Q&A – Garantiordningen for fornybar energi

The guarantee scheme 

1. What risks will the guarantee scheme cover? 

• The guarantee scheme can cover different types of risks, but will initially primarily be used to cover credit risk. Still, Norad will assess transactions according to an overarching assessment of risk (based on the context, experience, and transaction) meaning that other risks can be considered. 

2. What is Norfund’s role?

• Norfund will support with risk assessments, which includes due diligence and the pricing of guarantee premiums. 

3. What is the rationale behind the risk-sharing proportion of 50% and can the guarantee cover more than 50%, such as 75 %-80%

• According to regulation on Financial Management in Central Government, the state should normally not take on more than 50% of the total risk. 
• Risk-sharing is an important measure to secure that all parties in a transaction has aligned incentives, and through this call for proposal guarantees will not be provided for more than 50% of the total risk. 

4. Why is there a maximum limit of 30% to low-income countries?

• This is a politically determined risk mitigating measure. Norad aims to provide guarantees in low-income countries up to the maximum limit at 30%, which we are aiming to fulfil. 

5. How will this guarantee scheme make it easier for investors to support projects in local currency?

• This guarantee scheme is one out of Norad’s several measures to support local projects. 
• The guarantee scheme may issue guarantees in EUR, USD and NOK, which will support investments across geographies, however not local currencies
• On a longer-term basis Norad will consider supporting mechanisms accounting for currency related risks.

 

6. What is the process for calling on the guarantee? Do all other possible alternatives (arbitration, etc.) need to have been exhausted before calling on the guarantee?

• Process for calling on the guarantee will depend on the overall structure of the agreement and will be decided during negotiations.
• Depending on the project/portfolio irrevocable on-demand guarantees may be issued. 

 

7. Would the guarantee be governed by Norwegian law?

• The guarantee agreement will be governed by Norwegian law. In exceptional circumstances, and at Norad’s own sole discretion, English law may be chosen. 

Eligibility and criteria  

8. There are three main objectives for the guarantee scheme. Do they all need to be met? Will they each be assigned equal weighting when you are evaluating the different indicators? 

• All three main objectives will need to be met. The weighting will depend on the circumstances and type of project, as well as an overall consideration of the total portfolio composition of the guarantee scheme.

9. What are the governance requirements and what information about the guarantee beneficiary should be included in the concept note?

• The concept note should cover a short description about the guarantee beneficiary. This should include relevant information about overarching work and activities, any relevant experience, ownership, and any other relevant information the applicant deems as appropriate. The beneficiary must be able to display strong management of financial, administrative, and technical policies and procedures, and present a system of internal controls that safeguards assets and protects against fraud and corruption.
• Please see Section 4 in the Call for proposals where the governance requirements and information about the guarantee beneficiary is covered

 

10. What is meant by sharing the risk with a professional entity?

• Norad must share the risk with another professional entity and may cover up to maximum 50 percent of the addressed risk exposure (i.e., the risk that the guarantee is intended to cover). This means that the risk must be shared with a co-guarantor or the guarantee beneficiary (e.g when taking 50% of the risk together with a bank), if appropriate.
• Norad can share risk with multiple professional entities.  
• Please note that Norad is unfortunately unable to support in connecting co-guarantors to guarantee beneficiaries  

11. What cross-cutting issues have to be considered and how will you consider the cross cutting issues

• The cross-cutting issues that need to be considered include human rights, gender equality, climate change, nature, and anti-corruption. Each issue’s consideration will depend on the project/portfolios. 
• When applying for a guarantee through the call for proposals, documentation of underlying systems for considering cross-cutting issues will need to be provided. This could include a risk management strategy or other documentation outlining measures for risk mitigation and internal controls. 
• We will review the relevant organisations’ systems and procedures for risks and security to ensure that cross-cutting issues are addressed and that relevant mitigation measures are taken into account.

12. Do you expect the fund/financial institution to have any track record? 

• Yes, Norad will assess and prioritise applications according to the guarantee beneficiary’s track record and experience. Please see the call for proposals, section 6A ‘Review of Stage 1 applications’ for further details. 

