Financial Risk (CAPEX Sensitivity)
+Mitigated by leveraging a blended finance structure with a 30% grant component to de-risk initial investment, and using standardized, modular designs to control costs during scale-up.
Fixing the Broken Chain That Keeps Farmers Poor
"Solar Cool Chain" is a national, decentralized, solar-powered cool chain system designed to solve a critical market failure—reducing waste, enhancing crop value, and increasing farmer income by an estimated 20-35%.
The Anatomy of a Broken System
Bangladesh loses a third of its farm produce before it reaches a consumer—a loss equivalent to 4.0% of GDP. For smallholder farmers, this inefficiency translates directly into distress sales, mounting debt, and persistent poverty. The root cause is a profound infrastructure deficit.
Post-Harvest Losses by Sector
How it works
Produce & Value Flow
- Produce moves from farm to a local "Spoke" for pre-cooling.
- It's then aggregated at a larger "Sub-Hub" for sorting, grading, and storage.
- The SPV's platform facilitates market linkage, connecting aggregated produce with B2B buyers at premium prices.
Investment & Partnership
- A central SPV acts as master franchisor, managing tech and strategy.
- The SPV partners with established Partner Organizations (POs) for on-the-ground execution.
- POs onboard local entrepreneurs to operate hubs, structuring partnerships with clear equity splits (e.g., 70-30) to align incentives.
The Detailed Model: Architecture & Execution
A three-tiered physical network, a two-tiered franchise model, and a proprietary digital platform create a scalable, resilient, and bankable national ecosystem.
Three-Tier Hub-and-Spoke Model
| Feature | Tier 1 "Spoke" | Tier 2 "Sub-Hub" | Tier 3 "Central Hub" |
|---|---|---|---|
| Capacity | 5–10 MT | 50–100 MT | 200+ MT |
| Power System | Grid-Tied Solar + Battery | Grid-Tied Solar + Battery | Grid-Tied Solar + Battery |
| Primary Function | Farm-gate Pre-cooling | Aggregation & Grading | Urban Distribution & Export |
| Est. CAPEX (USD) | $15k–$25k | $180k–$250k | $600k–$800k |
Operations KPIs targets
Utilization Target
>75%
Chamber Uptime
>99.5%
Temp Compliance
>99%
Cash Conversion
<10 days
Role Matrix (RACI)
| Process | SPV | PO | Spoke Ops |
|---|---|---|---|
| Booking & pricing | A | R | C |
| Inbound QC & weighment | C | A | R |
| Chamber ops & logs | C | A | R |
| Maintenance (P/CM) | A | R | C |
| Dispute resolution | A | R | C |
A=Accountable; R=Responsible; C=Consulted.
SLAs & SOP Snippets
- Uptime: ≥ 99.2% chamber availability; alert < 60 sec; on-site response ≤ 4h.
- Temp compliance: ≥ 98% time-in-range; excursion < 30 min.
- Maint: monthly checks; quarterly deep service; annual overhaul.
- Booking: cut-off T-24h; overbooking max 5%; no-show fee = 1 day tariff.
- QC: digital weighment, time-stamped images, two-person sign-off.
- Service credits: If uptime < 99.2% in a week, credit = 1 day CaaS for affected slots.
- Escalation: P1 (cooling outage) on-site ≤ 2h; P2 ≤ 8h; failure → third-party swap chamber.
- Spares: critical spares kit on-site; compressor lead-time < 72h via pooled inventory.
Financial Framework & Revenue Model
The project is designed for blended finance, featuring strong unit economics and multiple revenue streams to ensure long-term viability and attractive investor returns.
Revenue focus: CaaS & value-add drive near-term cash; forecasting & financing build-out covered in the data room.
Capital Strategy
A layered, blended finance approach managed by a dedicated SPV to de-risk investment across phases.
- Pilot: Grant & First-Loss capital to absorb initial risks.
- Scale-up: Concessional Debt from DFIs for regional expansion.
- National: Commercial Equity & Debt once the model is proven.
Core Revenue Chain
The model creates value at each step, ensuring profitability for the operator while increasing income for the farmer.
- 1. Farmer Pays for Service: Pays CaaS fee and optional grading/packaging.
- ▼
- 2. Hub Operator Earns: Primary revenue stream from fees.
- ▼
- 3. Buyer Pays for Quality: Premium for aggregated, high-quality produce via B2B marketplace.
- ▼
- 4. All Parties Profit: Operator earns commission; farmer receives higher net price.
PO Franchisee Revenue Streams
Partner Organizations acting as franchisees have access to multiple, layered income sources.
- Primary CaaS Fees: Consistent revenue from farmer storage services.
- Value-Added Service Fees: Charges for grading, sorting, and packaging.
- Sales Commission: A 2–5% commission on produce sold through the B2B marketplace.
- Logistics Fees: Transport between spokes, hubs, and final markets.
- Future Streams: Carbon credits & surplus solar energy sales.
