Guideline for the Preparation of a Concept Note

GUIDELINES FOR THE PREPARATION OF A CONCEPT NOTE

EEP Mekong training on the preparation of a concept noteMyanmar, Lao PDR, Vietnam, Thailand and Cambodia

TABLE OF CONTENTS:

1. Project Overview a) EEP co-financing and own contributionb) Technical focus and technology applicationc) Project concept

2. Project Information d) Problem identification/analysise) Result Chainf) Business plan g) Development Impacts: Human Rights Base Approach and Cross Cutting Objectivesh) Sustainability, Replicability, and Scalability i) Business innovationj) Risk analysis and mitigationk) Implementation Plan

TABLE OF CONTENTS:

3. Financial Information a) Project budgetb) Financial sourcesc) Financial management: Transparency and Accountabilityd) Result Based Financing (RBF)

5. Applicant Information

Application Process

Q&A

• Only a summary of the various aspects of the project idea, which will be further elaborated

in the Full Project Proposal stage

• Concise and credible plan that can be quickly and easily interpreted by readers who are

not familiar with the project

Give an initial opinion as to whether the project is bankable / has investment potential

and may be suitable for further consideration / further development work / support and

advice from EEP Mekong

• A full Business Plan document complementing the Executive Summary included in the CN

application form is not mandatory at this stage, but can be attached as separate document

for additional information.

Concept Note Guidelines.

1. Project Overview

On line application form: https://members.eepmekong.org/

1. Project Overview

Guidelines Download and calculator

On line application form: https://members.eepmekong.org/

1. Project Overview

Pay-as-you-go Solar Energy for Irrigation in Tanintharyi

• Mock Case Study: Solar Water Pumping System for Irrigation in remote areas of Myanmar

• All the information is fictitious with the purpose to show how to complete the form.

1. Project OverviewEEP co-financing and own contribution

1,211,200

0 €

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12,000,000 €0 €

200,000 €

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1,200,000 €

EEP Max Co-financing

Maximum EEP contribution for a Project of “X(Z)” size = [x(1)*y(1)] + …. + [(x(n)-x(n-1))*y(n)] + …. + [(X(Z)-X(Z-1))*y(Z)] “n” is every stretch of the project size“Z” is the last step corresponding to the particular project size “X(n)” is the project size corresponding to the “n” stretch“X(Z)” is the total project size “Y(n)” is the multiplier (EEP contribution for every “n” stretch)

EEP On-line Budget calculator: https://members.eepmekong.org/



450,000 1,211,200

1. Project OverviewProject Duration

450,000 1,211,200 23

1. Project OverviewCountry. Technical focus and technology application

x

450,000 1,211,200 23


x

x

450,000 1,211,200 23


x

x

Solar Water Pumping for Irrigation

450,000 1,211,200 23

1. Project OverviewProject concept


Source BCTCL


Source NSW

x20 Farms in remote areas

(off-grid)


In the remote lands of Tanintharyi, there is not access to the national electric grid. Currently, farmers use diesel-powered pumps for irrigation, but the cost of the fuel is the area is too high due to the transportation required to reach the site. Solar radiation is abundant, and a photovoltaic pumping systems can be an attractive alternative to the diesel engines, at a more affordable price for the farmers. The proposed solar-powered pumping system consists of solar panels connected to an electric motor that runs a bore DC electric pump. A water storage will be installed in order to guarantee the continuous water supply including night hours when solar energy is not available.An energy meter will be installed to measure the total energy consumed per month, and the measurements will be reported remotely to a central billing centre. The payments by the farmers will be also made remotely through mobile phone…..Etc…

2. Project InformationProblem identification / analysis


Lack of Access to Affordable Energy for Irrigation

Lack of Access to electric grid

Difficult access to bring fuel (High cost)

Unawareness of alternative off-grid options

Lack of Technical capabilities for clean energy

Lack of investment

High cost of irrigation

Agricultural sector not competitive

High unemployment

Poverty

Economic and Gender Inequality

Pollution and GHG emission from diesel engines

2. Project InformationProblem identification / analysis. Fishbone diagrams

Source: Conceptdraw

- Controllable input- Noise


High cost of fuel due to additional cost for transportation to the remote sites. This makes economically unfeasible to provide irrigation in some of the remote farms. A reduction of the energy cost is necessary to improve the agricultural sector and impoverish economy in the area.

