Deadline: 15-Feb-23
The Norwegian Ministry of Foreign Affairs is seeking proposals for a grant scheme that aims to contribute to sustainable economic growth in the renewable energy sector, which is key for many developing countries. Consideration will also be given to projects in other sectors where there is an element of renewable energy.
Objectives
- The objectives of the relevant parts of the grant scheme are to contribute to:
- Increased access to affordable, reliable, sustainable and clean energy in ODA countries,
- Reduced emissions from the energy sector,
- Adaptation to effects of climate change,
- Increased job-creation in ODA countries.
- This call for proposals is targeted towards projects in the clean energy sector. Applications for other sectors may qualify for support if linked to energy access or productive use of energy, for example for agriculture and food security.
Funding Information
- The grant will cover up to 50% of the incurred project development costs and the applicant shall finance the remaining 50%. The minimum grant amount will be NOK 500,000. Applications for amounts under NOK 500,000 will be rejected. Applicants applying for support to more than one project that together amount to more than NOK 500,000 will be considered.
Cross-cutting issues
- The following four cross-cutting issues must be given adequate consideration in all projects:
- Human rights, with a particular focus on participation, accountability and non-discrimination
- Women’s rights and gender equality
- Climate change and environment, in particular climate change adaptation measures
- Anti-corruption.
- Grant recipients must identify material risk factors that may have a negative impact on the four cross-cutting issues, and must analyse and manage these risks throughout the project cycle.
Types of Projects
- Grants may be awarded for the following types of projects:
- Feasibility studies for establishment of renewable energy or clean cooking projects in developing countries
- Vocational training of local staff related to the establishment of business in developing countries
- Basic local, public infrastructure and investments required for the establishment of clean energy projects in developing countries
- Pilot production as part of a feasibility phase for establishment of business in developing countries in connection with clean cooking or off-grid renewable energy projects (note that the grant can cover only 15% of investment-related costs)
- Guarantee and risk premiums for financing of renewable energy projects.
Target group
- The main target group for this scheme is the population in developing countries, in particular population groups without access to renewable energy.
Target countries
- This call is open for projects implemented in all countries eligible for Norwegian development assistance (ODA countries), with a preference for projects in Sub-Saharan Africa. The national budget also identifies a list of partner countries for long-term development cooperation, which will be weighted as appropriate.
Performance Criteria
- The following indicators will measure results from successful project applications:
- The number of investment decisions taken as a result of supported project preparation
- The estimated consolidated investment amount released as a result of the grant
- Estimated number of new jobs created or number of personnel trained in the private sector in the developing country as a result of the support, disaggregated by gender and youth
- Estimated increase in supported projects’ production capacity of renewable energy
- Estimated number of people that have gained access clean energy solutions that the project has contributed
Eligibility Criteria
- Potential grant recipients are companies registered in Norway or abroad. Applicants must document that the following criteria are met:
- The applicant must be an independent legal person. Accurate and complete information about the nature of the organisation must be provided. Please note that neither holding, investment, consulting companies, nor equipment suppliers, are eligible for support.
- The applicant must have had a turnover in the last accounting year of at least NOK 6 million from the commercial activities. The applicant must present audited accounts for the last year. The criteria do not apply for off-grid renewable energy projects, provided that the applicant’s issuing of shares, having taken place within the last 12 months prior to the date of application, had a market capitalization of minimum NOK 6 million.
- The applicant must have the necessary expertise and administrative capacity to be able to implement the project(s).
- The applicant must demonstrate good insight into the issues concerned and must have set clear, achievable objectives for the project(s).
- The applicant must confirm that there are ethical guidelines for the company. The ethical guidelines must satisfy the minimum requirements set out in the guidance for the preparation of ethical guidelines for Norad’s grant recipients.
- The applicant must confirm that it is aware of and conforms to the UN’s guiding principles on business and human rights and the OECD’s guidelines for multinational enterprises.
- The applicant must confirm that sufficient security assessments will be carried out for its own employees for stays abroad, and the necessary measures are taken for, for example, training, own guidelines, insurances and equipment.
- The applicant must have established close ties with potential partners. Information about partners must be provided.
- Applications for guarantee and risk premiums for renewable energy projects must in addition fulfill the following eligibility criteria:
- Eligible activities include support to guarantee and risk premiums of debt and equity capital. Both equity and debt guarantees, and the risk margin on debt capital, will qualify.
- Mature projects close to financial close and investment decision will be prioritized as the time period from commitment to disbursement should be less than 12 months, given Norad’s one-year budget horizon.
- A financial commitment letter or term sheet from a lender or guarantor with fixed terms must be submitted with the application, for Norad to calculate the grant amount.
- The applicant must submit information about annual saved emissions that the renewable energy project will contribute to compared to alternative fossil fuel.
- The subsidy is not tied to a particular guarantor and is open to Norwegian and international investors.
- In its assessment of the application, Norad will consider a number of factors, including:
- Risks and risk management systems of the applicant
- Due diligence of project and project partners, including background check
- Relevance to the objectives of the grant scheme, including Norad’s geographical priorities
- Degree of additionality of Norad’s support
- Where relevant, the extent to which the main project takes cross-cutting issues into account
- Where relevant, the project’s local ownership, financial sustainability and exit strategy
- The project’s relevance in relation to Norwegian energy priorities and policies
- The project’s relevance to the local country’s own plans and priorities
- Administrative costs associated with the project are not covered
- The grant cannot be used to finance more than 15% of investment-related costs of a pilot project.
All projects must meet the following eligibility criteria:
- The project must be in line with the objectives of the grant scheme and must seek to meet a specifically defined need.
- The project must have clearly defined, realistic and measurable goals, and applications must include a description of the current situation (baseline) and indicators that will make it possible to measure and report results.
- The applicant must substantiate that the project is “catalytic”, i.e. that the funding will support activities that inform investment decisions, or trigger financial return or other forms of investments from private actors.
- The applicant must have considerable ownership and involvement in the implementation of the main project. The applicant must own minimum 25% of the equity in the planned main investment.
- The project must be cost-effective, and this must be reflected in a detailed budget. The grant recipient must not make a profit from the grant.
- The grant can cover maximum 50% of the incurred project costs and the applicant shall finance the remaining 50%.
- The applicant must declare all public funding granted to the project.
- The project must comply with the OECD/DAC criteria for ODA support.
- The applicant must document that the project is anchored within the company’s own management, and within potential partners’ management. Information about cooperating partners and their owners must be provided and be verifiable.
Ineligible
- No funding may be provided for:
- Sales and marketing activities.
- Projects solely for export to the recipient country.
- Projects that produce or otherwise involve weapons or other military material.
- Projects that produce or otherwise involve drugs, alcoholic drinks, and tobacco.
- The main investment subject of a feasibility study.
For more information, visit Norwegian Minister of Foreign Affairs.