PROJECT FACILITATION FUND

TABLE OF CONTENTS

3 SMEDevelopmentApexOverview

4ObjectivesOfTheFund

5 ProjectFacilitationFundinContext

6 ProjectSelectionCriteria

7 FundingGuidelines

8ProductsandServices

9Typesoftransactionscoveredbythefund:

10 FundingTerms

11 FrequentlyAskedQuestions

2

SMME DEVELOPMENT APEX OVERVIEW

The Ministry of Investment, Trade and Industry (MITI) endeavours to create a conducive environment for the promotion of Investment and development of Sustainable Industries and Trade, with a view to diversifying and growing the economy, creating wealth and employment, so that there is prosperity for all.

• MITIenvisionstocontributetothe

attainmentofVision2026whereBotswana’seconomywillbediversifiedandprivatesectorledwithsustainableandviableopportunities.

• TheMinistryisprioritisingentrepreneurshipandtheadvancementofSmall,MicroandMedium-sizedEnterprises(SMMEs)asthecatalysttoachievingeconomicgrowthanddevelopmentaswellaseconomicdiversification.

• Toeffectivelycontributetowardsattainmentofthisvision,theMinistryhasrefocuseditsimplementationapproachandinitiativesthrougha

3prongedApexmodel;theSMMEDevelopment,InvestmentPromotionandExportDevelopment.

• TheobjectiveoftheSMMEDevelopmentApexistoensureamorecoordinatedapproachtowardsSMMEDevelopment,InvestmentPromotionandExportDevelopment.

• OneofthecoreinitiativesundertheSMMEdevelopmentApexistodevelopandprovidepre-projectfundingforhighimpactprojectsintheSMMEspaceonagrantbasis.

• TheProjectFacilitationFundisanoutcomeofthecollaborationbetweenCEDAandLEAtoachievetheSMMEDevelopmentApex.

3

4

Objectives Of The Fund

The aim of the fund is to facilitate high impact start-up or existing businesses; to develop and submit bankable business proposals to prospective financiers such as CEDA or commercial banks

To this end the specific objectives of the fund shall be to:

• TocontributetotheGovernment`scommitmenttoimplementingprogressive‘DoingBusinessReforms”byinsulatingtheSMMEsectorfromimpedimentsofthelegalandregulatoryenvironment

• Toreducetheregulatoryburdenandtransactioncostsofprojectstoensurethattheircostsstructureremainsmanageable

• Tode-riskprojectsandfacilitateactivitiesrequiredtoprogressprojectsthroughtheirdevelopmentstagesup

tobankability

• Toengenderamoreagile‘gotomarket’strategyonthepartofprojectsbyincreasingtheirabsorptivecapacityforregulatoryrequirements

• Toensurethatbothstart-upsandexistingenterprisesareplacedonamoresustainableandcompetitivepedestalinthemarket

5

Project Facilitation Fund In Context

Project Facilitation

High Impact Projects

Project FundingClient

CommitmentServices to be

Funded

ProjectFacilitationisdefinedastheactivitiesrequiredtoprogressprojectsthroughtheirdevelopmentstagesuptobankability.

• ThefinancingwilltargethighImpactprojects.

• Keyprioritysectorswillbe;Agro-processing,Manufacturing&Tourism

• TheFundwillalsoconsiderothersectorsoftheeconomywithpotentialtocreateemploymentanddiversifytheeconomy.

• Fundingwillbeonagrant-loanbasis.

• TheassessmentofprojectswillbecarriedoutbyawellresourcedProjectPreparationTeamconstitutedbyLEA&CEDA

• Todemonstratecommitment,eligibleentrepreneurswillberequiredtocontributetoensureitssustenance

• Thefundisthusbasedonagrant-loancontributoryarrangement,withclientexpectedtocontribute50%ofthecostoutlayinformofaloanorpaidupcapitalwherefeasible.

• EnvironmentalImpactAssessment

• EnvironmentalManagementPlans

• SoilTests

• SpecializedLicenses

• Product&ProcessCertification

6

Project Selection Criteria

1 Loan finance

2 Equity

2 Start-Up &Existing Business

3 Citizen Owned

4 Must be an SMME

5 Registered LEA Client

6 National Priorities

7 Sector/Strategic Fit

Project Selection Criteria

1 Development Impact

8 High Impact

7

Funding Guidelines-high level Process

Register Assess Project Funding CEDAFinance

• RegisterwithLEA

• Submitproposalmeetingallrequirementsforthefund

• IfsubmittedatCEDA,CEDAtorecommendtheclienttoLEAforassistance

• LEAassessesapplicationforcompliancetocriterion.

• LEArecommendsapplicationforfundingtoCEDA

• CEDAAssessesRecommendationfromLEA

• ClientpayscontributionasprescribedtoCEDA

• CEDApaysserviceprovidersdirectlyperthetimeline

• LEAmonitorsimplementationofservice

• FinalpaymentbyCEDAonrecommendationfromLEA

• CEDAassessestheBusinessproposal

• Recommend/orotherwiseprojectforfundingbasedontheoutcomeoftheProjectFundingInterventions.

