The OPEC Fund for International Development
Content: Grant Application
Procedures and Process
Applicable to: Grant Applications
Guidelines for Submitted by Eligible Partners
Sponsor: SPESD-GTA
Grant
Cleared by and date:
Applications RPRC Chairman
Director-General
Next Review: Two years from
approval date
Contact: SPES-GTA@[Link]
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The OPEC Fund for International Development
Table of Content
SECTION I: PURPOSE...............................................................................................................3
SECTION II APPLICATION.......................................................................................................3
SECTION III: DEFINITIONS........................................................................................................ 3
SECTION IV: GRANT ELIGIBILITY............................................................................................ 4
IV.1 General Principles............................................................................................................ 4
1V.2 Types of Grants............................................................................................................... 4
IV.3 Country Eligibility............................................................................................................ 5
IV.4 Priority Sectors and Areas..............................................................................................6
IV.5 Eligible Partners............................................................................................................... 6
IV.6 Eligible activities and expenditures.............................................................................. 7
IV.7 Grant Amount and Co-financing Requirements......................................................... 9
SECTION V: PREPARATION AND PROCESSING OF GRANT APPLICATIONS........10
V.1 Grant Application Modalities........................................................................................10
V.2 Formulation of Grant Proposals.................................................................................. 10
V.3 Processing of Grant Applications................................................................................. 11
SECTION VI: IMPLEMENTATION / MANAGEMENT......................................................... 11
SECTION VII: ENTRY INTO FORCE......................................................................................... 12
SECTION VIII: AMENDMENT...................................................................................................... 12
Annex................................................................................................................................................13
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GUIDELINES FOR GRANT APPLICATION
SECTION I: PURPOSE
1. OPEC Fund’s mandate is to provide financial assistance to developing
countries, particularly low-income countries, in support of their economic and
social development efforts. This assistance includes sovereign loans, private
sector and trade finance as well as grants. In this regard, since inception, the
OPEC Fund has extended grants in support of technical assistance and
capacity building activities as well as special development initiatives aimed at
building public goods and addressing the needs of disadvantaged populations
in its partner countries, especially least developed countries. In addition, the
OPEC Fund has provided emergency aid grants in support of victims of all
kind of crises.
2. Following a comprehensive review which was completed in June 2020, the
OPEC Fund has revised the objectives, focus and scope of its Grant Program
to ensure better alignment with its new strategic goals and current priorities.
3. In view of the above-mentioned changes, the OPEC Fund has developed these
Guidelines outlining the revised eligibility criteria for its grant financing and
modalities for submission of grant applications.
SECTION II APPLICATION
The procedures and processes outlined in these Guidelines apply to any grant
activity or project sponsored or designed by eligible OPEC Fund partners.
SECTION III; DEFINITIONS
Words and phrases used in these Guidelines for External Grant Applicants shall
have the meanings ascribed to them below:
LDCs Least Developed Countries
NGOs Non-governmental Organization
SIDS Small Island Development States
UN United Nations
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SECTION IViGRANT ELIGIBILITY
IV.l General Principles
All grant applications should meet the following general principles:
(i) The requested grant should support initiatives and activities that present a
clear and measurable development impact;
(ii) The objectives of the proposed grant activities and projects/programs should
be clearly aligned with the OPEC Fund’s strategic goals and priorities.
Therefore, for country-specific grants, the OPEC Fund will prioritize project
proposals and activities that are clearly linked to, could complement or
support its existing operations in the country concerned.
(iii) The proposed interventions and activities should be delivered in a cost-
effective manner.
IV.2 Types of Grants
1. Under its grant program, OPEC Fund could extend three types of grants:
(i) Grants for country-specific activities and projects:
This type of grant could cover any of the following activities:
- Technical assistance grants for project preparation, including pre
feasibility and feasibility studies, and final design of projects where there
is potential for OPEC Fund’s participation;
- Grant components of a larger project and program financed by the OPEC
Fund through its public sector (sovereign loans) and/or private sector
and trade finance facilities;
- Institutional capacity building of relevant government agencies of
partner countries (training of staff in project design, preparation,
monitoring and evaluation) with the aim of facilitating the
implementation of OPEC Fund operations and helping these agencies
better prepare future projects;
- Stand-alone projects or activities that are not directly linked to a specific
OPEC Fund project.
