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Climate policy objectives for developing countries 

Status

Open round

Financier(s)

Heitmekaubanduse kauplemissüsteem (HKS)

We support activities that help developing countries mitigate and adapt to climate change. 

1. General information

The call for applications is open and applications can be submitted via the e-support environment until 11 March 2024 at 17.00. Grants are awarded in Estonian and more information can be found on the EIC website here. 

The objective of the grant is to contribute to climate change mitigation and adaptation in developing countries. The awarding of the grant will be based on the needs of the target countries and international climate agreements, as well as other relevant international climate strategy documents and climate research.

In the application round, projects can only be carried out in the following priority target countries: Armenia, Botswana, Georgia, Kosovo, Moldova, Ukraine, Kenya, North Macedonia, Tanzania, Rwanda, Uganda, and Namibia. 

The grant money originates from the proceeds of auctioning emission allowances, and the measure was developed by the Ministry of Climate. 

The conditions for granting the support can be found here  (in Estonian).

2. Application

What do we support?

We support the export of solutions, knowledge, services and products which have been developed in Estonia, or which have been developed abroad and have received added value in Estonia, to developing countries to help mitigate and/or adapt to the impacts of climate change. The solution must be specific, adhere to the needs of the target country, and must conform to the regulation governing the measure. The connection between the expected results of the project and climate change must be identifiable based on the OECD methodology (so-called Rio markers).

Areas of activity for project applications submitted for receiving the grant (areas not limited to these):

  • energy field (for example, renewable energy production, energy conservation, energy storage);
  • waste management (for example, waste management technologies);

  • field of transportation (for example, transportation with minimal greenhouse gas emission, alternative mobility systems);
  • field of construction (for example, reduction of construction-related greenhouse gas emissions and increasing carbon capture, passive use of solar energy, on-site generation of renewable energy);
  • agriculture (for example, organic agriculture, sustainable crop farming, sustainable animal husbandry);
  • forestry (for example, carbon capture in forestry, agroforestry);
  • water management (for example, rainwater harvesting, treatment and dispersal, treatment of drinking water and wastewater);
  • prevention of erosion and flooding, and reducing the negative effects thereof (for example, flood monitoring technologies);
  • disaster prevention, and the reduction of the negative effects thereof (for example, disaster monitoring systems);
  • information and communications technology;
  • increasing capacity and capability pursuant to Article 11 of the Paris Agreement (for example, to implement adaptation and mitigation activities, facilitate technology development, dissemination and deployment, facilitate access to climate finance, foster relevant aspects of education, training and public awareness).

Who can apply for the grant?

  • A legal person registered in the Republic of Estonia;
  • a government authority or an authority administered by it;
  • a local government authority or an authority administered by it.

To implement the project, the applicant must have a partner in the target country (from a priority country for the application round).

How to apply?

Application takes place via the e-support environment in Estonian. There is a relevant application form available in the e-support environment. The completed application, together with the required documents, must be submitted to the EIC by the application deadline, at the latest, bearing the digital signature of a person authorised to represent the applicant.

What is the maximum duration of projects?

The maximum duration of the projects is 36 months, i.e., 3 years.

What is the budget for the application round?

The budget for the application round is EUR 947,300. Per project, the minimum grant is EUR 30,000 and the maximum grant is EUR 200,000. When granting the aid, the rules governing European Union State Aid or de minimis aid will be applied (if relevant).

The maximum grant rate is 90% of the eligible costs. Self-financing must amount to at least 10% of the total eligible costs.

3. Assessment and financing

Assessment of an application consists of the following activities:

  • registering the application;
  • verifying the conformity of the application and the applicant, verification of financial capabilities, if necessary;
  • substantive assessment of the application;
  • preferential assessment for applications complying with the requirements;
  • deciding whether to grant financing to the application or not.

Depending on the activity supported, the processing and assessment of applications may take up to 4 calendar months. Under subsection 18 (2) of the conditions for awarding the grant, applications are processed within 90 calendar days, plus the time allowed for supplementing the application.

The compliance of the application is checked by the EIC project coordinator, who, if necessary, sends a request to the applicant about the deficiencies and provides a deadline for correction. The compliance check verifies whether the requirements for the application and the applicant are met. Verification of the compliance of the application is carried out on the basis of §§ 18–19 of the conditions for awarding the grant.

Applications that pass the compliance check are forwarded to substantive assessment. The content of the applications is assessed by experts, who can be from the EIC and from outside. The substantive assessment determines whether the activities and objectives proposed in the application meet the objective of the grant. Substantive check of the application is carried out on the basis of subsection 17 (2) and §19 of the conditions for awarding the grant.

Preferential assessment will be used if there are more applications meeting the requirements than the budget of the round enables to finance. The assessment of the application on the basis of preferential criteria and the preferential criteria for the application are set out in §§ 20–21 of the regulation governing the measure. 

A ranking of applications will be established as a result of the preferential assessment. On the basis of this ranking, the EIC will decide whether to grant the financing or not to grant the financing.

