BPF – Call for proposals

1) What are the maturity criteria for projects eligible for BPF co-funding?

The BPF can co-finance projects at different levels of maturity: feasibility study, design of a prototype or MVP, launch of a pilot project on a new market, structuring of production channels, deployment of an innovative solution on a larger scale, etc. To get inspired, explore our portfolio and discover examples of projects we already co-financed.

2) What’s the reference date for the three-year existence criterion of the lead partner? 

The lead partner must have been registered for more than three years on the application submission date.

3) How is the annual turnover calculated to determine the eligibility of the leading partner? 

The annual turnover considered for determining the eligibility of the lead partner corresponds to the average annual turnover achieved over the three fiscal years preceding the year of the submission of the project proposal.

To qualify for the maximum amount of co-financing from the BPF, the lead partner must have an average annual turnover of at least 500,000 EUR over the past three years.
However, businesses with lower turnovers can also apply, but their turnover (average over three years) must be three times higher than the co-financing amount requested. For example: if an enterprise has an average turnover of EUR 300,000 over the previous 3 years, the co-financing amount requested must not exceed EUR 100,000.

4) Are there any restrictions on where the lead partner’s employees can live?

There are no restrictions on the place of residence of employees of the lead partner, who may be based outside European Union and/or in developing countries.

5) What type of employment contract should the lead partner’s employees have? 

The employees of the lead partner must have an employment contract that complies with national legislation. Interns, contractors, or freelancers are not considered employees.

6) In practical terms, what does it mean for the lead partner to “comply with the “de minimis” regulation?

The “de minimis” regulation is part of the legislative framework adopted by the European Union to regulate the granting of state aids to businesses, aiming to minimize distortion of competition within the internal market. “De minimis” aid, whose amount does not exceed a certain ceiling, can be granted by Member States without prior notification or authorization. They are regulated by Regulation 2023/2831 of December 13, 2023.

Taking into account this regulation and the national regulation of Luxemburg, an enterprise can only receive up to EUR 200,000 of “de minimis” public aid over a period of 3 consecutive fiscal years. Aid received under other regulations than the “de minimis” regulation is not counted towards these ceilings.

In case the project is accepted and before the co-financing agreement is signed, the lead partner must provide proof, by submitting a declaration on honor, that the total amount of aid received by the company does not exceed this ceiling of EUR 200,000.

Applicants are advised to verify the amount of “de minimis” aid related to their company with the Ministry of Economy of their country of establishment or any other authority authorized to provide this information.

7) Is R&D aid considered in the calculation of the amount of “de minimis” aid? 

Aid granted for R&D projects is not included in the “de minimis” calculation.

8) As a lead partner, can I benefit from other public funding if I receive co-funding from the BPF? 

It is possible to accumulate “de minimis” aid received, up to the ceiling of €200,000 over three rolling financial years. You may also receive public support for other purposes, which are not included in this ceiling.

9) Do any eligibility conditions apply to the local partner?

No, the local partner must simply be a public or private entity, university, research institute or civil society player established in a developing country, where the project will be implemented.

10) Can branches of European/Northern enterprises be considered as local partners?

It is possible to consider branches of European/Northern enterprises as local partners. However, it is highly recommended to prioritize other types of local partners.

11) Can a joint venture between the lead partner and a local company be considered a local partner?

It is possible to consider a joint venture between the lead partner and a local enterprise as local partner for BPF projects.

12) Can I submit a project in several countries?

Yes, it is possible to submit a project taking place in several developing countries.

13) Are there any exclusion criteria?

