Application Process to Award SECF Support

SECF application has two-stage process to encourage genuine applicants to secure financial incentive for RE projects.

In the first phase,  an application for a Concept Note of a potential RE  project is requested via online portal which will allow an applicant to present the project concept providing Applicants data, Project data, targeted beneficiaries, initial technical and economic data of the project along with financial position of the applicant. The Concept notes received are shortlisted by an Initial screening committee based on the eligibility, technical feasibility, financial viability, and impact of the project.

In the second phase, all shortlisted concept notes are invited for full application via online portal which is more detailed information of the project; such as feasibility report that includes details on objectives, project implementation, future sustainability, financial Information and budgeting analysis of the project to evaluate for investment. The full application will have thorough due diligence on technical feasibility, social impact, risk assessment and financial viability of the proposed project. After the due diligence, the application will then be evaluated  by an Independent Evaluation Panel (IEP) on institutions’ capacity and financial soundness to manage the proposed project in a sustainable way to ensure that the evaluations are done  with independency and transparently. All the applications that are sound, potential for sustainability beyond SECF support and meet the objective of SECF will then be recommended to Investment committee (IC) for approval. The IC then reviews all recommended applications and approves the project that are most promising and  ensure value for money.

Appropriate steps are required to ensure adequate responses from potential institutions applying for the challenge fund. Following picture depicts the SECF application process flow:

 

Eligible Institutions

Institutions that are eligible to apply for the SECF support are as follows:

  1. Any Nepali-based private sector company or consortium of companies (including but not limited to renewable energy (RE) project developers and investors, energy companies, Commercial & Industrial enterprises, Banks & Financial Institutions, cooperatives, aggregated residential groups, etc.) interested in developing RE projects that provide RE to off-takers (consumers) in either the public or private sector
  2. Joint Ventures between Nepali- and foreign-based renewable project developers and investors interested in developing RE projects that provide RE to off-takers (consumers) in either the public or private sector, registered in Nepal with PAN/VAT registration
  3. Special Purpose Vehicles established for Public-Partner Partnerships interested in developing RE projects that provide RE to off-takers (consumers) in either the public or private sector.

Governance Structure of SECF

Appropriate Governance structure is very important to manage a Challenge Fund. While adopting SECF process, a proper and transparent screening process in each of the SECF governance level will be followed so that adequate transparency and accountability can be ensured at each level.

The Initial screening committee is responsible to evaluate and shortlist all the concept note under four major key areas will be consider for shortlisting

Evaluation Criteria Weightage
Eligibility Mandatory – No scoring
Technical Feasibility of the project 35
Financial feasibility and Investment/Co-funding from applicants 35
Desired benefits and Impact 30

All concept notes must get a minimum of 60 marks to be eligible for shortlisting for full application. Once the concept note is shortlisted, the concerned applicant institution will be informed and encouraged to apply full application within a month.

The Committee consists of the following office-bearers that represent different institutions:

No. Institution Member Role
1 Division Chief of the relevant division of AEPC Coordinator
2 Section Chief of relevant section of AEPC Member
3 Nominated expert from the relevant programme Member
4 Representative of MoEWRI (Technical) Member
5 Fund Manager of SECF Member

All complete full applications received online will go to Due Diligence (DD) which will be conducted by SECF Secretariate. Only full applications with successful DD will be evaluated by the Independent Evaluation Panel (IEP). The main objective of IEP is to appraise the proposals in terms of technical and financial appropriateness of the proposed costs and viability gap, as well as the applicant’s institutional capacity and financial soundness to manage the proposed project in a sustainable way.

The IEP is an independent group of experts selected through a public call. The panel will be selected from the fields relevant to the fund (i.e. BFI experts, technology providers, RE technology experts, consultants, etc.). The roster of all approved panel experts’ will be maintained at the Secretariat. For each panel meeting, the Fund Manager in close consultation with IC chair and ED of AEPC will select at least 3 experts as IEP for a particular lot of the proposals received based on the nature of the proposal and proposed technology.

The IEP will use predefined criteria to evaluate the project proposals by awarding appropriate scores. While evaluating the Full application following six major key areas will be consider for evaluating

Evaluation Criteria Weightage
Alignment with the objective of the programme Mandatory – No scoring
Technical Feasibility of the project 40
Social impact of the project 20
Risk assessment/monitoring 10
Financial Evaluation 30

All the full applications must get a minimum of 70 marks to be recommended with justifications for further approval to the Investment Committee (IC) for approval. The current Investment committee of CREF will work as an Investment committee for SECF too. The members in the current CREF investment committee consists of the following members:

No. Institution Member Role
1 Joint Secretary, Ministry of Energy, Water Resources and Irrigation Chairperson
2 Executive Director, AEPC Member
3 Representative from Ministry of Finance, Gazetted II Class Member
4 Chief Executive Officer Nepal Bankers Association Member
5 One Representative nominated by the development partners Member
6 One Private Sector Representative from RE production, distribution or management institution nominated by the ministry Member
7 CREF Secretariat Head Member Secretary