Request for proposals. Spark Fund I (RFP-I)

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1 Request for proposals Spark Fund I (RFP-I) The purpose of this Request for Proposals (RFP) is to solicit from Sierra Leone based enterprises at the venture or growth stage that are seeking venture to scale their enterprise and strengthen organizational capacity. Context and justification Welthungerhilfe in partnership with COOPI, ENFO and IBIS are implementing a project co-funded by European Union (EU) titled Promoting Renewable Energy Services for Social Development in Sierra Leone (PRESSD- SL). This project is implemented in the districts of Kenema, Kailahun, Kono, Bombali, Portloko and Kambia, providing electricity through renewable energy (solar) for rural communities. The project is targeting some communities with solar mini-grids, energy hubs for some agricultural business centers (ABCs), community charging stations and the sales of pico-pv lights to villages and towns within these operational districts. For the sales of the pico-pv lights, the PRESSD-SL Project has adopted a market-based approach, developing the market and its actors to facilitate the expansion of their activities, involving all actors in the value chain. Therefore, The Project provides support at different levels, like facilitating access to finance for retailers and wholesalers, raising awareness for consumers and developing distribution channels up to the remote villages. The Pioneer Gap in the solar energy sector Access to adequate growth capital continues to be a considerable challenge for organizations and enterprises in the pico-pv lights, as in many other base of the pyramid (BoP) focused industries globally. Early stage enterprises looking to scale their operations in developing markets often do not qualify for traditional sources of growth capital. Therefore, patient sources of investment and investment-like venture grant financing are necessary to help early and growth stage enterprises bridge this pioneer gap. PRESSD Project is launching the Spark Fund I to address this gap and help more pico-pv dedicated enterprises become investment ready. The Spark Fund I intends to bridge the gap that enterprises at venture and growth stage find, and help them to a reach profitability stage to become long term, stable actors, to supply with pico-pv products Sierra Leonean demand. Graphically, the diagram below shows the leverage for an enterprise that Spark Funds I can contribute to:

2 Fig.1 The Pioneer Gap The Spark Fund Round I Overview The Spark Fund I seeks to provide investment-like seed capital and capacity development support to help enterprises reach commercial viability, scale, and ultimately unlock additional investments for future growth. The Spark Fund I targets the specific capital and capacity development needs of enterprises that have passed proof-of-concept, are at the venture or growth stage, and are focused on the commercial up-scaling of their operations. As such, enterprises supported by Spark will be: 1) Market-based, commercially viable enterprises 2) Venture- or growth-stage enterprises that are generating income and are not yet mature enough to access growth capital from traditional investment sources 3) Scalable enterprises with the potential to make a significant contribution to the Sierra Leone s government goals of enabling 250,000 households to adopt clean and efficient lighting technologies by end of Objectives and Outcomes The activities supported in this RFP are part of the PRESSD-SL objectives to increase investment to the clean energy sector by supporting the development of existing, market-based enterprises, thereby creating a pipeline of commercially viable and scalable enterprises.

3 Grant Terms Under RFP-I, the Spark Fund will award grants, market expansion opportunities and capacity development services to at least 2 qualifying enterprises via Spark Fund, which will provide selected earlier stage enterprises with up to EUR each for the commercialization of minimum pico-pv solar devices each. The award grant can cover a maximum of 40% of the EXW price of the purchase order. Funding will be disbursed in two tranches, 2/3 immediately after awarding and 1/3 upon procurement and transport documentation presented (original invoice and Bills of Lading). However, the applicant will have an 8-month term to complete the objectives of their sales plan. Regular reporting on sales and activities and milestones will be required over the full 8 month period, in addition to a final results report after the end of the grant term. Awarding criteria Industry/sector focus: The applicant must operate within the energy access value chain, limited to organizations focused on pico-pv lights distribution, retailing and financing. Organizational Stage of Development: The applicant must be beyond proof-of-concept and postrevenue, meaning the enterprise has generated sales with pico-pv lights. The applicant must have the capacity to ramp up and scale operations on pico-pv lights. Organizational Profitability: The applicant is not required to be profitable to apply. However, they must show at least break-even profitability after a 12-months period through a clear and feasible plan. Focus Areas: Only enterprises registered and with operations in Sierra Leone are eligible to apply. A minimum of 35% of the sales have to be done in the northern districts of Bombali, Port Loko or Kambia, and a minimum of 35% of the sales in the eastern districts of Kenema, Kono or Kailahun. The rest of the sales can be done in any other part of the Country. Impact: The applicant must be focused on driving highly scalable impact in alignment with the PRESSD Project objectives to improve access to energy, enlighten livelihoods, empower women and protect environment through the promotion and adoption of clean and efficient energy. Gender and Women s Empowerment: All applicant should demonstrate a significant commitment to having a positive impact on women and girls. Qualifying products The RFP-I is focusing on pico-pv light products with peak PV module power up to 12 W. Applicants must ensure products that maintain Quality Standards that set a baseline level of quality, durability, and truth in advertising to protect consumers. Meeting the Standards is a requirement for participation in the RFP-I. Quality Standards from Lighting Global program apply to this call. See the list of products that are Lighting Global verified:

