Convergence has awarded a proof of concept grant under the Asia Climate Solutions Design Grant to [Mekong Capital](https://www.mekongcapital.com/) to design a USD 200 million blended finance vehicle called the Mekong Earth Regeneration Fund (MERF). This vehicle aims to provide growth-stage private equity funding for regenerative agriculture and sustainable land use business models in the Lower Mekong region.

The majority of the local population in the Lower Mekong region relies on agriculture and rural farming, leaving them vulnerable to the severe impacts of climate change. Decades of unsustainable agricultural land use practices have contributed to increased greenhouse gas emissions (GHGs) and land degradation, exacerbating climate hazards. Private investment in sustainable agriculture and forestry is scarce, and the majority of climate finance is currently provided as debt, which is ill-suited for the region’s early-stage businesses with longer-term growth needs. MERF’s blended finance structure, incorporating concessional and commercial capital, is designed to attract private investors by offering downside protection while promoting impactful investments.

This initiative seeks to leverage Mekong Capital’s significant experience to address the gap of undersupplied equity funding in the region and support the expansion of impactful agri-businesses. In addition, MERF intends to provide hands-on support to investee companies through a complementary technical assistance facility that will help expand the operational capacity and impact of these companies.

MERF aims to cultivate a thriving, biodiverse ecosystem in the Lower Mekong region focusing on Cambodia, Laos, and Vietnam through sustainable land use, nature-based solutions, and regenerative farming practices. Together with climate mitigation benefits, it aims to provide significant co-benefits of improved livelihoods, climate adaptation and enhanced resilience of farmers, and protection of biodiversity. The long-term objective is to improve the livelihoods of at least 1 million beneficiaries, regenerate at least 200,000 ha of forest, agricultural, and coastal land and contribute to over 10 million tonnes of CO2e emission reductions.

__Design question and learning potential from the market:__ *How can a commercial private equity fund manager transition to designing a blended climate finance fund to provide long-term equity funding for sustainable agriculture and forestry businesses in the Lower Mekong region?*

Mekong Capital has previously secured grant funding from the Dutch Fund for Climate and Development for completing the feasibility study of MERF. Through our proof of concept grant, Mekong Capital will look to build off of the feasibility study and advance the design of the fund to help it launch. An important part of this phase will be engaging with different funders to gather feedback, refine the capital structure of the fund and secure anchor commitments, particularly from development finance institutions and private investors. Along with the capital structure, the grant will also enable Mekong Capital to complete the setup of the legal structure of the fund. 

The grant will be critical for Mekong Capital to complete key activities for finalizing the setup of the fund’s technical assistance facility including the development of an operations manual, creating an implementation framework and governance structure, and preparing for the pilot phase of the facility. In parallel, the team will advance the project pipeline by identifying and engaging with potential investees in the regenerative agriculture and sustainable forestry sectors in the region.

acs logos

The application deadline is __November 22, 2024__. Upon submission, Convergence will review all concept notes and invite select applicants to submit a full proposal for funding consideration.

Watch our recent [Info Session](https://youtu.be/0GLYffCwkzg) to learn more about the ACS Design Grant.

## Scope of the Design Funding Window

The Asia Climate Solutions (ACS) Design Grant awards grant funding for the design and launch of innovative blended finance solutions that mobilize private capital to sectors critical for climate transition and resilience in developing markets in Asia. The ACS Design Grant aims to demonstrate the potential of funding from family offices, foundations, and donor agencies to catalyze blended finance solutions addressing the climate finance gap, at scale. The anchor donors of this initiative are the Monetary Authority of Singapore, the Department of Foreign Affairs and Trade Australia, Olayan Group, UBS Optimus Foundation, and Rockefeller Foundation. 

The ACS Design Grant will target critical climate mitigation and adaptation sectors in Asia including nature-based solutions (NbS), clean energy transition, and sustainable cities and infrastructure. It will provide feasibility study and proof of concept grants for innovative solutions using blended capital structures to crowd-in climate-smart investment in the region.