Etc..

2. Project InformationResults Chain. Project overall objective and outcomes


• A results chain is a set of interlinked cause-effect

A typical results chain includes the following elements:

1.Inputs = available resources (human, physical etc.)

2.Activities = processes to transform inputs into...

3.Outputs = goods and services for...

4.Outcomes = utilization of outputs by target groups or intermediaries,

5.Direct impacts on their situation, behaviour, capacity and

6.Indirect impacts in the same sense, or on a larger scale

• A results chain is a set of interlinked cause-effect relationships.• It describes a desired change and the means by which to attain it.• The desired change relates typically to the situation, behavior and/or capabilities of a target group.

Source: GIZ


Formulate the following questions to identify the result chain of the Project


OVERALL OBJECTIVE:- Implement an innovative business model to provide access to affordable clean energy for irrigation in remote lands of Tanintharyi.

OUTCOMES:- 20 farms will be able to irrigate crops and expand their agricultural business.- 500 direct and indirect jobs will be created.- The impacts on climate change will be reduced.

2. Project InformationBusiness Plan

Describe the rationale of how the project / organization creates, delivers, and captures value.

Source: Strategyzer

ValueCost

2. Project InformationBusiness Plan. Business Model Canvas

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Streams

Value Proposition

Costumer Relationship

Channels

Costumer Segments

Source: Strategyzer

ValueCost


Create new businesses

Reduce energy cost

Pay-as-you-go energy for irrigation

Source: IEA

ValueCost


PV System Installers, and communication operators.

Install and manage solar installations and payment system.

EEP Funds. Bank Loan. 20 Year PPA with the farmers.

EPC Cost for installing the plants.O&M of the systems and costumer service.

Affordable access to clean energy for irrigation

Remote payments system, and support of local agents

An SPV takes the loans and provide the services

Farmers / Irrigation water suppliers

Energy FeeCarbon credits

2. Project InformationBusiness Plan. Business Model

Not Water

Energy (kWh)

• A Solar PV Energy Business model driven by a third party which develop the project and own PV systems, result in:

Reduction of hassle & complexity for end-user.

Secures adequate financing support. Avoids the extensive upfront investment

and following maintenance and monitoring costs, for the end user (only have to care about the electricity fee).

Source NSW

2. Project Information.Business Plan. Business Model

2. Project Information.Business Plan. Business Model

Source NSW

SMS activation systemMeter and remote controller

“pay-as-you-go” systemCentral Server

2. Project InformationBusiness Plan. Business Model

Payment System

• The system incorporates a pay-as-you-go controller that allows power to the water pumps only when the system has been unlocked by entering a valid code through the mobile phone. The code is obtained by sending a top-up number along with the serial number by SMS to the company central server.

• Once the code is received in the central server, a signal is automatically sent to the system to supply electricity to the pumps.

• Top-ups are either physical cards bought for cash, or codes bought by mobile phone, using a mobile money system. They can be purchased for one month activation, with a limit of 1,050 kWh/Month.

www.innocarus.com

2. Project Information.Business Plan. Marketing Plan

• A marketing plan is a comprehensive blueprint which outlines an organization's overall marketing efforts.

• A good marketing plan sets clear, realistic and measurable objectives, includes deadlines, provides a budget and allocates responsibilities. A plan can consist of these elements:

analysis of your current market your business objectives key strategies steps to achieving your objectives proposed budget timing

• The marketing mix is a business tool that can be defined through the 4P: price, product, promotion, and place.

EEP

2. Project Information.Business Plan. Marketing Plan

Marketing Mix (4P):

Product: Energy to be sold to farmers with the purpose of pumping water. The energy supplied will be enough to pump all the required water for irrigation, and simultaneously store a fraction of it in the form of water accumulated in tanks, in order to use gravity to pump water during the required hours by night. A total of 252,000 kWh/Yr will be supplied to 20 farmers.

Additionally, the project will avoid the emission of 4,334 Tn of GHG. These will be certified and sold in the carbon markets through the Clean Development Mechanisms.

Price: The price will be set at 0.6 USD/kWh. A market survey and analysis was conducted to determine that this is the maximum price local farmers can afford to run financially sustainable agricultural businesses. The cost of producing the energy through fossil fuels would be 0.69USD/kWh, what means that a fossil fuel energy producer would have to set the price well above 0,7 USD/kWh, and it wouldn’t be feasible.