(ii) Grants for special development initiatives of global or regional scope:
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This type of grant supports selected initiatives and programs aimed at
addressing development challenges faced by OPEC Fund’s partner
countries and which require a high level of cross-border cooperation.
(iii) Emergency aid grants: OPEC Fund provides this type of grant in support
of humanitarian relief operations, including material or logistical assistance
delivered for humanitarian purposes. This aid also supports interventions
aimed at rehabilitating basic infrastructure and restoring access to basic
services in partner countries in the aftermath of conflicts or natural
disasters.
2. For all types of grants, and with the exception of emergency aid grants and
grants in support of projects sponsored by other Development Finance
Institutions or UN agencies, proposed activities and projects may be
undertaken only where there is clear evidence of government commitment to
the activity and the project concerned and, alignment with OPEC Fund’s
priorities. Furthermore, project proponents or sponsors are required to submit
a grant application (details in section 2).
IV.3 Country Eligibility
1. In line with the Agreement establishing the OPEC Fund, developing countries
other than OPEC Member Countries are eligible for OPEC Fund’s grant
assistance, with special consideration to the needs of LDCs.
2. While the main criteria for extending a grant will be the developmental impact
of the activity or project concerned, for country-specific grants, particularly
those linked to OPEC Fund’s sovereign operations, other criteria will be also
considered. These include countries’ capacities as well as special
circumstances. In this regard, and in recognition of their special circumstances
and specific development challenges, the OPEC Fund will extend grants in
support of selected initiatives targeting small island development states
(SIDS), and conflict-affected and fragile states, especially SIDS that are also
categorized by the United Nations as LDCs.
3. Finally, while there is no country-based allocation of grants, the OPEC Fund
aims at ensuring a balanced geographical distribution of its grant resources
among eligible partner countries.
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IV.4 Priority Sectors and Areas
While the OPEC Fund has financed projects in agriculture, energy, health,
transportation and water and sanitation sectors, it aims to be a demand-driven
organization responsive to the needs of its partner countries. In addition, and as
noted earlier, it provides emergency aid assistance and supports selected regional
and global initiatives, especially those addressing priority issues in the sustainable
development agenda.
IV.5 Eligible Partners
1. Eligible partners are any government or non-government entity, including co
financing partners, private sector entities, research entities, UN agencies and
international NGOs.
All grantees, should meet the following eligibility criteria:
(i) Provide evidence of currently valid legal registration under the laws of the
country in which they operate, as well as evidence of a certificate to do
business in the country in which they intend to carry out the relevant
activity, if different from the place of legal registration.
(ii) Have a good track record in the implementation of OPEC Fund projects and
activities, and in the case of new partners, a good track record in
executing/implementing similar donor Funded projects in the targeted
region and country;
(iii) Have proven technical expertise in the area/sector covered;
(iv) Have appropriate organizational and management capacity, and show the
existence of a sound financial system, including clear accounting and
budgeting standards, audited financial statements that are audited by a
registered auditor, a transparent budgeting process, and other indicators
that confirm their capacity to assume fiduciary (supervision and
implementation) responsibility for OPEC Fund.
2. When a non-government entity is applying for a grant, it should provide clear
evidence (e.g. a letter from the relevant government authority) of government
approval of the proposed project/activity, and commitment to support it. In
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the case of regional projects, project proponents should provide evidence of
approval from all governments concerned.
3. For first time grant applicants, a support/recommendation letter from another
donor/sponsor is also required.
IV.6 Eligible activities and expenditures
1. Eligible activities for grant financing include:
(i) Institutional capacity building and technical assistance:
(ii) Knowledge production (sector and thematic studies) and dissemination
in OPEC Fund priority sectors;
(iii) ,Project preparation;
(iv) Grant components of larger OPEC Fund Funded projects (e.g. training,
procurement of small equipment, initial stock of medicine for a hospital,
or textbooks for a school, and small infrastructure):
(v) Advocacy/outreach activities.
