CONCEPT ON EON-MHTESTD

AUGUMENENTED AND
VIRTUAL REALITY PROJECT ON
ESTABLISHMENT OF AN
INTERACTIVE DIGITAL CENTRE
(IDC)
Contents
1.0 Project Scope ......................................................................................................................... 2
1.1 Project Summary ................................................................................................................. 2
1.1.1 Project Title .................................................................................................................... 2
1.1.2 Location ........................................................................................................................ 2
1.1.3 Activities Involved ........................................................................................................ 2
1.1.4 Beneficiaries .................................................................................................................. 3
1.1.5 Overall Project Cost, Including Operation and Maintenance .............................. 4
1.1.6 Type Of Finance ........................................................................................................... 4
1.1.7 Construction Period ..................................................................................................... 5
1.2 Outputs ................................................................................................................................. 5
1.2.1 Goods and Services..................................................................................................... 5
1.2.2 Expected Revenue Streams ....................................................................................... 6
1.3 Outcomes ........................................................................................................................................ 7
1.3.1 Trade Facilitation..................................................................................................................... 7
1.3.2 Employment Creation ........................................................................................................... 7
1.3.3 Impact On Fiscus..................................................................................................................... 7
2.0 Alignment to National Development .......................................................................................... 7
2.1 Linkage with National Development Goals ........................................................................... 7
2.2 Project Objectives and Goals .................................................................................................... 7
2.3 The Problem Being Solved ........................................................................................................... 7
2.4 Project Justification ....................................................................................................................... 8
2.5 Other strategic considerations................................................................................................... 9
3.0 PROPOSED DEAL STRUCTURE .......................................................................................................... 9
3.1 Joint Venture model -Supply Operate and Transfer............................................................ 9
3.2 Concession Period/Operation Period ...................................................................................... 9
3.3 Shareholding ................................................................................................................................. 10
3.4 Responsibility of Each Partner .................................................................................................. 10
3.4.1 Government (Contracting Authority) ............................................................................. 10
3.4.2 Private Investor - EON REALITY (Counterparty) ............................................................. 11

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1.0 Project Scope

1.1 Project Summary

Following the “Zimbabwe is open for Business” Statement by the President, His Excellency
Cde. Emmerson Mnangagwa on the 24th of November 2017 at his inauguration
Zimbabwe. EON REALITY made an unsolicited bid and approached the government of
Zimbabwe through the Ministry of Higher and Tertiary Education to establish an
Interactive Digital Centre (IDC). This entails introducing the use of augmented and virtual
reality in Zimbabwe through the established IDC.

1.1.1 Project Title

The project is titled Augmented and Virtual Reality (AVR) in Zimbabwe. Virtual reality
(VR) is the technology of immersing users in a fully artificial digital environment.
Augmented reality (AR) overlays virtual objects on the real-world environment. AR and
VR make use of three dimensional images (3D). The use of both technologies is what EON
reality term AVR, where objects are overlaid on the real world environment and the user
in immersed to interact with that environment.

1.1.2 Location
An Interactive Digital Centre (IDC) comprises of three main components which include,
an innovation academy, a development studio and a showroom. The Ministry of Higher
and Tertiary Education Science and Technology Development has availed the
Zimbabwe Centre for High Performance Computing (ZCHPC) to house the IDC.

i. The Innovation academy: used to train students and Information Technology (IT)
professionals to build the much needed skills in 3D imaging.
ii. AVR Developments Studio: this is the development of market relevant products
by harnessing the 3D imaging skills developed in the Innovation academy.
iii. The VR/AR showroom: which showcases state-of the-art VR/AR technologies that
are used for different services.

1.1.3 Activities Involved

The Augmented and virtual reality Project in Zimbabwe can be broken down into three
main activities which are Human capacity development in the domain of AVR,
development of Market related products and Showcasing AR and VR technologies.

i. Human Capacity Development in the Domain of AVR

Making use of the IDC innovation academy, training and capacitation of experts
in AR and VR will be carried out. EON proposes the use of undergraduate students
who have an interest in 3D imaging though the Government of Zimbabwe who
can pursue AR and VR training as vocational training for different stake holders
in the industry. This will not only equip individuals in AVR but also engage high end
companies such as Willowvale motors, Wattle Company and Schweppes limited
to make use of this technology.