Place: The location will be right on the water source, and near the lands to irrigate. The advantage of off-grid renewable energy systems compared with

the conventional ones, is that technically these can be located anywhere. As the extension of lands to irrigate is wide and the farms are disperse, instead of one large power plant, twenty small systems will be installed covering each of the farms. The data collected on the energy meters, will be sent remotely to the energy producer offices, and the payments will be made by the farmers remotely through a mobile phone application.

Promotion: The price of the energy for these first 20 farms is lower than the potential market price if this project is successful, therefore, the EEP funds

are utilized to reduce price as promotion of the product. The project will be a demonstration of the energy alternative for the region. It will incentivize other communities to implement similar projects. Once the model has been demonstrated, the cost will be reduced due to the economies of scale / experience, and reduction of financial risks, which will trigger new developments.

2. Project InformationBusiness Plan. Feasibility Study

Project Requirements:

• Number of Farms: 20

• Water required: 8 L/second - 30m head

• Irrigation time: 12 hours (10 hours day and 2 hours night)

• Pump Power required per farm: 5kW

• Irrigation period per year: 30 weeks / Yr

• Energy required per year per farm: 12,600 kWh/Yr

• Total Energy required per year: 252,000 kWh/Yr


Cost of Energy produced using Diesel Engines:

• Price of diesel pump: 3,500 Eur/ unit

• Depreciation period of diesel engine: 20 years

• Specific diesel consumption: 0.3 L/kWh

• Cost of Diesel per liter on-site: 1.75 Eur/L

• Annual cost of Diesel Engine O&M: 150Eur/MW

• Total cost per year per farm: 8,860 Eur/Yr

• Total cost per kWh using diesel: 0.69 USD/kWh


Cost of Energy produced by Solar PV

• Solar PV capacity factor for the location: 15%

• Solar PV capacity required per farm - equivalent to 5kW diesel: 16,7kW

• Storage tank required for the night 2 hours required: 57,500 L/ Farm

• Cost of the Solar PV system (installed): 2.2 Eur/W

• Cost of the 5kW DC pump and controller per farm: 8,320 Eur/ Farm


Cost of Energy produced by Solar PV

• Cost of the piping per farm: 2,000 Eur/ Farm

• Cost of the storage tank (installed): 0.2 Eur/L.

• Depreciation period of the PV pump System: 20 Yr

• Annual cost of the PV O&M: 20 Eur/kW

• Total cost per year per farm: 67,240 Eur/Yr

• Total cost per kWh: 0,27 Eur/kWh

- (Cost of PV Energy < Cost of diesel energy)


Financial Results:

Case 1 (Without EEP funds)

• Energy Price (equal to off-setting diesel): 0.69 Eur/kWh

• Total capital cost for the 20 Solar PV pumps: 1,211,200 Eur

• O&M Cost: 6,680 Eur/Yr

• Revenues: 173,880 Eur/ Yr

• Profit: 167,200 Eur/Yr

• Simple payback (without discount rate): 7.2 Yr


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

-1500000

-1000000

-500000

0

500000

1000000

NPV

Financial Results:

Case 1 (Without EEP funds)

• Annual discount rate: 5%

• Net Present Value (NPV): 830,935 Eur

• Project IRR: 12%

• Pay back (with discount rate): 13 YrMarket Price estimated = 0.60Eur/ kWh -> not feasible


Financial Results:

Case 2 (With EEP funds)

• Energy Price (Market price): 0.60

• Total Own Funds: 761,200 Eur

• O&M Cost: 6,680 Eur/Yr

• Revenues: 151,200 Eur/ Yr

• Profit: 144,520 Eur/Yr

• Simple payback (without discount rate): 5.3 Yr

2. Project InformationBusiness Plan. Feasibility Study Financial Results:

Case 2 (With EEP funds)

• Annual discount rate: 5%

• Net Present Value (NPV): 1,039,839 Eur

• Project IRR: 18%

• Pay back (with discount rate): 9 Yr

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

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-500000

0

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NPV


Source EP&B

Financial Structure:


Financial Structure:

• Equity: 30%

• Debt: 70%

• Interest rate: 10%

• Repayment period: 5 Yr

• Equity IRR: 27%1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

-400000

-200000

0

200000

400000

600000

800000

1000000

1200000

NPV

2. Project Information Business Plan. Feasibility Study

Product: Energy to be sold to farmers with the purpose of pumping water. The energy supplied will be enough to pump all the required water for irrigation, and simultaneously store a fraction of it in the form of water accumulated in tanks, in order to use gravity to pump water during the required hours by night. A total of 252,000 kWh/Yr will be supplied to 20 farmers. Additionally, the project will avoid the emission of 4,334 Tn of GHG. These will be certified and sold in the carbon markets through the Clean Development Mechanisms.

