Support for Projects in Developing Countries

Support for Projects in Developing Countries

Background and objective Financed by the Ministry for Foreign Affairs, managed by Finnfund Promotes business cooperation between companies in Finland and in developing countries Offers support for developing country projects: Business Partnership Support Matchmaking service Advice and guidance

Finnpartnership BUSINESS PARTNERSHIP SUPPORT

Business Partnership Support - What? Financial support for the planning, development and training phases of projects aiming at establishing long term commercial activity in, or starting importing from developing countries

Business Partnership Support SUPPORTABLE PROJECTS

Business Partnership Support - Area of Operation Low Income Developing Countries Upper Middle Income Developing Countries Fragile states http://www.finnpartnership.fi/developingcountries/

Business Partnership Support - Approved by continent 2006-2016

Business Partnership Support - Supportable project types A grant type of seed capital for projects aiming at long-term business partnerships in developing countries, e.g. joint venture, subsidiary company other long-term partnerships (long-term subcontracting, maintenance, franchise or licensing contract) importing from developing countries vocational education and training -------------------------------------------------------------------------- The support does not cover: market studies related to establishing a sales office identification of distributors exports from Finland to developing countries!

Business Partnership Support - Eligible applicants companies registered in Finland or elsewhere that have a substantial link to Finland (significant Finnish ownership or a contractual relationship between a Finnish company and the company registered abroad) public utilities or other institutions registered in Finland research facilities, universities, cooperatives, chambers of commerce or similar organisations based in Finland non-governmental organisations/associations registered in Finland that practice or contribute to economic operations consortium of several companies or organisations

Business Partnership Support - Supportable sectors Support to all sectors except for exclusion list, e.g. E.g. alcohol, tobacco, gambling Support ( ) allocated mostly for: ICT (17 %) Services (8 %) Environment (8 %) Energy (8 %) Manufacturing, engineering and machinery (7 %) Metal and industry engineering (6 %) Agriculture and food processing (6 %) Construction (6 %)

BPS - Commercial viability & sustainability Projects have to be commercially viable and realistic Are the plans realistic? Does the applicant have enough resources to implement the project? Is there a possibility for the project to become profitable? etc. comply with international standards related to environmental and social issues contribute to positive development impacts

Business Partnership Support SUPPORT AMOUNT

Business partnership support - Amount of grant Tuki hyväksytyistä kustannuksista SMEs and other small organizations Fragile states* Low Income Developing Countries** Upper Middle Income Developing Countries *** 85 % 70 % 50 % Large companies 85 % 50 % 30 % NGOs, academies, foundations (essential supporting activities, training etc.) 85 % 85 % 85 % * Afghanistan, Eritrea, Guinea-Bissau, Haiti, Iraq, Jordan, Kiribati, Lebanon, Libya, Marshall Islands, Central Africal Republic, Micronesia, Palestine, Somalia, South-Sudan, Sudan, Syria, Tuvalu, Yemen, Zimbabwe ** Low Income Developing Countries cover: Least developed countries (LDC), Other low income countries (LIC), Lower middle income countries and territories (LMIC) *** Direct development impacts required, (job creation esp. for women & marginalized groups, economic growth esp. in remote areas, combat climate change / renewable energy, technology transfer, capacity building / knowledge transfer) 13

Business partnership support - Amount of grant A maximum of 200 000 of public (de minimis) aid over the current and the two previous fiscal years Fisheries and aquaculture max. 30 000, primary production of agricultural products max. 15 000, transport sector max. 100 000. No support can be allocated for the coal industry. Or 400 000 aid that is not de minimis. De minimis regulation In principle, the support is de minimis aid. If the applicant finds that the Support is not de minimis aid, reasons for this must be given in the application. Each project is considered individually to determine whether or not it falls under the de minimis regulation. Projects, where impacts are not directed towards the European Economic Area, do not fall under the de minimis regulation: the produced goods or services as a whole are meant for outside the EEA and the Support cannot affect trade or competition between member states.