13. Could you support an impact debt fund that focuses on energy access and provides inventory finance to SHS distributors in selected countries?

• Our guarantee is suited for long-term financing and not for inventory finance. We can support impact funds, and yes, we can support SHS (Solar Home Systems).

14. Would you accept submissions from a consortium of institutions (e.g., of a private company and commercial bank)? 

• Yes, but please clearly outline roles and contributions of each organisation.
• Please also note the eligibility criteria, including that the guarantee beneficiary has to be a legally established company. 

15. Can Non-Profit Organisations partner with a Bank to apply for this program? 

• Applicants must fulfil the criteria of the call, see the point 4 ‘Target groups and eligibility criteria’ in the published call. It reads as follows: “This call for proposals is open for applications from banks, funds and financial institutions, specialised entities focusing on guarantees, and individual projects and/or companies.”  
• Depending upon the role of the NGO is supposed to take in the transaction, an application may be considered.

16. Does the sponsor need to have identified or engaged the bank before applying for the guarantee or can sponsor apply first? 

• Yes, the sponsor or bank need to have been identified / engaged before applying. 

17. What kinds of financial institutions would you not support under this scheme/programme? 

• This call for proposals is open for applications from banks, funds and financial institutions, specialised entities focusing on guarantees, and individual projects and/or companies. Please see section 4 in the call for proposals for further details.

18. Do there have to be defined/identified projects at the outset of the application or is it possible to apply on the basis of a hypothetical portfolio that it is expected to be issued guarantees in respect of going forward 

• It is possible to apply based on a prospective portfolio, without a 100% predefined portfolio. However, it will then be important to provide information that underbuilds the probability of the applicants ability to build a portfolio within a reasonable timeframe, so the more identified projects provided, the better. It is important for Norad that the limited guarantee facility gets utilises for its purpose and is not bound up without being effective.

19. Can existing projects qualify for on-lending through this scheme? 

• The aim of the scheme is to catalyse new and additional investment, as well as being highly additional. Existing projects may only be considered if additional and new funding will be catalysed as a result (assuming alignment with the other criteria). 

20. Can the guarantee be used for large-scale projects, such as a $100 million green bond issuance? 

• The guarantees can be used for large-scale projects. However, any guarantees covering bond issuance will need to be further analysed. 

21. Can multiple co-guarantors share the 50% risk, or is only one co-guarantor allowed? If a project fails to secure a co-guarantor, is there any assistance from NORAD in finding one? 

• Norad can share risk with multiple co-guarantors and will through this call for proposal only take on a maximum of 50% of the total risk exposure. Applications for Stage 1 do not have to show documentation of a co-guarantor, but projects that are able to secure one or more will have preference. A plan for and/or progress in securing one or several co-guarantors will be helpful and is a criterion that applicants will be evaluated against.
• Norad is unable to support in connecting guarantee beneficiaries with co-guarantors. 

22. Does a lender/debt investor count as a co-guarantor? Or does the co-guarantor have to be another guarantee scheme?

• Norad must share the risk with a professional entity. This may be the funding provider/lender, as for example a bank. The risks need to be balanced and Norad would like to work pari passu with banks. 

23. If the applicant bank is willing to carry the 50% of the risk, does it have to look for another party to do so?

• No, the guarantee beneficiary (here applicant bank) can cover the remaining risk. 

24. Can this guarantee be used to raise funds externally or domestically through banks or other funding sources? 

• The aim of the scheme is to catalyse new and additional investment, which can be done through funding sources. 

25. Is the guarantee applicable to both domestic lending and international financing? 

• Yes

26. Can this guarantee be matched with international organizations or co-guarantors (e.g., philanthropic/MDBs/government entities)? 

• We need co-guarantors to share the risk exposure with and so the guarantee should be shared with any other professional actor, including those you have outlined. Any structures proposed with an MDB (including co-guaranteeing) should be flagged to Norad, as this will not go through the call for proposals. 