Price: The price will be set at 0.6 USD/kWh. A market survey and analysis was conducted to determine that this is the maximum price local farmers can afford to run financially sustainable agricultural businesses. The cost of producing the energy through fossil fuels would be 0.69USD/kWh. Place: The location will be right on the water source, and near the lands to irrigate. As the extension of lands to irrigate is wide and the farms are disperse, instead of one large power plant, twenty small systems will be installed covering each of the farms. The data collected on the energy meters, will be sent remotely to the energy producer offices, and the payments will be made by the farmers remotely through a mobile phone application. Promotion: Initially the project will use the EEP funds as a promotion to reduce the CAPEX. It will incentivize other communities to implement similar projects. Once the model has been demonstrated, the cost will be reduced due to the economies of scale / experience, and reduction of financial risks, which will trigger new developments..

For the Concept Note stage, only a very brief Business Executive Summary is required

Focus on explaining why your business is going to be successful summarizing the “Target market” (Who are you selling to? Why would they buy your products/services?) and your “Marketing strategy” (Summarize the 4P).

2. Project InformationDevelopment impacts

Human rights-based approach to development: Democratic ownership and accountability, Effectiveness and impact,

Openness, Policy coherence for development, Focus on the least developed countries

Finland’s foreign and security policystrengthening international stability, security, peace, justice and sustainable development, as well as promoting the rule of law, democracy and human

rights

Gender equality

Climate sustainability

Reduction of inequalityA

dem

ocra

tic a

nd

acco

unta

ble

soci

ety

that

pr

omot

es h

uman

righ

ts

An

incl

usiv

e gr

een

econ

omy

that

pro

mot

es e

mpl

oym

ent

Sus

tain

able

man

agem

ent o

f na

tura

l res

ourc

es a

nd

envi

ronm

enta

l pro

tect

ion

Hum

an d

evel

opm

ent

UN Millennium Declaration and Millennium Development Goals

Eradication of extreme poverty

Priorities of development policy and development cooperation

Cross-cutting objectives

2. Project InformationDevelopment impacts

• Human Rights Base Approach

• Cross Cutting Objectives

Project Information

Climate Sustainability

CO2 Emission saving

Energy Savings in 20 years: 5,040 MWh

Specific diesel emissions: 860 CO2gr/kWh

Total CO2 Emissions avoided: 4,334 Tn

Project Information

Reduction of inequality

Economic savings for the community:

Economic savings per kWh: 0.09 Eur/kWh (13%)

Annual economic savings: 22,400 Eur/Yr

Total economic saving: 448,000 Eur

Productive use of energy:

Direct and indirect: Increase the agricultural production in the region, jobs and wealth creation

Gender Equality

The creation of new jobs thanks to the expansion of the irrigation system will impact in the number of women working in the agricultural sector. Also, new jobs will be created for the administration of new emerging businesses.

2. Project Information


Solar Water Pumping system Installed


Design and Engineering 2 41,300 Leader

Solar Water Pumping system Installed


Directly:Farmers: The availability of irrigation will allow an expansion of the agricultural business. Community: The expansion of the agricultural businesses will create jobs and wealth distribution among the population. Also, a number of new businesses and highly qualified jobs will be created to support the operation of the system; A network of local O&M service partners with the required spare parts in stock will support the energy and water service providers in keeping the systems up and running. Various service options, from service contracts to training sessions will be available to the energy service companies, NGOs, or community-based associations. The operation of the remote energy management platform which allows the remote monitoring of each system will also required skilled operators.


- Sustainability: a 20 years PPA has been agreed with the farmers, which guarantees the financial viability and sustainability. The farmers will grow their business dependent on the energy supplied, and therefore, a captive market will be created. The EEP funds will not be required beyond the 6 years set for the RBF disbursements

- Replicability: There are hundreds of farms in the region that could adopt similar irrigation systems. As the number of new installations grow, the economies of scale and experience will reduce the cost. Additionally, as this solution becomes well known and attractive for new costumers, the price could be slightly increased.

