Support for Projects in Developing Countries

Siv Ahlberg21.9.2016

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

• In close collaboration with business and public stakeholders

Finnpartnership - in close collaboration with businesses and other public stakeholders

Consultants

Embassies

Sister organisations abroad

Regional development agencies

BUSINESS PARTNERSHIP SUPPORT

Finnpartnership

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

SUPPORTABLE PROJECTSBusiness Partnership Support

Business Partnership Support - Area of Operation

http://www.finnpartnership.fi/developingcountries/

Low Income Developing CountriesUpper Middle Income Developing Countries

Business Partnership Support - Supportable project typesA 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

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

SUPPORT AMOUNTBusiness Partnership Support

** Low Income Developing Countries cover: Least developed countries (LDC), Other low income countries (LIC), Lower middle income countries and territories (LMIC)

Business partnership support - Amount of grant

*** 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)

* Afghanistan, Chad, Comoros, Eritrea, Guinea-Bissau, Haiti, Iraq, Kiribati, Lebanon, Libya, Marshall Islands, Micronesia, Myanmar, Palestine, Somalia, South-Sudan, Sudan, Syria, Togo, Tuvalu, Yemen, Zimbabwe

Fragile states*

Low Income Developing Countries**

Upper Middle Income Developing

Countries ***SMEs and other small organisations 85 % 70 % 50 %

Large companies 85 % 50 % 30 %

NGOs, academies, foundations (essential supporting activities; trainings etc.)

85 % 85 % 85 %

Applican / Coverage Amount

Business partnership support - Amount of grantA 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 .

SUPPORTABLE PROJECT PHASES

Business Partnership Support

Business Partnership

SupportMatchmakin

g

Preparatory phase Implementation phase

Business Partnership Support - Supportable project phases

Capacity building (when changing

the current business)

Pre-feasibility 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

Note! No financing of actual operations

(agreements, devices, HR, buildings, …)

SUPPORTABLE EXPENSESBusiness Partnership Support

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 Non-eligible expenses!Market research General marketing and marketing material expenses

General research and research concerning certifications, identification of business opportunities

Customer negotiations, negotiations related to tenders or details of e.g. loan agreements, certification auditing

Consultancy work related to legal consulting, operational environment and business licence, business licence fees Preparation of tender documents

Training of employees of the upcoming joint venture / subsidiary company or local subcontractors Training of customers, sales and marketing training

Translation and interpreter fees related to the employee’s education in the target country, translation of cooperation agreements

Teaching material and instructions for use

Unavoidable taxi fares in target country, car rental, road tolls Parking fees, kilometre allowances, taxi fares in Finland

Necessary medical expenses considering the target country conditions (e.g. malaria, typhoid vaccine), visa fees

Personal or other unnecessary medical expenses considering the target country conditions

Auditor’s fee related to the BPS, notary fees, payments to the public authorities Courier service and representation expenses

Matters that affect the decision whether to establish business or not and in which way

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.

APPLICATION PROCESSBusiness Partnership Support

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 process takes approximately 2 - 4 months

Application period

Grant decision day

1.1.-28.2. 30.4.1.3.-30.4. 30.6.1.5.-30.6. 31.8.1.7.-31.8. 31.10.

1.9.-31.10. 31.12.1.11.-31.12.

28.2.

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

MATCHMAKINGFinnpartnership

Matchmaking - Identifying Business Partnerships• Finnpartnership channels business partnership

initiatives and opportunities from companies in developing countries to Finnish companies and vice versa

• Opportunities are added to the Matchmaking database (www) where they can be explored

• Partnership initiatives can also be forwarded directly to interested parties

• Focus sectors: ICT, environment, energy, agriculture• Currently over 320 companies are looking for business

partners in the service

Matchmaking - Identifying Business Partnerships• In order to register for the Matchmaking Service, company must be

– in a solid financial base– registered in one of the OECD/DAC listed countries – capable of presenting a concrete and potentially feasible business

proposal – established a year prior to registering

• Matchmaking registration form must be supported with additional documents. The mandatory documents include:– Financial information from last financial year– Business registration certificate– Copies of social and environmental related certificates and audits if

the company possesses one.

Matchmaking - Identifying Business Partnerships• Starts from a company’s wish to

find a new partner for business: 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

www.finnpartnership.fi/matchmaking

Matchmaking - Identifying Business Partnerships• Business initiatives are published

on the internet• Easy to search the profiles with

the search engine• Business partnership initiatives

will also be forwarded directly to eligible companies and partner organisations

• Use of consultants for moreactive matchmaking

www.finnpartnership.fi/partnersearch

www.finnpartnership.fi/partnersearch

Active Matchmaking companies/ country March 2016 – total 279

Active Matchmaking companies / industry March 2016

ADVISORY SERVICESFinnpartnership

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

c/o Finnfund, P.O. Box 391, 00121 Helsinki, Finland

tel. +358 9 348 434, fax +358 9 3484 3346fp@finnpartnership.fi

matchmaking@finnpartnership.fi

www.finnpartnership.fi