Business Models

Our Business Models

---

Identiko offers several flexible engagement schemes that give our clients a wide range of options to choose from in the implementation of their identity projects. These options include outright purchase of equipment and services to various PPP arrangements including profit sharing

Build, Train & Transfer

In this scenario, the client pays Identiko for the execution of a project within a specified limited period.

In these kinds of projects Identiko will offer the following services

• Project management
• Procurement of hardware and software components
• Train operators and technicians
• Deploy equiments and software
• Provide support

The client is usually responsible for on site operations as well as engagement and remuneration of operators.

Compared with other models, this model requires an up-front investment from the client but also means that any revenue accruing or fees charged by the client or government for the operations, services or products delivered all go to the client and are not shared with Identiko.

Contact our sales team on a Build and Transfer Engagement

Design, Build & Operate

BOT is another business model through which Identiko undertakes projects with clients especially on public sector projects involving identification services. The client cedes part of the process, either the production or personalisation of identity documents and provision of identity based services to Identiko for 5 to 10 or more years. As a result of this, Identiko will make all required investment to procure and deploy equipment and infrastructure, create local employment and transfer know-how. The client’s employees will participate in the end to end deployments and operations and be trained to benefit from Identiko’s experience to learn how to operate the new service and equipment.

• A BOT project does not require up front investment (capital expenditure) from the client as Identiko will wholly fund and operate the project for the years ceded.
• Any revenue from the provision of services or fees charged by identiko for issuing cards will wholly accrue to Identiko dring the ceded period.
• When requested a BOT-scheme is sometimes completed at the end of the contract period by organizing the transfer to the client of all hardware, machines and software licenses
• Identiko has the financial strength and deep financial backing to carry out huge long term investments, relieving our clients of the financial burden of equipment purchase and deployments while recouping these costs over a long term.
• Identiko recoups its investment and collects revenue directly from the charging fees for the issue of card, documents or other digital credentials to the end users.

Each project is unique and extensive analysis is done to model the viability of a project and determine the time recovery period for the project (minimum 5 years) based on estimates of the number of cards/document to be issued or the number of transaction requests every year during the contract period.

Contact our sales team on a Build Operate and Transfer Engagement

Build, Operate & Transfer

A Build Operate Transfer (BOT) Project is typically used to develop a discrete asset rather than a whole network and is generally entirely new or greenfield in nature (although refurbishment may be involved). In a BOT Project Identiko will generally obtain its revenues through a fee charged to the utility/ government rather than tariffs charged to consumers.

BOT Project Features

• In a BOT project, the public sector grantor grants to Identiko the right to develop and operate a facility or system for a certain period (the "Project Period"), in what would otherwise be a public sector project.
• Usually a discrete, greenfield new build project.
• Identiko finances, owns and constructs the facility or system and operates it commercially for the project period, after which the facility is transferred to the authority.
• BOT is the typical structure for project finance. As it relates to new build, there is no revenue stream from the outset. Lenders are therefore anxious to ensure that project assets are ring-fenced within the operating project company and that all risks associated with the project are assumed and passed on to the appropriate actor. Identiko, the operator is also prohibited from carrying out other activities. The operator is therefore usually a special purpose vehicle.
• The revenues are often obtained from a single "offtake purchaser" such as a utility or government, who purchases project output from Identiko or the SPV (this is different from a pure concession where output is sold directly to consumers and end users).
• Identiko obtains financing for the project, and procures the design and construction of the works and operates the facility during the concession period.
• The project company is typically a special purpose vehicle, its shareholders will often include companies with construction and/or operation experience, and with input supply and offtake purchase capabilities. It is also essential to include shareholders with experience in the management of the appropriate type of projects, such as working with diverse and multicultural partners, given the particular risks specific to these aspects of a BOT project. The offtake purchaser/ utility will be anxious to ensure that the key shareholders remain in the project company for a period of time as the project is likely to have been awarded to it on the basis of their expertise and financial stability.
• Identiko/SPV will co ordinate the construction and operation of the project in accordance with the requirements of the concession agreement. The off-taker will want to know the identity of the construction sub-contractor and the operator.
• The revenues generated from the operation phase are intended to cover operating costs, maintenance, repayment of debt principal (which represents a significant portion of development and construction costs), financing costs (including interest and fees), and a return for the shareholders of the special purpose company.
• Lenders provide non recourse or limited recourse financing and will, therefore, bear any residual risk along with the project company and its shareholders.
• Identiko is assuming a lot of risk. It is anxious to ensure that those risks that stay with the grantor are protected. It is common for a project company to require some form of guarantee from the government or commitments which are incorporated into an Implementation Agreement.
• In order to minimize such residual risk (as the lenders will only want, as far as possible, to bear a limited portion of the commercial risk of the project) the lenders will insist on passing the project company risk to the other project participants through contracts, such as a construction contract, an operation and maintenance contract

Contractual Structure The chart below shows the contractual structure of a typical BOT Project or Concession, including the lending agreements, the shareholder's agreement between the Project company shareholders and the subcontracts of the operating contract and the construction contract, which will typically be between the Project company and a member of the project company consortium.

