Frequently asked questions regarding SDG 7 Results
What is the definition of the target market: ‘poor people’?
SDG 7 Results intends to support reaching out to the customer-strata that are “harder to reach than business as usual operation of the applicant allows”. These are poor people and those living in remote areas. SDG 7 Results defines the main target customer segment as people with an income level of no more than $3.20 per capita per day (World Bank poverty index). Applicants will have to make plausible, supported by the business plan, that the main segment of its targeted customers under the proposal is at an income level below $3.20 per capita per day.
What will be the main indicator for the projects under the facility?
Our main indicator is the number of connections made, i.e. the number of households that have gained access to renewable energy services as offered by the project. In parallel, additional indicators, requirements and safeguards are required in relation to Corporate Social Responsibility, quality, warranties and service levels you are providing.
Is the facility open to capitalising risk-mitigation instruments? For example, Credit Guarantee Funds or Financing Institutions funding decentralised clean energy entrepreneurs or end-beneficiaries?
SDG 7 Results offers subsidies to NGOs and companies (including financial institutions) to target new and more difficult to reach markets. FIs and NGOs (aggregators) will need to work with local entrepreneurs to reach these markets that would otherwise remain underserved. Applicants will need to prove that without the subsidy these markets would not be reached.
Can one proposal target several countries?
In case the application includes more countries, the target market has to be both geographically coherent and logically have similar obstacles and conditions.
Applicants are expected to pre-finance their activities. How can I arrange this? What are the possibilities?
Applicants are expected to be financially stable and to demonstrate their ability to pre-finance the project activities. Pre-finance of the project is to be arranged by the applicant, for example through financing from a (local) bank or investor, the company’s own capital or angel investors and institutions. It is however not required to pre-finance the full project period. During the implementation RVO will accept intermediate claims (with certain minimum claim size) for verification and payment.
Are new innovations eligible or only proven successful models?
Yes, innovations are eligible. However, please note that 1) new products added to the portfolio once the project has started need to be certified prior to acceptance under the activity, and 2) new products should at least have the same service levels as the products from the original proposals.
If a company is already operating in the target market, is my project eligible?
This depends on the product and the consumer segment that the current company is servicing. SDG 7 Results main target customer segment are people with an income level of no more than $3.20 per capita per day (World Bank poverty index) that is currently underserved.
In the project business plan, RVO will review the expanding of the ‘Business as Usual’ (BAU) market into a territory or market that is more difficult to reach. The subsidy is aimed at helping project owners to overcome the initial hurdles to either set up your distribution system in that area, or pilot and test and implement a payment system or a consumer financing system for these consumers. If the activity is BAU, then there is no need for a subsidy.
Can partners come from another country than the focus country?
Yes, if partners can demonstrate relevant experience in decentralised renewable energy services in the region they can come from other countries than the project country.
When will RVO pay out the subsidy?
During the implementation period of the project, RVO can accept multiple claims (of a certain minimum claim size) for verification and payment. Payments are based on a) an official claim from the project applicant, b) the report of the Independent Verification Agent.
How is the payment based-for-results arranged?
Under the SDG 7 Results facility, verification is conducted by an independent verification agent (IVA). Its function is to ensure that payments are done only for verified results by certifying that the claimed results have been physically delivered and that pre-agreed standards of service have been achieved.
The grant award decisions will include a verification protocol with the requirements regarding the verification of results.
To uphold the quality of the data collection, grant recipients are obliged to use a digital application made available by RVO to record the results (at household level). A maximum total of 8 verification requests can be done over the course of the project. Upon completion of the verification, the IVA will submit its Verification Report to RVO including a recommendation on whether payment by RVO to the service provider is warranted and the incentive amount that is justified. RVO subsequently examines and evaluates the Verification Report and disburses payment of the approved incentive amount. Payment should take place within 12 weeks upon receiving the request for verification.