4. Implementation

Implementation of the project starts on the date specified in the financing decision, which cannot be earlier than the date of the decision to satisfy the application. The decision to finance the application and the conditions provided therein form the basis for the implementation of the project. We recommend that you read the decision carefully, as it specifies the conditions for using the grant in the implementation of the project. 

The implementation of the project consists of:

  • concluding the contracts required to carry out the project (e.g., employment contracts);
  • carrying out procurements (in the public procurement register) and/or accepting comparable quotations (if the recipient of the grant purchases services, goods or rights for the implementation of the project in an amount exceeding EUR 5,000, excluding VAT);
  • submitting the cost statements (invoices, payment orders, pay slips, etc.) related to the implementation of the project, and disbursement of the grant;
  • project reporting (interim report for each calendar year, final report at the end of the project, and a follow-up report which must be submitted three (3) years after the end of the project).

Disclosure and notification

The implementation of the project is also subject to requirements of disclosure and notification. 

Projects should preferably have their own website where key information and images about the project are published. The public may also be informed, for example, through articles published in newspapers, etc.

In addition, the conditions of the grant provide for notification requirements, according to which, the objects installed under the project must be designated as follows: ‘Projekti rahastab Kliimaministeerium rahvusvahelise kliimakoostöö vahenditest’ (in Estonia) or ‘Project is financed by the Republic of Estonia’ (outside Estonia).

It is required to use the logo of the Ministry of Climate with the three lions (the English version outside of Estonia). It is also required to add the EIC logo (the English version of the EIC logo outside Estonia).

5. Frequently asked questions

  • What is the eligibility period of the project?

The start of the project eligibility period cannot be earlier than the date of the decision to satisfy the application, and the end cannot be later than 36 months from the decision to satisfy the application. On the basis of a reasoned request, the EIC may extend the eligibility period of the project in the case that circumstances arise during the implementation of the project that are beyond the grant recipient’s control and that could not be foreseen at the time of submission of the application.

  • Which costs are eligible and which are ineligible?

Eligible costs must have been incurred and paid during the eligibility period and be necessary for the activity specified in the application. The costs must be directly related to the project, transparent, justified, reasonable, proportionate, described in detail, indispensable for the implementation of the project, and consistent with the project budget.

The costs must be paid by the grant recipient, the project partner or the partner in the target country, and must be recorded in the accounting records of the grant recipient, the project partner or the partner in the target country, and must be distinguishable from other expenditure, verifiable, and in accordance with the Accounting Act or the accounting requirements of the target country.

The following costs are eligible:
1) project management costs (costs related to the remuneration of the project manager, assistant project manager, and accountant) or the project manager’s remuneration up to 20% of the eligible costs, and these must be based on the actual costs of project implementation.

2) remuneration of employees or public servants working for the project on the basis of an employment contract, including all necessary taxes and benefits which are relevant under the contracts. If an employee or expert working for the project also performs other non-project-related tasks in the organisation, the project-related tasks must be clearly distinguishable.

3) remuneration payable to an expert involved to achieve the objective of the project, including all necessary taxes and benefits which are relevant under the contracts.

In order to determine the amount of eligible costs in the remuneration of an employee and an expert, the contract concluded for the performance of the tasks or the job description of the employee or the expert must contain at least a list of project-related tasks of the employee or the expert, the expected results, the volume of work, and the amount of remuneration to be paid. As proof of the work performed, the employee and the expert submit a summary of the work performed or an instrument of delivery and receipt containing an overview of the work performed and the results achieved. 

Staff costs related to the management of the grant recipient, the project partner and the partner in the target country are not eligible. Any remuneration paid in addition to wages is also not eligible.

4) project-related daily allowance up to the non-taxable limit set by the Income Tax Act. According to clauses 13 (3) 1) and 2) of the Income Tax Act, the tax-free daily allowance for assignments abroad is limited to 50 euros for the first 15 days of the assignment, but not more than 15 days in a calendar month, and 32 euros for each subsequent day.

5) project-related assignment costs, incl. accommodation costs up to 128 euros per day;

6) project-related travel expenses on the basis of a public transport ticket or taxi invoice, on the basis of a document certifying fuel consumption and the calculation thereof, or in accordance with the conditions for use of a personal means of transport and reimbursement established in the organisation, up to the non-taxable limit established by the Income Tax Act. For the use of a private car for the performance of official, employment-related or professional duties, the tax-free limit for the compensation paid to a single person is 0.30 euros per kilometre, but not more than 335 euros per calendar month for each employer paying the compensation.

7) costs of the procurement of supplies, services and works directly linked to the achievement of the objective of the project;

8) costs of organising project-related events, including seminars and trainings, including income tax and social tax imposed on fringe benefits;

9) costs of issuing project-related publications and digital materials;

10) costs of project-related information activities;

11) national taxes and fees that are not refundable by Estonia or a foreign country (including value-added tax);

12) overhead costs of the grant recipient, the project partner and the partner in the target country, up to 5% of the eligible costs of the project.

