Empower Change: Norad – Norwegian Agency for Development Cooperation’s New Call for Proposals – Supporting Enterprise Development in Renewable Energy Across Developing Nations

1.  General information about the Norad – Norwegian Agency for Development Cooperationcall for proposals

This is a call for proposals under the grant scheme for enterprise development for renewable energy. The grant scheme aims to contribute to sustainable economic growth through access to energy, which is key for many developing countries. Consideration will also be given to projects in other sectors with a significant element of renewable energy.

Grants are intended to reduce risk prior to investment decisions. Grants can support feasibility studies for business establishment or renewable energy projects or training of local staff. Applications for guarantee and risk premium in the long-term financing of renewable energy projects will also be considered (see section 5C).

This call is application-based and competitive, and open to any Norwegian or international applicants that meet the criteria in section 4A. Applications are evaluated and weighted in relation to other applications and the call’s overall portfolio, and applications are only granted in accordance with the guidelines and criteria set out in this call.

The budget for the call is limited, so not all relevant applications will be successful, depending on application volume. No applicant is entitled to a grant from this scheme, even if all the formal and material criteria under the grant scheme are met. Applications that are assessed that do not adhere to the formal requirements of the call and grant scheme will be rejected.

Applicants will first be asked to submit a short concept note, as well as audited financial accounts from 2022 or 2023, if available (in English), and confirm that they meet the grant scheme’s minimum criteria to qualify for support (see section 4A and 4B). This will be referred to as “Stage 1” of the application process. Applications will be assessed based on criteria in section 5A.

Successful applicants will subsequently be invited to submit full applications as well as any other required documentation. This will be referred to as “Stage 2” of the application process.
Unsuccessful applicants at both stages will be notified as soon as possible.

The grant may cover up to 50% of the incurred project costs and the applicant is responsible for financing the remaining 50%. The minimum grant amount will be NOK 1,000,000. Applications for amounts under NOK 1,000,000 will be rejected. The grant can also not exceed ten per cent of the applicant’s yearly turnover.

All applications and relevant documentation for stages 1 and 2 must be submitted through Norad’s Grants Portal.

2. Prioritized objectives, target groups, countries, and sectors

Preference will be given to those projects that have the most significant contribution to the objectives of the grant scheme.

A. The objective of the grant scheme is to contribute to
Increased access to affordable, reliable, sustainable and clean energy in ODA countries,
Reduced emissions from the energy sector,

B. The target groups are:
The main target group for this scheme is the local population in developing countries, in particular population groups without access to renewable energy.

C. Target countries:
This call is open for projects implemented in all countries eligible for Norwegian development assistance (OECD DAC list). Projects in Sub-Saharan Africa will be prioritised.

D. Prioritised Sectors:
This call for proposals is only applicable to projects in the on-grid or mini-grid clean energy sector. Applications for other sectors will be reviewed and may qualify for support only if linked to energy access or productive use of energy, for example for agriculture and food security. Applications for projects around improved cooking solutions and solar home systems will not be considered in this call. These applicants are instead encouraged to apply with Norad partners that work more directed at this segment:

• The Energy and Environment Partnership Trust Fund (EEP Africa)
• Global Energy Transformation Programme (GET.pro)
• Modern Cooking Facility for Africa (MCFA)

3. Supported Activities, and project criteria
 

A. Project activities that may be supported include:

• Feasibility studies for establishment of renewable energy projects
• Vocational training of local staff related to the establishment of business
• Pilot production as part of a feasibility phase for establishment of business in connection with off-grid renewable energy projects.
• Guarantee and risk premiums for financing of renewable energy projects. See section 5C for more information.

B. No funding may be provided for:

• Sales and marketing activities.
• Projects solely for export from the recipient country.
• CAPEX investment beyond 20 % of the total cost of a pilot project
• Projects that involve weapons or other military material.
• Projects that involve drugs, alcoholic drinks, and tobacco.
• The main investment subject of a feasibility study.

4. About the application process

The application process will be set up in two stages. In the first stage, applicants will be asked to provide a brief concept note, and document that the project and applying company meet the necessary criteria to qualify for support. Successful concept notes are not guaranteed support. Successful concept notes will be invited to stage 2 and submit a full application. Applicants must make it through the entire process.

A. Stage 1: The Concept Note

For the first stage of the application process, applicants will be asked to submit a short concept note (four pages, PDF format, uploaded to Norad’s grants portal), describing the project, and presenting the business case. The purpose of the call is to contribute to private sector development in service of job creation and renewable energy production. The concept note should reflect a viable business case. The concept note must include the following information in this order:

• A short description of the proposal’s main activities that will be supported by the grant. The project’s geographic location and relevance for the target group should be clearly justified (1 page).
• A brief proposal of how the activities support and relate to the business case of the main project, including financial capacity and competence to implement the main project (1- 1½ page), based on a positive feasibility study where applicable.
• Yearly budget and the applicant’s ability to co-finance minimum 50% of the supported activity (½ page)
• Expected results on the supported activity and scalability (½ page)
• Possible partners to the project, both public and private and their contribution when relevant (½ page)
• For renewable energy projects applying under the guarantee and risk premium scheme: see section 5C for additional information that should be included.

