Luxembourg Private Sector Support Facility – Burkina Faso

The available funds amount to 2 million euros to subsidize viable projects distributed among 3 windows. The window-based model allows for the selection of companies based on their size (revenue, number of employees, etc.) through a competitive process, with projects that best contribute to the overall objectives of the AGREF program.

This call for projects aims to open three windows.

The presented business models must demonstrate how they produce and maintain a social impact on their target markets. Companies must formulate their strategy in a way that shows they align with the principles of the green economy and promote tangible outcomes in terms of sustainable development in their target communities and market.

Progress made in achieving these objectives will be measured through:

• Value of additional investments mobilized by the company for the implementation of its project.
• Growth in the number of additional unique customers.
• Attrition rate.
• Growth in the number of units of products sold (specify the type of product).
• Growth in valorized waste.
• Growth in revenue.
• Growth in additional direct jobs created.
• Responsible business practices.

To be eligible for funding, applicant private companies must meet the following criteria:

• Be a legally registered private company (SME/SMI) physically established in Burkina Faso.
• Be a private sector company engaged in the field of the green economy. Business consortiums are allowed if complementarity is objectively demonstrated.
• Comply with the fundamental laws and regulations in force in the country, including tax and social compliance laws.
• Be able to demonstrate its capacity to mobilize the required co-financing in accordance with the submitted project, within the limits of the project’s duration.
• Comply with the fundamentals of national and international human rights, labor standards, environmental management laws, and principles of sustainable development.
• To have been active for at least two (2) accounting periods at the time of application and to provide the financial statements that attest to this.
• Not to be associated with activities prohibited by the government of Burkina Faso, such as terrorism, money laundering, or on a list prohibiting trade with certain companies (IFC (International Finance Corporation), USAID, UN, EU (European Union), and any other network), in accordance with the resolutions of the United Nations Security Council issued under Chapter VII of the United Nations Charter.
• Not to use chemical inputs, including plant protection products and fertilizers.
• Not to have received more than 10 million in grants (Window 1), 50 million (Window 2), 85 million (Window 3).

Each candidate will be evaluated and scored based on the following criteria:

• Present a commercially viable business model. The proposal must be technically sound and align with the principles of the green economy.
• Specify the number of new skilled jobs expected.
• Specify how performance is measured and evaluated, with all agreed indicators, objectives, and milestones.
• Provide satisfactory references. If possible, testimonials on past performance should be submitted.
• Demonstrate a history of revenue from their users for existing products/services/a proven success in at least one market.
• Demonstrate good financial health, including two years of audited financial statements, established financial management processes and procedures, and dedicated financial management staff.
• Demonstrate investment relationships/potential access to matching funds (based on the ratio of 50% grant that will not exceed 30% of the average revenue of the last two years and 50% for the match).
• Demonstrate how the matching funds will be made available, detailing when the funds will be available.
• Demonstrate the management team’s ability to implement the proposed activity/project (adequate internal resources/capabilities).
• Demonstrate how the business model produces/maintains a social impact on target markets.
• In their business proposals, companies must describe their environmental impact and their waste management policies and procedures, and demonstrate compliance with international and national environmental management regulations. Candidates must provide an overview of potential waste in the value and supply chains and explain how they intend to manage it. They must indicate the added value or gain of their proposal compared to traditional practice.
• Demonstrate consideration of gender in the project.
• Identify the risks and threats to project implementation and the methods that would be used to mitigate these risks.
• Justify the additionality of the grant requested.

The goal is to identify and subsidize viable greening projects that have a real and demonstrable social impact (job creation), it is therefore decided to resort to competitive financing for companies “that wish to green their production process, manage waste efficiently… This model allows for the selection of companies through a competitive process whose projects best contribute to achieving the overall objectives of the AGREF program within the limits of available funds.