27. Is there a preference for matching co-guarantors (e.g., government, philanthropic, or private entities)? Can projects funded by multilateral development banks or development agencies also apply for this guarantee? Are there restrictions on who can act as a co-guarantor, or is it open to any qualified entity? 

• There is no preference on type of co-guarantor. They will only have to be a professional entity. This includes government, philanthropic, or private entity. MDBs are not the target group for this call for proposals – we are able to work directly with MDBs without them applying through the call for proposals.

28. Who can apply? Can countries or sub-nationals apply?

• The call for proposals is open for applications from banks, funds and financial institutions, specialised entities focusing on guarantees, and individual projects and/or companies 
• Please note the preference of credit guarantees 
• If companies apply then please note the assessment criteria of progression with the funding sources/financing partners underlying the investment 
• The  main objective of the guarantee scheme is to catalyse additional investments in renewable energy and mobilise private capital. 
• Support on country level will go through MDBs (and so not the call for proposals) and we are currently unable to issue guarantees to sub-nationals. 

29. Are debt crowdfunding platforms eligible (to cover multiple projects)?

• Due to the potential complexities of these kinds of platforms, such applications will currently not be prioritised. 

30. Is it possible to provide a guarantee to a partnership between a microfinance and a renewable energy company in Zambia?

• This will depend on the partnership and our assessment of the associated risks. 

31. Will you consider, transaction where we already have guarantor?

• We are able to consider such transactions, but please note that we cannot replace a guarantor and that we have to be additional (according to the OECD definition), implying that we should support investments that would not have otherwise taken place.  

32. Can a microfinance institution apply?

• Yes, but please note the indicative minimum guarantee amount of 200m NOK, along with alignment of the other eligibility and assessment criteria.
• We will also prioritise applications according to their ability to impact the objectives of the guarantee scheme. 

The application process – requirements, clarifications, and assessments 

33. Could you advise if you have available a pro forma for Phase 1 - the concept note. 

• There is no template (pro forma) for the concept note. 
• Details of what the concept note for Stage 1 should include is described in the call for proposals in Section 5A.

34. What should be included in the concept note?

• Please see the call for proposals which will outline what is required at the concept note stage. 
• It should be noted that the concept note is an application for one or more projects where investment, transaction, and project details are well detailed and progressed. 

35. What is the deadline for submission? 

• There is no deadline for Stage 1 (concept note), but please note that Norad will undergo the first round of assessments in January 2025, so we encourage applications ahead of then. 
• Successful applicants to Stage 2 will receive a timeline to work from

36. We’re a newly established organisation and don’t have access to audited accounts

• Please outline this as a reason in the application form.

37. When you said that there is no deadline, how will you prioritise projects? Will you proceed until the budget is completely absorbed? 

• Norad will start assessing applications in January 2025. Depending on number of applications, the amounts requested, and the work involved in processing we will continue to process applications for as long as we see that there is availability under the facility amount and capacity to process.

38. What metrics will be used to evaluate the success of projects funded through this scheme?

• Metrics will be finalised in the agreements, but likely to include the metrics that are included in the call for proposals in section 2. 

39. How long will it take to process an application?

• The total processing timeline will be determined by internal processes, due diligence, risk assessments, and any negotiations. Norad will do its best to process applications as efficiently as possible and be transparent in the process. 

40. How will you consider a country’s debt?

• The level of a country’s debt will be considered on a case-by-case basis, along with any potential analyses to understand the influence of a Norad guarantee on a country’s debt, if required. 

41. From what year should we submit the audited reports?

• Please submit the latest audited reports that is available, preferably 2023 or 2024.

42. What level of financial documentation is required at the concept note stage (e.g., business plans, feasibility studies)? 

• Only incorporation documents and audited accounts for the last financial year are required (in addition to the concept note) for Stage 1. 

43. How does the timing of the risk assessment interact with the core process? Is the first stage of risk assessment done after submission of concept note and before detailed proposal?