2. Other eligible activities include stand-alone activities and projects that are not
directly linked to OPEC Fund operations, such as thematic studies, private
sector development initiatives, and innovative projects aimed at promoting
new business models and development approaches with the potential to be
scaled-up and subsequently supported through the Fund’s other financing
facilities, humanitarian aid and special (global/regional) development
initiatives.
3. Eligible expenditures include the reasonable cost of goods, works and services
required for the implementation of the proposed grant activity or project, and
that the OPEC Fund grant will finance in accordance with the conditions set
in the relevant Grant Agreement.
4. Direct Costs could include;
(i) Consulting services: expenditures related to studies, training, technical
assistance for project design and preparation, as well as other services
provided by international and local consultants, i.e. travel, accommodation
and subsistence cost. These services should be procured in accordance
with OPEC Fund’s procurement guidelines.
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(ii) Research and study costs that directly contribute to the outputs of the
project;
(iii) Costs of workshops and seminars sponsored by the OPEC Fund, including
travel and lodging expenses of participants and trainers or facilitators, and
training materials acquired for this purpose;
(iv) Training, including development of training materials]
i) Civil works noting that grant financing is not aimed to finance large
infrastructure projects but could cover only small rehabilitation or
construction works;
ii) Any equipment, excluding vehicles, deemed necessary for project
implementation and completion. This could cover purchase and installation
of machines and computers and office furniture;
iii) Initial stock of supplies for social infrastructure project (e.g. medicine for a
hospital, or textbooks for a school) financed by OPEC Fund;
iv) Any other project-related expenditure]
v) Operation costs: running costs directly and clearly attributable to the
project, such as incremental office rental costs and utilities;
vi) Salaries and allowances: salaries and allowances of personnel employed by
the institution receiving the grant if directly and fully assigned to the project
(i.e. project management and supervision) and provided that these costs
be shared on pro-rata basis among all co-financiers and the grant recipient
organization. Where part time staff are used, the full time equivalent of the
salary should be indicated.
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vii)Cosf of independent auditing of grant funded activities and projects.
5. Other eligible expenditures include indirect costs such as program support
cost other than direct project management costs, also referred to as
overheads, that are associated with the organizational structure of the grant
recipient organization and services that it will need to provide in order to
support the implementation of the proposed project. Examples of indirect
costs include corporate executive management: country office, regional or
corporate management; corporate accounting and financial management
staff; internal audit function at headquarters and unit level; institutional legal
support; and, corporate human resources management.
6. While the OPEC Fund recognizes that the share of indirect costs in total
project cost could vary from project to project, they should be well justified
and shared evenly among all co-financiers and the grant recipient
organization. These costs should also remain within a reasonable limit. In
addition, the budget provided in the grant application should clearly
distinguish indirect from direct costs. The review of grant proposals will pay
particular attention to these aspects.
IV.7 Grant Amount and Co-financing Requirements
The amount of OPEC Fund contribution will vary according to the scope and the
nature of the proposed grant activity or project. However, and with the exception
of emergency aid and small grants in amounts of up to US$100,000, OPEC Fund’s
contribution to a stand-alone project should not exceed 50% of the total cost of
the said project. This contribution should also be matched by an at least equal
amount of grant financing provided by the project sponsor and/or other co
financiers. The co-financing should be either confirmed or available before final
approval of the requested grant by the relevant OPEC Fund authority.
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SECTION V: PREPARATION AND PROCESSING OF GRANT APPLICATIONS
V.l Grant Application Modalities
1. Grant applications could be submitted on ad-hoc basis at any time. However,
partner organizations are encouraged not to submit more than one
application a year. Additionally, those partners that have been recently
awarded a grant from the OPEC Fund for a similar project in the same country
should wait until the project concerned has been satisfactorily completed
before submitting a new grant application. It is worth recalling here that the
track-record of grant applicants with the OPEC Fund is an important criteria
in the assessment of grant proposals.
2. For activities such as studies and capacity building in priority areas, the OPEC
Fund may also organize calls for proposals through which partner institutions
are invited to bid and implement these activities based on pre-defined terms
of reference.
3. With respect to public sector operations, for activities such as technical
assistance, project preparation and grant-components of larger OPEC Fund
financed projects, partner countries should apply for a grant through the
relevant government agency (e.g. Ministry of Finance) and submit the grant
application along with the loan-financing request for the project concerned.
