Frequently Asked Questions ORIO

FAQ

1. Questions related to the phases of the project

How long does it take from selection until the construction of the project?
In general it will take around 2,5 to 3 years. Timelines depend on the project complexity and include on average:

  • 6 months for the signing of the Grant Arrangement for the development phase;
  • 1 year for studies and deliverables of the development phase;
  • 6 months for appraisal of the development phase and selection for implementation of the project;
  • 2 months for signing of the Grant Arrangement Implementation and Operations & Maintenance
  • Phase;
  • 8 months for the tender process.

Is it possible to surpass the first phase of the project cycle, i.e. project development phase, if the project has already been developed when applying for ORIO support?
The development phase is mandatory. Usually, studies that have already been executed need to be updated. However, if the project has already been fully developed based on recent data, this phase can be very short. For more information on the development, implementation and operation and maintenance phases see also the ORIO Manual and chapter 10-13 of the ORIO Policy Rules.

How long does it take from selection until the signed grant arrangement of the development phase?
The time frame is about 6 months. The input & output plan and monitoring and evaluation plan must be drafted by the applicant after selection of the project. This will result in the grant arrangement for the development phase which must be signed by the applicant and returned to the Netherlands Enterprise Agency.

When does the development phase end?
The final result of the development phase is the detailed project plan, including all the supporting studies. The complete project plan will be assessed against formal requirements and must score ‘satisfactory’ on each criterion. The assessment will be submitted to ACORIO for advice. After the project plan has been assessed, the applicant will be notified in writing of the outcome. If the project is not eligible for a grant for the implementation and operation & maintenance phases, the
applicant will be informed of the reason. Once all the agreements and conditions agreed in the grant arrangement for the development phase and the input & output plan have been met, the decision on whether to approve the project
has been made and the final report has been submitted, all advance payments will be converted into definitive payments. Final settlement will also take place at this time, based on the final invoice. The final payment of at least 10% of the total grant for the development phase (exclusive of unforeseen expenditure) does not depend on the outcome of the Netherlands Enterprise Agency’s decision on approval.

How long does the assessment of the project plan at the end of the development phase take?
The time frame is 4-6 months. This depends, amongst others, on the quality of the project plan submitted and the duration of the round (or rounds) of questions.

When can the actual construction and works start?
When a project has been approved for the implementation and operation & maintenance phases it is eligible for a grant for those phases. If the negotiations on the grant arrangement have resulted in a document that is acceptable to both parties, the Agency will finalise the grant arrangement. According to the procurement plan, the detailed design and tender documents and tender procedure will be carried out, and after that the tender will be opened by the Central Government. After successful completion of the tender a company/ companies will be awarded a contract and the actual construction and works can start.

2. Questions related to finance

For more information on finance and project costs please refer to chapter 13 of the ORIO Policy Rules, the Manual and the table Eligibility Costs.

Is there a minimum and maximum amount for projects costs related to ORIO?
The total project costs are not only the costs of construction of infrastructure. The eligible costs are all studies in the development phase; detailed design, tender documents, procurement and construction in the implementation phase; and the operation and maintenance costs of up to 10 years. These total project costs can be no more than EUR 60 million and no less than EUR 2 million.

Which costs are eligible?
For more details, please refer to the table Eligibility costs in the Manual.

Is it possible that a project consist of several projects?
Yes, in principle a project can consist of several projects as long as the total project costs do not go beyond the maximum total of EUR 60 million.

Can costs which have been made for the development of the project prior to the selection by ORIO be reimbursed?
No, costs that have been incurred for the development before the project has been selected are not reimbursable.