The current cycle will have a thematic focus on sustainable agriculture and/or clean energy solutions with innovative models demonstrating the use of blended finance for mobilizing local sources of public, private, and/or philanthropic capital to support vulnerable local communities in key Southeast Asian markets such as Indonesia, Philippines, and Vietnam. 

__Applicants are invited to apply with solutions that align with the thematic focus or the broader criteria of the program.__

## Types of Funding Available

Applicants can apply for feasibility study or proof-of-concept funding.

### Feasibility Study Grant

Feasibility study applications must be able to 1) present a viable investment thesis, and an initial capital structure and 2) demonstrate early engagement with potential investors and relevant stakeholders.

- Grants range between USD 50,000 to USD 200,000.
- Funding to explore the feasibility of the concept. For example, a combination of the following activities would be eligible:
  - Assessing the investability/bankability of the concept
  - Conducting market scoping and stakeholder consultations
  - Conducting an impact analysis including climate and gender impact potential
  - Designing the capital and legal structure
- Promising feasibility studies funded through this window may be considered for follow-on proof-of-concept funding.

### Proof-of-Concept Grant

Proof-of-concept applications will be expected to present 1) interest and ideally commitment from investors and relevant stakeholders to support the concept, and 2) a financial model.

- Grants and conditionally repayable grants range between USD 200,000 to USD 400,000.
- If a feasibility study (or equivalent) has been completed, then funding would be provided to complete all design and structuring activities to launch. For example, a combination of the following activities would be eligible:
  - Finalizing the capital structure and financial model
  - Fundraising and marketing activities with prospective investors
  - Final selection of implementing partners
  - Finalizing the legal structure and producing key documents needed to launch
  - Development of an impact assessment framework and gender action plan (or equivalent) based on the impact analysis from prior feasibility work.

Note: Both grants and conditionally repayable grants will be awarded to support the design and launch of solutions. Conditionally repayable grants and their repayment terms will be considered for Proof of Concept applications on a case-by-case basis. Repayment is expected only if the solution successfully launches and meets key milestones such as financial close.

## Eligibility Criteria

Proposals must meet the following eligibility criteria:
- Purpose:
  - Proposals articulate a clear need for grant support for the design and/or launch of an innovative blended finance solution.
  - Solutions must target climate change mitigation and/or adaptation.
  - The proposed solution should be implemented through a financial instrument. It can be in the form of a fund, project finance vehicle, private company, bond, results-based financing, facility, or any other type of instrument.
- Geography: Proposals target one or more developing market(s) in Asia. Applicants do not need to be domiciled in a developing market(s) but end beneficiaries and target activities must.
- Sectors: Proposals target one or more of the following sector(s) and sub-sector(s): 
  - Nature-based Solutions (NbS) 
    - Sustainable forestry and climate-smart land use / adaptation
    - Sustainable agriculture and agroforestry
    - Climate-related insurance and disaster resilience
    - Natural resource management, directly linked to preserving and protecting natural assets, such as:
      - Sustainable fisheries and aquaculture
      - Sustainable forestry
      - Forest and blue carbon
      - Coastal protection
      - Eco-tourism
  - Clean Energy Transition
      - Renewable energy generation (on-grid and off-grid)
      - Energy efficiency
      - Energy transmission, storage, and distribution
  - Sustainable Cities & Infrastructure
      - Sustainable infrastructure/housing
      - Low-carbon transportation
      - Waste and wastewater management
      - Urban Nature-based Solutions
- Thematic Focus: The current cycle will also have a dedicated thematic focus on sustainable agriculture and clean energy solutions with innovative models demonstrating the use of mobilizing local sources of capital to support vulnerable local communities in key Southeast Asian markets such as Indonesia, Philippines, and Vietnam. Applicants can apply with solutions that meet this thematic focus or apply under the broader criteria of the program.
- Applicant: Proposals will only be accepted from organizations or consortiums of organizations. For example, eligible organizations could include asset owners, asset managers, advisory firms, foundations, not-for-profit organizations, and private enterprises. The lead organization must be able to provide 1) proof of incorporation, and 2) financial statements for the previous fiscal year.

