Engagement Process

The engagement process for a fund to cooperate with SCAF consists of the following steps:

1. Proposal

The fund manager begins the process by preparing a proposal for SCAF consideration. This proposal details the investment fund entity under development, or already in implementation, and the specific plan for creating a seed capital window within it and adding an associated enterprise development support programme. There are no fixed proposal formats, although all information described in the Proposal Guidelines section must be included (see checklist). Proposals should be no longer than XX pages.

2. Screened and Terms and Conditions Negotiated

Proposal screening will be carried out based on the evaluation criteria . The terms of SCAF support are to be negotiated on a case by case basis depending on local economic conditions, the maturity of the targeted clean energy sector(s), the overall investment strategy of the cooperating fund and the impact these all have on expected enterprise development and transaction costs and returns on investment. The SCAF evaluation criteria defines the conditionality for the support to be provided (in terms of enterprise development services offered, co-finance requirements, deal size, technology type, etc) but some flexibility will be allowed to tailor specific support contracts to local conditions.

3. Due Diligence

A detailed due diligence will be carried out on the fund management entity and its specific proposal as a condition precedent for SCAF contractual engagement. This procedure will verify that the cooperating fund manager has the appropriate capacity, management systems and legal authorities to carry out the proposed investment activity and as well has the ability and systems in place to provide the proposed Enterprise Development Support.

4. Approval

Once the due diligence process has confirmed a valid proposal and qualified fund management entity, the proposal package will be considered for approval.

5. Contracting

The contractual arrangements with the approved cooperating funds will define the terms and conditions whereby SCAF support can be used, and will include the reporting, auditing and monitoring and evaluation (M&E) functions. The contractual agreement will involve annual disbursements to pay for enterprise development activities (reviewed and approved on an annual basis), as well as individual disbursements for each project seed financed by the cooperating fund (screened on a case by case basis). The fund manager will be obliged to meet an investment schedule (i.e., the enterprise development support must lead to subsequent investments from the seed finance window) failing which they will be obliged to repay a share of the enterprise development support provided.