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 ii. The Development of Market Related Products

Resulting to the elasticity of AR and VR technology, will not be limited to marketing

ready made products but also develop services and produce dependent on the
industrial demand. ??This implies that a product developed will have a ready
market. This will be the responsibility of the Joint venture to identify the market
needs and tailor make products to suite the clientele base.

iii. Showcasing AR and VR Technologies

Considering that some AR and VR products require specialized equipment the
showroom would be made available to make use of these products to the IDC
clientele. It will also be used as an advertising platform of the technology to attract
potential clients and identify market requirements.

1.1.4 Beneficiaries
The Government of Zimbabwe through the MHTESTD has the mandate of promoting
emerging technologies and ICT is the global fastest developing sector. The AVR Initiative
will seek to leverage on supercomputing, virtual reality capabilities to improve the
sustainable livelihoods of the Zimbabwean nation through advancements in oil
exploration, mineral exploration and environmental management policies which all seek
enhance the GDP of the country. The country spends millions of dollars of scarce foreign
currency on the importation of such services proposed in the initiative and it would be
beneficial for the country to have an interactive digital Centre that generates revenue
by offering services to multinational companies, Non-Governmental organisations,
universities and mines for designated fees that will be used to further improve the
technologies inherent in the country. Key national benefits include:

• Enhanced technology for the various sectors in the country

• Stimulate job creation of future smart jobs especially in the field of technical and
vocational training targeted to uplift several hundred thousand workers and
vocational skills in Zimbabwe by deploying countrywide AVR Smart Worker rollouts.

• Injection of foreign direct investments by EON in the tune of millions

• Improved research capabilities that will improve Intellectual Property generation

methodologies.

In addition to national benefits there are institutional benefits to the Zimbabwe Centre for
High performance computing and these include:

• Improvement of the capacity utilisation of the Zimbabwean High performance

computing centre;

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 • Enables the expansion of ZCHPC in terms of infrastructure as it offers services to
diversified market spheres and consequently resulting in revenue generation to
sustain its computational services to academia;

• The initiative will allow ZCHPC to leverage on other government institutions and
parastatals such as the national Data centre’s infrastructure to extend its services
across the nation; and

• The institution will become an enabler of innovation and a preferred mechanical,

medical, educational research institution in Zimbabwe.

Academic Institutions from primary to higher and tertiary education would benefit from
cutting costs of carrying out practical sessions that make up part of the curriculum
through use of AR in carrying out practicals. This will result in better skilled academic
products. Augmented and Virtual Reality (AVR) has been proven to enable knowledge
transfer, which can be up to 12 times faster, which allows for the fast -tracking of
employable students.

1.1.5 Overall Project Cost, Including Operation and Maintenance (reference to financial
statements attached)
1.1.6 Type of Finance
EON would like to co invest $20.9 Million into the InteractiveDigital Centre focused on AR
and VR technology development for knowledge transfer. The proposed investment is
modelled after similar investment projects in 23 locations around the globe including
Manchester UK, Laval France, City of Tshwane, State of Mexico Government, Abu Dhabi
UAE.

EON Reality Group provides in-kind to the Government of Zimbabwe $19,804,752 as

follows:

i. 50% of IDC Equipment, $6,692,752, described in Schedule A;

ii. EON software contribution $11,972,000, described in Schedule A;
iii. Entrepreneur School (ES) curriculum valued at $300,000; and
iv. Manpower (for first five (5) years): $840,000 (two (2) Teachers and Content
development experts to teach ES school and develop knowledge applications
with students).

The government of Zimbabwe will purchase the equipment from EON for $6,692,752
which is presented as an upfront 50% contribution to the project. The payment is
expected to be carried out as follows:

i. 35% of Purchaser’s Payment within five (5) days of Signature Date

upon the opening of the bank account;

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 ii. 35% of Purchaser’s Payment within five (5) days upon delivery of EON
software and installed in work stations included in the IDC
Equipment;
iii. 25% of Purchaser’s Payment within five (5) days of delivery of all
remaining IDC Equipment to a mutually agreed address by the
Parties; and
iv. 5% of Purchaser’s Payment immediately upon installation and
operational verification of the IDC Equipment.

1.1.7 Construction Period

Following the existence of a space that is readily available for the establishment of the
IDC the construction and full set up is based on the setup of the AVR hardware and
software that EON Reality is bringing onboard.

The installation period is dependent on the payment of the Government of Zimbabwe as

the purchaser towards procuring 100 % of the IDC equipment.