2. Project InformationBusiness Innovation

The remotely activated Pay-as-you-go service allows the utilization of Solar Energy services in remote areas where it wouldn’t be possible to access regularly to collect the payments.The system incorporates a controller that allows power to the water pumps only when the system has been unlocked by entering a valid code through the mobile phone. The code is obtained by sending a top-up number along with the serial number by SMS to the company central server.Top-ups are either physical cards bought for cash, or codes bought by mobile phone, using a mobile money system.

2. Project InformationRisk analysis and mitigation


PV System severely damaged by a natural disaster

Electric System failure

5

2

Political Turmoil

4


PV System failure (medium severity) Predictive maintenance implemented

2. Project InformationImplementation plan

2. Project Information Implementation plan

Source: Solarprofessional

4 teams working in parallel (Steps 6 to 13 will be repeated 5 times): Total 17 months (3 months/farm + 2 months design)EEP Project: 17 Months construction + 6 months in operation = 23 months


4 teams will work in parallel completing 5 installations each. The construction period will last 17 months: 2 months for the design, engineering and procurement3 months for each of the 5 installations constructed by each of the 4 teams. The total duration of the EEP Project will be 17 Months for the construction and 6 months for the operation, adding a total of 23 months.

……

etc….

3. Financial InformationProject budget

Photovoltaic system Engineering 41,300

etc..

3. Financial InformationProject budget

Solar Photovoltaic Pannels (333 kW) 275,000

etc..

Civil Works 29,200

etc..

3. Financial InformationFinancial sources

228,360

532,840

450,000

1,211,200

* values must be the same and should match with the values in PART 1 : PROJECT OVERVIEW** If there is in-kind contribution, please provide basis of valuation in the box provided below.

3. Financial InformationFinancial management. Transparency and Accountability

- The SPV will take the loan and repay it through the collected the fees. It will also pay the EPC and O&M contracts. The SPV will be managed by the board of directors and advisors accountable for the financial statements.

- The Lead Applicant, as the sponsor of the project will be accountable for the EEP funds. - The cash free pre-paid system eliminates the problem of fund mismanagement as funds can be directly transferred into a bank account reserved to cover for operation and maintenance costs.

3. Financial InformationAdditionality


• Net positive difference that results from an intervention. The extent to which an activity (and associated outputs, outcomes and impacts) is larger in scale, at a higher quality, takes place quicker, takes place at a different location, or takes place at all as a result of intervention

-1500000

-1000000

-500000

0

500000

1000000

NPV

1 2 3 4 5 6 7 8 9 101112131415161718192021

-1000000

-500000

0

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NPV

Feasibility Gap

• Feasible, bankable and financially attractive for private investments

• Price of Energy reduced for end users

• Reduction of pollution and GHG emissions

Not Feasible without EEP funds Feasible with EEP funds


The project is technically feasible and is close to commercial, however, the required prices of energy are too high for the local economies. The contribution from EEP is utilized both for reducing the energy cost for the end users, and for improving the financial results, making the project bankable and attractive for private investors. The success of the project would demonstrate the business model in the region, and incentivize other communities to implement similar projects. Once the model has been demonstrated, the cost will be reduced due to the economies of scale / experience, and reduction of financial risks.

3. Financial InformationResults based Finance (RBF)

• Funds are disbursed not against expenditures on the input side, but against demonstrated and independently verified results

• Gives private sector entrepreneurs freedom to use the funds for anything they need

• RBF incentive equals additional transaction costs: Business as usual vs innovative business plan

RBF is a funding approach in which the funding entity provides a financial incentive, conditional on the recipient achieving pre-determined results.

Concept

3. Financial InformationResults based Finance (RBF). Characteristics of RBF

Year 0 Year 1 Year 2 Year 3 Year 4 Year 50

50

100

150

200

250

300

350

Risk PremiumAdministrationMarginCost of funds

Cost

of c

redi

t pr

ovisi

on in

USD

Example: Community Bank in Tanzania providing credits for Domestic Biogas Digesters

3. Financial InformationResults based Finance (RBF). Characteristics of RBF

•Project developers have to clearly indicate which of the result in their proposal will trigger the EEP incentive. Eligible results are:

• Increased access to sustainable energy services (number of households / business supplied with sustainable energy)

• Increased renewable energy generation or energy saving (kWh generated from renewable sources or saved by energy-efficient equipment)

• A combination of both types of results is possible. Other results can be proposed but need approval.