Overhead costs include the following costs: 

  • the purchase cost of office supplies. Office supplies do not include office furniture;
  • the cost of leasing office equipment. The total cost of operational leasing may not exceed the acquisition cost of the office equipment;
  • the cost of communication services, including monthly and subscription fees for telephone and fax services, the current cost of using the service and the running costs of postal and electronic data communications;
  • maintenance and repair costs of information technology (servers and networks) and office equipment;
  • utility costs, including heating, water and electricity consumption, cleaning and security costs of premises, excluding the costs of false alarms;
  • costs of opening and maintaining a bank account for the project, transfer fees, currency exchange fees, currency exchange losses.

Overhead costs other than those mentioned above cannot be included under eligible costs. Overhead costs must be listed in the application by cost types, and the methodology for calculating overhead costs as project costs must be included. The eligible amount of overhead costs per project is calculated in proportion to the total overhead costs pursuant to:

  • the surface area of the premises used;
  • the costs incurred;
  • the cost of renting the premises.

13) and other direct costs necessary for the implementation of the project.

Representation costs and the cost of gifts made, fines, interest on arrears and other financial penalties, as well as legal costs and other costs not related to the supported activities and not justified in terms of implementation of the project are not eligible.

Costs for which a grant has been awarded or which have previously been reimbursed from the national budget or from EU or external funds are also not eligible.

A cash payment is eligible if it is indispensable to achieve the objective of the project and the payment cannot be made by bank transfer or card payment to the contracting entity or service provider, and cost statements are available to substantiate the expenditure.

Such costs will be considered eligible if it is impossible to pay via bank transfer or by card and there is an invoice and proof of payment, such as a receipt.

Value-added tax (VAT) is an eligible cost, if it can be demonstrated that the grant recipient is an end-user who, under legislation governing value-added tax, is not entitled to deduct input VAT or reclaim VAT on VAT paid under the project and is not otherwise eligible for VAT compensation.

  • What is an own product?

An own product is a product or solution developed by the grant recipient or the project partner themselves, which is already available on the market or has been developed specifically for the purposes of the project. The cost of an own product is the cost of the direct measurable resources (materials, labour, etc.) used to develop the own product or solution, excluding profit. In cases where the cost to produce any component of the own product exceeds 5,000 euros excluding VAT, quotations must be taken, or the decision to not take quotations must be justified in writing.

  • Disbursement and reimbursement of the grant

The grant will be disbursed via the e-support environment on the basis of paid cost statements after the submission of a disbursement request.

In justified cases, a single advance payment of up to 30% of the grant amount will be made to the applicant. In order to receive the next instalment of the grant, the grant recipient must prove, on the basis of cost statements, that they have exhausted the advance payment.

The EIC will refuse to disburse the grant or part thereof if the disbursement request, interim or final report is not approved, or if the financial situation of the grant recipient has deteriorated to such an extent that the use of the grant or the implementation of the project is at risk.

  • What are the requirements for cost statements?

Along with the disbursement request, the grant recipient must submit the following documents relating to the eligible costs incurred by the grant recipient, project partner, or partner in the target country to the EIC:

  1. documents certifying that a procurement has been carried out, if these are not available from the public procurement register, including at least three quotations together with the terms of reference submitted with the request. If it is not possible to obtain three independent quotations, an appropriate justification shall be provided.
  2. copies of invoices issued for the goods, services or works, accompanied by copies of the documents certifying the delivery and receipt of the goods, services or works;
  3. copies of documents certifying the payment of invoices;
  4. the contracts concluded for the implementation of the project, or copies thereof if the contract has not been signed digitally;
  5. project-related analyses, studies, documents and other materials prepared during the reporting period.
  • How and when do amendments to the project take place?

The EIC may reconsider the decision to satisfy the application in justified cases and by making the respective decision on the basis of request submitted by the grant recipient.

If the grant recipient requests a modification of the volume of budget lines intended for specific activities in the project budget on the account of the volume of other budget lines by no more than 10% compared to the initial budget line, or a modification of the eligibility period of the project by less than two months, the relevant information and justification shall be submitted through the e-support environment.

Should the project become more expensive, the grant amount will not be increased.

  • When are the interim, final and follow-up reports due?

Interim reports must be submitted once per year via the e-support environment.

The final report must be submitted together with the last disbursement request within 30 calendar days after the end of the project’s eligibility period. The project will be deemed to have been completed once the final report has been validated in the e-support environment and the last disbursement has been made.

A follow-up report must be submitted three (3) years after the end of the project via the e-support environment, summarising information on the use, impact and sustainability of the project results after the end of the project.

  • Publication of the project

When using the grant, it is important to inform the public that the project is being implemented with the support of the Republic of Estonia. The grant recipient is obligated to refer to the project supporter as follows: ‘Projekti rahastab Kliimaministeerium rahvusvahelise kliimakoostöö vahenditest’ (in Estonia) or ‘Project is financed by the Republic of Estonia’ (outside Estonia). It is required to use the logo of the Ministry of Climate with the three lions (the English version outside of Estonia). The public can be informed, for example, by means of articles published in newspapers or by designating the objects acquired in the manner described above. The project should preferably have its own website, enabling important project-related information, including photos, to be located.