## Evaluation Criteria

All applications received will be scored on a scale of 0-100 depending on the stage of the solution.

|      | Maximum Available scores     |  | 
| ---------- | ---------- | ---------- | 
| Criteria       | Feasibility Study | Proof of concept |
|__Development impact__<ul><li>How will climate mitigation or adaptation be incorporated into the concept’s design and operations?</li><li>What will be the environmental and socioeconomic impact of the concept?</li><li>How will gender equality be incorporated into the concept’s design and operations?</li><li>What indicators will be used to measure progress and impact outcomes?</li></ul>| 19 | 19 |
|__Scalability and/or replicability__<ul><li>How much private capital does the concept aim to catalyze?</li><li>How much local capital does the concept aim to mobilize?</li><li>If the concept is successful, can other practitioners use a similar approach? Will the concept contribute to creating a pipeline of investable climate finance solutions in emerging markets?</li></ul>| 19 | 19 |
|__Additionality__<ul><li>Does the concept aim to deploy financial instruments that are under-supplied, and will therefore catalyze financing with a high degree of additionality?</li><li>Does the concept have strong potential to address a market failure in the short term, and catalyze broader market financing in the long term?</li><li>To what extent will the design grant be catalytic in achieving the targeted development impact?</li></ul>| 17 | 17 |
|__Innovation & Demonstration Effect__<ul><li>Is the concept testing a never-before-tested design?</li><li>Is the concept replicating an existing approach in a new market?</li><li>Does the concept demonstrate the rationale and business case for using blended finance for climate adaptation and/or mitigation?</li></ul>| 17 | 13 |
|__Likelihood to achieve financial close__<ul><li>Is the structure proposed in the concept bankable/investable?</li><li>Is the concept likely to attract private investors and close within the short or medium term?</li><li>Have investors been actively involved in the design of the concept to date?</li></ul>| 9 | 12 |
| __Track record of applicant__<ul><li>Does the applicant have the relevant expertise, track record, and capacity required to succeed?</li></ul>| 12 | 12 |
| __Stakeholder Support__<ul><li>	Does the concept have the support and buy-in of key stakeholders in the target region/country (e.g., government, prospective investors, partners)?</li></ul>| 7 | 8 |
| __Total__ | 100 | 100 |

## Application Process

*Stage 1: Submission of concept notes*

- Interested applicants can initiate the application process by logging in to [https://designfunding.convergence.finance/en/](https://designfunding.convergence.finance/en/)
- The next application deadline is __November 22, 2024__.
- Follow the instructions provided to submit a concept note and supplemental materials (e.g., pitch deck) by the deadline date.
- Applicants may submit one application per funding cycle. 
- Convergence reviews the concept notes and supporting materials to i) screen for eligibility and ii) based on the evaluation criteria, select a longlist of concept notes to proceed to Stage 2.
- Unsuccessful applicants are notified. Due to the high volume of applications expected, we regret that at this stage we are unable to provide feedback on unsuccessful applications.

*Stage 2: Submission of full proposals*

- Longlisted applicants are invited to submit a full proposal for funding consideration.
- Follow the instructions provided to submit a full proposal by the deadline date.
- Convergence reviews full proposals according to the evaluation criteria and shortlists proposals. Convergence may request additional information as necessary.
- Convergence conducts technical due diligence on shortlisted proposals. Shortlisted applicants are asked to respond to due diligence questions from Convergence and are requested to make introductions to key stakeholders for interviews as part of the due diligence process.
- Unsuccessful applicants are notified. Due to the high volume of applications expected, we regret that at this stage we are unable to provide feedback on unsuccessful applications.

