 |
|
|
|
|
|
|
|
|
 |
 |
|
||||||
 |
 |
 |
 |
|
||||
 |
 |
 |
 |
 |
 |
|
||
|
General Conditions for SupportThere is no required format for proposals submitted to become cooperating funds. However successful proposals must provide information on and address all conditions detailed in the following guidelines (see checklist). * Please note that only investment entities that have a business mandate and relevant requisite experience for financing clean energy companies and projects are eligible to enter into SCAF cooperating fund agreements. Project developers seeking seed financing will be directed to SCAF cooperating fund managers once they are operational. 1. Seed Finance Instrument Seed financing is defined as any form of financial commitment made at the early stage of a project, enterprise or technology development with the intention of preparing it for full scale investment consideration. The proposal must state how the fund manager intends to integrate a seed finance window within their overall investment strategy and the general types of investee companies and preparatory activities that would be financed from the seed window. 2. Seed Investee Companies Eligible investees from the seed investment window can include technology companies, equipment manufacturers, equipment distributors and installers, engineering service companies, project developers such as energy service companies (ESCOs), project specific special purpose companies, independent power producers, energy users, and others. The funds larger investment window does not necessarily need to be focused only on clean energy but rather could have a broader focus. 3. SCAF Support to Seed Investments The SCAF Seed Capital Support to be paid on a project by project basis will be negotiated with each cooperating fund manager at inception of the fund based on the commercial maturity of the target clean energy sectors in the proposed countries of operation. Typically the support will be in the range of 10% to 20% of each seed capital investment, paid at the time of investment disbursement. On a standardised basis the subsidy will be used to cover some of the elevated project development costs that normally would be charged to, or financed by the developer. 4. Maximum Seed Investment Size The Maximum seed investment will be negotiated as part of the SCAF cooperating fund agreement, but usually will be not more than US$ 500,000 in size. Investments above this level will not be considered seed transactions and will not be eligible for SCAF support. 5. Investment in pre-commercial markets In each target country, SCAF-supported seed financing shall only be eligible for investments in ventures, sectors and technology areas that are still in early stages of development. For this reason, the SCAF cooperating fund agreement will set a limit to the number and/or volume of seed investments in a specific technology area of each target country. SCAF will also reserve the right to refuse clearance of further investment proposals in a specific technology area, if there is a clear sign that the respective market has reached its critical mass or the threshold to being considered fully commercial. 6. Timing of Seed Investments To be considered an eligible seed investment the cooperating fund manager must certify that they do not normally intend to provide follow-on investment to the project/company in the 12 months following disbursement of the seed funds. If follow-on investment does occur during the 12 month period the fund manager must inform the SCAF and either i) request a waiver, based on the assertion that the two commitments combined are still small enough to constitute a seed finance transaction, or ii) pay back the initial SCAF seed capital support, based on the assertion that the project is now investment grade and is no longer in need of seed financing. 7. Ineligible technologies Support agreements with cooperating fund managers will include a negative list of ineligible technologies, based on the level of commercial maturity of each technology in the target country and in some instances additional concerns such as environmental impact. In Least Developed Countries most technologies will be eligible, other than those included in the all-country negative list below. In other emerging market countries only the ‘second wave’ of technologies will be eligible, not the first wave that today are considered fully commercial. For example wind and hydro generation projects in China and India, or geothermal projects in the Philippines, would not qualify for SCAF support. Technologies ineligible for support in all countries:
8. Size of the Seed Window and Overall Investment Fund Seed windows will typically be expected to account for 5% to 10% of total allocated fund capital and be at least $3 million in size. Proposals must state the intended capital allocation to the seed window, both as a percentage and in absolute terms, as well as the minimum aggregate capital commitment required for initial fund closing and the maximum amount of aggregate capital commitments expected for a final closing. 9. SCAF Capital Commitment The SCAF funds provided through both the enterprise development and seed capital support lines will cover only a portion of the incremental seed investment costs up to a total of $1,000,000. The target for this cost-sharing will be 50%, although could range up to 75% in circumstances where the costs of enterprise development are significantly elevated (e.g. in UN defined Least Developed Countries). 10. Eligible Countries of Investment Cooperating fund agreements can be negotiated for seed investment activities in any GEF eligible county in Asia or Africa. 11. Fund Manager Responsibilities The manager of the cooperating fund will be responsible for all operational and administrative aspects of the project/seed window to be created involving compliance with relevant legal requirements, marketing, project identification and screening, monitoring as well as disinvestments and a coherent exit strategy. Prior to contracting with SCAF the fund manager will be required to i) Create the seed window institutional structure and documentation including, but not limited to contracting, transfer of funds and board membership arrangements, and ii) Ensure compliance with relevant legal requirements. 12. Exclusion of prior beneficiaries of GEF support The cooperating fund will not employ SCAF-funds to provide seed capital support to entrepreneurs or ventures that within a three year period have already benefited from direct capital- and/or investment subsidies from any other Global Environment Facility supported programme. For this purpose, and on a project by-project basis, the cooperating fund manager will certify compliance with this condition. 13. Exclusion of Support for CDM or JI Preparatory Costs SCAF funds cannot be used to pay for any costs involved with the issuance of UNFCCC Kyoto Protocol emissions reductions agreements (including methodological development, verification and certification). 14. Compliance with Environmental Safeguards All projects have to be prepared to follow the requirements of ADB (in Asia) and AfDB (in Africa) environment and social safeguard policies. For this purpose, cooperating funds shall mainstream compliance with environmental safeguards by incorporating measures to mitigate potentially adverse impacts as key aspects of their investment, project design, construction, and operating processes. 15. Evaluation Criteria Bidding organisations are required to submit detailed technical and financial proposals explaining how enterprise development services will be offered and how a seed window will be created within an existing or planned clean energy fund. Cooperating funds will be selected through an open and on-going competitive tendering process based on:
|
|
|||||||
 |
|
|||||||