4 Areas of potential support The full amount of the grant will be dedicated to a purchase order placed after receiving the awarding notice to mitigate access to finance burden. Moreover, market expansion support and capacity building will be provided in the following potential areas: - Developing and rolling out a marketing strategy - Developing key local sales channels and distribution models - Seeking capacity development and training in areas of business with significant skills gaps i.e. accounting, supply chain management, inventory system, etc. - Entering new markets (geographies, segments, etc.) - Introducing innovative financing schemes to increase products affordability and uptake. Application Process and Deadlines The application process will be open from June 12 th to June 27 th ( 5 pm local time), Please read all instructions carefully. Incomplete applications or late applications will not be accepted. Applicants will have to submit an electronic documents to the address xavier.castellvi@welthungerhilfe.de AND hardcopy in a sealed envelope marked: CONFIDENTIAL Open only at bid opening SLE 1024/SPARK FUND I/RFP-I Return address to be on the back of the envelope and the full contact detail of the company and valid phone number (s). All documents must be submitted to Welthungerhilfe Country Office Freetown, Nº59 Frazer Street, Off Wilkinson Road or Welthungerhilfe PRESSD Project office, 15 Reservation Road, Kenema. Please note: The opening of the award is public and will be carried out on the 28 th June, 2017 at 2pm local time at Welthungerhilfe Country Office, Nº59 Frazer Street, Off Wilkinson road, Freetown. Unsuccessful applicants will be notified on or before 10 th July In case of any questions contact in writing procurement officer, Alhaji.bangura@welthungerhilfe.de. Application documents Applicants are asked to submit the following documents for their application: 1) A max 4 page executive Summary Business description and plan of the applicant. 2) Two years official financial statements including balance sheet and profit & loss statement. If two years are not available, provide the same statements since the beginning of operations. 3) 5 years profit & loss planning and investment plan of the enterprise 4) Description of the 8-months sales plan: a. Bill of Quantities stating the prices quoted for the potential purchase through the Spark Fund.

5 b. Realistic time needed to introduce purchase order to the supplier. c. Realistic time for transit, reception, storing and start of sales. d. Selling phase plan for the Spark Fund procured products: progress of sales, milestones, distribution channels and target areas. e. A technical description, including leaflet of the materials quoted. 5) Complete pre-qualification of applicants (refer to Annex I) Applicants will also be asked to provide the following information and attachments as part of the application 1) CVs of key management (Up to three). 2) Valid Business registration certificates. Evaluation Process and Criteria Each applicant will be evaluated and scored against the following criteria: Strength of the business model: Assesses whether the enterprise has a clear market-based approach, is commercially viable, integrates gender and is in line with the PRESSD Project objective to enhance demand or strengthen supply. In addition assesses the understanding of the market and demand, positioning of the product in the market, and enterprise growth strategy and financial strategy. Financial sustainability and planning: Credibility, Accuracy and Soundness of Financial Forecast. Potential to unlock additional for-profit growth capital. Shows commercial viability in medium and long term, with rational cost structures, profit margins, existing assets and liabilities. Commitment to Impact: Shows clear, measurable ad realistic positive impacts in target areas. The enterprise should strive towards affordability, accessibility and availability of well-performing technologies to have these impacts. Promotes job creation and livelihoods, and women empowerment. Growth plan and projections: Assesses the enterprise s identified opportunities for growth and expansion, the proposed actions to roll out the growth strategy, and overall feasibility of the projections. Management: Determines if the management has the background, diversity, local market BoP experience, sufficient sector knowledge, business management skills, and the ability to manage reporting requirements. Demonstrate how the business model will deliver and sustain social impact in the target markets Exclusion Criteria: Non submission of all requested documents Non submission of price of all items Offered items are not in line with the requirements Late or incomplete bid Bid not submitted in sealed envelopes Bid Document submitted without signature and stamp. A due diligence may be conducted to pre-selected enterprises prior to the final awarding of the grants.

6 Annex I - Applicant qualification (3 pages) Company name Legal form Number of employees Nationality of company Postal address Telephone number address Website Name of Managing Director Sales & marketing contact person Shipping department contact person Range of services provided by the company (company portfolio) Remarks

7 Applicant qualification Welthungerhilfe supports the goals of the UN Global Compact The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. By doing so, business, as a primary driver of globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere. Human Rights - Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and - Principle 2: make sure that they are not complicit in human rights abuses. Labour - Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; - Principle 4: the elimination of all forms of forced and compulsory labour; - Principle 5: the effective abolition of child labour; and - Principle 6: the elimination of discrimination in respect of employment and occupation. Environment - Principle 7: Businesses should support a precautionary approach to environmental challenges; - Principle 8: undertake initiatives to promote greater environmental responsibility; and - Principle 9: encourage the development and diffusion of environmentally friendly technologies Anti-Corruption - Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. The Global Compact is global and local; private and public; voluntary yet accountable. Further information is available on this website in different languages:

8 Applicant qualification We, (name of company) hereby declare that a) we are not in bankruptcy proceedings, judicial insolvency proceedings or in liquidation, that we have not ceased our commercial activities and are not in a comparable situation by virtue of similar proceedings referred to in the national legal provisions, b) we have not received a sanction by legally binding judgment for reasons which bring into doubt our professional reliability, c) we comply with our duty to pay social insurance contributions, taxes or other levies in accordance with the legal provisions of the state in which we have our office, the state of the consignee, or the state where the contract is performed, d) we have not received a legally binding sentence due to fraud, corruption, participation in a criminal association, or another act directed against the financial interests of the European Communities, e) no serious breaches of contract due to non-performance of our contractual obligations have been ascertained in connection with another contract or a contract awarded from the Community budget, f) we are providing you with all the information required in connection with participation in a tender, g) in respect of contracts which are ultimately paid for out of European Community funds, no one has accused us of breach of contract due to gross violation of our contractual obligations, h) we have not been excluded as a contract partner by the European Community due to ethical issues, i) we assure the European Commission, the European Anti-Corruption Bureau and the auditors of the European Community reasonable access on demand to our business and accounting documents for the purpose of checks and audits, j) we respect basic social rights and condemn child labor. We support the goals of the United Nations Global Compact Date, company name, signature, name in block capitals, company stamp.