*Stage 3: Investment Committee review and approval*

- Shortlisted proposals that pass due diligence are recommended by Convergence to the Investment Committee for approval.
- The Investment Committee is composed of independent experts who recommend proposals to the Convergence Board of Directors for funding.
- Shortlisted applicants that do not pass due diligence are notified. Convergence at its discretion maybe available for a call to provide high-level feedback to a subset of the highest scoring shortlisted proposals.

*Stage 4: Compliance review and Final Approval*

- Proposals approved by the Investment Committee undergo a compliance review led by Convergence’s Chief Financial Officer.
- Following the compliance review, cleared proposals are recommended to either Convergence's Senior Management or Board of Directors for final approval.
- Shortlisted applicants that are not selected for funding at this stage are notified. Convergence at its discretion maybe available for a call to provide high-level feedback to a subset of the highest scoring shortlisted proposals.

*Stage 5: Contracting*

- Following Board approval, Convergence initiates the contracting stage with the selected awardees.
- Convergence will execute contracts with the selected awardees that includes the design activities and key milestones agreed upon with the awardees.

Notes:
- Convergence will only consider one application per organization per funding cycle.
- Convergence is under no obligation to provide feedback on concept notes or proposals.
- Concept notes and proposals must be submitted in English.

The Asia Climate Solutions (ACS) Design Grant will provide early-stage grants for high-impact climate financing solutions in emerging markets in Asia. The Grant aims to mobilize private capital at scale into high-impact target sectors across climate mitigation and adaptation.

Design of Mekong Earth Regeneration Fund (MERF)

Convergence awarded a proof of concept grant under the Gender Responsive Climate Finance Window to Clarmondial AG for the design and launch of a blended debt vehicle, Biosphere Integrity Fund (“BIF”), to transition emerging and developing market agricultural supply chains and sourcing landscapes to achieve targets on environment, local livelihoods, business resilience, and women's economic empowerment.

Environmental degradation is increasing value chain risk and uncertainty. There is a pressing need to mitigate environmental and regulatory risks, which, in turn, increases financing needs both on and off the farm. Agriculture, Forestry & Other Land Use sectors contribute [13-21%](https://unfccc.int/topics/land-use/workstreams/land-use--land-use-change-and-forestry-lulucf#:~:text=The%20Intergovernmental%20Panel%20on%20Climate,in%20the%20period%202010%2D2019.) of global greenhouse gas emissions and approximately [$420 billion](https://www.paulsoninstitute.org/wp-content/uploads/2020/10/Updated-10.23.20-FINANCING-NATURE_Exec.-Summary_Final-with-endorsements_101420.pdf) are needed annually to transition croplands to conservation agriculture practices. In recognition of these challenges, corporations are preparing for emerging regulations, engaging in industry initiatives, and in landscape coalitions. For instance, the EU Deforestation Regulation (EUDR) will require substantial investment to ensure traceability to enforce deforestation-free imports to Europe. Specialized financing solutions are required to promote shared accountability for risks and returns between relevant stakeholders, across value chains and within sourcing landscapes. Companies cannot cover the full transition cost from current budgets, and additional private finance must be mobilized. 

Clarmondial is designing the Biosphere Integrity Fund to provide longer-term transition finance across sourcing landscapes focusing on biodiversity and gender responsive climate action. The fund will finance on-farm, value chain and landscape actions. Its investments will drive accountability in the value chain and ensure financial sustainability. The Biosphere Integrity Fund has been conceptualized through the Business Case for Collective Landscape Action, an initiative supported by the U.S. Agency for International Development (USAID) and executed in collaboration with the Rainforest Alliance (RA), Conservation International, and CDP. The fund will support and finance on farm action such as agroforestry practice, soil health management practices, farmer training and agronomic support; value chain enhancements through renewable energy integration and efficient water and waste management; and landscape initiatives like building watershed protections and wildlife corridors. Overall the vehicle will look to convert  500,000 hectares of land to sustainable management, potentially avoiding 5 million tons of carbon emissions, improving livelihoods of more than 50,000 residents and farmers with over 50% women beneficiaries resulting in healthy landscape, and climate resilient ecosystem services. 