In addition to the eligibility criteria, the following exclusion criteria apply:

• The partners are responsible or involved in environmental degradation, human rights violations, forced labor, or child labor;
• The partners and the solution do present a significant risk for people and the land;
• The partners are subject to any ongoing criminal proceedings related to fraud, corruption, money laundering, terrorism, human trafficking or any other legal obligations, and do not engage in discrimination based on race, color, age, sex, gender identity and expression, ethnic or national origin, disability, pregnancy, religion, political affiliation, union membership, veteran status, protected genetic information, or marital status in hiring and employment practices, including wages, promotions, rewards, and access to training;
• The partners are subject to sanctions by the European Union (EU) and their representatives (owners or executives) are not listed on the EU sanctions list;
• The partners have not fulfilled their obligations relating to the payment of taxes and social security contribution in accordance with the legal provisions of the country in which there are established;
• The partners do not comply with the United Nations Guiding Principles on Business and Human Rights and with the OECD Guiding Principles on Human rights (chapter IV) for themselves and throughout their entire value chain;
• The partners are bankrupt, insolvent, are not being wound up, have not ceased operations, are not having their affairs administered by the courts, have not entered into an arrangement with creditors and are not in any analogous situation arising from a similar procedure provided for in national legislation or regulations.
• The partners imply operations in the following sectors: weapons, mining, alcohol, gambling, tobacco, pornography, extractive industries, and non-renewable energy.

14) What is the recommended duration of a project?

The projects supported should have a duration of one to two years.

15) How do I fill in the application form?

The application form is concise but needs to be thorough enough to clearly outline the partners involved, the nature of the partnership, and the project idea, all while aligning with the BPF selection criteria.

16) How do you define innovation?

Innovation is about creating, finding, adapting, and applying new ideas, approaches, products, services or methods to solve existing problems or meet unmet needs. It is not limited to the creation of something completely new, but also encompasses the significant and creative modification of what already exists or its use in a new context. Also, innovation can provide a solution that had no local demand because it was not known, but which meets a real need in terms of impact. To be considered “innovative”, the solution must be sufficiently distinct from other products, services or approaches already on the market in the country in question. This may mean distinctions in the design features of the product/service to better meet needs, the distribution model, the customer segment (i.e. offering new products or services to previously underserved populations), the business model (who pays and who benefits, the price), the resilience of the product or service (anticipating future developments).

17) Is there a preferred impact theme?

The BPF is open to any type of positive environmental and social impact, as long as the project contributes to achieving the Sustainable Development Goals (SDGs) by proposing an innovative solution to a clearly identified development challenge. Partners should endeavor to identify the number of people affected by an identified problem, the scale, trend and geography of the problem, the root causes of the problem and how it affects people’s living conditions in concrete terms. They should then clearly indicate what impact the project is expected to have, for example in terms of job creation, access to basic infrastructure and services, social services, goods and services relating to quality of life, etc.

18) How is additionality defined?

In the context of BPF, additionality marks a positive contribution that would not have been made without co-funding and generally characterizes projects that take bold risks to provide innovative and impactful solutions. To assess additionality, the selection committee will take the following aspects into account:

• The limited ability of the partners to finance the project themselves within a reasonable timeframe or to obtain similar support from a commercial investor;
• The impact of the co-financing on the project’s results, including not only the existence of results but also their scale, quality and speed of achievement;
• Demonstration that the results of the project would not have been possible without the co-financing, and that they are therefore greater, of better quality or achieved more quickly thanks to the co-financing;
• The project’s potential to stimulate replication of the model or systemic change in this market or industry.

19) How do you define the futureproof criterion?

The futureproof criterion refers to the degree of adaptation of the company to future risks and trends, such as climate change and land degradation, changes in consumption patterns, and Industry 4.0.

Looking at the overall potential impact of the project (positive and negative, short and long term), is the project economically, socially, and environmentally sustainable and forward-looking concerning risks, threats, and major global trends? For example, depending on the objectives of each action, does the project include in its analysis the risks and impacts as well as the opportunities that megatrends such as climate change and the fourth industrial revolution (among others) could have on its analysis of profitability?

20) Who is in the BPF pre-selection committee?

The BPF pre-selection committee is made up of representatives from the Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade, LuxDev, the Ministry of the Economy and the Luxembourg Chamber of Commerce.

21) How will I receive notification of pre-selection for the BPF co-financing?

You will receive a notification letter informing you about the results of the preselection by email, usually around two months after the call for proposal ends.

