Program of the Federal Ministry of Finance for the by elizabethberkley


									Program of the Federal Ministry of Finance for the purpose of supporting the identification and
       preparation of projects within the framework of the Austrian soft loan scheme
                        ("Project Preparatory Program Soft Loan“)
                                      Version 1.1.2009

1.     Objective of the Program

1.     The program aims to support developing countries in identifying and preparing projects that serve
       the sustainable economic and social development in these countries. To this effect, the program
       offers financial support for project identifying or preparatory measures in conjunction with
       undertakings in primarily developing countries according to the designations by OECD-DAC and
       defined as Austrian soft loan countries that are of special interest in terms of economic and
       developmental policies. The program shall apply to those sectors in which projects may in
       principle be financed through Austrian soft loans.

2.     To this effect, the Republic of Austria (represented by the Federal Ministry of Finance-hereinafter
       referred to as MoF) provides grants, depending upon the requirements of the program at hand, the
       availability of budgetary resources for the intended use set forth under paragraph 1, in conformity
       with the Export Financing Guarantees Act of 1981, as amended, that may qualify as Austrian
       Official Development Assistance.

3.     The handling of the program is carried out within the existing Austrian soft loan scheme based
       upon an agreement with Oesterreichische Kontrollbank Aktiengesellschaft (hereinafter referred to
       as „OeKB“) as clearing agent.

4.     Under the soft loan scheme, MoF decides on the applications for grants prepared by OeKB. A
       legal claim on the part of the applicant to the provision of a grant by MoF cannot be derived. If
       the requirements for a grant in conformity with paragraphs1 and 2 are met, the applicant enters
       into a contract about the grant under private law.

    target countries classified in categories 3 - 7 by the OECD; (for a list of countries, refer to
    attachment 2)

2.   Object of the Program

1.   Within the framework of the program, project identifying or preparatory measures in conjunction
     with project undertakings abroad – which may be financed through Austrian soft loans – can be
     supported through grants by MoF. Along these lines, measures can be classified either as
     measures related to pre-investment decision technical cooperation or as measures of procurement-
     related technical assistance.

     In particular, the following measures and related costs may be supported:

     a)   Identification, assessment/review/evaluation, development and preparation of project
          undertakings, including pilot project undertakings

     b)   Pre-feasibility and feasibility studies

     c)   Expert opinions related to specific issues as well as other consulting services

     d)   Other specific services serving the preparation of project undertakings abroad.

     The grants by the Republic of Austria are effected within the Austrian soft loan scheme and may
     be granted in conjunction with services provided by an Austrian company or untied.

2.   Services the rendering of which has already commenced upon application, and services that have
     already obtained commitment to being supported arising from other programs or on the part of
     third parties are not eligible for support.
     Furthermore, services are not eligible that have already been rendered in a comparable way,
     hence constituting no new services.

3.   Clearing Agent

     OeKB acts as the clearing agent for the program under consideration. As stipulated in the
     corresponding agreement, OeKB’s duties include in particular the following items:

     a)    Servicing and handling the program, applying the care of a prudent businessman

     b)    Acknowledging receipt of manifestations of interest and applications for grants for project
           preparatory measures

     c)    Reviewing the grant eligibility requirements, preparing them for decision-making purposes
           on the part of MoF and handling these decisions

     d)    Where required, conducting the business acitivity on behalf and in the name of the project
           executing organisation.

4.   Service Recipients

     Service recipients within the meaning and purview of this program are always the project
     executing organisations in charge of the preparation and commissioning of the project
     undertakings in the respective developing country. This applies also in the case of a competitive
     bidding procedure and a business activity conduct by OeKB on behalf and in the name of the
     project executing organisation.

5.   Service Providers

1.   Service providers within the meaning of the program under consideration are in particular:

     a)   Providers of services, technological solutions and other facilities

     b)   Consultants, in the narrow sense

     c)   Other service providers that are able to complete viable projects or contribute to these.

2.   Service providers in accordance with tiret a) through c) have to render their services
     independently of and detached from conclusions of supply contracts.

3.   Companies being engaged as general consultants by the service recipient are not eligible for
     providing services within the framework of the program.

6.   Grant Eligibility Criteria

1.   The foreign undertaking has a reasonable chance of being realized subsequently.

2.   The foreign undertaking has a well-founded chance of being financed subsequently via an
     Austrian soft loan.

3.   The service sought relating to the foreign undertaking shall contribute to the promotion of
     sustainable economic development in the recipient country as well as to the realization of
     economic policy interests. Along these dimensions, the potential for subsequent Austrian exports
     of goods and services has to be considered as well.

4.   The costs of the program-related services have to reflect near-market costs and be in due
     proportion to the intended project.

5.   The potential service provider must
     -     have the ability, in economic terms, to successfully carry out the service,
     -     possess the required technical and engineering skills and
     -     credibly prove evidence of above mentioned skills and of his performance ability through

6.   The service must not have commenced yet upon application for grant. The existence of
     preparatory works does not constitute reason for rejection; however, their existence has to be
     made known in advance.

7.   The potential service provider has to disclose to OeKB all mandates to carry out services, bids or
     applications for providing services, both current ones and those within the past five years, within
     the framework of the respective sector as well as with respect of the specific recipient country.

8.   In case the contract value with the potential service provider exceeds € 40,000, at least three
     independent bids have to be solicited, the costs qualifying for support are assessed in such case as
     a function of the best qualified bid.

7.   Type, Scope and Amount of Support

1.   As a rule, grants for costs incurred related to preparatory measures, in pursuance of section 2, are
     to be provided as non-repayable grants up to a maximum amount of € 90,000 per individual
     undertaking. Costs may only be recognized in conjunction with pertinent program measures in
     conformity with section 2, based upon an in-depth breakdown, a financing requirement schedule
     as well as on detailed accounting upon completion of services rendered.

