Strictly Confidential

GEP Mozambique

Agriculture Investment Overview













January 2013






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1. Introduction:
Mozambique is uniquely situated on the African continent. The country was for many years one of the
worlds top food exporters. The cotton, coffee, grains, sugar, nuts and fruits grown there were exported all
over the world until the 1970s when the country was plunged into a long and bitter civil war. Peaceful since
1992, the country has now emerged to be one of the fastest growing economies in the world and provides a
unique opportunity to again take advantage of an ideal climate for agriculture.
Good Earth Power (GEP) is an international organisation with interests in the construction, energy,
communications and land development sectors in Africa and the Middle East. Its primary purpose is to
leverage unique technologies to drive forward self-sustaining growth and economic prosperity through the
provision of food security, energy security and infrastructure.
GEPs holding company in Mozambique ZR Energies Mozambique Limited (ZREM) has recently secured a
540,000 Hectare land concession in central Mozambique, near the town of Sena, on the edge of the
Zambezi river. The 99-year concession has existing timber operations on site, as well as excellent potential
for a large-scale commercial farming operation.
ZREM has secured the right to use and profit from the land - Direito de Uso e Aproveitamento da Terra
(DUAT) including planting, growing, harvesting and exporting agricultural crops and timber. To implement
& deliver the agriculture programme, ZREM has set up a commercial farming business called GEP
Mozambique AgriCo Limited (AgriCo).
AgriCo has employed very experienced farmers across Africa to roll out its operations using proven farm
management systems and state-of-the-art technology with irrigation, machinery, seed selection, soil
rejuvenation, and plant husbandry to match the global best practises and yields from places like the US,
Brazil, Argentina and Europe. Agricultural commodities grown will initially include Maize & Soy, followed by
Rice and Sugar at a later stage. Insurance will be obtained to cover site and crop risk.
AgriCo expects to generate significant long-term financial returns by selling 100% of the crops produced to a
long term farm gate off-taker. ZREM is in advanced discussion with Bunge Limited [NYSE:BG], one of the
worlds leading Agri-businesses and other major international off-takers such as Cargill.
As part of an initial funding round, AgriCo has contracted with The Ideas Factory (TIF) as its UK master
funding partner. TIF is seeking investors for 50 x individual 15-hectare plots at GBP10,000 per plot.
Investors can choose to independently operate and manage the plots themselves or appoint AgriCo (through
TIF) to do it on their behalf. If AgriCo is appointed by the Investor, AgriCo is offering a secured, fixed 14%
per annum return (+RPI) for a 25 year term. Investors are free to sell their fully assignable plots whenever
they choose.

2. Key Concession / Project attributes:
The 540,000 Hectare (ha) site is to be utilised as:
o 200,000 ha Wildlife Reservation
o 200,000 ha Sustainable Timber Plantation


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o 140,000 ha Agriculture (120,000 ha is currently Timber, which will be cleared, and 20,000 ha of
grassland that needs very little work to clear and can be planted imminently)
Unique location a climatic region of Mozambique which has:
o High average monthly temperatures above 25 C and average daily sunshine of 8 hours per day
which creates high amounts of photosynthesis
o Situated next to the Zambezi River (40% of the fresh water flow in Southern Africa) allowing for
an exceptional irrigation infrastructure, and a minimum of 2 crops per annum per hectare
o Low annual monthly rainfall of 64mm per month, which means very little diseases (rainfall brings
disease) and a realistic year round operation
DUAT (local planning permission attached to the land) has been secured for farming and exports
National, Regional and Local support for the commercial operation is very positive, as it will be a
significant employment generator for the local community, as well as a major contributor to
improvements in local infrastructure
No new concessions over 1,000 ha were made between the end of 2009 to the end of 2011 large land
concessions, with the necessary permits to commercialise them, are difficult to obtain, meaning little
immediate competition
A very experienced operating team with an extensive track record in large scale farming across Africa
An Off-take agreement with Bunge is being finalised