Business Partnership Support SUPPORTABLE PROJECT PHASES

Business Partnership Support - Supportable project phases Preparatory phase Implementation phase Prefeasibility study, information collection on target country, actors and markets Business associate / partner identification Feasibility study, business plan, environmental and social assessments, pilot and proof of concept projects related to commercial/ merchandised technology or solutions Employee training, e.g. related to improving quality (also vocational training) Max 200 days Capacity building (when changing the current business) Matchmaking Business Partnership Support Note! No financing of actual operations (agreements, devices, HR, buildings, )

Business Partnership Support SUPPORTABLE EXPENSES

Business Partnership Support - Approved expenses In different project phases, approved expenses for the applicant s own personnel and external experts include: travel costs when travelling to the target country or another country relevant to the project accommodation and daily allowance costs while working in the target county or another country relevant to the project applicant s internal labor expenses while working in the target country or another country relevant to the project experts fees regardless of the place where the work is being conducted Services obtained from external experts can be, for example, services related to: target country information and market surveys legal advice on target country laws and regulations

Business Partnership Support - Examples on eligible expenses Eligible expenses Market research General research and research concerning certifications, identification of business opportunities Consultancy work related to legal consulting, operational environment and business licence, business licence fees Training of employees of the upcoming joint venture / subsidiary company or local subcontractors Translation and interpreter fees related to the employee s education in the target country, translation of cooperation agreements Unavoidable taxi fares in target country, car rental, road tolls Necessary medical expenses considering the target country conditions (e.g. malaria, typhoid vaccine), visa fees Auditor s fee related to the BPS, notary fees, payments to the public authorities Matters that affect the decision whether to establish business or not and in which way Non-eligible expenses! General marketing and marketing material expenses Customer negotiations, negotiations related to tenders or details of e.g. loan agreements, certification auditing Preparation of tender documents Training of customers, sales and marketing training Teaching material and instructions for use Parking fees, kilometre allowances, taxi fares in Finland Personal or other unnecessary medical expenses considering the target country conditions Courier service and representation expenses Expenses considered to be normal business activities such as recruitment, implementation and monitoring of strategy

BPS - Working expenses of external experts The working hours of external experts work regardless of the country EUR 910 per day for senior experts/consultants (EUR 113,75 / h) EUR 520 per day for junior experts/consultants (EUR 65 / h) External experts fees can include services related to Target country information Market research Legal advice / consulting Translation and interpretation From BPS s perspective external expert can charge client company over EUR 910/ day, but FP cannot support expenses that exceed EUR 910/ day charge reasonable office fees as far as they are a part of the assignment (phone costs, printing, internet...) *** Work as an contact person, filling out the application forms on behalf of the applicant company etc. Work in several projects at the same time Work as an own employee in one applicant company and simultaneously work as an external consultant for another applicant company

Piloting technology and solutions and proof of concept projects Supportable are piloting technology and solutions and proof of concept projects aiming at long-term business partnerships The following expenses can be supportable in piloting and proof of concept projects: Planning phase expenses (e.g. technical assistance) Local personnel training expenses, e.g. new technology implementation Freight expenses and work expenses related to installation work Case-by-case basis reasonable investments in equipment and construction work if the piloted equipment stays in the ownership of the applicant company or the target country partner for at least as long as the BPS is valid Changes in terms and conditions since January 1, 2015: Previously supportable only piloting technology and solutions. Currently supportable also proof of concept projects for commercialisation of new technology and solutions.

