Over the next five years, or Phase 1 of its operations, WilmaFund aims to invest $20 million in Community Enterprise LLCs as shown in the Projections Table (PDF, 148kb). Of this, $16 million will be direct investment in projects (new LLC start-ups and added enterprises to existing clusters) financed by grants of equity raised by The WILMA Group from African corporations. Also, over the next five years, WilmaFund aims to raise over $5 million in grants from public donors. These grants will be used to cover WilmaFund's costs that returns on its investments (initially small) will not be able to finance.
Across rural and other marginalized areas of Tanzania, WilmaFund plans to invest during 2006-10 in a portfolio of approximately 130 projects in about 30 Community Enterprise LLCs. Average investment per project is assumed to be about $150,000, based on plans already prepared. The Community Enterprise LLCs will manage clusters of business initiatives that respond to the development opportunities of WILMA-certified CDAs. CDAs are community based organizations whose members are heads of households, residing in well-defined areas (villages, towns, neighborhoods), who have formed an association for this purpose.
Investments in these companies are expected to provide WilmaFund with an average return equivalent to 10% on the capital invested. Export-oriented enterprises with short capital gestation periods, such as mushroom production, are expected to yield 15% to 20% per annum on average, while businesses mainly serving local markets (including utilities and social services linked to higher-return commercial businesses) are expected to earn much smaller rates of return. In addition, CDAs are encouraged and supported technically to raise grant funds to support their own-managed programs, including revolving capital funds for micro-finance of projects designed by their members.