• The main risk assessment will take place after Stage 1. More details will be provided to those invited to Stage 2. 

44. It was mentioned on the website that certain features of the guarantee scheme are subject to final approval from Parliament and the Norwegian Agency for Public and Financial Management, expected in January 2025. Are there any changes?

• As of now (January 2025), we are still waiting for final approval, but any potential changes on the application process will be updated in the call for proposals. 

 

45. Does the submission for renewable energy projects need to focus on a single project, or can multiple projects be combined into one proposal if they collectively add additional megawatts—such as through the rehabilitation of existing projects—and involve signing a new Power Purchase Agreement (PPA) with a purchaser?

• Both single and multiple projects can be considered. 
• The rehabilitation of existing projects is within scope, but please note that we will prioritise applications according to mobilised new investment and impact. 

 

46. We have a portfolio of three projects that together exceed NOK 200 million. Will this be considered as a combined application for you?

• We consider portfolios as using the same financing source (under a bank). A portfolio is not a combination of projects within an application. 
• Please note that the indicated minimum amount of NOK 200 million refers to the guarantee provided by Norad on behalf of the Norwegian state. The guarantee will cover maximum 50% of the total risk. 

Geographic scope 

47. Could you please share the list of eligible countries? 

• Transactions in any ODA-country is eligible
• You can find list of ODA countries on the OECD website: ODA recipients: countries, territories, and international organisations | OECD

48. Are there any restrictions on the countries in which projects can be implemented? 

• There are no restrictions on specific countries, but projects/portfolios have to be in an ODA-country.

49. Would you consider an individual application that targeted an excess of 30% LDC countries, or does that cap also apply to each application, as well as the overall framework? 

• The 30%-limit applies to the total facility of 5bn NOK. We can consider applications that target low-income countries, but we will need to assess applications according to their geographical spread to ensure that the overall amount to low-income countries does not exceed 30% of 5 bn NOK

50. Would you also consider projects outside of ODA countries but with a wider impact globally?

• We are only able to issue guarantees in ODA-eligible countries. 

Sectoral coverage – renewable energy  

51. What renewable energy projects will you consider and are there any preferences or exclusions regarding technology

• The guarantee scheme was created to increase the share of renewable energy in low and middle-income countries. We cover transactions that are in line with SDG7 (energy access) and SDG13 (reduced emissions). 
• The Norwegian parliament has specified that the guarantee scheme can cover risk related to grid-based power plants, distributed generation solutions, power grids and other energy infrastructure, energy efficiency measures, and efforts towards a more productive use of energy.
• As an outset renewable energy is energy derived from natural sources that are replenished at a higher rate than they are consumed. This will typically include energy from non-fossil fuel sources such as hydro, geothermal, solar, wind, bio-fuels, tide and wave sources. Whether a project or a portfolio is contributing to the objective of the scheme will be assessed on a case-by-case basis. Examples of eligible projects are solar panels, transmission projects, clean cooking and pumped storage. Hydrogen projects will be considered but not prioritised.

52. Will you consider guaranteeing a portfolio of distributed BESS under OPEX/PPA mode? 

• But please note the overall requirement of the guarantee scheme to be additional, meaning that guarantees will only be provided when they are vital for the realisation of the transaction. If there are other viable financing options, guarantees will not be provided. 

53. Will this guarantee projects with industrial PPAs for Solar - BESS for diesel mitigation 

• The scheme is for renewable energy. Hybrid systems with a fossil fuel component may be considered where access benefits and avoided emissions by this type of solutions is well documented, and where the fossil share of the total effect is minimal (ideally less than 10%). 

54. Say a portfolio with multiple projects is built and the guarantee is not linked to a single project – would there be a timeline to deploy the guarantee capacity in the case the project get approval? 

• In such scenarios there will be a timeline for deploying the guarantee based on the assessment of the portfolio. As a guidance we will be prioritising portfolios which are near to financial close. 