2.   A monetary contribution on the part of the service recipient will be determined on a case-by-case
     basis, taking account of the type of the respective measure; said contribution should account for at
     least 20 % of the aggregate amount of the services.

8.   Procedure

1.   A manifestation of interest and application for the execution and grant support of the project
     identifying or preparatory measures as set forth under section 2 may be filed by the project
     executing organisation („applicant“), designated under section 4, in writing, with OeKB as the
     clearing agent, forwarding a copy to MoF (for contacts, refer to attachment 1), enclosing the
     following data:

     a)    Type, size, purpose, financing requirements, sponsor, operator of the intended project to
           which the service arising from the program is related

     b)    Type, scope, objective, costs of the service applied for under the program

     c)    Presentation of the project executing organisation itself (technical competence, size, track
           record, financial adequacy, financial standing)

     d)    Potential service providers or service providers involved so far.

     Upon request of either OeKB or MoF, further documentation is to be furnished, if need be.

     Based upon the documentation supplied, OeKB assesses the grant eligibility criteria and
     subsequently makes a go/no-go recommendation to MoF.

2.   The decision as to providing the grant is incumbent on MoF and is taken on the basis of the
     recommendation made on the part of OeKB. OeKB shall inform the applicant of the decision in

     In the event of a partial or entire rejection of the application, OeKB has to point out to the
     applicant (project executing organisation), in writing, the decisive reasons leading to this decision.

     The decision on the part of MoF has to be implemented within a given period of time and may be
     made contingent upon a cut-off date for the completion of the service in question.

3.   Provision of a promise/grant does not constitute a claim to financing an undertaking abroad,
     arising from the specific program preparatory measure, under the Austrian soft loan scheme.

4.   Reporting requirements

     The recipient of the grant as well as the service provider are obliged to immediately report to
     MoF, via OeKB, the following circumstances:

     a)    The application for/provision of additional grants for the same undertaking at/by other

     b)    The modification, discontinuation or impossibility of achieving the intended purpose of the

     c)    Opening of an insolvency proceeding involving assets of the service provider.

9.   Payment

1.   The project executing organisation in the respective developing country shall be the beneficiary.

2.   The payment of the grant will be effected by MoF via OeKB directly to the service provider, in
     tranches to be stipulated in individual agreements (e.g., down payment (30%), a maximum of 2
     interim tranches, last payment after final accounting). As a rule, the payment is effected in line
     with the degree of evidenced completion of services /upon interim reporting and on the condition
     that the underlying criteria and general conditions have not materially changed.

     The service provider may be requested to put up a security for his rendering of services (e.g.,
     bank guarantee in the amount of down payment).

10. Evidence of Proper Use

1.   The proper use of grants has to be substantiated vis-à-vis OeKB within one month from
     completing the supported services, at the very latest, through a written declaration, by presenting
     receipts/documents as well as tangible results. OeKB is obliged to scrutinize the proper
     accounting for the resources granted.

2.   The results of the services rendered (studies, concepts, in-depth analyses, etc.) remain in the
     ownership of the recipient of the services; however, they will be supplied to MoF. The Ministry
     may assert an unrestricted, free-of-charge claim to using the results.

11. Suspension and Reclaim of the Grant

    The extinction of a claim to the payment of already committed grants, as well as the reclaim of
    grants already paid out will be contemplated in particular in the cases stated below:

   a)     Default on the part of the project executing organisation with respect of its pro-rata share

   b)     Failure to furnish or late supplying of requested reports, evidence, and information

   c)     Failure to report ad-hoc incidents and material changes that may considerably delay or
          render impossible the execution of the measure supported

   d)     Opening of an insolvency proceeding involving the assets of the service provider prior to
          proper completion of the service supported

   e)     Entire, partial misuse or delayed use of grants

   f)     Unjust enrichment, obtaining the grant via inaccurate or incomplete information

   g)     Corruption or warranted suspicion of corruption.

12. Performance Review

    Upon completion of the tenor of the program and upon conclusion of the project preparatory
    measures supported by the Ministry, the MoF will conduct a performance review and evaluation
    as to the attainment of the program-related objectives sought.

13. Entry into force and tenor of the program

    This program shall take effect upon its promulgation as of January 1, 2009, remaining in force for
    until December 31, 2009. Decisions about the provision of grants within the program may be
    passed until this date. An extension of the program may be considered depending upon the
    availability of budgetary resources.

                                                                        Attachment 1


Oesterreichische Kontrollbank AG

Project- and Environmental Analyses      Werner Schmied

                                         Christian Hanzlik

Credit Department                        Dieter Nell

                                         Ilse Czermak

                                         Margarete Biedermann

                                         Verena Valduga

Federal Ministry of Finance              Silvia Maca

                                         Christoph Kreutler

                                                            Attachment 2

              Austrian Soft Loan Countries
             that are eligible for the program

                  (as at December 17, 2008)

   REGION                   COUNTRY
                    Albania                         6
                    Bosnia and Herzegovina          7
Western Balkans
                    Kosovo                          7
                    Macedonia                       5
                    Algeria                         3
                    Egypt                           4
 North Africa /
                    Jordan                          5
  Middle East
                    Morocco                         3
                    Tunisia                         3
                    Dominican Republic              5
 Central and
                    El Salvador                     4
South America
                    Peru                            3
                    India                           3
Southeast Asia      Thailand                        3
                    Vietnam                         4
                    Azerbaijan                      5
Other countries
                    Namibia                         3


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