How We Make Money (Per 50-Ton Hub @ 70% util)
| CaaS Core | Value-Add | Illustrative Annual |
|---|---|---|
|
|
|
| Total Annual Revenue: ~BDT 5.0–5.6M | ||
CaaS
~75%
Value-Add
~20%
Commission
~5%
Utilization
70%
Illustrative; see model. Assumes tomato/banana mix, 2-week dwell, 70% utilization.
Unit Snapshot – 50-Ton Hub
| Metric | 50% | 70% (Base) | 90% |
|---|---|---|---|
| Revenue (M BDT) | 3.6 | 5.0 | 6.4 |
| OPEX (M BDT) | ~1.2 | ~1.3 | ~1.45 |
| EBITDA (M BDT) | ~2.4 | ~3.7 | ~4.9 |
| Cash breakeven util | ~62–65% (covers OPEX + debt at 6y, 5%) | ||
DSCR (years 3–6): ~1.08–1.12 @ 70% util — positive but tight; utilization is the covenant driver.
IRR figures shown elsewhere are illustrative; base case assumes 6-year 5% annuity and 70% utilization.
Seasonality & Utilization Plan
| Month | Target Util% | Levers |
|---|---|---|
| Jan–Mar | 78–82 | Potato anchor, onion dry |
| Apr–Jun | 68–72 | Tomato/veg push, promos |
| Jul–Sep | 60–65 | Banana focus, logistics tie-ups |
| Oct–Dec | 70–75 | Festive demand, contract lots |
- Dynamic tariffs (-5% early booking; volume tiers) to smooth peaks/valleys.
- PO-led aggregation to pre-commit ~50% capacity in low-season.
- “Market-ready” packaging to reduce dwell and increase turns.
Pilot Business Case: Nilphamari Hub
Region: Nilphamari, North Bengal
Recommended Pilot Mix & Rationale
A balanced portfolio of high-volume and high-value crops to test the model, de-risk operations, and ensure strong initial returns.
| Category | Produce | Rationale |
|---|---|---|
| Cold Band (0-4°C) | Potato, Cabbage | High local volume, anchor crops |
| Cool Band (7-12°C) | Tomato, Brinjal | Steady market, quick cycle |
| Dry Store | Onion, Garlic | Strong cash crop, export option |
Cooling & Operations Design
-
Multi-Chamber Model:
- Chamber 1 (0–2°C): Cauliflower, cabbage, carrot
- Chamber 2 (10–12°C): Brinjal, tomato (short duration)
-
Specialized Storage:
- Separate bulk storage for Potato (3–4°C, 80–90% RH)
- Dry zone for Onion/garlic (0–2°C, 65–75% RH)
-
Cross-Contamination Protocol:
Potatoes will be stored in a dedicated, sealed unit with zoned airflow to prevent ethylene emissions from spoiling other produce.
Cash Cycle & Working Capital
How money flows from booking to payout, and how we keep cash positive during peak seasons.
Payment Terms
- Farmers: 50% deposit at booking, balance weekly.
- B2B Buyers: Net 7–14 days via escrow; 2% discount for T+2 pay.
- Disputes: 1% holdback; release ≤ 5 days post-delivery QC.
Order-to-Cash Timeline
- Digital booking → deposit
- Inbound weighment & QC → storage starts
- Grading/packaging (optional) → pick ticket
- Dispatch to buyer → e-PoD
- Escrow release → payout to farmers
Target cash conversion cycle: < 10 days.
Working Capital Controls
- Receivables aging < 10d; auto dunning at D+7.
- Farmer advances capped at 70% of net realizable value.
- No-show fee & storage lien for unpaid balances.
Worked Example (Tomato, 12 MT lot)
Assumptions: tariff BDT 1.7/kg/week, dwell 2.0 weeks, commission 3%, sale price BDT 120/kg. Storage fee total = 12,000 × 1.7 × 2 = BDT 40,800. Commission = 12,000 × 120 × 3% = BDT 43,200.
| Day | Event | Operator Cash (BDT) | Escrow Pass-through (BDT) |
|---|---|---|---|
| T-1 | Booking deposit (50% of storage) | +20,400 | — |
| T | Inbound QC & storage start | 0 | — |
| T+10 | Dispatch → e-PoD | 0 | — |
| T+14 | Storage balance collected | +20,400 | — |
| T+17 | Escrow release (buyer payment) | +43,200 (3% commission) | +1,396,800 to farmers |
| T+22 | Holdback release after QC | 0 | Included above (released on QC) |
Operator CCC ~ T-1 → T+14 for storage fees; commission paid at T+17. Escrow amounts are pass-through, not operator revenue.
Risk Mitigation & Governance
A proactive risk management framework is integrated into the operational design, informed by sensitivity analysis of key financial drivers.
Operational Risk (Utilization Sensitivity)
+Addressed through strong farmer aggregation via POs, contract farming agreements, and a digital booking platform to manage and forecast demand.
Market Risk (Tariff Sensitivity)
+Managed by diversifying revenue streams beyond CaaS (e.g., service fees, commissions) and proactive coordination with DAM and SREDA to ensure tariff stability.