For simplicity and control in administration, WilmaFund's investments in projects yield returns that are paid like a royalty (or a sales tax) over the first five years of each project's life. These payments are calculated as a certain percentage of the gross revenue of each project in each of the first five years of its existence after capitalization. For each project, this percentage is calculated at the time of capitalization as the expected average annual rate of return from this project (or enterprise) to WilmaFund over this five-year start-up period, and this number is fixed in the investment contract between WilmaFund and the enterprise management. The percentage is calculated from the expected time path of gross revenue of the enterprise, as defined in the business plan of the enterprise. The projections in the business plan must be a central-case scenario (not a high-end target), and thus the expected return to WilmaFund from this enterprise can be considered as an unbiased forecast.
As shown in the Projections Table (PDF, 148kb), after a critical mass of holdings in enterprises has been achieved (in about five years), this investment income is expected to finance a continuation of WilmaFund's investment program (at the same scale of $20 million per five-year phase), all WilmaFund's related costs (including building a reserve for investment losses), and the buildup of a healthy operating reserve.