Applicants will need to confirm in the concept note that the following minimum criteria are met to qualify for support under the scheme in the first stage:
 

• The applicant must be a legal commercial company. Please note that neither holding, investment, consulting companies, nor equipment suppliers, are eligible for support.

• The applicant must have financial capacity to implement the supported project as well as the main project (main investment).
• 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 three years. The criteria do not apply for off-grid renewable energy projects, provided that the applicant at the last emission, having taken place within the last 12 months prior to the date of application, had a market capitalisation of minimum NOK 6 million.
• The applicant must have the necessary professional and administrative expertise.
• 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 princples 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.
• The project must be in line with the objectives of the grant scheme mentioned above and must seek to address a specific and defined need.
• 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 grant cannot be used to finance more than 10-15% of investment-related costs of a pilot project.
• The project must comply with the OECD/DAC criteria for ODA support.

Additional and specific application criteria and information for support to guarantee and risk premiums for renewable energy projects. Be sure to document this information with the concept note.

• Eligible activities include support to guarantee and risk premium 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 prioritised 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 (ATI, MIGA, Eksfin or other) and is open to Norwegian / international investors.

Please note that failing to meet the minimum criteria will result in the application being rejected automatically. There is no recourse to not meeting the minimum criteria.


B. Stage 2: The full application

Applicants that successfully pass stage 1 will be invited to submit a full and formal application through the Grants Portal. Applicants will be asked to supply full documentation (in English) for all claims made in Stage 1, as well as additional information for a full assessment of the project. See section 5B for a list of the questions that will be filled out in the full application. In addition to the criteria mentioned in Stage 1, applicants for Stage 2 will be asked to document that they meet ethical guidelines such as UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. Failure to do so could lead to the application being rejected.

5. How applications are assessed

A. Stage 1 application review

Norad will assess and prioritise applications for this grant scheme as a whole by means of the following criteria:

• The applicant’s financial strength to carry out the activities and main project
• Estimated number of personnel trained in the private sector in the developing country as a result of the support, disaggregated by gender
• Additionality of Norad’s support in the project being realised
• Estimated increase in supported projects’ production capacity of renewable energy
• Estimated number of people that have gained access to affordable, reliable, and sustainable clean energy solutions that the project has contributed to
• For feasibility studies: the realism and relevance of the study for the main project
• Scalability of the main project (where relevant) and estimated consolidated investment amount released as a result of the grant

Please note that it is up to the applicant to provide credible evidence for the above-mentioned estimations. Failure to provide credible evidence/documentation for the business case could result in the application being rejected.

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B. Stage 2 applications review

When assessing the full application, Norad will ask the applicant to answer the following questions. Norad will also assess the full application based on these criteria:

• Risks and risk management systems of the applicant
• Due diligence of project and project partners, including background checks [1]
• Relevance to the objectives of the grant scheme described above, including Norad’s geographical priorities (see section 2C)
• Degree of additionality of Norad’s support
• Where relevant, the extent to which the project takes the cross-cutting issues into account [2]
• Where relevant, the project’s local ownership, financial sustainability and exit strategy
• The project’s relevance in relation to Norwegian strategies / priorities and policy documents in the sector
• The project’s relevance to the local country’s own plans and priorities
• 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 substantiate that the project is “catalytic”, i.e. that the funding will trigger investment decisions, financial return or other forms of investments from private actors.
• Administrative costs associated with the project are not covered.
• The applicant must declare all public funding granted to the project.
• The project must be cost-effective. This must be documented by a detailed budget.
• 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.

[1]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.

[2] Cross-cutting issues include human rights, women’s rights and gender equality, climate change and environment and anti-corruption.
The grant recipient must identify significant risk factors that may have a negative impact on the cross-cutting issues and analyze 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.


C. Other information

Applications will be assessed in accordance with the process and criteria described above. 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.
• Maximum budgeting and funding rates for consultants is NOK 1,600 per hour, based on a competitive procurement process.
• 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.

 
You can read more about this call for proposals, including answers to frequently asked questions, on Norad’s website: 
 
Contact information
Questions about the call can be directed to:
Department for climate and environment
Section for energy
E-mail: [email protected]

Specific information for applicants regarding this call for proposals

Questions related to technical issues with the Grants Portal can be sent to [email protected]

Visit the Norad – Norwegian Agency for Development Cooperation Official Webpage