If the project is selected, is the financing of the entire project by ORIO secured?
No, only when a project has been approved for the development phase it is eligible for a grant for that phase. Only with the signed grant arrangement for the development phase the costs of the agreed deliverables of the development phase can be paid in accordance with the agreed payment schedule. After the assessment of the project plan of the development phase, the applicant will be notified in writing of the outcome. The development phase has been concluded. When a project has been approved for the implementation and operation & maintenance phases it is eligible for a grant for those phases and payments will be transferred according to the payment schedule

3. Questions related to procurement and bidding procedures

Is International Competitive Bidding compulsory for all ORIO countries?
No, goods, works and services for the project should be purchased in a transparent and efficient manner in accordance with legislation in the applicant’s country and the OECD Good Procurement Practices for Official Development Assistance. When selecting a supplier of goods and services, quality and sustainability will be taken into account. Compliance with CSR guidelines is a requirement. Before a tender procedure  begins, the relevant draft contract must be submitted to the Netherlands Enterprise Agency for a declaration of no objection. For more information about procurement see also paragraph 7.2 of the ORIO Manual (pdf).

Are direct negotiations a procurement option for ORIO projects?
In applying the OECD's Good Procurement Practices a distinction must be made when procuring goods and services for the project between i) the fact that direct negotiations between the competent authority and the contractor are permitted and ii) the fact that a form of tendering is required to select a contractor. Apart from this distinction, the the Netherlands Enterprise Agency will in all cases see to it that the process is efficient, honest and transparent. In case of direct negotiations, we will ascertain whether the prices are market conform and whether the other terms and conditions are consistent with good commercial practices in the sector in question. Similarly, all project costs and plans will be assessed for usefulness and necessity. See section 13c of the ORIO Policy Rules. For more information on the evaluation criteria see also paragraph 7.2 paragraph of the ORIO Manual (pdf).

Can only Dutch companies be involved with ORIO applications?
No, non-Dutch companies can also be involved in ORIO. For more information about procurement see also paragraph 7.2 of the ORIO Manual (pdf).

4. Questions related to reporting to the Netherlands Enterprise Agency

When do I need to prove the commercial non-viability of the project?
Initially in the application, the applicant must prove that the project is not ‘commercially viable’. When assessing applications, commercial viability will be assessed using the OECD/DAC Ex Ante Guidance for Tied Aid. Applicants must demonstrate that according to the Ex Ante Guidance for Tied Aid the project tends to be commercially non-viable. At this stage it is not necessary to demonstrate commercial non-viability with a detailed cash-flow analysis. However, if projects tend to favour a conclusion of commercial viability, detailed information on this matter must be provided using the cash-flow analysis tool based on provisional figures and indicators.
Later in the project plan of the development phase, the applicant must prove the commercial non-viability with a detailed cash-flow analysis.

Which kind of projects tend to be commercially viable?
Energy projects tend to be commercially viable. For ORIO an energy project is not allowed to be commercially viable within 12 years (even sustainable energy projects). Some of the factors that commercial viability depend on are whether it concerns a Greenfield energy project or whether it links to an existing system (this could be either the extension of an existing grid and/or an energy generation project with 100% uptake onto an existing grid). The latter is more likely to be
commercially viable. It also matters whether the project concerns a rural or an urban project. Also, regarding project definition we follow OECD guidelines (please see our policy regulations for the definition of a project). In the application it is therefore advisable to, amongst others, add information on the state of the grid (% transmission losses) and to what extent upgrading of the grid is part of the project. If the information is available, it is advisable to include information on
the book value of the system in place. In addition, as pro-poor impact is one of the criteria on which we score the project, it is important to be clear about the beneficiaries (rural/urban, income position). All in all, we need quite some information in order for us to be able to determine the commercial viability and the impact of energy projects. Therefore, if you decide to file an ORIO application, it is advisable to include a solid foundation of the commercial non-viability.

5. Other questions

Who decides which countries qualify for ORIO?
This is decided by the Dutch Ministry of Foreign Affairs. The list is based on the partner countries of Dutch Development Cooperation in combination with some selected Least Developed Countries and emerging markets. The Minister will review this list semi-annually.

How does the Netherlands Enterprise Agency handle the different foreign currency exchange rates?
The Netherlands Enterprise Agency makes payments exclusively in Euros. Possible exchange rate differences are not reimbursed by the Agency.

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