The Convergence grant will enhance the initiatives supported by USAID by enabling Clarmondial to integrate payments for ecosystem services into their transaction structure. This funding will also contribute to the design of the technical assistance facility and help develop a transaction-level impact framework, advancing Clarmondial towards the launch of the fund.

__Design question and learning potential for the market:__ *How can a blended finance vehicle be structured to promote gender-responsive investment in climate-resilient practices across agriculture supply chains and sourcing landscapes?*

The Biosphere Integrity Fund leverages its catalytic tranche and Technical Assistance Facility (TAF) to deliver both financial returns and impactful gender-responsive investments. Given the long-term nature of the investments, the fund aims to foster significant systemic changes through extended capital provisions. This includes payments for ecosystem services such as carbon insets and high-quality offsets, along with potential credits under the UNFCCC Paris Agreement Article 6 framework. These financial mechanisms are designed to enhance the livelihoods of women both on and off the farm. Clarmondial will engage consultants to identify relevant gender indicators for incorporation into loan agreements. The fund will monitor gender-specific outcomes and compliance with the EU’s Sustainable Finance Disclosure Regulation (SFDR) as an Article 9 Fund. Beyond setting quantitative targets at the fund level, the fund plans to create an impact framework adaptable to individual transactions. 
The Convergence grant will aid in developing a gender integration framework that links transaction-specific and fund-wide requirements, enhancing their ability to craft transaction-level Key Performance Indicators (KPIs) with borrowers. The Technical Assistance Facility (TAF) will further support borrowers in implementing gender action plans through capacity-building initiatives. The success of Biosphere in environmental, social, and governance (ESG) aspects is expected to catalyze subsequent funds by Clarmondial and other managers.

Global Affairs Canada Logo

application/vnd.openxmlformats-officedocument.wordprocessingml.document

English Application Template - Feasibility Study - Gender-Responsive Climate Finance Design Funding Window

English Application Template - Proof-of-Concept - Gender-Responsive Climate Finance Design Funding Window

French Application Template - Feasibility Study - Gender-Responsive Climate Finance Design Funding Window

French Application Template - Proof-of-Concept - Gender-Responsive Climate Finance Design Funding Window

The Gender-Responsive Climate Finance Design Funding Window will award early-stage grant funding for the design and launch of innovative blended finance vehicles focused on the intersection of climate change and gender equality in emerging markets globally. This Window is funded by the Government of Canada.

Le Guichet de financement de la conception du financement climatique sensible au genre va accorder des subventions de démarrage pour la conception et le lancement de véhicules de financement mixte innovants axés sur l’intersection des problématiques de changement climatique et d’égalité des genres dans les marchés émergents du monde entier. Ce guichet est financé par le gouvernement du Canada. 

Design of a blended finance vehicle investing in the transition to sustainable agriculture supply chains and sourcing landscapes

Convergence awarded a proof of concept grant under the Gender Responsive Climate Finance Window to Camco for the design and launch of a $100 million blended finance vehicle, Transforming Island Development Through Electrification and Sustainability (“TIDES”), to support the development of renewable energy projects through partnering with local developers in the Pacific Islands.

The Pacific Islands rely heavily on diesel for electricity generation, specifically Islands like Tonga where imported diesel accounts for [90% of the electricity generation](https://www.adb.org/news/tonga-gets-more-funds-cut-diesel-boost-solar-power-outer-islands#:~:text=Tonga%20has%20177%20islands%20scattered,international%20fluctuations%20in%20fuel%20prices.). Such dependence not only escalates costs but also exposes the islands to significant supply chain and climate-related risks, adversely impacting economic stability and disproportionately affecting women. Most funding for energy comes from public institutions/donor funding or funding directly from project developers balance sheets. More than often, financial options have considerably long approval processes; strict project finance requirements; and require on balance sheet financing. They also tend to overlook the gender component in climate initiatives which is critical to ensuring inclusive development. 

