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1. Program Description FSCP-GIAF-ETHIOPIA GRANT APPLICATION GUIDE 1. Program Description Cultivating New Frontiers in Agriculture (CNFA) is implementing the 34-month Farm Service Center Program (FSCP) in partnership with the GIZ Green Innovation Centres for the Agriculture and Food Sector in Ethiopia (GIAF-Ethiopia). The project will establish five private retail input supply stores known as Farm Service Centers (FSCs). These Ethiopian-owned and operated enterprises are designed to improve the productivity, food security and incomes of smallholder famers in the Arsi zone of Ethiopia by linking them to high-quality agricultural inputs and extension services. The project is strategically aligned to build the role of the private sector and is connected to CNFA’s other initiatives in Ethiopia, which also work in the development of FSCs. In addition, and in line with the larger GIAF-Ethiopia initiatives the project will establish FSCs in the following five woredas recommended by the Federal Ministry of Agriculture and Natural Resources and the Oromia Bureau of Agriculture - Hitosa, Lude-Hitosa, Arsi-Robe, Digelu-Tijo and Tiyo. The project will also focus on up-scaling of innovations and best practices for wheat and faba bean production. FSCP-GIAF-Ethiopia is a follow-on to the successful Commercial Farm Service Program, which piloted CNFA’s Farm Service Center (FSC) Model in Ethiopia for the first time. CNFA’s Farm Service Center Model is a market-based, private sector model that applies matching grants and training methodology to establish small and medium-sized enterprises (SMEs) that deliver farm supplies and services. FSCs are located in larger townships and serve as rural development centers that meet the needs of private farmers in their communities. These centers provide a range of agricultural inputs (crop protection materials, fertilizers and seeds), machinery services, veterinary services and products, marketing assistance for agricultural outputs, training and information, and access to credit. FSCP-GIAF-Ethiopia’s distinguishing feature is a focus on the adoption of innovative technologies and a focus, which will impact over 25,000 smallholders over the life of the project. Expected Impact $160,000 in private sector investment leveraged $375,000 in FSC sales 25,000 FSC clients served 1,666 smallholder farmers trained 30 new jobs created Partner - Deutche Gesellschaft fur Internationale Zusammenarbeit (GIZ) GmbH. FSC Model Overview Evaluation, FSC Market selection, FSC FSC-led Outreach construction, FSC staff verification design and inventory trainings and campaign staffing and training survey approval of stocking demos site visitation FSC grants *** FINAL AWARD IS DETERMINED BY FSCP-GIAF-ETHIOPIA AND SUBJECT TO AVAILABLE FUNDING*** Page | 1 2. Grant Application and Award Process The core of the implementation strategy is a competitive business plan evaluation process to select Ethiopian entrepreneurs and enterprises for matching grant funding. CNFA is establishing three FSCs in Hitosa, Tiyo and Arsi Robe Woredas. In addition to these three FSCs, CNFA is planning to establish two Farm Service Centers in Lode Hitosa and Digelu Tijo Woreda’s. Grant size of around €30,000 will be awarded. All grant applications and awards will include a matching requirement of 1:1. Business Approval Site visits Grant Review and plan and to CNFA Application to highest award and scoring of grant HQ and on air scoring signing of applications agreement GIZ no applicants agreements preparation objection FSCP- GIAF-Ethiopia anticipates that the process from application to project award (signing of the Grant Agreement) will take approximately 72 working days for all grants. Estimated Process by step Comments Working Days Applicants will have adequate time to submit Grant application on air 20 detailed proposal A team of three FSCP-GIAF-Ethiopia staff members will score the proposals using a Review and scoring of standard evaluation form. 10 applications Highest scoring applications will be prioritized for site visits Highest scoring applicants will be visited Site visit to qualified applicants Informal interviews of key potential staff will be and approval of HQ and GIZ conducted 15 shortlisted applicants for business Initial Environmental Assessment will be development conducted Applicants will develop their detail business plan Business plan development including detail work plan and budget 20 expenditure plan CNFA Program Manager reviews and approves projects for sending to CNFA, or provides comments/suggestions regarding the changes Presentation to CNFA HQ and GIZ CNFA-HQ reviews the proposal and approves its 3 presentation to GIZ, or provides comments/suggestions for changes into the proposal until the presentation Proposals