2017 call for proposals - Enterprise Development for Jobs
Poverty reduction is the overriding objective of Norwegian development aid. The main objective for this grant scheme is to contribute to job creation in developing countries by stimulating to more, sustainable commercial investments. In addition, it aims to stimulate renewable energy projects that increase access to renewable energy and thereby contribute to job creation and poverty reduction.
Potential grant recipients are companies that can demonstrate ability to create new private sector jobs through sustainable investments in developing countries, or companies (producers) that can demonstrate ability to increase access to renewable energy.
The ultimate beneficiaries of the activities funded through the grant scheme are people in developing countries for whom new jobs are created.
Activities eligible for support
The scheme does not provide investment support or loans but does provide grants to activities that contribute to early-phase project development and activities that limit commercial risk before investment decision.
Eligible activities include but are not limited to pre-feasibility studies, partner search, trial production, training of local staff, strengthening of local suppliers in the value chain, and local infrastructure investments related to the company’s investment in production capacity.
All sectors can apply. However, projects in the following sectors will be given priority:
- Energy, defined as 1) renewable energy and 2) local suppliers of goods and services related to the oil and gas sector
- Agriculture, including agro-processing
- Fish and marine resources
- Maritime sector
- Information and Communication Technology (ICT)
Grants will not be given to private sector activities that produce weaponry or other military material, intoxicants such as alcoholic drinks and narcotics, or tobacco.
Applicants may submit a project outline for a long-term project, in which an initial estimate is made of the grant support needed for the various project stages. Funding for different stages may be triggered based on pre-defined milestones achieved.
The minimum grant size is NOK 500 000. Proposals will be assessed on a competitive basis. Norad will assess and select the best applications for grants based on a pre-defined set of criteria. The grant covers up to 50% of the total activity cost.
The budget should only include early-phase activities/costs that are prior to an investment decision and should not include any parts of the actual main project.
Grants are not given for marketing, sales, research and development, purchase of equipment and machinery, for the company’s normal operation.
Maximum funding rates for salaries to employees and consulting are respectively NOK 550 and NOK 1,000 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.
Norad covers project expenses related to consulting and legal fees, as well as external experts’ work and travel costs. Fees for auditor review of the project reporting are also covered, as well as minor project-related costs such as mail, telephone, car rental, accommodation, etc.
Funding will be prioritized to projects in the six focus countries for Private Sector Development, as defined in the Government’s White Paper, “Working Together”: Ethiopia, Malawi, Mozambique, Myanmar, Nepal and Tanzania.
Projects in other developing countries eligible for Norwegian development assistance may also be considered. Among these, projects in low-income countries will be given priority. See list of eligible countries (in Norwegian).
Requirements for applicants
- Grants are only allocated to established enterprises, based on demonstrated track record of performance and competence. The definition of “established” is based on an overall assessment of competitive advantages, expertise, capital, management and skills for managing projects in developing countries.
- The applicant must be a legal entity. The applicant must provide information about its legal status in the application, and describe its owner and all its partners.
- Grants are only awarded to companies for which adequate due diligence processes can be carried out within a reasonable time and cost. Norad may reject any application if this is not considered possible, if Norad considers the applicant's risk profile as too high or if the documentation from the applicant, including the commercial assumptions, is insufficient.
- The applicant must document access to the necessary and sufficient financial resources to implement and follow up the investment. Applicants without audited accounts for the last three years must otherwise demonstrate access to the required financial resources.
- The applicant must have an annual turnover of at least NOK 10 million shown in the audited accounts for the previous financial year. Any exception to this rule must be based on special justification.
- At least 50% of the approved costs shall be covered by the Grant recipient’s own funds. This contribution shall be identifiable in the project accounts. Any exception to this rule must be based on special justification.
- The applicant must own a minimum of 25% of the planned investment (in cases where joint ventures are considered). Any exception to this rule must be based on special justification.
- Grant recipients must have ethical guidelines for their business operations. These shall as a minimum meet the requirements of “Guidelines for the preparation of ethical guidelines for Norad grant recipients”. See ethical guidelines - Guide for Norad’s grant recipients. See also Declaration concerning ethical guidelines.
- The applicant shall confirm that it has undertaken adequate security assessments for the employees that will work in high-risk areas, hereunder any mitigating measures related to training, guidance material, insurance and equipment.
- Projects supported under this scheme must comply with the EEA Agreement rules on state aid.
Norad will assess and rank the applications based on the following criteria:
- Likelihood of creating private sector jobs and/or increased access to renewable energy.
- Geographic and sector-specific scope in accordance with applicable Norwegian priorities.
- The project is commercially viable in the long term, but all or parts of the project would not have been realized without the grant (additionality).
- To what extent the project is catalytic, i.e. triggering capital or other forms of engagement from the private sector.
- The viability of the business plan and documented competencies and experience.
- Cost efficiency of the grant-supported activities.
- The extent of the applicant’s ownership and participation in the project.
All applicants must show how they plan to manage financial and non-financial risk. The risk management should include the most important risk factors that may impede results achievement. In addition, applicants shall identify significant risk factors that may have a negative impact on the four cross-cutting issues of Norwegian Development Assistance, and shall analyse and manage these risk factors throughout the project cycle.
The risk assessment shall be scaled to the significance of the project, including its scope and duration.
Norad expects the applicant to act in accordance with the UN Guiding Principles on Business and Human Rights, and with the OECD Guidelines for Corporate Responsibility.
Background for the grant scheme
The overriding goal of Norwegian development assistance is poverty reduction. Promoting private sector development and job creation is vital for achieving this. Increased workforce participation leads to higher household incomes, better living conditions, economic growth, tax revenue, and social integration. It develops skills, strengthens the position of women, and has a stabilising effect on society as a whole.
In June 2015 the Norwegian Government launched the White Paper Working together which describes how Norway will intensify its efforts to create an enabling environment for private sector development in developing countries, with a focus on public–private partnerships.
As a follow-up to the White Paper, this application-based grant scheme, Enterprise Development for Jobs, was launched in September 2016. The purpose is to support private sector development in developing countries. The grant scheme is untied, and is intended to contribute to job creation through sustainable private sector development. Grants may be provided in connection with projects that contribute to long-term investments or the establishment of local enterprises.