GUIDELINES

Support Line 2 - Seed Capital Support

1) Main Objective
The Seed Capital Support, paid on a project by project basis, is designed to help offset the hurdle of higher perceived risks and lower expected returns when dealing with early stage sustainable energy enterprises.  The level of subsidy support provided 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 can be used to cover some of the elevated project development costs that normally would be charged to, or financed by the developer. For example, this may include:

• project technical assessments;
• regulatory compliance and framework reviews;
• negotiations of power purchase or other off-take agreements;
• legal review of intellectual property and patent rights;
• operational and maintenance cost review and analysis;
• environmental impact assessments; and
• other aspects of the permitting process.

2) Contractual Arrangements

The seed capital subsidy will be paid out on an investment by investment basis and will be standardized within each cooperating fund agreement. The subsidy will be made at the same time that the cooperating fund makes their seed investment. The fund manager of the cooperating fund will be responsible for all operational and administrative aspects of the seed window to be created within or in association with a larger commercial energy fund. This responsibility will include compliance with relevant legal requirements, marketing, project identification and screening, monitoring as well as disinvestments and exit strategy.

3) Minimum Services Required

On a project-by-project basis the fund manager will be required to:

• Screen and appraise potential seed-stage clean energy ventures
• Request SCAF clearance for each project to be submitted to cooperating funds seed investment committee (a max. 10 business day response will be provided)
• Use SCAF support to pay for project development costs, as described in 1) Main Objective above.
• Continuously track progress of project development and the overall seed portfolio