Business Plan Competition – Grants from returned funds

Overview

CARE International in Caucasus (CARE) in consortium with the Regional Development Association (RDA) and the International School of Economics at TSU (ISET) is launching a new call for strengthening the cooperatives already supported by the project “Cooperation for Rural Prosperity in Georgia”. This project is funded by the European Union (EU) and its European Neighbourhood Programme for Agriculture and Rural Development (ENPARD-Georgia), and the Austrian Development Agency.

“Cooperation for Rural Prosperity in Georgia” is under implementation in 9 municipalities of West Georgia, specifically: Senaki, Khobi, Abasha, Martivili, Lanchkhuti, Ozurgeti, Chokhatauri, Tsageri and Lentekhi. It aims to increase the efficiency of the agricultural production and income levels of farmers by promoting financially sustainable models of business-oriented smallholder farmer groups. Since the beginning of the project, 51 agricultural cooperatives have received financial and intensive technical support to ensure the sustainable operation of their businesses.

The financial support provided throughout project implementation is being returned by the beneficiary cooperatives. The logic behind this repayment system is to reduce dependency, increase sustainability, and finally, prepare the cooperatives for repaying investments following a fixed schedule - which would make them more ready to engage with the banking sector afterwards - and to establish a model that can be scaled-up.

This call is possible thanks to the funds returned by the beneficiary cooperatives. The cooperatives will continue returning the cost of the investments provided by the project, which will allow the establishment of a Fund addressed to provide financial support to agricultural cooperatives. This Fund will continue operation after the end of the project, allowing beneficiary cooperatives accessing to additional support in the future.

Purpose of the call

This call is addressed to support project beneficiaries in the implementation of actions in the following fields:

(I) Strengthening the value chain and adding value to production, including actions on marketing
(II) Innovations in the production system. This measure includes, and it’s not restricted to, the support to biological production systems
(III) Diversification, including investments related to agro and ecotourism
(IV) Improvement of effectiveness of current businesses. This measure includes, and it’s not restricted to, the support to working capital

Grants

The size of grants is in the range between 8,000 and 15,000 Euro. In the case of joint applications involving 3 or more cooperatives (being all of them project beneficiaries), the maximum grant size is 40,000 Euro. The amount should be indicated in Georgian lari in the applications. These grant amounts are excluding the co-finance from the applicant side, which should equal or exceed 20% of the full investment. In other words, the full investment is consisting of: grant (maximum of 80%) and co-finance from cooperative (minimum of 20%).

Note: The thresholds will be considered taking into account the exchange rate at the time of submission.

Grants can’t be used for purchasing land. Applications requesting support for working capital involving i) salaries and payment to physical persons (for instance, for the purchase of raw materials for processing purposes) or ii) expenses on utilities (as water and electricity, among others) won’t be allowed.

It should be ensured by the applicant that grant and cooperative contribution will be completely invested before 30th November 2017. The project won’t accept applications proposing a timeframe exceeding this date.

The current grant will be included in the existing agreement between the cooperative and the project through an amendment. The new grant amount will be added to an upgraded repayment schedule, agreed between the project and the applicant, which will include the previous and current grant.

Eligibility and co-finance:

This is a restricted call to which only project beneficiaries - agricultural cooperatives already supported by the project – can apply. Besides, the applicant has to fulfil the following requirements:

Completion of contribution (cash and in-kind) as established in the existing agreement between the applicant and the project, and return of funds as per the agreed schedule, by the time the call is closed.

Registration as agricultural cooperative, not having any warning from ACDA, and having all corresponding documentation (charter, share registration, etc.) properly in place and according to the current situation in the cooperative. In the case of joint applications, the union of cooperatives should be registered as established in the current legislation on cooperatives. Although this registration won’t be compulsory at the time the application is submitted it will be required in the case the joint application is selected to be granted. The cooperatives involved in the application should ensure the registration is taking place within the timeframe proposed by the project and described in these guidelines.

The applicant must contribute at least 20% in cash to the full investment. Co-finance from the applicant should be transferred to CARE’s bank account and CARE will procure the required investments.

Application and selection process

Applicants should submit electronic version of the business plan applications by Wednesday 27th September at 6 pm to the following email address: tkakulia@rda.ge

The business plan application form and these guidelines are available on the following sites: www.rda.org.ge; http://care-caucasus.org.ge/. Applicants who fail to submit their applications within the given timeframe, will be automatically excluded from the call.

Besides the business plan application form, it’s requested the following information:

Minutes of the general meeting, verifying approval of the grant application, and confirming the mobilization of funds and its source, for applicant’s co-finance, signed by all members
Letter of guarantee from bank or financial institution in case of requiring a loan for the fulfillment of the co-finance to the investment
Letter of consent from relevant local agencies and private persons if the investment project affects interests of a state organization or a private person external to the cooperative
Confirmation documents on the property and/or use of new buildings and assets not presented in previous competitions and not provided by the project

The business plans applications will be assessed following the scoring system indicated in the form. Other criteria that will be taken into account in the selection of proposals are the following:

Number of members in the cooperative
Percentage of women among cooperative members
Involvement of several cooperatives, being all of them project beneficiaries
Previous grant history

The assessment will take place till the end of September 2017. In the 1st week of October, the project will contact the selected applicants and will communicate the need of improvements when necessary. The new agreements will be signed by 15th October and the full investment, both from project and from cooperative side, shall be completed by 30th November 2017.

Note: The information provided by the applicant is for internal use, for the sole purpose of the grant selection, and will be treated as strictly confidential.

Application Form (GEO) >>