The PSI is closed for new applications. As per July 1st 2014, the Dutch Ministry of Development Cooperation has launched the new programme the Dutch Good Growth Fund (DGGF).
The Private Sector Investment programme (PSI) is a subsidy programme of the Dutch Ministry of Foreign Affairs / Development Cooperation that supports innovative investment projects in emerging markets in Africa, Asia, Latin America and Eastern Europe (see country list elsewhere in this document).
A PSI project is an investment project, implemented by a Dutch or for certain countries other foreign company together with a local company in the emerging market. If the investment meets the criteria, it can be eligible for a grant by PSI. This grant consists of a financial contribution of 50% to the costs of the investment, up to a maximum of EUR 750,000 (grant).
Most important criteria and characteristics of PSI projects
- Cooperation: PSI grants cooperation projects (business-to-business), which consist of at least one foreign company (the applicant) and one local company in the PSI-country (the local partner). In most cases, the cooperation takes the form of establishing a joint venture between the two companies, according to local law. Note: for a number of countries, the applicant company does not have to be Dutch, it can be a company from any country but the PSI-country!
- Sustainable economic activities: Projects must aim at long term economic activity in the PSI-country.
- Pilot projects PSI grants commercial pilot projects. This means that a small scale, commercially feasible scale is being granted. After completion of the project, the project partners are considered to do follow up (expansion) investments in the PSI -country (that are not being granted).
- Innovation PSI: projects have to be innovative for the PSI-country and may not disturb local competition. Innovative means that the project adds something new to the local economy (e.g. new products, production processes, product-market combination).
- Knowledge and experience: It has to be proved, that project partners possess all required knowledge and experience, to successfully implement the project.
- Market potential: It has to be proved, that there is a good market potential for the proposed new product.
- Creation of employment: PSI projects need to create employment locally and must involve training and knowledge transfer from abroad to the PSI-country.
- Corporate Social Responsibility: PSI projects need to comply with all aspects of Corporate Social Responsibility.
- Economic development: PSI projects need to positively contribute to the sustainable economic development of the PSI-country.
- Maximum project budget: The maximum project budget is EUR 1.5 million, of which 50% can be granted. Projects must remain within this budget limit.
- Eligible project costs: Eligible project costs are costs for ‘hardware’ (e.g. new buildings, equipment and machinery) on the one hand and costs for project management, training and knowledge transfer on the other hand. The division between costs for hardware and other costs is usually 75% – 25%.
- Deadlines: Proposals can be submitted twice per year: in February and August.
- Start of the project: Projects can only be started after approval by the Dutch government agency NL EVD International.
- Financing of own contribution: Project partners must prove that they are able to finance their own contribution, i.e. 50% of the project budget plus 10% working capital.
- Requirements for the applicant company (the foreign company): The applicant company has to exist for at least three years and it needs to have substantial economic activity, preferably in the sector of the intended project. It has to submit an audited annual report of the last closed fiscal year and needs to prove that it is capable of financing the own contribution in the project.
- Requirements for the local company: Preferably, also the local company must exist for at least three years and it has to show an audited annual report of the last fiscal year as well.
- Project duration: Projects usually have a duration of between 24 and at maximum 30 months.
- Eligible countries: Afghanistan, Albania*, Armenia*, Bangladesh, Benin, Bolivia, Bosnia and Herzegovina*, Burkina Faso, Burundi, Cape Verde*, Colombia*, Democratic Republic of Congo, Egypt*, Ethiopia, Gambia, Georgia*, Ghana, Guatemala, Indonesia*, Kenya*, Kosovo*, Macedonia*, Madagaskar, Malawi, Mali, Morocco*, Moldova*, Mongolia*, Mozambique, Nepal, Nicaragua, Pakistan, Palestinian Authorities, Peru*, Philippines*, Rwanda, Senegal, Sierra Leone, Soedan, Suriname*, Tanzania, Thailand*, Uganda, Vietnam*, Zambia, South Africa, Southern Sudan, Yemen.
* For these countries the applicant needs to be a Dutch company. For the other countries, the applicant can be any company outside of the country the project will be located.