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WHAT IS IT ABOUT?

The Local Competitiveness Facility (LCF) is a matched grant facility to support private business partnerships focusing on value chain integration. NGOs and Training and Vocational Centres (TVETs) can also be a partner under certain conditions.

The main outcome of LCF is to fund innovative economic partnership projects to enhance pro-poor local economic development (LED). The businesses benefitting from LCF should make an economic impact, contributing to economic growth of the District and improved quality of life of its citizens.

 

Main objectives

  1. LCF will fund projects that will make a positive LED impact. LCF funded projects should have an impact on a part of a value chain in a region, and should create jobs for people from that region.
    LCF will fund projects that make a real pro-poor impact, which means that jobs should be created for poor people.
  2. LCF will fund partnerships between micro, small, medium and large companies or cooperatives. Only companies or cooperatives that are in a partnership with other cooperatives can apply to LCF.
  3. LCF will fund innovative project ideas in the area of value chain development to mitigate cost and risk barriers that inhibit development of innovative private sector partnerships.

 

How does it work? 

The LCF is operated on a competitive basis to ensure that those interventions that are consistent with the objectives of LCF and the District are prioritized. 

Four Districts were selected to pilot LCF: Nyagatare, Gisagara, Gakenke and Rutsiro. Below, you can find a short description of the possibilities for funding that LCF offers. Please find more detailed information in the application guidelines

 

The following funding is available under LCF

Financing windows Minimum and maximum value to apply from LCF Own Contribution from project partners (cash or in-kind
Window1 Between 5 000 000 and 10 000 000 Rwf Min 10% own contribution of total project value 
Window2 Between 10 000 000 and 40 000 000 RwF Min 30% own contribution of total project value 

For window 1, the value applicants can apply for from LCF should be between 5 000 000 RwF and 10 000 000 RwF. The project partners should provide a minimum of 10% of the total project value of the project

For window 2, the value applicants can apply for from LCF should be between 10 000 000 RwF and 40 000 000 RwF. The project partners should provide a minimum of 30% of the total project value of the project.

EXAMPLE: the total project value is 20 000 000 RwF. The project partners should minimum provide 6 000 000 RwF (30% of 20 000 000 RwF) themselves and 14 000 000 RwF can be requested from LCF.

 

Which economic sectors is LCF supporting? 

LCF will only fund projects under the following priority sectors:

  • Agri-business (agro-processing): both agriculture and livestock;
  • Handcrafts (as per National Hand Craft Strategic plan): basketry and mats, embroidery and woven products, textiles, ceramics and pottery, leather (products), wood products, jewelry (products) and welding;
  • Tourism: accommodation, development and operationalization of touristic sites, cultural villages and sites, guides, travel agents, water sports;
  • ICT: radio, television, cellular phones, computer and network hardware and software, satellite systems, as well as services associated with them (videoconferencing, e-learning, MEIS, mobile money, online registration services, internet services)
  • Distribution and services sector: in partnership with any of the above sectors; companies in the distribution or services sector alone cannot apply, it should be distribution and services companies as part of a value-chain (e.g. a transport company partnering with an agri-business company)

 

What are eligible partnerships to apply for LCF? 

Financing windows Eligible partnership
Window 1

Two possibilities:

  • A medium or large company partners with micro, small companies or cooperatives. The applicant company should be a formal company, and the other companies should be informal.
  • An NGO partners with micro, small companies or cooperativesThe NGO is the applicant organisation; the companies/cooperatives are informal.
    Note that there should be at least 2 companies/cooperatives part of the partnership. Meaning that the partnership should consist of at least the 3 members of the partnership: 1 NGO (Applicant) + partner 1 (informal company/cooperative) + partner 2 (informal company/cooperative)

 

Notes:

  • There must be at least two businesses (company/cooperative) per partnership
  • TVET centres (public or private) can be part of the partnership as a member (not as applicant organisation) and be located anywhere in Rwanda. They can only partner with a partnership of at least 2 businesses (company/cooperative)
  • Medium or large formal companies and NGOs cannot take part as members, but only as applicants
  • NGOs should be registered in Rwanda and have operations in the pilot Districts. Proof should be provided.
  • An NGO can be part of more than one application, but not more than three applications. If an NGO applies for more than one project, its capacity to actually manage more than one project will be assessed during due diligence phase.
  • NGOs participating in partnership are entitled at maximum 10% of the project costs as overhead expenses compensation if they act as project managers to support informal companies.
Window 2

Two possibilities:

  • Formal micro companies and/or small companies and/or cooperatives establish a partnership together
  • Large/medium companies partner with small or micro enterprises/cooperatives

 

Notes:

  • All companies should be formal
  • There must be at least two companies per partnership
  • TVET centres (public or private) can be part of the partnership as a member (not as applicant organisation) and be located anywhere in Rwanda. They can only partner with a partnership of at least 2 businesses (company/cooperative)
  • NGOs cannot be part of Window 2

For further information: please consult the application guidelines. This document can also be consulted in the Publications section of this website.

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