V.2 Formulation of Grant Proposals
In order to facilitate the screening of grant applications against eligibility criteria,
grant applicants are required to submit project proposals using OPEC Fund Grant
Application Form . The latter includes a clear description of project objectives and
the project scope, main justifications, main expected results/deliverables, a detailed
activity based budget and financing plan, as well as detailed information on the
proposed project implementation, monitoring and supervision arrangements. In this
regard, when more than one organization is involved in project implementation, the
proposal should clearly describe the roles and responsibilities of each implementing
partner. It should also provide information on any envisioned procurement activity.
Finally, grant applications should be submitted along with a number of documents
listed in Annex.
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V.3 Processing of Grant Applications
1. Upon receipt of a grant application, the OPEC Fund will send an
acknowledgement to the grant applicant within two weeks, and screen the
proposal against the aforementioned eligibility criteria. In this regard, only
those requests meeting these requirements are subject to a more detailed
internal review and assessment, noting that, with the exception of small grants
and emergency aid grants, all grant applications are processed and approved
following the same procedures.
2. As part of its internal review and due diligence process, the OPEC Fund may
contact the grant applicant/project sponsor to request further information
and clarifications, as required. However, due to the large number of grant
applications received every year, and unless it has explicitly expressed its
interest in supporting a particular project proposal, the OPEC Fund will not
answer queries (through phone calls or emails) from partners regarding the
status of their grant applications.
3. Upon completion of the internal review process, only grant proposals meeting
all eligibility criteria and found of particular interest and relevance will be
submitted for management’s consideration and subsequently final approval
by the relevant OPEC Fund authority. Thereafter, the OPEC Fund will send a
notification letter of approval to the head of the organization concerned.
SECTION VI: IMPLEMENTATION / MANAGEMENT
Following approval of the Grants Operations Manual and the present document, the
SPES-GTA will request the CSD-IT to upload these Guidelines for External Grant
Applicants on OPEC Fund public website. In addition, and in coordination with the
Communications Department, it will share this document with long-standing and
strategic partners.
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SECTION Vil: ENTRY INTO FORCE
The Guidelines for Grant Application shall become effective as of the approval date.
SECTION VIII: AMENDMENT
Amendments to the Guidelines for Grant Application shall follow the procedure set
forth in Section V or Section VI of the Policies and Procedures Framework, as
applicable.
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Annex
List of Supporting Documents to be included in the Grant Application
Standard Documents to be provided by all grant applicants
i) Results Based Logical Framework;
ii) Detailed Implementation Plan and Arrangements;
iii) Detailed Activity Based Budget for the proposed intervention/project;
iv) Detailed financing plan with evidence of secured/confirmed co-financing, as
applicable;
V) For non-government entities, excluding Development Finance Institutions and
UN agencies, a letter of a relevant government authority from the country
concerned confirming its approval of the proposed project/activity and its
alignment with the country’s current development objectives and priorities;
vi) For studies, detailed draft terms of reference to be endorsed by the OPEC
Fund.
Additional requirements for organizations, excluding Development Finance
Institutions and UN agencies, that have not previously received an OPEC Fund grant
i) Evidence of currently valid legal registration under the laws of the country in
which it is operating, as well as evidence of a certificate to do business in the
country in which it intends to carry out the relevant activity, if different from
the place of legal registration;
ii) A support/recommendation letter from another donor/sponsor;
iii) Evidence of good track record in executing/implementing similar donor
Funded projects in the targeted region and country: this could include a list of
recently completed projects with testimonials from other co-financiers and
beneficiaries, as well as hyperlinks to relevant project completion and
evaluation reports;
iv) Evidence of proven technical expertise in the area/sector covered: this could
include information on number of experts employed and their qualifications,
awards received, and (for studies), list of relevant reports published;
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v) Evidence of appropriate organizational and management capacity, and of the
existence of a sound financial system, including clear accounting and
budgeting standards, a transparent budgeting process, audited financial
statements and audit reports for the past three years, and other indicators that
confirm their capacity to assume fiduciary (supervision and implementation)
responsibility for OPEC Fund.
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