3. Site Location:



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4. AgriCo Crop Selection:
AgriCo has chosen as its primary field crops Maize, Soya and Sugar. These are three of the most widely
grown food crops on the planet with a wide range of uses and a large group of buyers in the market.
Maize Maize is the largest grown cereal with close to 1 Billion MT being produced and eaten each year. It
is the main staple food crop for all of Southern Africa, meaning that the market for the products will be local,
year round and dependable. Additionally, it is one of the main raw materials of feed for chickens and cattle,
the main farmed protein sources in the region. The crop requires heat, sunshine, water and good soils all
of which are available on the land chosen in Mozambique by the AgriCo.
Soya Soya bean is an oilseed produced for its oil, seedcake, and used in various foods around the world,
the largest producers being the US, Argentina and Brazil. The seedcake is also main component of animal
feed (the Mozambique Government expects poultry demand to triple in the next 10 years). Soya has
excellent nitrogen fixing qualities in soils, and when grown with Maize and Wheat, and can help to increase
the yield of those crops, while lowering the requirement for fertilizer, thus saving costs.
Sugar In time, AgriCo will produce Sugarcane, which is a crop that is widely, successfully grown
throughout Mozambique and the coastal regions of South Africa. Over 1.7 billion MT of sugarcane is grown
globally. Sugar is a constant, large, global market and is traded in London and New York, as well as on
many regional exchanges. Sugarcane is a crop planted once, and harvested repeatedly over a five year
period before it is replanted.
AgriCo is finalising the off-take agreement. Bunge or Cargill will purchase direct all of the crops from the farm
gate, meaning AgriCo has no delivery risk.
5. The Financial Proposal:
A 750-hectare parcel (from the initial, cleared 20,000 ha) has been identified in a prime part of the
concession for immediate plantations. This initial 750 hectare investor parcel will be a sub-concession to the
Investors. ZREM reserves the right to extend this to 1,500 hectares.

Investors can buy leasehold 15-Hectare plots of land in this 25-year project. A 15-Hectare plot lease is priced
at 10,000, with multiple plot purchases allowable and providing for 20% pa returns. The investor has total
freedom to sell, reassign, exploit the land themselves; appoint a third party to do the farming on their behalf
or let the plot to AgriCo. Investors are given the choice to enter into a tenancy agreement where Investors
become the landlord and AgriCo the tenant. AgriCo can pay such rental returns when they utilise each
rented plot for the management and exploitation of your leasehold-lands produce.

It is envisaged that the investment will be a long-term, secured income play per plot, but as there is no
requirement to appoint AgriCo, Investors are free to self-manage their plot, sell whatever they produce to
their own trading partners and sell or assign their sub-lease at any point in time. TIF will have first right of
refusal to purchase the land back from the Investor at the proposed sale price.

If an investor was to appoint AgriCo to operate and manage on their behalf, AgriCo commits to pay 17% per
annum (+ RPI) for 25 years. This would yield around 62,000 on a 10,000 investment. (assumes 3% RPI).

Alternatively, investors can sell at any point, including back to TIF if desired. See the tables below which
outlines the potential returns and options, based on a 10K investment and a 20K investment.



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Mozambique Agri Investment scenario
Investment Amount 10,000
Lease Term (years) 25
AgriCo Yield (per annum) 17%
Forecast RPI (per annum) 3%
Year Investor Holds Investor Sells to TIF Investor Sells to TIF
for 25 years at par after 5 years at par after 10 years
1 1,700 1,700 1,700
2 1,751 1,751 1,751
3 1,804 1,804 1,804
4 1,858 1,858 1,858
5 1,913 11,913 1,913
6 1,971 1,971
7 2,030 2,030
8 2,091 2,091
9 2,154 2,154
10 2,218 12,218
11 2,285
12 2,353
13 2,424
14 2,497
15 2,571
16 2,649
17 2,728
18 2,810
19 2,894
20 2,981
21 3,070
22 3,163
23 3,257
24 3,355
25 3,456
Total Return 61,981 19,026 29,489
Return on Investment 620% 190% 295%
Profit 51,981 9,026 19,489
Return on Investment scenarios