1.2 Outputs
1.2.1 Goods and services
This Project will allow the provision of industrial scale applications that can transform
Zimbabwean Industry in terms of production processes, high cost infrastructure
development simulations. The Industrial applications which can be adopted include the
following:

1.2.1.1 Architecture

The Project seeks to provide applications that will give a competitive advantage for both
software and hardware for the experts in the architectural domain sphere. These
advantages could range from better rendering of the virtual environment to group
collaboration and property visualization. AVR can shorten the client approval process.
Before VR and AR, the 3D depictions of houses and buildings used by architects have
only been seen on flat pieces of paper or computer screens. But these very same 3D
models can be used in VR and AR to create a real-world experience for the end
consumer. Thus saving a great deal of time when creating the prototypes to meet your
client’s standards.

1.2.1.2 Magnetic Gear

The Proposed Project will enhance the field of simulations of electromagnetic

characteristics for industries that use magnetic infrastructure.

1.2.1.3 Aerodynamics

The industrial applications proposed also aim to enhance the aerodynamics industry in
Zimbabwe. The impetus will be on visualizing and interacting with aircraft Computer
Aided Design (CAD) geometry to allow the National Carrier Air Zimbabwe to assemble

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and maintain its fleet of airlines, thus providing a VR environment almost identical to that
inside of the full-scale physical mockups once built for each aircraft during the design
phase. These applications can enhance the following aircraft features:

o flight deck design;

o maintainability/accessibility verification;
o assembly planning;
o maintenance training; and
o the creation of maintenance training animations.

1.2.1.4 Complex Assembly

Modern manufacturing involves putting together hundreds or thousands of components

in a precise sequence as quickly as possible. Volvo has been experimenting AR using
Microsoft HoloLens and proposed AVR platforms in the project would focus on improving
the Zimbabwean Motor Industry through cutting edge technologies that improve
technical efficiency on the assembly line.

1.2.1.5 Quality Assurance

Many Industries in Zimbabwe have Quality assurance systems that are often manual and
heavily reliant on individuals to detect any anomalies within the production line. However
with the improvements in technology through Augmented Virtual Reality firms can
implement automated Quality Assurances (QAs).

1.2.1.6 Production Automation

The AVR era allows the automation of the production process using a whole host of
sensors and actuators. When workers are presented with data and the mechanics
through gadgets the production line becomes more efficient.

1.2.1.7 Defence AVR Platforms

For the armed forces, training is time-consuming, costly and potentially dangerous but
technology offers a better way. Increasingly, military leaders the world over are turning
to virtual reality (VR) as a means to make training more efficient and more cost-effective.
With the rise of inexpensive equipment, highly detailed and customized simulations, AVR
can provide a full range of immersive scenarios for military training from mission rehearsals
to live fire exercises. By being placed in a more hands-on learning environment, personnel
can not only gauge more realistic reactions but also have higher retention of information
since VR brings training beyond theory. These Solutions will enhance the training
methodologies for the Defense Forces and can be incorporated to the Defence College
so that even compatriots within the region can be serviced using the facility.

1.2.2 Expected Revenue Streams

The revenue streams expected is beyond $6.1m USD per annum.

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1.3 Outcomes

1.3.1 Trade Facilitation

The AVR Projects provides the platform of exporting services to the SADC region which is
in need of both Augmented and virtual reality expertise. The advantage is that in the
region only the South African Pretoria IDC has been identified to have the potential of
exporting such services thus implying that the market is readily available. The Project
improves the technological positioning of the country as an IDC that will provide services
to other countries within the region. Global connectivity is also enhanced as the
technical partner has global subsidiaries that foster Research and Development (R& D)
programmes which would improve the research capabilities, spheres within the country
and interconnectivity to other advancements the world over.

1.3.2 Employment Creation

The Centre is expected to create 150 new direct jobs and several thousands of indirect
jobs within the next five years to satisfy the capacity-building requirements of the Centre
and the local economy, which is needed to support local and regional content roll-out.
The EON’s network in 55 countries and the IDC exchange program will also provide
professional global employment opportunities for the Zimbabwean team.

1.3.3 Impact on the Fiscus

The project is expected to add value to the fiscus through streams of incomes as well as creation of jobs
on the project as well as downstream.

2.0 Alignment to National Development

The project is in alignment with the Zimbabwe Agenda for Sustainable Economic Transformation
(ZIMASSET) under the Value Addition Cluster.