If your project is shortlisted, you will then receive documents and information about the next steps for submitting your detailed proposal.

22) How can I apply for this call for proposals?

Here is the link [link to the platform] to apply for the call for proposals.

23) Are there any required documents that I need to attach to my application?

To complete your application, you must provide the following documents:

• For the lead partner: company business registration certificate;
• For the lead partner: Document verifying employment of at least five employees;
• For the lead partner: income statement of the last three years or other document demonstrating compliance with the turnover criteria;
• Joint commitment of the partners to commit as candidate for this call for proposals.

Feel free to include any other documentation you deem helpful for understanding the project.

24) What languages can applications be written in?

Applications may be submitted in English or French.

25) What is the deadline for applications?

The deadline for applications is October 31, 2024.

26) Does LuxDev offer support in filling in the application form? Is it possible to discuss my application with LuxDev before submitting it?

We offer information sessions on the call for proposals, in the form of webinars. Dates and registration links are available on our website. If you have a question about the application process or the criteria applied, we recommend that, before writing, you read this FAQ carefully to check whether the answer to your question already exists. If not, you can send your questions to bpf@luxdev.lu.

27) I need more time to complete the application form – can I submit it later?

For the sake of fairness, no applications will be considered outside of this process and timeline for this edition. Applications must be submitted on time via the online portal before the deadline for applications.

28) Can an enterprise submit several applications for BPF co-funding?

An enterprise may apply for only one project per open call for proposals. However, an enterprise whose project has been selected may resubmit a project later, subject to compliance with the “de minimis” rule. An enterprise whose project has not been preselected may also resubmit a revised version of the project, incorporating the selection committee’s feedback,  or submit a different project for the next call for proposals.

29) What policy applies to intellectual property?

Ownership, title, and industrial and intellectual property rights to the results of the action and to reports and other documents relating to it are vested in the partner. However, the partner grants LuxDev the right to use, free of charge and as it sees fit, any documents in any form whatsoever derived from the action, while respecting pre-existing industrial and intellectual property rights.

In addition, the partner authorises LuxDev to publish on its website and on the project website, photos and videos of the action supplied by the partner as part of the report, provided that the author of the photos and videos is expressly mentioned .

30) How will the personal data relating to my application be stored?

With your consent, you agree that LuxDev may keep information relating to your application for the following periods:

• up to five years after the end of the co-financing agreement;
• up to five years after rejection of the application.

Purposes in the case of a co-financing contract:

• Internal evaluation of projects under MAE/023 portfolio to identify best practices and make them available to future applicants;
• Reporting on the effectiveness of MAE/023 to the Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade (MFA) throughout the project duration;
• Identification of multiple co-financings.

Purpose in case of application’s rejection: allow LuxDev – during subsequent co-financing cycles – to know which applicants have previously submitted a co-financing request and for what reasons it was rejected.

Consent for the retention of your data can be withdrawn at any time by sending a message to bpf@luxdev.lu, with a copy to rgpd@luxdev.lu.

Withdrawal does not affect the legality of the processing carried out until then. You can find more information in our Notice on the Protection of Personal Data (https://luxdev.lu/files/documents/LuxDev_privacy_en.pdf).

31) How does Good Grants platform process the data I share on the application platform?

Good Grants platform complies with the European General Data Protection Regulation (GDPR).

32) What should my detailed proposal contain?

Shortlisted candidates will receive instructions on how to submit their detailed proposal. It will include a business case, an activity plan, a detailed budget, as well as a results chain aligned with the Sustainable Development Goals (SDGs). The selection committee will carefully examine the project’s financial viability and sustainability, in addition to the other selection criteria listed above. It will also be necessary to demonstrate the impact of the project by developing specific indicators and targets directly linked to its contribution to the SDGs. This will allow for a concrete demonstration of the project’s impact.

33) What is our approach to Responsible Business Conduct (RBC)?