Recognizing the central role that clean and affordable energy has in growing sustainable and inclusive economies, Camco aims to launch TIDES which introduces an innovative aggregation structure, pooling a portfolio of renewable energy projects to facilitate scalable business models that yield both economic returns and positive climate and gender impacts. TIDES will invest across three thematic priorities to spur Pacific Island’s clean energy transition: businesses and projects that reinforce grid power, businesses serving commercial and industrial power and energy efficiency requirements and businesses providing reliable, affordable renewable energy-based solutions and productive use equipment to rural and remote communities’- which results in savings in cost and emissions at both national and local levels. Moreover, TIDES is supported by the Market Development Facility (MDF), which enhances the project's impact by filling crucial market gaps. The MDF will provide technical assistance grants, results-based financing, and loans for development phases to support essential capacity building. Overall, TIDES aims to support 83 megawatts of renewable energy generation capacity, avoiding 2.3 million tons of carbon emission, creating 500 new jobs opportunities for women and providing first-time energy access to over 50,000 people, including 35,000 women and girls.

Previously, Convergence supported the initial design of this vehicle with a feasibility study grant under the Indo-Pacific Design Funding Window, enabling Camco to establish a project pipeline, engage with potential investors and determine the initial financial and legal structure of the vehicle. Building on this foundation, the proof of concept grant will help launch TIDES, further enhancing its design and operational framework.

__Design question and learning potential for the market:__ *How can a blended vehicle be tailored to prioritize gender inclusivity while attracting investments at scale for a diverse portfolio of  renewable energy projects in the Pacific Islands?*

TIDES is committed to increasing the participation of Pacific and women-owned and managed businesses in the renewable energy sector, principally through its development partner network and partnerships. Camco will partner with local Development partners to efficiently originate and aggregate multiple projects efficiently, providing funding, technical assistance, and project preparation support. By utilizing donor first-loss capital to de-risk investments for other stakeholders, TIDES aims to attract additional capital and develop an inclusive energy sector appealing to regional investors. 

Using the proof-of-concept grant, the vehicle aims to generate economic development by targeting direct community benefits for women. TIDES will work with development partners to increase female participation and gender equality in their companies. This will be done through their MDF technical assistance component which will provide capacity building support to undertake gender baseline assessments and establish concrete and measurable gender action plans. Moreover, technical assistance will also be used to increase capacity of the target development partners to enhance their bankability and increase pipeline of investable projects in the region while also enabling projects to overcome the initial barriers to implementation.

Design of a blended vehicle to finance gender-inclusive renewable energy projects in the Pacific

The [SDG Impact Finance Initiative](http://www.sdgimpactfinance.org/) aims to advance measurable progress in developing countries towards the achievement of the UN Sustainable Development Goals (SDGs) by mobilizing new capital through innovative finance solutions and collaboration between public and private partners. 

Launched by Switzerland’s State Secretariat for Economic Affairs (SECO), UBS Optimus Foundation, Credit Suisse Foundation, and the Swiss Agency for Development and Cooperation (SDC) the goal of the SDG Impact Finance initiative is to unlock capital towards the SDGs by 2030 through three critical pathways: 

1. __Sparking Innovation__ - by kick-starting promising, impactful ideas and projects through traditional and repayable grants. This includes support for feasibility studies, proof of concept and expansion grants.	 
2. __Fuelling Growth and Scale__ - by ensuring good projects don't just survive but thrive through investing in a way that attracts more private investment. This includes first loss investments/guarantees, and at a later stage is expected to include technical assistance and payment for outcomes.
3. __Shaping the ecosystem__ - by stimulating the environment for impact investing in Switzerland and beyond, working with key partners. Our focus on framework conditions includes policy, tax, and regulation, as well as impact standards.