2.1 Linkage to National Development Goals

The project is in sync with the national vision which stipulates that Zimbabwe will become
an upper middle income economy by 2030. Through application of these AVR emerging
technologies Zimbabwe can be enabled to successfully attain vision 2030.

2.2 Project Objectives and Goals

The following objectives and goals are expected to be realised:

i. Set up a Virtual and Augmented Reality laboratory (IDC);

ii. Identification of Premises; (note you mentioned of the ZCHPC, so cross
reference on this point)
iii. Establishment AVR training Centre in Zimbabwe; and
iv. Establishment AVR Enterprise Platform in Zimbabwe.

2.3 The Problem Being Solved

The Augmented and Virtual Reality (AVR) project was initiated by the Minister of Ministry
of Higher and Tertiary Education Science and Technology Development together with
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the Zimbabwe Centre for High Performance Computing early 2018. Hence the transfer of
technology through Augmented and Virtual Reality is expected to expedite
improvement of service delivery on technological services for Zimbabwe in various
domain such as manufacturing, enhancement of the aerodynamics industry,
automobile industry which is envisaged to offer innovative AVR solutions for their users as
well as for their in-house research and development. In education AVR has become
more interactive and interesting with emerging technology's introduction wherein
solutions of Virtual Reality for education moving the trend ahead towards excellent
opportunities for academicians and learners to deep dive into the era of digital learning.
AVR solutions not only align the education system with the digital era, but also makes it
more convenient and attractive for learners.

The Dynamic change in interactive technology has improved the way doctors carry out
their surgeries as they have enough run-through before the actual operation. Technicians
working with heavy machinery, get enough practice to operate the machinery without
actually having to handle the hazardous machines. Costs have been cut in
aerodynamics training and military training to mention a few sectors, by the use of
Interactive Digital Centres (IDCs).

IDCs make use of Virtual and Augmented Reality to create different environments that
mimic the physical environment for training, research and educational purposes. IDCs
are also being used to design machinery and robots for production in different industrial
domains, this reduces the cost of developing several prototypes. This then makes an IDC
an investment of interest as it will be used to improve among others, the industrial and
education sectors in Zimbabwe.

The combination of Artificial Intelligence (AI), Internet of Things (IoT), Augmented Reality
(AR )and Virtual Reality(VR) propels human-computer interaction in different domains
such as architecture, quality assurance, complex assembly, production automation and
Defense AVR platforms amongst others. Virtual Reality being the creation of a virtual
world prototyping the physical environment is combined with augmented reality that
entails data overlays on mobile devises creating a seamless environment of real and
digital integration. Where man and machine intelligence work together for mutual
benefit and technology empowers a nation. Additionally this project will indulge different
corporations in architecture, quality assurance, complex assembly, production
automation and defense thus making the market very lucrative to establish a Virtual and
Augmented Reality Project in Zimbabwe.

2.4 Project Justification

The project facilitates the transfer of Technology through Augmented and Virtual
Reality Platform Projects enhancing automation of the production process in various
domains using sensors and actuators. It improves quality assurance in production line by
eliminating manual and heavy reliance on individuals in detecting any anomalies.

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Enhancement of the aerodynamics industry in Zimbabwe. The impetus will be on
visualizing and interacting with aircraft CAD geometry to allow the National Carrier Air
Zimbabwe to assemble, maintain its fleet of airlines, thus providing a VR environment
almost identical to that inside of the full-scale physical mock-ups once built for each
aircraft during the design phase. These applications can enhance flight deck design,
maintainability/accessibility verification, assembly planning, maintenance training, and
the creation of maintenance training animations.

Modern manufacturing involves putting together different components in a precise

sequence as quickly as possible. AVR platforms would focus on improving the
Zimbabwean Motor Industry through cutting edge technologies that improve technical
efficiency on the assembly line.

These Solutions will enhance the training methodologies for the Defense Forces, Health
practitioners working on highly infectious disease e.g. Ebola, cholera, the mining sectors
on handling earth moving machinery.

The project would also create employment for the local since it is estimated that the
project would employ more than 250 people.

2.5 Other Strategic Considerations

The venue has been strategically placed to enable easy accessibility to all the
stakeholders. This will also allow expanded use of other ICT infrastructure that we have in
the country such as the Zimbabwe High Performance Computer.