In line with the OECD’s “Due diligence guidance for Responsible Business Conduct”, preselected enterprises will be required to complete a simplified RBC template tailored to the needs of businesses, and to select at least two activities related to Responsible Business Conduct to be implemented over the duration of the project. All multinationals must demonstrate an in-depth RBC approach. As lead partners of BPF projects, Luxembourg companies with more than 100 employees will be encouraged to adhere to the National Pact on ‘Businesses and Human Rights’.

Enterprises with a large footprint in minerals, textiles, construction, cement, animal protein or other high-risk sectors as defined by the EU may be asked to provide additional supporting documentation. Any business processing raw materials linked to EU regulations on deforestation will have to highlight its approach to combating deforestation. To date, the targeted value chains include soy, beef, palm oil, timber, cocoa, and coffee, as well as all products derived from them.

34) What human rights principles should the partners respect?

The lead partner verifies, as part of a due diligence procedure, that he complies, for himself and the entire value chain of which he is part, with the United Nations’ guiding principles on business and human rights, as well as the OECD’s guiding principles on human rights.

Due diligence is the process by which enterprises, as an integral part of their decision-making and risk management systems, identify, prevent, mitigate and report on actual or potential adverse human rights impacts of their activities. The nature and extent of due diligence appropriate to a particular situation will depend on factors such as the size of the enterprise, the context of its operations, the specific recommendations of the guidelines and the severity of the adverse impacts. Where enterprises have many suppliers, they are encouraged to identify the general areas where the risk of adverse impacts is most significant and then, based on this risk assessment, to prioritize due diligence on certain suppliers.

35) What support is available to draw up my detailed proposal?

The project team is at the disposal of pre-selected companies for any request for clarification concerning the drafting of their detailed proposal. Luxembourg-based companies will also be able to benefit from the support of Luxinnovation, the national innovation agency.

36) What is the timeframe for drafting the detailed proposal with my partners?

Partners have 3 to 4 months to draw up their detailed proposal. The deadline for submission of a detailed proposal will be indicated at the time of notification of the pre-selection.

37) Who is in the BPF selection committee?

The BPF pre-selection and selection committees are made up of the same representatives (see the composition of the pre-selection committee above).

38) How does the pitch session work?

If your project is pre-selected and after submitting your detailed proposal, you will be invited to pitch your project in front of the selection committee. You will be notified of the dates in advance. You should plan to attend a one-hour session. Involving the local partner is strongly recommended.

39) How will I receive the selection notification for a BPF co-financing?

If your project is selected, you will receive a notification letter by email and by post. You will then be contacted by the project team to work out the impact indicators and negotiate the contract.

40) What is co-financing and are there any rules to follow?

Co-financing is a direct financial contribution through a donation or non-commercial payment: It aims to encourage businesses to propose initiatives that achieve specific impact results in line with the objectives outlined in the call for proposals.

Key rules to follow:

1. Private sector initiatives: Co-financing is only possible when the initiative comes from the private sector, and the results of the funded action belong to the co-financing beneficiary.
2. Non-profit rule: on the one hand, co-financing cannot aim to generate a profit from the project and, on the other hand, creation of reserves through the project is not allowed. Any profit margins obtained from the co-financed project during its execution must be reinvested in project execution.
3. Double funding prohibition: Double funding of project costs is not allowed. Expenses for actions that occurred before the signing of a co-financing agreement are not eligible (principle of non-cumulative allocation and absence of double funding, as well as the principle of non-retroactivity).

41) Will the co-financing need to be repaid?

The financial support granted by the BPF is a non-refundable grant. Payment of the final tranche of co-financing, which represents 25% of the total, is however limited to the expenditure actually incurred.

42) Can I get an advance before signing the contract and starting the project?

Yes, if your project is pre-selected, you can request pre-financing corresponding to a maximum of 10% of the total amount of co-financing requested. This pre-financing is intended to help partners prepare their detailed proposal, for example by carrying out market research or field missions. Staff costs are covered up to a maximum daily rate of EUR 300.

If the project is selected, the amount granted will be deducted from the first tranche of co-financing.

If the project is not selected, the amount granted will not be returned, subject to proof of expenditure.