• FundingisnotlimitedtoCEDAonly,clientfreetoseekfundingfromotherfinanciers

Satisfaction of the of the criterion does not guarantee funding. CEDA will use its discretion to further determine eligibility as and when required.

8

Products and Services

• Fundingwillcover,butnotlimitedtothefollowingpre-projectfundinginitiatives:

• EnvironmentImpactAssessments

• ProductTestingandProcessCertification

• DueDiligence/ValuationReport

• SoilandWaterTests

• BoreholeTestPumpReport

• StructuralReports

9

Types of transactions covered by the fund:

• Start-upsorgreenfields.

• Earlystageinvesting.

• Expansioncapital.

• JointVentures

• Mergersandacquisitions.

• Restructuringandturnarounds

• Managementbuyoutsandbuy-ins

10

Funding Terms

• FundingLimits:TheminimumsizeofthefundingisP5,000andwiththemaximumamountofP200000tobedisbursedcontingentuponsizeandnatureoftheprojectpertheselectioncriterion.

• AnyamountoverP200000willbecontributedbytheapplicant

• Thefundwillbebasedonagrant-loancontributoryarrangement,withclientexpectedtocontribute50%ofthecostoutlayintheformofaloanorpaidupcapitalwherefeasible.

• InterestRate:Aninterestrateof5%perannumwillbechargedontheloans.

Repayment Period: The repayment periods for loans in months are follows;

• LoansfromP5,000.00toP50,000,000willnotexceed12months• LoansfromP50,001willnotexceed60months.• Graceperiod:thiswillnotexceed48monthsandnointerestwouldaccrueduringthe

graceperiod.

11

Frequently Asked Questions

1. What is the Project Facilitation Fund and why was it set up?TheProjectFacilitationFundisacollaborationbetweenCEDAandLEA.ProjectFacilitationistheactivitiesrequiredtoprogressprojectsthroughitsstagestoimprovebankability.TheFundprovidesafacilitythatismeanttoassistcitizenswithpre-projectfundingforhighimpactprojectsintheSMMEspaceonagrant-loancontributorybasis.

2. How will the grant –loan contributory scheme work?Theprojectfundingisbasedonagrant-loancontributoryagreement.Theclientwillbeexpectedtocontribute50%oftheoutlayintheformofaloanorpaidupcapitalwherefeasible.

Example• CostofEnvironmentalImpactassessmentis

P100,000.00.• TheFundprovidesaloanfacilityof

P50,000.00• TheFundprovidesagrantofP50,000.00• Aninterestrateof5%perannumwillbe

chargedonallloans

3. How do I apply for funding• RegistertobecomeaLEAclient• Submityourexistingbusinessplanwhichyou

couldnotimplementduetolackoffundstocarryoutthepre-fundingworks/services

• LEAwillassessyourbusinessplanandrouteapplicationstoCEDAforfurtherassessmentandpossiblefunding.

4. What kind of businesses are eligible for funding?

Thefollowingtransactionswillbeeligibleforfunding:

• Start-ups• Earlystageinvesting• Expansions

• Jointventures• Mergersandacquisitions• Restructuringandturn-arounds

5. Which sectors are covered by the FundPrioritywillbegiventoAgro-processing,ManufacturingandTourism,howeverothersectorswillbeconsiderediftheymeetthehighimpactcriteria.

6. Which services will the Fund cover?Thefundwillcoverthefollowingservices:• EnvironmentImpactAssessment• ProducttestingandProcessCertification• Duediligenceandvaluations• Soilandwatertests• BoreholeTestPumpReport• Structuralreports

7. What are the payment terms of the loan facility?LoansfromP5,000.00toP50,000.00willnotexceed12monthsLoansfromP50,001.00willnotexceed60monthsAninterestrateof5%perannumwillbechargedonallloans

8. When my business proposal is complete do I submit my application to CEDA for funding?Notnecessarily,theclientisfreetoseekfundingwithanyinstitutionoftheirchoice.ShouldtheywishtouseCEDAtofundtheirprojecttheyarefreetoapply.However,theapplicationwillfollowthenormalCEDAapplicationprocess.”

9. Where can I get more information on the Fund?ContactthenearestLEAorCEDAbranchformoreinformation.

PROJECT FACILITATION FUND

LOCAL ENTERPRISE AUTHORITY (HEAD OFFICE)

PrivateBag191GaboroneBotswana

Physical Address:2ndFloor,BlockA,Lot50676FairgroundsOfficeParkGaboroneBotswana

Tel: +267-3644000Fax: +267-3644001Tol Free: 0800155155

The Citizen Entrepreneurial Development Agency (CEDA)

PrivateBag00504GaboroneBotswana

Physical Address:FourThirtySquare,Plot54350PGMatanteRoadCBD,Gaborone

Tel: +267-3170895Fax: +267-3170896