3.0 Proposed Deal Structure

3.1 Joint Venture Model - Supply Operate and Transfer
A contractual arrangement whereby a counterparty supplies to the Government or a
contracting authority the equipment and machinery for a project and undertakes to
operate the project for a period and consideration specified in the agreement. During
the operation of the project, the counterparty shall undertake to train employees of the
Government or contracting authority to operate the project.

This IDC Joint-Venture Partnership will take the type of a Supply, Operate and Transfer
(SOT) agreement, where EON would hand over the project to the MHTESTD at the
conclusion of the 5 year operational period, in a sustainable manner whereby the
Zimbabwean Team would have been trained enough to be in the capacity to operate
the IDC. This SOT is captured in the Joint Ventures Act [Chapter 22:22], Schedule Section
2(2), Part II, section 16.

3.2 Concession Period/Operation Period

EON invests $20.9m USD over the 5-year term of the Agreement, the Government of
Zimbabwe (GOZ) provides a $6.7m USD grant.

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3.3 Shareholding
EON Reality is willing to contribute its own resources to the value of US$20.9m. (76%) over
five years in the establishment and operations of the Zimbabwe IDC, and which also
includes a US$6.7m contribution towards the initial establishment of the IDC. The
Government of Zimbabwe (GOZ) will provide a US$$6.7m (24%) up-front grant as its
contribution to the initial establishment of the Centre. EON has 76% of shareholding driven
from 20.9m USD while the contracting party has a 24% shareholding stemming from the
shareholder contribution of an up-front grant of 6.7million USD.

This however shall be revised after incorporating the GOZ contribution of infrastructure
and land values.

3.4 Responsibility of Each Partner

3.4.1 Government (Contracting Authority)
The Ministry of Higher and Tertiary Education, Science and Technology Development
have indicated their desire to establish an IDC in Zimbabwe, working in collaboration with
EON Reality.

To create an IDC Hub in Zimbabwe, which will act as the GOZ / Ministry, as well as EON
Reality’s exclusive Centre of Excellence in Zimbabwe. As the Country Hub, the Zimbabwe
IDC will be subsequently responsible for, and oversee any subsequent satellite IDC
center’s that open in Zimbabwe.

The Government of Zimbabwe (GOZ) will provide a US$$6.7m for the project.

The Government of Zimbabwe will be responsible for providing the Infrastructure to house
the equipment. This infrastructure as well as the land thereof shall be costed to add up
to the US$6.7m and change the shareholding structure consequently.

Government of Zimbabwe owns and controls 100% of the Zimbabwe IDC infrastructure
and equipment at the end of the 5 year period.

The Government of Zimbabwe (GoZ) facilitates for all duty waivers for equipment
earmarked for the IDC as well as facilitating for all work permit matters for expatriate EON
staff, repatriation of EON profits and any other regulatory or clearance matters needed
for a smooth flow of the project.

The GoZ through the MHTESTD will collect all incomes and revenues related to the services
delivered by the IDC and through its Public Finance System make the same payments to
EON.

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3.4.2 Private investor - EON REALITY (Counterparty)
EON Reality is willing to contribute its own resources to the value of US$20.9m.
World Links Zimbabwe represents EON Reality in Zimbabwe, and, given their previous
experience in VR implementation in Zimbabwe, will also help to operate the IDC, on
behalf of the parties.

EON Reality owns the EON Zimbabwe company (with World Links Zimbabwe), that will
have the obligation to execute the mutually agreed Key Performance Indicators (KPIs).
The above notwithstanding, the ownership structure should align to the Republic of
Zimbabwe Joint Ventures Act (chapter 22:22).

Training of the local EON Engineers until they have been capacitated to deliver the
services. Establishment and launch of the Zimbabwe IDC at the identified location
Manpower (for first five (5) years): $840,000 (two (2) Teachers and Content development
experts to teach ES school and develop knowledge apps with students);

Provide, in accordance with technical and software support proposal, in respect of the
IDC Equipment and IDC Software for the Term:

(i) software and hardware support; and

(ii) software upgrades and installation;

(iii) deliver the required IDC Equipment consisting of software and hardware as to the
IDC Space;

(iv) supply material documentation for training in respect of the IDC Equipment;

(v) Provide PURCHASER training on new EON products, software or any other new
products introduced into the market after the Launch Date; and

(vi) Maintenance and support of all equipment.

Find attached financial statements to support this Proposed Joint Venture in addition to
the concept note, and purchase agreement already submitted earlier.

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