Business Partnership Support APPLICATION PROCESS

Business Partnership Support - Application Process Grant can be applied for any time of the year Application forms are available online Registration date is provided when application with required attachments is submitted to The Ministry for Foreign Affairs Expenses occurred after the registration date can be covered by the grant (i.e. project activities can be implemented with own risk) Application period Finnpartnership processing period Foreign Ministry decision 1.1.-28.2. 1.3.-30.4. May-June 1.3.-30.4. 1.5.-30.6. July-August 1.5.-30.6. 1.7.-31.8. September- October 1.7.-31.8. 1.9.-31.10. November- December 1.9.-31.10. 1.11.-31.12. January- February 1.11.-31.12. 1.1.-28.2. March-April Application process takes approximately 2-4 months

BPS - Payment of support and reporting The support is valid for 24 months from the date that the applicant has been informed of the Discretionary Government Transfer Decision by the Ministry for Foreign Affairs of Finland The support is paid: After the costs have incurred based on the reimbursement request In either 1 or 2 settlements. A final report must be provided together with the reimbursement request

Finnpartnership MATCHMAKING

Matchmaking service - Identifying Business Partnerships For companies in developing countries seeking out new business partners from Finland http://finnpartnership.fi/www/en/matchmaking Finnpartnership channels business partnership initiatives and opportunities from companies in developing countries to Finnish companies Opportunities are added to the Matchmaking Partner search database where they can be explored Also included to Finnpartnership newsletter, shared regionally across Finland etc. Public Partner search profile does not include confidential information Partnership initiatives can also be forwarded directly to interested parties

Matchmaking service - Identifying Business Partnerships Starts from a company s wish to find a new partner for business: Companies searching for long term joint activities: joint ventures, importing / exporting, transfer of technology and know how, etc.. Companies can apply for the Matchmaking service by submitting an application form Form can be downloaded from Finnpartnership s website

www.finnpartnership.fi/matchmaking Matchmaking registration form can be downloaded from Finnpartnership website

Matchmaking service Registration form + documents Matchmaking registration form must be supported with additional documents. The mandatory documents include: Financial information of the last year Business registration certificate Marketing material (e.g. brochure, pictures of product and/or certificates) Companies registered to Matchmaking Service are obliged to observe Code of Conduct of Finnpartnership (included in Matchmaking registration form) N.B. Confidential material (e.g. financial documents) are not published Documents should be send to matchmaking@finnpartnership.fi

Matchmaking service Eligible applicants In order to register for the Matchmaking Service, company must be On a solid financial base Registered in one of the OECD-DAC listed country Established for a minimum one year prior to registration Able to describe clearly what kind of business partner it is looking for Companies from all sectors welcomed except for exclusion list E.g. alcohol, tobacco, gambling, arms related business proposals cannot be registered to Matchmaking service

Matchmaking service Partner search database Business initiatives are published on the internet (Partner search database open for public) Easy to search the profiles with the search engine

Matchmaking service Active MM companies 8/2017 Currently around 350 companies are looking for business partners from Finland 9 Serbian (manufacturing, agri, ICT, services, construction) Registered companies will receive a follow up email once a year asking to provide feedback on the results of the service Passive companies and companies without up-to-date contact details are removed* *In December 2016 there were 355 companies registered to MM service. 59 companies were removed in Feb 2017 to ensure up-to-date information of Partner search database

Matchmaking Countries and sectors Matchmaking service includes business initiatives from ~50 countries

Matchmaking Countries and sectors Most companies registered from the following sectors: Agriculture and food processing Textiles and clothing ICT Business initiatives of Matchmaking registrees can vary from import of fruits all the way to companies interested in Finnish technology

Finnpartnership ADVISORY SERVICES

Advice and guidance Monthly newsletter: information on business opportunities and events related to business partnerships and business opportunities Developing Country Database: provides useful information for the companies aiming to do business in developing countries

Finnish Fund for Industrial Cooperation Ltd. (Finnfund) State-owned development finance institution Risk capital for profitable private projects in developing countries and Russia since 1980 Long-term financial investor with minority stake, EUR 1-10 million - loans, mezzanine financing or equity Market-based interest rate compensation for the risk-taking Investment criteria include profitability, social and environmental responsibility, development impacts and Finnish interest Co-financing with other European development financing institutions and commercial banks. www.finnfund.fi 19.9.2017 37

c/o Finnfund, P.O. Box 391, 00121 Helsinki, Finland tel. +358 9 348 434, fax +358 9 3484 3346 fp@finnpartnership.fi matchmaking@finnpartnership.fi www.finnpartnership.fi