Each project will involve some variation of this contractual structure depending on its particular requirements: not all BOT projects will require a guaranteed supply of input, therefore a fuel/ input supply agreement may not be necessary. The payment stream may be in part or completely through tariffs from the general public, rather than from an offtake purchaser.

Management, Operation and Maintenance

Identiko recommends Management, Operation and Management contracts to a range of engagements from technical assistance contracts through to full-blown operation and maintenance agreements. The main common features are that the awarding authority engages the Identiko to manage a range of activities for a relatively short time period (2 to 5 years). Management contracts tend to be task specific and input rather than output focused while Operation and maintenance agreements may have more outputs or performance requirements.

The simplest management contracts involve Identiko being paid a fixed fee by the awarding authority for performing specific tasks - the remuneration does not depend on collection of tariffs and the Identiko does not typically take on the risk of asset condition. Where the management contracts become more performance-based, they may involve the Identiko taking on more risk, even risk of asset condition and replacement of more minor components and equipment.

Key Features of Management/O&M Contracts

• Identiko to manage a range of activities;
• Generally short term, usually for two to five years;
• Traditionally been favored as transitional arrangements for introducing the private sector into managing infrastructure but longer term operation and maintenance agreements are becoming more common in the water and energy sectors where more extensive participation by the private sector through a lease, affermage or concession arrangement in these "essential services" is deemed to be too politically sensitive or impractical
• Limited potential for improvements in efficiency and performance although more sophisticated management contracts (which are often called operation and maintenance contracts) may introduce some incentives for efficiency or improved bill collection, by defining performance targets and basing a portion of the remuneration on their fulfillment (and cover longer time periods);
• Identiko is usually paid a fixed fee to cover its staff and expenses. There may also be a performance based fee and liquidated damages for failure to achieve performance parameters;
• Identiko may be required to collect bills on behalf of the utility and may accept some collection risk in terms of performance standards but is unlikely to collect bills on its own behalf;
• Can be useful where condition of assets is uncertain where the private sector would be unwilling to accept more extensive risk;
• Some may also include obligations on Identiko to operate and maintain the assets, sometimes extending to bearing the cost of routine replacement of small, low value parts of equipment. Such features require more monitoring to ensure that the outputs are being achieved and usually involve higher establishment costs;
• Operating agreements are also usual in relation to BOT/ concession arrangements, with the concessionaire sub-contracting the operations phase of the concession to an operator;

Usually no transfer of employees to the contractor - the contractor will merely add a layer of management over the existing utility structure. This often causes problems if the staff of the utility still look to the awarding authority, their employer, for instructions. Enforcement of discipline by the private operator may also be difficult.

Registration As A Service

Identiko has based on our experience deploying registration systems, built a roboust identification platform for registration of people for diverse purposes and across different age ranges. This platform can be made available to clients who are wishing to embark on various registration projects that involve capturing and aggregation of demographic and biometric data but do not have the luxury of time to start from scratch and would like to minimize their upfront costs by paying for usage of the platform and scaling their costs as their registrations grow.

Our platform provides full range of features which are also customizable for each client from registration, both offline & online, Automated Multimodal Biometric Information System for deduplication of registered data, to digital credential generation, card production and personlisation and ongoing identity verification using our platform and mobile devices.

This service gives clients a leg up on the competition, minimizes their risks and provides instantaneous return on investment on their chosen projects.

The platform’s architecture also provides a secure open access api to the identity service which clients can build on for their various projects which feed off the data and services of the identification service, from identity verification, identity searches, deduplication.

This approach is effective and provides clients with the benefit of years of experience and capability which would have taken them a long period of time and huge investment effort before they could achieve the same level of performance and functionality. In this age of increasingly rapid obsolescence of hardware and infrastructure, most organisations do not have the luxury of long wait periods or investments which may have become obsolete or irrelevant by the time they are completed if at all.

Biometrics as a Service

Our biometrics as a service patform extends our experience in biometrics technologies to clients, governments or businesses who already have a registry of their citizens or population and want to retain this registry but now wish to augment this information with biometrics to take advantage of the benefits of deduplication and realtime verification. Our biometrics service enables the capture and linking of biometric data with the existing data held by the company, government or agency and provides biometric operations to extend the functionality of the existing system.

The benefits of this model are that the company, government or agency does not have to invest in equipment, hardware, and biometric software licenses to engage in biometric data capture, verification, deduplication or biometric searches. All the equipment reuired including those for registration and verification are provided by Identiko as a paid service and the client only pays for data captured and biometric transactions, i.e., verification, searches which they have requested.