43) Do all partners have to contribute financially to the project?

Overall, the partners must make a financial contribution to the project, representing at least 50% of the total cost of the project.

The lead partner must invest financially in the project. There are no obligations regarding the financial contribution of the local partner(s), but a balanced participation of each partner is encouraged and valued when applications are analysed.

44) If my project is selected, how will the co-financing be paid out?

As soon as the agreement between LuxDev and the lead partner has been signed, a first instalment of 25% of the co-financing amount will be paid, after any suspensive conditions have been lifted.

To receive payment of a second instalment of 50% of the co-financing amount, the partners must provide the following supporting documents:

• A financial report showing that 50% of the total planned expenditure has been spent.
• A technical report demonstrating the achievement of the impact objectives agreed with the partners to release the payment corresponding to this stage.

The lead partner must also demonstrate the completion of at least one of the two pre-defined RBC actions.

The balance of maximum 25% will be paid based on a final technical and financial report demonstrating the results of the project and justifying the expenditure actually incurred corresponding to the totalitý of the budget. The lead partner must also demonstrate the completion of the pre-defined RBC actions. Payment of the balance is limited to the expenditure actually incurred.

45) To whom the co-financing will be paid out?

The co-financing from LuxDev will be integrally paid out to the lead partner.

46) What types of expenditure are eligible?

To be eligible for co-financing, expenditure must meet all the following criteria (without being exhaustive):

• be necessary for carrying out the action (economic activity), directly attributable to the action and resulting directly from its execution;
• be borne by the project promoter(s), i.e. they represent actual expenditure genuinely and effectively borne by the project promoter(s);
• be reasonable, justified and in line with the principle of sound financial management, as well as being in line with the usual practices of the project owner(s), whatever the source of funding. Procurement contracts must comply with normal purchasing practices, provided that the contract is awarded to the bid offering the best value for money and that any conflict of interest is avoided;
• be due during the period of implementation of the co-financed project, consistent with the scope and timetable of the activities;
• be identifiable and supported by documentary evidence, in particular determined and recorded in accordance with the usual accounting practices of the project sponsor(s);
• comply with the provisions of the applicable tax and social legislation, considering the privileges and other advantages granted to the project promoter(s).

47) As a partner in the project, what type of co-financing can I provide?

The partners contribute financially and in kind, for example by using their internal human resources.

The co-financing provided by the partners may not come from another grant obtained from a public entity. Loans from financial institutions and grants from private foundations may be considered as part of the co-financing.

48) In what currency will the co-financing be paid?

Co-financing will be paid in euros to the lead partner.

49) What costs are not eligible?

The following costs are not eligible: costs incurred outside the project period indicated in the co-financing agreement, dividends paid by the company, debts and debt charges, interest rate charges, bank charges and exchange losses, costs relating to the development of the project.

50) If my project is selected, what can I expect in terms of monitoring and reporting? 

Businesses receiving co-financing will be required to provide LuxDev with biannual technical and financial reports. These reports will focus on the results indicators and targets proposed by the enterprises in their application, agreed with LuxDev and mentioned in the annexes to the co-financing agreement. The achievement of certain results will trigger the co-financing payment instalments. Following each report (half-yearly or final), the enterprise may be invited to take part in a short meeting with LuxDev team. To evaluate the results of the selected projects and to improve learning, LuxDev reserves the right to request on-site visits by its staff and external evaluations. Depending on the progress observed, LuxDev will select certain projects for which an external impact evaluation will be carried out.

At the end of the project, the partners must continue to monitor the predefined long-term impact indicators and provide LuxDev with an annual update until two years after the end of the project.

51) What supporting documents will be required for expenses incurred during the project?

The lead partner undertakes to facilitate access to all supporting documents for expenditure at LuxDev’s request. Accordingly, the partner must make available its accounts and any other document justifying compliance with the conditions under which the co-financing was granted. For example:

• for human resources expenditure, payroll records for employees may be requested;
• for purchases of equipment or services, invoices must be available.