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Mozambique Agri Investment scenario
Investment Amount 20,000
Lease Term (years) 25
AgriCo Yield (per annum) 20%
Forecast RPI (per annum) 3%
Year Investor Holds Investor Sells to TIF Investor Sells to TIF
for 25 years at par after 5 years at par after 10 years
1 4,000 4,000 4,000
2 4,120 4,120 4,120
3 4,244 4,244 4,244
4 4,371 4,371 4,371
5 4,502 24,502 4,502
6 4,637 4,637
7 4,776 4,776
8 4,919 4,919
9 5,067 5,067
10 5,219 25,219
11 5,376
12 5,537
13 5,703
14 5,874
15 6,050
16 6,232
17 6,419
18 6,611
19 6,810
20 7,014
21 7,224
22 7,441
23 7,664
24 7,894
25 8,131
Total Return 145,837 41,237 65,856
Return on Investment 729% 206% 329%
Profit 125,837 21,237 45,856
Return on Investment scenarios


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6. Additional Security from ZREM
As a double form of protection and security, in addition to agricultural insurances taken out, AgriCo has
agreed to underwrite the return on this investment for TIF from large scale forestry assets owned by its
parent company in Mozambique. This effectively means that if the crops are blighted one year, and income
from agriculture is not available, AgriCo will still pay the offered return to TIF investors from other income
producing assets owned.
7. Buyback Option
If an investor wants to sell their plot after 5 years to recoup their capital, TIF will buyback or on-sell any plots
at the original price paid. Investors must give TIF notice at the end of year 4 if they wish to take up this
buyback option.
Notwithstanding this offer, Investors are free to sell or assign the plot at any time during the life of the
agreement for whichever price they can achieve.
8. Legal structure:
Investors will enter into one or two agreements through FPA
a) A Sub-Concession Agreement with ZREM, and:
b) A Services Agreement with AgriCo where AgriCo operates, manages and commercialises the land
and off-take sales on behalf of the Investor for 25 years at a fixed return of 14% per annum (+ RPI)
9. GEP Mozambique AgriCo Management Team:
1) Clay Taber, Agricultural Director, GEP
Clay has spent the last 21 years working in finance and development in emerging markets. For the last six
years he has been focused on creating opportunities in the agri-business sector throughout Africa, and has
worked on projects in Mozambique, Malawi, Tanzania, Ethiopia, Sierra Leone, Guinea, Namibia, DRC,
Nigeria, Ghana, and South Africa. Clay and his team have advised on over 200,000 ha of agricultural
investments, as well as many different processing operations. Former employers include BNP Paribas,
Raiffeisen ZentralBank Austria, the European Privatisation and Investment Corporation and JC Bradford &
Company (now part of UBS).
Crop development experience: Maize, Wheat, Soya, Tomatoes, Cassava, Beans, Cotton, Potatoes and
Sugar.
2) Luhan Swart, Technical Director, AgriCo
Luhan has provided his expertise on over 150,000 ha throughout Africa. Prior to joining GEP, he advised on
large scale farm projects all over Africa, and prior to that he was for 13 years the Technical Director for
Hygrotech SA, a major African seed and varietal specialist company. He has worked in South Africa,
Mozambique, Namibia, Nigeria, Ghana, DRC, and Zimbabwe.



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Crop Specialties: Wheat, Maize, Soya, Cassava, Tomatoes, Sunflowers, Cabbage, Seed Maize, Beans,
Cotton and Chilies.
3) Brian Morkel, Operations Director, AgriCo
Brian has managed and advised on over 120,000 ha of farmland globally, growing grains and oilseeds in
Europe and Africa. He has worked in Zimbabwe, Zambia, Russia, Romania, Tanzania and South Africa.
Crops grown in scale farming operations : Wheat, Maize, Soya, Sunflowers, Barley, Beans, Sorghum,
Asparagus, Carrots, Baby Corn, Green Beans, Runner Beans, Courgettes, Fresno and Jalapeno chillies for
local and export markets.
10. Schedule of supporting Documentation to be provided:
1. 540,000 Hectare Concession Agreement in Portuguese, outlining ZREMs ownership
2. Certified English translation of the Concession Agreement
3. Copy of the DUAT (commercial agricultural growing license) in Portuguese
4. Certified English translation of the DUAT
5. Copy of the agriculture export license in Portuguese
6. Certified English translation of the agriculture export license
7. Copy of the ZREM security offered to TIF
8. Draft of Investor Sub-Concession Agreement
9. Draft of Investor Services Agreement