The Africa Enterprise Challenge Fund (AECF), through the Renewable Energy and Climate Technologies (REACT) Sub-Saharan Africa (SSA) programme, is supporting private companies that are promoting the use of renewable energy in Somalia. Funded by the Swedish International Development Authority (Sida), the Renewable Energy and Climate Technologies in Sub-Saharan Africa (REACT SSA) initiative seeks to reduce poverty through a transformational increase in the use of renewable energy by off-grid households.
In the REACT SSA Somalia programme, qualifying companies will receive between US$100,000 and US$1.5 million of pure grants, awarded upon the achievement of mutually agreed milestones. The grants will be given to commercially-viable companies out of which 25 percent will be women owned or managed.
DISCLAIMER: This call for application is not binding upon The AECF and no legal right or obligations arises therefrom. The AECF reserves the right to determine the structure of the selection process, number of short-listed applicants, the right to withdraw from the process, the right to change timetables at any time without notice and reserves the right to withdraw this call for applications at any time, without prior notice and without incurring any liability to indemnify, compensate and/or reimburse any party whatsoever.
The specific objectives of the fund are:
Applicants for the REACT SSA - Somalia grants must meet the following criteria:
● Be private sector enterprises that are aligned with the focus areas. Joint ventures are allowed (including those who had applied earlier but were unsuccessful) . Must be legally registered and physically established in Somalia. Registration at both Federal and State-levels are required. The following documents are mandatory:
· Must be legally registered and physically established in Somalia. Registration at both Federal and State-levels are required.The following documents are mandatory:
ü Valid company registration documents (business license) from both Federal and State-levels.
ü Memorandum and Articles of Association (MEMARTS).
ü Company profile.
ü Audited financial reports for the past 2 years (2019 and 2020).
ü Most recent management accounts of the year 2021.
ü Certified bank statements for all current accounts and loan accounts from 1st January 2021 to date.
ü Valid tax compliance certificate for the past year.
· Must show a commitment to match AECF funding. Matching contributions are required to demonstrate interest and trust from the wider investor community.
· Request funds amount within the stipulated range of US$ 100,000 – US$ 1.5 million. This is a full grant. The Funding must, however, be used for a specific project in Somalia.
· Be compliant with fundamental in-country and international human rights, labour standards, environmental management laws.
· Must NOT be involved in any act of terrorism or support terrorists’ activities.
· Must allow regular due diligence by AECF
The AECF will award grants from US$100,000 to US$1,500,000 to selected qualifying companies under this competition. Funding will be milestone based, where disbursements are based on mutually agreed milestones that have to be delivered/achieved.
Small/pico-scale PV household technologies comprising lighting and phone charging systems.
Small (50wp) to large (100+Wp) solar systems for home and business use.
Mini and micro grids from solar energy
Energy-efficient cooking equipment such as improved cook stoves
Clean fuels like ethanol and biogas for rural and peri urban use
Production and distribution models that support local entrepreneurship within a renewable energy supply chain
Standalone equipment solutions for off-grid productive use including solar pumps and cooling solutions
Large off-grid energy solutions for public and private institutions
Telco-based solutions supporting renewable energy supply chains
Business models that address sustainable e-waste management
Each applicant will be evaluated and scored against the following criteria:
The REACT SSA - Somalia Programme grants will be offered after successfully completing a business plan, financial model, and an elaborate due diligence process.
Applicants are required to complete an application form available HERE. The application must comply with the programme Term Sheet requirements. This includes:
· Outline a business model that is commercially sustainable.
· Indicate the methods for coordination with local administration and participating communities.
· Support a product that is certified in line with global standardization procedures.
· In the case of existing companies, provide a track record of earning revenues and demonstrate sound financial health.
· Demonstrate an understanding of the country context and culture.
· Outline a targeted approach to connect the peri-urban, rural poor and internally displaced persons (where applicable) to affordable and high-quality clean energy products and services.
· Demonstrate how the business model will deliver and sustain social impact in the target markets.
· Demonstrate an alignment to the global and respective national environmental management regulations.
· Providing comprehensive details of market strategy and financial models covering sales targets, projected cost of sales, operational costs and the sources of finance.
· Demonstrate how gender analysis has informed the product/service design and how it will impact the project.
· Demonstrate how matching funds will be sourced and when the cash will be available.
Award winners will be selected on the basis of additionality, value for money and sustainability of their business plans.
Applications must be submitted by the closing date, October 31, 2021, at mid-night (East Africa Time).
For any clarification about the application process, please email: REACTSSASomalia@aecfafrica.org
What are Performance Based Grants?
This is grant funding where disbursements are based on mutually agreed milestones that have to delivered/achieved.
Can a company that is in the process of registration in Somalia still apply for funding?
Financing is applicable for companies that are already legally registered and physically established in Federal Republic of Somalia (FRS) for at least 2 years.
If our company applied for the first call and was not shortlisted, can we apply again?
Yes, companies which were not shortlisted in the previous call are free to apply again. The application form is however different from the first one and can be accessed through the AECF website. All applications will be done online through the link provided.
Which business intervention areas is the programme seeking to address?
The programme targets businesses that can deliver low cost, affordable, quality clean energy products and services that benefit the rural and peri urban poor; especially women.
What type of companies is the programme is seeking to support:
Private sector companies and microfinance institutions that are commercially active in the renewable energy sector in Somalia.
What are the desired socio - economic Impact to be addressed with the programme?
Business models must clearly demonstrate how they deliver and sustain social impact in their target markets. Specifically, this means number of households served by the product; clean power installed; improvements in people's income; inclusivity of women; stimulation of market growth and engagement of SMEs in renewable energy value chains within Somalia.
What additional support is provided other than funding?
- Business-to-business learning across investees through open-source networks, industry associations and other instruments.
- Provision of targeted Technical Assistance (TA), especially to startup companies.
- Business to investor linkage through AECF Connect.
How will the funding be disbursed?
The funding will be milestone based on mutually agreed milestones that have to be delivered/achieved. AECF will require matching contribution of 1: 0.4 (AECF to Company, if male owned/managed company) and 1:0.3 (AECF to Company, if female owned/managed company). Matching funds will be fully in cash.
Why the difference in matching funds between male and female owned/managed companies?
The AECF intends to target more women-owned and women-led companies to promote gender inclusivity in energy access.
May I partner with other organisations to apply?
Yes joint ventures are allowed and must be private sector enterprises that are aligned with the focus areas.
I would like to discuss my proposal with someone from AECF before submitting?
Please contact REACTSSASomalia@aecfafrica.org with your questions and we will be in touch with you. We generally respond to emails within 48 hours during the working week.
Can one organisation submit multiple applications?
Only one application that will be allowed per company.
Does submission of my application guarantee funding?
No, every application will be evaluated and only the best viable projects.
What is additionality?
We recognize that the additionality factor is context (geography, sector, etc.), for this programme our broad check will be against: Faster, Bigger, Wider scope and More Inclusive. A detailed description is provided in the term sheet.
How will we find out if we have been successful?
The AECF Competition Team will contact all applicants and inform them of the outcome of the competition.
What is the word - limit of the application?
This is will be provided in the Business Plan document.
Will there be an opportunity to update information after the closing date?
There will be no opportunity to update the information after the closing date. Applications close on 31st October 2021 at midnight.
Can investment decisions be contested
No, AECF investment decision is final.