[Funding for Agricultural Support Services]

Funding for Productive Projects

What are the eligibility Criteria for prospective applicants?
1. The applicant must be an association of agricultural producers (farmers or processors) and/or buyers (exporters, processing firms or supermarket chains). Individuals are not eligible. Buyers must have a binding contract with an agricultural producer association.

2. The association must have the following characteristics:

• Be a legal entity;
• Have documented by-laws and financial statements;
• Be a non-governmental entity; and
• Be willing to adhere to the cost-sharing and cost-recovery requirements of the grant.

3. The project must have the following characteristics:

• Be focused on a non-traditional market opportunity. A project focusing on traditional commodities will be eligible for financing only if the project focuses on new, value-added products for established markets.
• Address a clear market opportunity, and
• Be feasible from a financial, technical, and environmental standpoint and be sustainable over time.

What kind of goods and services can the Grant finance?

There are several kinds of goods and services, the cost of which the grant will cover. These are:

• The costs of organizing the association; and includes legal and accounting fees;
• Costs associated with preparing project proposals;
• The cost of services; including extension, training, technical assistance, regularization, market analysis, market visits, information collection and other relevant services for the project;
• Shared capital investments costs. Shared capital investments include investments where the benefits accrue to the association and not to any individual.

What is the maximum size of the Grant per Beneficiary?

The maximum grant amount for any one project is US$300,000. There is no minimum grant amount. The maximum cumulative amount for any association is US$300,000.

What is the process by which Grant funds are made available?

There are several steps that must be taken before an applicant may gain access to grant funds.

Step 1. The applicant completes and submits an application form. The form may be submitted to an ADO or directly to the PIU.

Step 2. The ADO forwards the completed form to the Director of the PIU along with any supporting documents.

Step 3. After reviewing the project document, the PIU may provide assistance to the applicant for the preparation of project proposal, both in terms of technical and financial resources.

Step 4. The applicant submits the completed project proposal to the PIU.

Step 5. The PIU ascertains completeness of the project proposal and convenes a meeting of the Technical Review Committee (TRC).

Step 6. The TRC reviews the project proposal and if it finds that the project proposal complies with all the grant regulations, the TRC recommends approval of the project proposal to the Project Steering Committee.

Step 7. The PIU director convenes a meeting of the PSC to consider approval of the project.

Step 8. The PIU director sends a copy of the approved project proposal and the TRC letter of recommendation to the IDB for its no-objection.

Step 9. After obtaining the IDB’s no-objection, the PIU sends a letter to the applicant, advising formally of the decision of the PSC.

Step 10. The PIU and the applicant thereafter enter into a contract.

Note: The PIU will make reasonable efforts to ensure speedy processing of projects.

What are the procedures for the procurement of goods, services and works financed by the grants?

The appropriate procurement procedures to be followed in each project approved by the PSC are established by the PIU in the contract with the association. The mechanisms for procurement can be direct, indirect or a combination of both.

Under direct procurement, the PIU is responsible for procuring goods and services and civil works and making payments directly to suppliers and services providers.

Under indirect procurement, the association is responsible for procuring goods and services and for making payments to suppliers and services providers.

The PIU and the association will agree on the procurement procedures depending on the size of the project, the nature of goods and services to be procured, and the institutional capacity of the association.

COST-SHARING

Associations are required to provide matching funds (cost-share) for projects as follows:

1. 10% minimum of the grant amount for services
2. 20% minimum of the grant amount for shared capital investments

Cost sharing can be in either cash or kind (e.g. labor, transportation, accommodation, property), or a combination of both. Associations can also meet their cost-sharing requirements with credit (e.g. bank loan, crop lien, contract farming or supplier financing). The actual level of cost sharing is determined on a case-by-case basis, depending on the nature of the project and the beneficiaries.

COST-RECOVERY PROGRAMME FOR CAPITAL INVESTMENT

Associations are required to establish a cost-recovery programme to retrieve 100% of the operating and maintenance costs of any capital investment acquired with the grant.

[Funding for Agricultural Support Services]