Nordic Climate Facility – Testing the viability of innovative climate solutions : 9th call for proposals

Nordic Climate Facility – Testing the viability of innovative climate solutions : 9th call for proposals

Programme objectives :

The Nordic Climate Facility (NCF) is a challenge fund set up and administered by the Nordic Development Fund (NDF) to finance innovative climate change projects. NCF has five objectives:

  • Increase low-income countries’ capacity to mitigate and adapt to climate change
  • Encourage and promote innovations in areas susceptible to climate change
  • Build partnerships between Nordic and partner country actors, both private and public organisations
  • Contribute to sustainable development and the reduction of poverty
  • Leverage additional financing for climate action

Themes :

The NCF 9 theme is broad and a wide range of activities from different sectors will fit within the theme. NCF aims to finance innovative climate-relevant business concepts. These concepts should address a climate-related problem, i.e. address adaptation3 and/or mitigation4 of climate change. The projects should also aim to test the climate solutions viability from financial, technical, social and environmental perspectives.

The project partners’ need to have a long-term plan for their concept beyond NCF financing. The aim should be that the climate solution becomes commercially viable and creates jobs and/or income-generating opportunities, as well as improves the quality of life for the local population. Commercial viability is the ability of a business, product or service to compete effectively and to make profit. Commercial viability does not have to be achieved within the lifetime of the NCF project, but the NCF project should be a step towards that goal.

Projects should be innovative, meaning that the proposed concepts and solutions should have the potential to improve the quality of life for vulnerable people and tackle climate change in developing countries more effectively than existing approaches.

Furthermore, strong project proposals have the following features:

  • the aim to build prosperity and reduce poverty;
  • the aim to increase gender equality;
  • realistic and clear outputs and outcomes;
  • strong replication and scaling-up potential;
  • convincing justification(s) for why NCF grant funding is needed;
  • alignment with national development and climate change plans, strategies and policies in the country of implementation.

The figure below shows which stages of the business concept NCF can finance. These include pilots and demonstration projects as well as replication and scale-up projects. NCF will NOT finance pre-feasibility/feasibility studies or projects exclusively focused on market studies/surveys, technology research, policy development work, capacity-building, or training. It will also not finance business concepts that are self-sustained and/or eligible for commercial financing.

Eligibility criteria :

Eligible applicants must be registered legal entities at the time of the concept note submission, such as:

  • For-profit companies and organisations;
  • Non-profit organisations and social entreprises;
  • Civil society organisations (CSOs); and
  • Research institutes and universities.

Projects should be implemented through partnerships between Nordic and local partners in an eligible NCF country. In addition, the project partnership may entail other partners. All project partners should have a meaningful role in the implementation of the project. The applications should clearly clarify the roles of and division of responsibilities between each project partner.

The partner requirements are as follows:

  • Nordic partner(s)

– The Nordic partner needs to be a Nordic company, organisation or other legal entity holding a registered place of operation in Denmark, Finland, Iceland, Norway or Sweden.
– Several Nordic partners can partner up to implement and finance the project; however, there should be one lead Nordic partner. The lead Nordic partner is the main applicant and accountable for the NCF application. The lead Nordic partner will be the sole and responsible contractual party towards NDF. The lead Nordic partner will, prior to the first disbursement, have sub-contracts with all other project partners.
– Multilateral institutions, UN agencies, bilateral financing institutions or other donor agencies, development financing institutions or their affiliates, trust funds, government ministries and individuals are not eligible.
– A copy of the registration certificate showing the registration of the Nordic partner(s) as a legal entity in one of the Nordic countries should be attached to the concept note.

  • Local partner(s)

– The Nordic partner(s) can have one or more local partners. A local partner is a local company, organisation or other legal entity registered in the country of implementation. The local partner(s) should, upon request, be able to show a copy of the registration certificate showing the registration of the local partner(s) as a legal entity in the country of implementation.
– Multilateral institutions, UN agencies, bilateral financing institutions or other donor agencies, development financing institutions or their affiliates, trust funds, government ministries and individuals are not eligible.

Funding principles :

NCF can provide grant financing of between EUR 250,000 to 500,000.

The NCF grant cannot cover the full project costs, and therefore co-financing is required from the project partners and/or other financiers.

Co-financing requirements:

The project partners must mobilise co-financing equal to at least 25% of the requested NCF grant as loan, equity and/or grant5. Of that amount, the Nordic partner(s) must provide at least 10% as loan or equity6, and the local partner(s) must provide at least 5% as loan, equity and or grant. The remaining 10% can be freely distributed between the project partners and other financiers.

There is no upper limit for co-financing and a higher share than 25% of co-financing from the project partners is encouraged as it demonstrates commitment, ownership and risk-sharing. Proposals providing more co-financing will receive a higher score.
All co-financing need to be earmarked solely for the implementation of the NCF project. Funds from ongoing initiatives and projects are not eligible as co-financing. Both in-kind and cash contributions can be considered as co-financing. Further information about eligible and non-eligible expenses is available in the project implementation manual.
For projects selected to the full proposal stage, signed commitment letters which specify the committed co-financing will be requested from all co-financiers. At that stage, supporting documentation of all co-financing should be available upon request.
The co-financing share cannot be reduced during the application process after the concept note has been submitted. A reduction in co-financing will disqualify the application. An increase in co-financing is permitted.

Duration :

The maximum implementation period is 30 months.

Application and submission details :

Applications can be submitted as of: 5 June 2019
Deadline for submissions: 5 September 2019 at 12 noon Central European Summer Time (GMT +2 hrs).

The lead Nordic partner is considered to be the main applicant and is thus responsible for submitting the application and will be the main focal point for any communication related to the application.

An applicant can submit several concept note proposals.

An applicant can also be a partner in more than one financed project. However, only two concept note proposals from a lead Nordic partner can be selected for full proposal stage. Organisations that have received NCF financing in a previous call are eligible to receive funding from NCF’s ninth call.

The NCF application process is a two-stage process with a concept note and full proposal. The application in the concept note stage is intended to be brief, focusing on the fulfilment of the basic eligibility criteria as well as the following key aspects: business concept viability, innovativeness. climate change relevance and justification for NCF financing. After the pre-screening, which reviews whether projects fulfil basic eligibility criteria, an Evaluation Committee will score eligible concept notes. The highest scoring proposals will then be invited to submit a detailed full proposal.

Approximately 30 project proposals will be shortlisted at the concept note stage and invited to submit full proposals. After the full proposal evaluation, the highest scoring full proposals will be invited for due diligence interviews. NDF’s management gives final project approval and only after that will contract negotiations commence between the lead Nordic partner and NDF. The aim is to finance between 12 and 15 projects per call.

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