Beyond co-financing, the program will provide targeted technical assistance to selected companies. The aim is to address operational gaps that companies may encounter in order to make them more efficient in achieving the set impact objectives. This support may take the form of inter-company learning through participation in specific training, networking, experience sharing, and other tools. In particular, for the training of unskilled youth in skilled jobs, stakeholders may seek support from the Benkadi Baara BKF/301 program.

Investment principles:

• Demand from the private sector: LuxDev is demand-driven, market-sensitive, and leverages the initiative and implementation capacity of the private sector to achieve favorable economic and social outcomes for the population.
• High-impact models: funded projects must demonstrate that they have a significant social impact on key expected socioeconomic impact indicators.
• Systemic change: funded projects must illustrate the potential for economic and social impact, beyond the immediate impact of the project, which will change market functioning.
• Addressing market failures or demonstrating added value: LuxDev finances projects that are constrained by market failures for access to financing, within the context of the specific markets in which they must be implemented.
• Risk sharing: LuxDev shares risks with private enterprises. The underlying principle is that the beneficiaries of the funds bear more risk than LuxDev. In practice, beneficiary companies contribute financially to the funded projects/activities, as this maximizes resource mobilization and the commitment of candidates to successful implementation. Financial contributions from companies can take the form of equity (contributions from external capital or shareholders), commercial or concessional loans, and/or grants from other funding sources.
• Competition: The funding application process (grants) of LuxDev and the associated conditions are made public to ensure that all eligible organizations have equal chances to compete for available funds and to guarantee transparency.
• Portfolio approach: LuxDev seeks to build a diversified investment portfolio in terms of risk, geographical distribution, sectoral distribution, and economic, social, and commercial impact.
• Do no harm: funded projects must consider potential conflict and risk factors to minimize potential harm and avoid negative impacts socially, economically, and environmentally.
• Business sustainability: funded projects must demonstrate innovation and potential for sustainability.

If selected, candidates must commit to:

• Collaborate with LuxDev to finalize the steps of the contract and the Key Performance Indicators. The step indicators are agreed upon with LuxDev before the contract is signed.
• Share data, technical and financial, including performance against the indicators. All data will be treated confidentially, unless otherwise agreed in advance.
• Commit to gathering and disbursing the total co-financing planned.
• Gather, analyze, and share project insights with LuxDev.
• Draft and provide reports in accordance with the agreed schedules and requirements.
• Participate in project reviews organized by LuxDev.
• Ensure that the company’s financial data and other management systems are accessible to teams mandated by LuxDev for audit purposes at the specified times.

The selection process will follow the steps below:

1. Opening of the call for proposals and online submission of projects: candidates will submit their project proposals on a web platform prepared by LuxDev. The project proposal will include details about the project that will be requested by the platform.
2. “Ongoing” pre-selection: LuxDev (with the support of external experts) will periodically conduct an objective analysis of the applications received until the funds are exhausted, but not later than November 26, 2024. The aim of this stage is to evaluate all eligible applications and pre-select the best for the next stage.
3. Pitch Day: The best applications will be invited to participate in a Project Presentation Day in Ouagadougou.
4. In-Depth Due Diligence: The BKF/023 project team will conduct final due diligence checks and prepare a note including business, financial, and impact risks, social and environmental risks – political risks and others – KYC checks.
5. Final selection: The BKF/023 will periodically make a final selection decision on the retained applications and inform headquarters to proceed with the notification.

Candidates must fill out an online application form available on the site:

Click on the apply button at the top of the page or click here

Objectives of the webinar

• The webinar will remind participants of the 2-step process to submit a complete file before November 26, 2024.

• The webinar will answer all questions in order to clarify the completion of the online form.

This event will provide the opportunity to exchange and therefore inform participants in more detail about the expectations of the AGREF Program.

To participate in this webinar, which will be preceded by the official launch of the call for projects, please first register via the registration form.

Thank you for circulating this announcement! We look forward to seeing many of you at this event.