are presented to GIZ. GIZ objects or GIZ review and “no objection” provides “no objection” for award and signing 3 Media Event in Addis Ababa to celebrate grant Grant signing 1 awards Total Number of Days 72 *** FINAL AWARD IS DETERMINED BY FSCP-GIAF-ETHIOPIA AND SUBJECT TO AVAILABLE FUNDING*** Page | 2 Applicants will be invited to submit an application that provides information regarding: The proposed sub-grant activity (how the FSC will be established and run); Necessary legal certifications; Proposed budget; Proposed impacts on the FSC as a business; Proposed impacts on the farming community near the FSC; Target beneficiaries/customers; Proposed potential FSC staffing plan; Summary of the applicant’s existing management structure; Summary of the applicant’s organizational profile; and Previous sub-grants management experience) and financial capacity. Applications will be reviewed by the Grant Review Committee (see section below). Shortlisted applicants will be visited and the top two enterprises will work with CNFA to develop a full FSC business plan. FSC business plans will be approved by the Program Manager, CNFA headquarters and GIZ (see section below). The grant award process will end once the project has identified the two best projects and these applicants and CNFA have signed grant agreements. At this stage, all available grant funds will be committed. Only at this stage will final rejection letters be sent to applicants who will not be invited to establish FSCs. During the period of the FSC sub-grants CNFA will conduct performance monitoring, reporting and compliance reviews. In addition to the disbursement of grant funds, CNFA will also provide extensive trainings and support to FSC sub-grantees. Upon successful completion of the sub-grant term (up to 12 months), CNFA anticipates that assets will be transferred to the permanent ownership of the sub- grantee. 3. Types and Amounts of Sub-grants The sub-grant fund will disburse a total of €60,000 to establish two Farm Service Centers. Single awards will be around €30,000. Entrepreneurs who participate in this sub-grant funding are required to contribute minimum matching contributions of 1:1 to ensure ownership. Required Targeted Estimated Size Type of Sub-grant Activity Matching Recipients of Sub-grant Ratio Farm Service Center Private enterprises, establishment to supply entrepreneurs, cooperative 1:1 €30,000 agricultural inputs and other unions, primary cooperatives, services to smallholder farmers and commercial farmers *** FINAL AWARD IS DETERMINED BY FSCP-GIAF-ETHIOPIA AND SUBJECT TO AVAILABLE FUNDING*** Page | 3 4. Eligibility Requirements General eligibility requirements are provided below to give potential applicants guidance regarding the type of projects FSCP-GIAF-Ethiopia seeks to fund and the key requirements that must be met to qualify for funding consideration. In order to be eligible for grant assistance from FSCP-GIAF-Ethiopia the applicant must meet all the requirments listed below. Applications that do not meet minimum eligibility requirements will be rejected. Legally/Financially the applicant: 1. Must be legally registered Ethiopian entity (PLC, Cooperative, sole proprietorship, etc) and include proof of registration and/or provide a copy of business license; 2. Must show proof of their ability to match grant funds on a 1:1 basis: o Applicants may demonstrate match by using new capital investment and/or leveraging commercial finance; o Cost share includes cash, commercial finance or revenue from operations, so long as it is verifiable from the recipient’s records, is necessary and reasonable for project objectives, is not included as contribution for any other GIZ-funded project and is not included in previous donor contributed assets; 3. Must demonstrate sound financial and administrative practices to: o Safeguard assets; o Protect against fraud, waste, and abuse; and o Support the achievement of the CNFA’s goals and objectives; 4. Must have good have evidence of good past financial performance; 5. Must have a transparent booking system (using Ethiopian Accounting standards); 6. Must be willing to undertake independent financial reviews or audits as requested; 7. Must provide legal proof of owning a land/house of rental lease of at least ten years – this is to be used to house the FSC; 8. Must be committed to adherence to high ethical business standards, including transparency in business dealings and record keeping; 9. Must be willing and able to complete all relevant certifications; 10. Must have bank account in the business’s name– this can to be used for the FSC; 11. Must not be involved in any prohibited activities and must not have existing defaults *** FINAL AWARD IS DETERMINED BY FSCP-GIAF-ETHIOPIA AND SUBJECT TO AVAILABLE
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