55. Do hydropower projects qualify as renewable energy under this scheme?

• Yes

56. Are other sectors, such as agriculture, eligible for the guarantee? 

• The guarantee scheme is specific to renewable energy

57. Are large hydrogen production facilities ‘in scope’ for financial support?

• Yes, green hydrogen can be considered, but elements such as feasibility, technical and project maturity and total contribution to the guarantee scheme’s overall objectives will affect the assessment (similar to other applications).

58. Can agriculture projects with renewable energy such as solar be eligible for a guarantee from Norad?

• The guarantee scheme is only for renewable energy
• It is possible to apply for a guarantee that will cover the renewable energy part of e.g. an agriculture project. 
• Any project would still need to be aligned with the eligibility criteria, such as the indicative minimum guarantee amount of 200m NOK

59. Does Electric Mobility qualify for this facility?

• Electricity mobility infrastructure is within scope. Any investments for the increased consumption of cars are currently outside of scope of our guarantee scheme.  

60. Does the rehabilitation of hydro power projects come under the guarantee scheme?

• Yes, it is technically within scope, but please note that we will prioritise applications according to impact and additionality. 

61. Can you consider waste to energy?

• Waste to energy can be considered, but the potential for impact will need to be analysed on a case-by-case basis, i.e. depending on the composition of the waste. 

62. Any priority on climate mitigation vs adaptation projects and if projects such as solar agriculture considered which has slight renewable aspect? 

• Please see above. We can consider projects in which there is a renewable energy component. However, we can only provide guarantee coverage for the elements that are within the definition of renewable energy
• The objective of the scheme is to drive investments in renewable energy, primarily as a climate mitigation measure

63. We’re building a cooling system for 1000 tonnes of potatoes and are planning to develop solar as the primary source of energy. Can we apply for grants? And how much?

• The guarantee scheme is only able to issue guarantees and not grants. Please refer to Norad’s website for current call for proposals for grants: https://www.norad.no/en/for-partners/guides-and-tools/calls-for-proposals/ 

Guarantee specifics including indicative minimum amount of 200m NOK  

64. What should we do if we have projects that require a guarantee coverage that is less than 200m NOK? How does this process work?

• Applications for investments requiring less than 200m NOK in guarantee coverage from Norad can be considered, but please note that any provision of guarantees to such projects/portfolios will be on exception
• Such applications will need to show exceptional value against the criteria of additionality and potential for impact (among the other formal and assessment criteria outlined in the call for proposals). This should be clearly outlined in the concept note 

65. Are there any qualifiers for individual projects (other than minimum 200m NOK)? 

• We will look at how the project aligns with the objectives of the guarantee scheme, the formal criteria, and assessment measures outlined in the call for proposals.
• Projects/portfolios that are mature and closer to financial close will be prioritised.

66. If we apply for a smaller amount, which is less than 200m NOK, what are the maximum timeframes for closing the project, or is it open throughout the guarantee scheme, which is five years?

• We have no time limit for when the project(s) need to reach financial close, but project(s) that are closer to financial close will be prioritised. 

67. What is the maximum nominal coverage Norad can offer on a guarantee?

• The amount available for guarantee coverage through this call for proposals is up to 1.75bn NOK, so we will limit the considerations of applications above 500m NOK, as higher amounts will reduce the ability to support several projects, and there is a need for diversification of risk

68. The 200m NOK guarantee size – is that for a project or will larger guarantees be available for applicants with a programmatic approach? and is the 200 NOK a limit per project or a global limit a bank or an institution can apply for?

• The 200m NOK is an indicative minimum This can cover both one project and a portfolio. 

69. If the minimum guarantee is 200m NOK and Norad normally covering 50%, does it mean that the project needs to be minimum 400m NOK then? 

• The indicative guarantee amount of 200m refers to the part that Norad will cover.  
• This means that the project/portfolio needs to require a risk cover of 400m NOK or above (equity would come in addition) 

70. Do you have a targeted range for the term of the guarantees issued under this scheme, or is it judged on a case-by-case basis per application? 

