Deadline: 8-Oct-20
The Ministry of Foreign Affairs and Norad are seeking applications for its grant scheme – Support for enterprise development in developing countries that aims to contribute to economic growth and increased access to affordable, reliable, sustainable and modern energy for all. Improved access to energy is a prerequisite for business development and job creation in developing countries.
In order to stimulate establishment of sound new business enterprises and investments in renewable energy in developing countries, grants are provided to reduce risk prior to investment decisions. Grants could for instance support feasibility studies for business establishment or renewable energy projects, training of local staff, basic local infrastructure investments, or guarantee premiums for renewable energy project.
Objectives
The grant scheme shall contribute to:
- Increased job-creation in ODA countries;
- Increased export of goods and services from ODA countries;
- Increased access to affordable, reliable, sustainable and modern energy in ODA countries;
- Reduced emissions from the energy sector.
Sector Priorities
Applications for projects in the following sectors (in alphabetical order) will be prioritized:
- Agro-investments;
- Fish and marine sector;
- Maritime sector;
- Information and Communication Technology (ICT);
- Energy (renewable energy and suppliers to offshore oil and gas industry);
- However, other sectors may also qualify.
Funding Information
- Minimum grant amount will be NOK 500,000.
- No funding may be provided for:
- Sale and marketing, or projects solely for export to the receiving country.
- Projects that produces or otherwise involves weapons or other military material, drugs such as alcoholic drinks, narcotics and tobacco.
- The main investment subject of a feasibility study.
Cross-cutting issues
The following four cross-cutting issues must be considered in all projects:
- Human rights, especially related to participation, accountability and non-discrimination;
- Women’s rights and gender equality;
- Climate change and environment;
- Anti-corruption.
*The grant recipient must identify significant risk factors that may have a negative impact on the cross-cutting issues and analyse and manage these throughout the project cycle. Norad will assess whether the grant recipient’s risk assessment and risk management are sufficient to avoid unintended negative effects.
Project Activities
- Feasibility studies for business establishment in developing countries.
- Training of local staff related to the establishment of business in developing countries.
- Basic local infrastructure investments required for the establishment of business in developing countries, (the business establishment).
- Feasibility studies for establishment of renewable energy projects in developing countries.
- Pilot production in connection with ICT- and off-grid renewable energy projects as part of a feasibility phase for establishment of business in developing countries.
- Guarantee premiums for renewable energy projects.
Potential grant recipients
- Registered commercial companies;
- Holding companies are not eligible for support.
Project Eligibility
Support may be awarded to projects that contribute to commercially profitable investments that:
- create jobs in developing countries;
- increase access to renewable energy and at the same time contribute to reduced/mitigated CO2 emissions in developing countries;
- increase export of goods and services from developing countries.
Eligibility Criteria
- Target group:
- The target groups for the grant scheme are: potential employees in developing countries and the population in developing countries, in particular population groups without access to renewable energy.
- Country priorities:
- This call is open for projects implemented in countries on the list of countries approved for Norwegian development assistance. Applications for projects from Norwegian partner countries will be prioritized. The partner countries are: Colombia, Ethiopia, Ghana, Indonesia, Malawi, Mozambique, Myanmar, Nepal, Tanzania and Uganda.
Allocation Criteria
All applicants must document that the following criteria are met:
- The applicant must be a legal commercial company. Accurate and comprehensive information on organizational legal status must be provided.
- The applicant must have the necessary professional and administrative expertise and capacity to implement the project.
- The applicant must have financial capacity to implement the supported project as well as the main project (main investment).
- The applicant must present audited accounts for the last 3 years. This criterion does not apply for ICT and off-grid renewable energy projects, provided:
- the applicant at the last emission, having taken place within the last 12 months prior to the date of application, had a market capitalization of minimum NOK 6 million; or
- the applicant has at least 20 fulltime permanent employees.
- The applicant must have had a turnover last accounting year of at least NOK 6 million from the commercial activities. This criterion does not apply for ICT and off-grid renewable energy projects, provided:
- the applicant at the last emission, having taken place within the last 12 months prior to the date of application, had a market capitalization of minimum NOK 6 million; or
- the applicant has at least 20 fulltime permanent employees.
- The applicant must confirm that they have developed ethical guidelines for the enterprise, which as a minimum fulfil the requirements of Norad’s guidance document: Ethical guidelines – Guide for Norads’s grant recipients.
- The applicant must confirm they are familiar with and adhere to the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.
- The applicant must confirm that they will make safety and security assessments for their employees when posted abroad and that necessary safety and security measures will be implemented.
- The applicant must document that the project is anchored with management, and with potential partners’ management. Information about such cooperating partners must be provided. Information about potential partners owners must be provided. The information provided about partners must be verifiable.
Criteria
All projects must meet the following criteria:
- The project must be in line with the objectives of the grant scheme mentioned and must seek to address a specific and defined need.
- The project must have clearly defined, realistic and measurable targets, and provide a baseline/current situation and indicators that make it possible to measure and report on the results achieved.
- The applicant must be able to demonstrate results and competencies from previous projects within the same or related sector as the project which is the subject for the application. This criterion does not apply for ICT and off-grid renewable energy project applications.
- The applicant must substantiate that the project is “catalytic”, i.e. that the funding will trigger financial 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 investment. The equity requirement applies throughout the supported period.
- The grant may not exceed 50 % of the costs of the activities for which funding is applied, and the applicant must from its own funds cover minimum 50 % of the cost of the funded activities.
- Administrative costs associated with the project are not covered.
- The applicant must declare all public funding granted the project.
- The project must be cost-effective. This must be documented by a detailed budget.
- The project must comply with the OECD/DAC criteria for ODA support.
When assessing the application, the following elements will be given emphasis:
- Risks and risk management;
- Due diligence of project and project partners;
- Due diligence involves a background-check of all central partners in the project. The due diligence will review information regarding possible involvement in criminal activity, terror or financing of terror and acts of financial fraud. The background check may also entail consideration of owners’ involvements in other companies to ensure avoidance of conflict of interest with the planned project;
- Relevance to the objectives of the grant scheme, as mentioned;
- The extent to which the project takes the cross-cutting issues into account;
- The project’s local ownership, sustainability and exit strategy;
- The project’s relevance in relation to Norwegian strategies and policy documents in the sector;
- The project’s relevance to the recipient country’s own plans and priorities;
- General guidelines for Norwegian aid funding;
- The grant scheme’s overall portfolio.
Additional and specific application criteria and information for support to guarantee premiums for renewable energy projects:
- Eligible activities include support to guarantee premium of debt and equity capital guarantees. Both lender 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 CO2 emissions that the renewable energy project will contribute to compared to alternative fossil fuel.
Other information
- Applications will be assessed in accordance with the process and criteria described.
- If necessary, Norad will collect internal and external advice in the application assessment.
- Maximum budgeting and funding rate for salaries to Norwegian and expatriate employees is NOK 800 per hour. Local salary levels should be stated in the budget and will be assessed on a case-by-case basis and based on local salary levels. Maximum budgeting and funding rates for consultants is NOK 1,600 per hour. Travel between home country and project country is approved for economy class only. Travel within the country of origin or a third country must be justified.
- Applications will be treated in accordance with the Norwegian Freedom of Information Act.
For more information, visit https://grants.mfa.no/#/calls