• The incentive is paid ex post after delivery of the result and there is no advance payment. However, “milestone results” (e.g. completion of the installation of a RE system) can also be proposed by developers.

• The first milestone can represent a maximum of 25% of the total grant.

3. Financial InformationResults based Finance (RBF). EEP Approach. Types of results and milestones

450,000 Eur

MILESTONE: 25% = 112,500 Eur Completion of the designs engineering and procurement

RESULTS I: 30% = 135,000 EurNumber of Farms connected (Max: 20)

RESULTS II: 45% = 202,500 Eur Energy supplied to end users Max: 6.3MWh

3. Financial InformationResults based Finance (RBF). Determination of the RBF incentive amounts


Milestone 1(25%=

112,500Eur)

000,000 Eur

RFBMilestone 0

112,500 EurMilestone 1

25%


25%



Result 1Farm Connected

(30%= 6,750 Eur/Farm)


(30%= 6,750 Eur/Farm)

Result 3Farm

Connected

(30%= 6,750 Eur/Farm

)

Resu

lt 4

Farm

Con

necte

d

(30%

= 6,7

50 Eu

r/Far

m)

RFB 112,500 Eur119,250 Eur126,000 EurMilestone 1Result 1Result 2Result 3132,750 Eur139,500 EurResult 4

27% 31%

3. Financial Information

4 teams working in parallel (Steps 6 to 13 will be repeated 5 times): Total 14 monthsEEP Project: 14 Months construction. 6 months in operation



(30%= 6,750 Eur/Farm)


(30%= 6,750 Eur/Farm)

Result 7Farm

Connected

(30%= 6,750 Eur/Farm

)

Resu

lt 8

Farm

Con

necte

d

(30%

= 6,7

50 Eu

r/Far

m)


(30%= 6,750 Eur/Farm)


(30%= 6,750 Eur/Farm)


(30%= 6,750 Eur/Farm)

Result 7Farm

Connected

(30%= 6,750 Eur/Farm

)Resu

lt 13

Farm

Con

necte

d

(30%

= 6,7

50 Eu

r/Far

m)


(30%= 6,750 Eur/Farm)


(30%= 6,750 Eur/Farm)Result 11

Farm Connected

(30%= 6,750 Eur/Farm)

Result 12

Farm Connected

(30%= 6,750 Eur/Farm

)

139,500 Eur

RFBResult 4Result 20247,500 Eur

31% 55%

3. Financial Information


247,500 Eur

RFBResult(kWh)

450,00 Eur

Milestones / Results

EEP

Fund

s rec

eive

d (E

ur) • Operating period: 6 months

• Energy supplied: 6,300 kWh• Incentive 32.14 Eur/kWh• Total: 202,500 Eur

• Milestones: 112,500 Eur• Result (Farms connected: 135,000 Eur • Energy supplied: 202,500 Eur• Total: 450,000 Eur

55%

100%


• Role of the Developers: • Propose the RBF plan, including the identification, definition and quantification of

the milestones and results that will trigger the incentives. This includes also the estimated deadlines to achieve the results.

• Document all the necessary information for the verification, and facilitate it to the verifiers

• Submit disbursement requests once the results have been verified. • Submit to RCU the Project Progress and Financial reports.• Hire the auditors for the final financial audit.

Monitoring, Evaluation, Reporting, Verification and Auditing (MERVA)

3. Financial InformationResults based Finance (RBF). MERVA

• The verification needs to be rigorous, with a 3rd party control via well-defined independent checks.

• Verification needs to be fast, so that firms do not suffer long disbursement delays

• Role of RCU• Conduct the Monitoring and Evaluation of the projects, including site visits when

necessary.• Coordinate with the Verifiers, and mediate with the donor to report the vierified

results and disbursement requests.

• Role of the Verifiers• Experts specialized in the technology used in the project, to conduct the Verification

of the results reported by the Developer.

• Role of the auditors• Conduct a final financial audit of the whole project, including all the reconciliation of

the balances and receipts.