• The guarantee tenor can be up to 15 years, with the possibility of exceptions. Please see section 3 of the call for proposals for further details. 

71. Can a local development bank receive a portfolio guarantee for transactions which are still to be originated and transacted? i.e. a guarantee commitment (assuming alignment with eligibility criteria)? 

• Yes, but please note that portfolios that are closer to financial close will be prioritised. 

72. Will Norad charge a commitment fee in such cases? 

• It is possible that Norad will not charge a commitment fee but we will come back to applicants with a final conclusion.

73. Can this guarantee be blended with green bonds?

• Any structure including green bonds would need to be further analysed.  

74. What is meant by the additional risk cover required above Norad's 50%? Let's say you have a 500M NOK portfolio, is the implication that if 250M NOK is guaranteed by Norad, and the remaining 250M NOK needs to have another guarantee? Or can the funders of that remaining 250M NOK absorb that risk unguaranteed?

• Norad will only take a maximum of 50% of the risk this call for proposal. The funding provider(s) (e.g. banks) can be the co-guarantors, taking the remaining risk. 

75. With regard to risk sharing, is it then fair to say that the guarantees will provide pari passu risk sharing i.e. they wont be first loss guarantees?

• Yes, our preference is to provide pro rata pari passu guarantees. We are able to do first loss guarantees, but only up to 10% of the total amount under the facility of the guarantee scheme, so will be on exception. 

76. Can portfolios of projects under a programme but with different project promoters be considered?  

• We can consider portfolios, as long as they are under the same financing umbrella. 

77. Will this guarantee be given upfront or as and when credit risk is realised?

• The guarantees are upfront and is a part of the financing of the transaction (at time of financial close)

78. Can you consider portfolio of small value transaction?

• Yes, but please note the indicative minimum guarantee amount of 200m NOK. 
• We will also prioritise applications according to their ability to impact the objectives of the guarantee scheme (along with the other criteria). 

79. Who will pay the guarantee premium - beneficiary or borrower?

• The guarantee beneficiary 

80. Is it accurate to say that since Norad does not offer a First Loss Default Guarantee, Norad's risk is eliminated once 50% or more of the loan has been recovered? Hence the other guarantor must be the one taking the higher risk?

• No, we are pro rata with the other risk takers

81. Is it necessary to disburse/deploy approximately the same amount as the total provided guarantee per year?

• When a guarantee is issued there will be a tentative agreed plan for the deployment of the guarantee, depending on the transaction and the structure this will differ.   

82. If we had a planned infrastructure fund of 40% equity, 60% debt, could NORAD take 20% (half) of the equity tranch via this guarantee mechanism, or we have to find all equity elsewhere and the risk guarantee is separate, reducing risk for both debt and equity investors?

• The mandate for risk sharing under the guarantee scheme is wide, however, as this is a pilot and need to focus, we will in this call for proposal prioritise credit guarantees, i.e. cover debt risk

83. Is the guarantee refundable?

• A guarantee which is issued and put into effect is valid and enforceable unless there is a default. We may issue irrevocable guarantees depending on the project/portfolio.

Pricing and subsidies 

84. What can the subsidies cover and what is the process for applying for a subsidy? 

• Applicants can apply for subsidies to cover parts of the guarantee premiums, and these will be awarded according to the demonstrated need, potential for impact and additionality.
• This will be a separate application process following Stage 1. Applicants in need of subsidies, who are accepted to Stage 2 will receive more information from Norad.

85. How does Norad envision pricing to happen?

• Norfund will undertake a risk assessment which will inform the price of the guarantee premiums. This is a two-step process that will take place after Stage 1. It entails 1) an initial assessment which will inform an indicative price, and 2) a final assessment confirming a final price of the guarantee premium. The pricing of the guarantee will reflect the risk covered.

86. How much can we expect the due diligence costs to be, and who will be responsible for bearing these costs? Will the costs for external consultants be covered by Norad or the applicant, and how will the size of the transaction influence this?

