Identified theme for SCF Round 5

We are seeking applicants with innovative solutions in the following theme:

Climate and Environmentally Sustainable Aspects:

Agriculture continues to be the mainstay of the Koshi province and provides livelihood to almost three fourth of the province’s population.

While production and processing of maize, cardamom, vegetables and dairy products are being scaled up for the economic development of the province, the integration of climatic aspects continues to be neglected. With lack of awareness of low carbon practices and limited technical knowledge on usage of clean energy system and their adoption into agriculture value chains, most production and processing functions continue to depend on fossil fuels and firewood. This has resulted in high carbon emission and continuity of practices that are not sustainable. Besides dependence on fossil fuels, the use of plastics and non-biodegradable materials is also rampant in the agricultural sector. Another constraint that has been preventing the adoption of climate friendly practices is the management of agricultural and agro-industry waste with very limited focus on recycling of waste. This points to the need to integrate climate aspects into the processing functions within the four value chains. Any interventions in this regard will therefore need to focus on activities that minimize the carbon footprint and ensure environmental sustainability.

SCF Round 5 is seeking service providers and agribusinesses from the private sector that have innovative, market-driven climate and environmentally sustainable solutions for the value-added dairy, maize, cardamom and vegetable products in the Koshi Province.

The fund will provide financial and technical support towards increasing access to services and attracting/developing service providers that can help expand agricultural activities as well as market for agricultural products of the Koshi Province. Innovation, with disruptive potential, will be of prime importance for the challenge fund. NAMDP will, among others, connect with existing start-up support mechanisms to incentivize and launch disruptive innovation. The CF would look at proposals that address the following (covered in further detail under guiding principles of the information pack:

• respond to market challenges.
• are innovative, and additional to what would have happened without Sahaj’s support.
• are inclusive, target women, marginalized groups, and other disadvantaged groups (DAGs).
• will be sustainable after Sahaj’s funding and have the potential to scale up.
• will contribute costs/funds to the proposed solution.

Specifically, the following service providers and agribusinesses are encouraged to apply:

• Carbon/energy audit firms
• Renewable energy firms
• Sustainable packaging firms
• Companies that use by-products as raw materials.
• Waste management companies
• Agribusinesses willing to adopt climate smart practices

Objectives of the Challenge Fund

• Contribute to increasing employment and value-add in the agricultural sectors (maize, dairy, cardamom and vegetable) of the Koshi Province in Nepal.
• Solicit innovative ideas to address some of the most challenging problems and obstacles identified in Branding, Packaging and Distribution channel services for products in the four value chains.
• Catalyze service providers within the four value chains to provide innovative and market-driven solutions to improve the branding, packaging, and distribution channel of agricultural products of the Koshi province and to expand their reach on a country wide scale.
• Address challenges where disruptive, ‘break-from-the-past’ type innovations are considered key to move the needle in service provision which can solve persistent bottlenecks in the private sector functioning in branding, packaging, and distribution channel of agri-products in the Koshi province and thereby contribute to a higher level of commercialization and economic value-add in the selected agri-sectors.

Guiding Principles

• Competitive process
• Innovation
• Cost sharing
• Scalability
• Transparency
• Additionality
• Competition
• Reciprocity
• Impact
• Gender Equality and Social Inclusion (GESI)
• Green growth, climate change

Support modalities

The majority of the SCF support is expected to be provided through grants. Where relevant, the fund may consider providing technical assistance. In cases where established companies want to embark on a disruptive innovation, a conditional grant (risk-sharing) or co-investment (matching grant) may be considered as well. Due to the nature of disruptive innovation, often done by new companies, no loan guarantees are expected to be provided, as these would imply repayment obligations soon after the disbursement (bank lending is generally considered less suitable for early-stage business initiatives).

Cost sharing

While the nature of the SCF grant is primarily to support disruptive innovation, it is expected that partners (grantees) contribute to the projects and innovations they propose. The overall rate of cost sharing is variable, and a function of the stage of the company or partner SCF chooses to work with. In general, the more established (and cash-positive) a company is, the higher the expectation of cost sharing.

Process and Timeline

Budget, Funding and Duration

The largest single award is not expected to exceed NPR. 5 million, although exceptions may be approved by the SCF Committee. SCF’s support for investment in machinery and equipment will be capped at 30% of the total amount. Beyond this amount investment in machinery and equipment will have to be done by the applicants themselves. Since SCF prioritizes service provision and technical support, this will cover a large proportion of the investment. Applicants with the lowest percentage of expected investment in machinery and equipments from SCF will be prioritized. 

Eligibility criteria

Applicants

• Nepali Companies (start-ups, young service providers or a separate team or division from an existing company) that intend to develop a new business line with innovative new branding, packaging, and distribution channel ideas.
• Start-ups that are seeking to expand and have a minimum feasible product and a strong business plan.

Criteria

Service Providers:

• Operating in the selected or related field for at least 1 year or have a credible business idea and plan to form a business.
• That have a minimum viable product, and solid business model and are looking to accelerate.
• That are financially sustainable (i.e. cash flow positive) or demonstrate a credible business plan/projections towards financial sustainability over the next three to five years.
• In case of an existing business, be registered at the company register and tax office and up to date on their registrations and tax duties.
• Able to demonstrate internal procedures and systems to ensure that the grant can be used transparently and efficiently.
• Be able to demonstrate their capacity to provide the funds budgeted for their own contribution.