Monitoring, Evaluation, Reporting, Verification and Auditing (MERVA)

3. Financial InformationResults based Finance (RBF). MERVA

4. Applicant Information

Attachments

IN ENGLISH

Attachments

Application process

We are

here

CONCEPT NOTE SCREENING CRITERIA (Must comply all the criteria) (YES/NO)

1. Is the Concept Note signed by an authorized representative of the Lead Partner, and are there signed MOUs with other possible partners annexed?

2. No conflict of interest / privileged relationship with a member of the technical evaluation. The scan copy of the signed statement must be included as annex, as well as a scan copy of the company business register or the country specific registration document in case of NGO application.

3. Clear additionality to the project from EEP grants funding?

4. Are the basic eligibility criteria respected (eligible partners, type of projects activity, technical focus, maximum implementation period, geographical area)?

5. Is it relevant to the objectives and priorities of the call for proposal?

6. Is it relevant to the particular needs and constraints of the target country or region related to clean energy policies and promotion strategies of the relevant countries?7. Does it present a defined business model?

8. Does it apply proven and Does it apply proven and mature technologies?

9. Does it meet the minimum co-financing ratio set for the investment?

10. Is the proposed funding results-based or can it easily be adapted at FPP stage?

11. Does the lead applicant have sufficient technical and project management expertise, as well as financial capacity?

12. HRBA principles are followed and integrated in the project approach

CONCEPT NOTE SCREENING CRITERIA (Must comply all the criteria)

Concept Note Evaluation

CONCEPT NOTE EVALUATION CRITERIA CONCEPT NOTE EVALUATION CRITERIA Weighting

(total=100)Score (0 – 5 ) higher = better

Project or business idea (e.g. level of maturity/implementation readiness, viability, business case, innovativeness)

30

Financing strategy 20

Strategy for scale-up/replication and/or to mobilize future investment 20

Financial leverage (own-financing share) above minimum share 10

Development impacts (e.g. social economic benefits to the target population including ethnic groups, poor households, women, female-headed households in terms of job/ livelihood creation, improvements of living standards etc.) and climate change mitigation (i.e. CO2 emission reductions)

20

• Minimum Qualifying Score: 350 points out of 500 points. • A zero score in any of the issues listed in the above table, except for financial leverage,

shall lead to disqualification.

Concept Note Evaluation

EVALUATION GRID FOR FULL PROJECT PROPOSALS - IFULL PROPOSAL EVALUATION CRITERIA Weighting

(total=100)Score (0 – 5 )

I) Relevance 15 The benefits of the project are clearly identified, and are relevant to the EEP overall objective, and to the particular needs and constraints of the target country or region.

10

The main beneficiaries are clearly identified, and there is a clear and direct mechanism through which the beneficiaries will benefit from the project.

5

II) Impact 20 The project has a sustainable impact on local / national income generation, and promoting entrepreneurship

15

The project proposal addresses the EEP HRBA principles and cross cutting objectives. 5 III) Sustainability and Replicability / scale-up 25 The project has potential for scaling up providing a model for replication, improving funding mechanisms and opportunities, leveraging private sector investment, etc. Prospects of accessing private financial institutions loans, and/or development bank funding increased.

10

The project presents a sustainable business model that ensures continued operations beyond the duration of the EEP funding.

15

Full Project Proposal Evaluation

EVALUATION GRID FOR FULL PROJECT PROPOSALS - IIFULL PROPOSAL EVALUATION CRITERIA Weighting

(total=100)Score (0 – 5 )

IV.) Innovation 5

The project contributes to the development of new and innovative business approaches, linkages, financial / credit instruments, RE configurations/approaches, etc..

5

V) Budget, Cost-Effectiveness and Financing Structure 20 The budget is justified and realistic for the proposed activities and expected outputs. The financing model is in line with a RBF approach.

10

Funds are used efficiently (e.g. cost/beneficiary, cost/t of CO2 emission reduction). 5 Amount of financing contributions from the lead partner, other partners and other confirmed sources of co-financing, above minimum contribution.

5

VI). Management/Resources 15 The applicant and partners has project management experience and technical expertise. 5

5The applicant has tangible experience in professional financial project management incl. accounting practices following international standardsThe proposed project enhances co-operation between local project developers and partners from Finland

5

Full Project Proposal Evaluation

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EEP Mekong Programme Technical Assistance by NIRAS Finland Oy

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Guideline for the Preparation of a Concept Note

Economy & Finance

Transcript of Guideline for the Preparation of a Concept Note