• The costs for due diligence will be carried by the applicant/guarantee beneficiary. The costs will only cover the external consultants undertaking due diligence and will vary according to the size of the transaction. Indicative costs will be outlined at the start of the due diligence process. We will aim to keep applicants updated on costs ahead of and throughout the due diligence process.

87. 4-8% seems to be a typical range of risk premium cost. Is this approximately what you expect?

• We are unable to comment on any ranges for guarantee premiums, as this is a newly established scheme 
• The pricing will be made more clear after the risk assessment has started after Stage 1 

Interactions with Norad funding 

88. Apart from guarantees, do you also offer grants?

• The guarantee scheme covers only guarantees, and does not offer grants or technical assistance. 
• Please refer to Norad website for information about grants provided by Norad: https://www.norad.no/en/for-partners/guides-and-tools/calls-for-proposals/ 

89. Can you receive other grants from Norad (such as the Enterprise Development Scheme), while still being eligible for this guarantee scheme?

• Yes, organisations that already receive funding from Norad are still eligible to receive guarantees from Norad. 

90. Can Norad guarantee early-stage activities like pre-feasibility studies or partnership development for a future project, or are guarantees strictly limited to covering financial risks during project implementation? 

• These costs would be better supported by Norad’s Renewable Energy for Development Scheme, which can offer grants for up to 50% of the costs described in the question. More information here: Norad's enterprise development scheme for renewable energy | Norad.no

91. Do you foresee allocating separate funding for capacity building to financial institutions and technical assistance to projects? 

• Norad provides grants for capacity building and technical assistance both directly to companies and through partners. Please see the following link for Norad’s calls for proposals: https://www.norad.no/en/for-partners/guides-and-tools/calls-for-proposals/
• The sovereign guarantee scheme does not have a separate capacity building component. 

Other 

92. You said all types of guarantees can be considered. Does that include counter-guarantees where Norad covers the guarantee extended by the applicant (e.g. to a local development bank)?

• Yes

93. Do you mean that once the bank secures the guarantee from Norad, the bank will use the fund to guarantee business in a respective country? 

• The guarantee aims to mobilise investments from funds, financial institutions, as well as banks. 

94. Will you be issuing other types of guarantees than credit guarantees? What about off take guarantees? 

• The guarantee scheme has the mandate to consider all kinds of risks, but will prioritise credit guarantees. The consideration of other guarantee types will depend on the total risk profile of the project/portfolio.  

95. What conditions will you put on first loss?

• The guarantee scheme can issue up to 10% of the total amount of 5 bn NOK for first loss guarantees. That means that first loss guarantees will be done on exception and only for projects/portfolios that can demonstrate a significant level of impact and link between investments and objectives, and additionality. 

Context 

96. What is the value-add of this guarantee scheme beyond existing solutions?

• The new guarantee scheme is a capital-efficient way for the state to provide risk mitigation and catalyse more investments, and is therefore an important addition to Norway’s development aid efforts. 
• This guarantee scheme will add to the volume of existing solutions, as well as represent one of Norway’s risk mitigation mechanisms for increased climate finance. The call for proposals will directly mobilise capital from private actors, while our work with MDBs will further increase their lending capacities to low- and middle-income countries. 

97. Why is the loss provision so high and why is it earmarked from the development aid budget?

• This is a pilot scheme so there are several risk mitigating measures in place including the loss provision. These measures are determined politically. 
• The loss provision is temporary and will over time be returned to the development aid budget through the payment of guarantee premiums 

98. Will the guarantee facility be increased?

• It is too early to say. The pilot phase will officially start in 2025 and is expected to last for 5 years.

Other administrative questions 

99. Are there any limits assigned to financial institutions or per transaction?

• There are no limits (related to amount or number of applications), so multiple applications are allowed
• However, single point exposure in the portfolio will be taken into consideration

100. Will we get a copy of the recording after the information sessions? 

• We will not release recordings of information sessions, but all questions submitted (written and verbally) are a part of this Q&A. 

Kindly help with the email for questions? 

guarantees@norad.no