FAQ: Enterprise development for renewable energy grant scheme

Application 

The project will be implemented by a special purpose vehicle or subsidiary company that may not satisfy all the requirements – should I apply through this company or the holding company? 

• The company implementing the project should apply and provide necessary documentation from the parent company demonstrating financial strength, experience with the sector or geography, the existence of relevant policies and anything else the subsidiary might be lacking. 

We would like to apply for support to several projects, but some do not meet the minimum grant amount. Can the projects be bundled? 

• Yes, applicants are encouraged to apply for support to a portfolio of projects in these cases, as long as the projects are thematically or geographically similar. Norad may choose to move forward with all or part of the portfolio. 

We are an NGO implementing a project that fits the grant scheme. Can we apply for support? 

• No, this grant scheme is only open to private or commercial companies. If there is a private technical partner carrying out the work with support from the NGO, the partner should apply. 

I am a consultant developing renewable energy projects on behalf of other developers. Can I apply for support? 

• No, the grant scheme requires that the applicant has a significant stake in the main project. In such cases the developer should apply. 

What kinds of infrastructure investments can be covered by the grant? 

• Basic public infrastructure refers to elements of site preparation or grid connection that are required for the project to be completed, but traditionally falls outside the developer’s responsibility, such as access roads or connecting lines. In cases where such infrastructure is catalytic for an investment decision, Norad can cover up to 50 % of the investment cost on the condition that ownership of the asset falls to a public authority, municipality or utility. 

What level of auditing is sufficient for the financial statements submitted to the application? 

• Financial statements (of the applicant and the project) must be audited in accordance with International Standards of Auditing (ISA). The Auditor shall comply with ISA 800 (Special Considerations - Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks), ISA 805 (Special Considerations audits of single financial statements and specific elements, accounts or items of a financial statement) and all ISAs relevant to the audit. Ideally, subsequent project audits should be carried out by the same auditor doing to organisational audit. 

Will all the documents in our application remain confidential? 

• No, as a government agency Norad is required to operate under Norway’s freedom of information act, which requires it to make available any document in its archive upon request. Exceptions are made for any information deemed commercially sensitive. 

Implementation and reporting 

What conditions must be met before Norad makes a disbursement?  

• Disbursements are made in arrears, meaning Norad does not make advance payments (with the exception of some infrastructure projects). Applicants must have the financial strength to cover the costs, as well as carry the main project. 
• Each disbursement is contingent upon the approval of both a progress (narrative) report and a financial report. The financial statements should be audited, in accordance with International Standards of Auditing (ISA). While Norad does not prescribe a specific reporting format, reporting requirements are defined in the agreement. The progress report and financial report may be submitted as a single document. 
• The financial report should use the same format as the agreed-upon budget to enable easy comparison between planned and actual expenditures.  
• New partners must submit a bank account confirmation from their bank. Bank account details will be verified in a virtual meeting between Norad and the partner before the first disbursement is made. 

What is meant with audited financial statements?  

• For reporting, audited financial statements refer to the financial statements of the project, not the company. 

Which requirements apply for audits of financial statements submitted with the reporting?  

• The financial statements of the project shall be audited in accordance with International Standards of Auditing (ISA). The auditor must comply with ISA 805 (Special Considerations audits of single financial statements and specific elements, accounts or items of a financial statement) and all other ISAs relevant to the project audit. 
• Norad may accept the use of national standards if they are assessed to be compliant with ISA 805. If the agreement partner wishes to use another standard, this must be specified in the agreement with Norad. 

Which requirements apply for auditors? 

• Norad reserves the right to approve the auditor. Ideally, Norad expects the company's existing auditor to undertake the project audit. The auditor must be a state-authorized auditor as of 2024 and should preferably be a branch of an international auditing firm.  

How much co-financing must the partner provide?  

• At least 50 %. The partner’s co-financing can include self-financing and contributions from other development partners, philanthropic organisations, etc. In the evaluation of applications, Norad will emphasise the extent to which the partner demonstrates "skin in the game" through the provision of their own financing. 

Which procurement rules apply?  

• Norad’s procurement guidelines apply. Norad’s procurement guidelines include threshold values that determine when competitive bidding processes must be conducted. Norad cannot grant exceptions to these guidelines, as they are based on Norwegian financial regulations. Funds managed by sub-grantees are not considered procurements (see next question for details).  

Will Norad disburse funds to parties other than the agreement partner?  

• No, Norad will only make disbursements to agreement partners. If an agreement partner intends to transfer funds to its partners (sub-grantees), this should be stated in the application. In such cases, a Memorandum of Understanding or a similar document should be attached to the application. Transfer of funds to a sub-grantee should be reflected in the agreed budget. If the amount exceeds the threshold value (NOK 1,3 million), the project auditor should audit these funds separately. 

Can Norad accept deviations from the agreed budget?  

• The budget constitutes part of the agreement. Acknowledging that it may sometimes be relevant to reschedule activities, any changes or deviations exceeding a threshold value (currently 20 %) of budget components require Norad’s written approval in advance. 
• Activities must continue to support the agreed outputs of the project. If a partner changes the agreed scope without Norad’s prior consent, it will be considered a breach of the agreement. For example, the grant cannot be used to support a wind project if the agreement concerns the development of a hydropower plant, nor can it be used to develop a project in country B if the agreement specifies country A. On a case-by-case basis, Norad may agree to change the project scope. In such cases, an addendum to the existing agreement will be required.