Financing for
Feasibility Studies
Feasibility Studies
At GEMM, we empower small and medium-sized companies within the EU to drive private sector development in developing and transition countries. That is why we seek partnerships to help our members.
As an initiative by DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, and with funding from the German Ministry for Economic Cooperation and Development (BMZ), GEMM aims to assist its members in finding financial support for feasibility studies that foster the introduction of new technology, processes, and services in these regions.
Program Objective
We believe private investment can bring positive change. Our program supports EU SMEs with investment intentions in developing countries by financing feasibility studies. This helps them explore realistic investment opportunities.
Who is Eligible for Submission of a Proposal
If your company is located and operating within the EU, with an annual turnover of up to EUR 500 million, and you have firm investment intentions, you can make proposals for feasibility studies. However, the feasibility study’s success is a prerequisite for consideration.
What is Co-Financed?
DEG provides co-financing for feasibility studies that prepare realistic private sector investments. These investments should focus on implementing new technologies, supporting the alignment of technologies and processes, and introducing services in developing countries. Examples of eligible measures include:
DEG is a German development finance institution that provides financial and technical assistance to private sector projects in developing countries.
Requirements for Submission
For your proposal to be considered for co-financing, it must meet the following requirements:
- Development Relevance: The private sector investment proposal should align with the overall concept of German development cooperation in the target country.
- Plausible Implementation and Profitability: The feasibility study must demonstrate the investment’s potential for successful implementation and micro-economic relevance.
- Commensurate Costs: The costs for the feasibility study must be proportionate to the planned private-sector commitment.
- Capability and Competence: Your company should have the ability, both professionally and financially, to utilize the feasibility study results and produce an internationally competitive investment proposal. Supporting documentation, such as references or balance sheets, may be required.
- Qualified Consultancy Firms: External consultancy firms with relevant expertise may be utilized for conducting analyses.
- Responsibility for Implementation: The proposing company is responsible for orderly implementing the feasibility study and its results.
- No Public Funding Duplication: The feasibility study must not be sponsored by public investment approvals or duplicate public funding.
Volume of Commitment
DEG commits to providing 50% of the costs for each feasibility study, up to a maximum of EUR 200,000. Upon completing the feasibility study, DEG will enter into a performance contract with your company to compile the study.
Timeline and Disbursement
The feasibility study should be completed within 12 months. Disbursements are made in two tranches based on performance milestones:
- The first disbursement is made pro rata at the beginning of the performance.
- The second disbursement is made pro rata upon completion of the feasibility study after DEG approves the study’s quality and clear documentation of costs.
DEG retains the right to assess the appropriateness of costs incurred during the implementation, and the co-financing amount may be adjusted if the proposed investment is deemed unfeasible.
Guidelines for Presenting the Study Proposal
To submit a study proposal for consideration, ensure it includes the following information:
- Description of the Investment: Provide a detailed description of the proposed private-sector investment, including estimated costs, financing plan, and an overview of profitability and significant risks.
- Development Impact: Describe the potential development impact on the partner country resulting from the investment.
- Feasibility Study Terms of Reference: Present a detailed proposal for financing the feasibility study, including itemized costs for external and internal services.
- Future Project Contract Awarding: Include information about the contract awarding process for the overall project, specifying the tender agent for competitive bidding procedures or the contractual partner for unsolicited bids.
- Financial Statements: Provide your company’s annual financial statements for the last three years.
At GEMM, we promote private sector investments that positively impact developing and transition countries. We look forward to receiving your proposals and working together to create a brighter future. Should you have any questions or need further information, please don’t hesitate to contact us.