (30%)—to fuel its 2024–2026 growth. By aligning capital with strategic goals, Boaz aims to dominate Ethiopia’s electrification sector while delivering 25%+ investor returns.

**Next Steps**:

- Finalize term sheets with *Partech Africa* by Q1 2024.

- Apply for $500k UNDP grant for rural solar by Q2 2024.

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*Funding the Future, Empowering Ethiopia.*