__Winners announced__

November 1, 2022 - SDG Impact Finance Initiative announced its first winners:

In its first proposals for funding, the SDG Impact Finance Initiative has awarded $1.5 million to seven winners after a highly competitive process. After reviewing a large field of high quality proposals that responded to the call for impact finance design ideas with the potential to make a meaningful difference on four of the UN Sustainable Goals: SDG 4 (Quality Education), SDG 8 (Decent Work and Economic Growth), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action). All proposals were assessed against pre-defined eligibility and evaluation criteria (view the list of criteria).

The proposals selected are:

__Carbon Fund for Nature-based Solutions:__ Feasibility grant for CrossBoundary to develop a $57 million blended fund to finance projects in afforestation, reforestation and revegetation (ARR) and reducing emissions from deforestation and forest degradation (REDD+) projects, starting in sub-Saharan Africa.

__Carbon Impact Strategy:__ Proof-of-concept grant to help BlueOrchard finalize the structure for a USD 300-500 million equity fund that will invest in conservation, reforestation and afforestation projects in emerging markets.

__Colibri Catalyst:__ Support for proof-of-concept for the design of a vehicle from Demeter Initiative that will pool concessional capital to de-risk intermediary vehicles investing in natural climate solutions and enable them to attract commercial capital.

__Ghana SDG-SME Fund of Funds:__ Feasibility grant awarded to Ground Up Project, working through local partners, to validate and scope a $250 million fund of funds structure to mobilize domestic and international institutional investments into SDG-aligned SMEs in Ghana.

__Global Finance for Education Fund:__ Grant awarded to the Global Schools Forum to assess the feasibility of a $35 million blended finance fund to improve access to and quality of education through impact-linked financing to education providers in India, Ghana, Kenya, Nigeria, Pakistan and Uganda.

__Offgrid.Finance Pop-UP SPVs:__ Feasibility support to Offgrid.Finance to scale a $100 million pop-up special purpose vehicle model in Africa that raises larger investments which can be broken down into smaller, de-risked loans for SMEs to purchase cleantech and productive use assets.

__Microleasing Fund:__ Expansion grant awarded to adOpes to support fundraising and deployment of a $100 million evergreen debt fund to provide asset financing tailored to the needs of smallholder farmers and micro enterprises in East Africa.

Visit the SDG Finance Initiative [website](http://www.sdgimpactfinance.org/) to learn more.

SIFI logo

### KEY TERMS FOR THE THIRD CALL FOR DESIGN FUNDING PROPOSALS
*Originally posted on the [SDG Impact Finance Initiative’s website](https://www.sdgimpactfinance.org/)*

__Start Your Application__ [__here__](https://designfunding.convergence.finance/en/).

__Read the FAQs [here](https://assets.ctfassets.net/4cgqlwde6qy0/uplC1vQwZtNEWk2uU1VEP/d02fb6916966830f5a0de3009b93d4db/SIFI_Cycle_3_FAQ.docx.pdf).__

We held two info sessions, which included insights on the application process, evaluation criteria, advice on submitting a successful application, and more.
- General information session: February 27, 2024, at 11AM – 12PM EST / 5PM – 6PM CET ([view recording](https://youtu.be/E8Q6GAPGObI))
- Targeted Information session : February 29, 2024 at 11AM – 12PM EST / 5PM – 6PM CET ([view recording](https://youtu.be/LZR4OfhtSjQ))

## Background

Following the success of the first and second calls for proposals, the [SDG Impact Finance Initiative](https://www.sdgimpactfinance.org/) (“the Initiative”) has announced a third call for proposals targeting a new set of UN Sustainable Development Goals (SDGs). The SDG Impact Finance Initiative’s Innovation Window awards grants for innovative impact finance solutions that will mobilize private capital for sustainable development in emerging and frontier markets. The Initiative is funded by the [State Secretariat for Economic Affairs](https://www.seco-cooperation.admin.ch/) (SECO), the [Swiss Development Cooperation Agency](https://www.eda.admin.ch/) (SDC), the [UBS Optimus Foundation](https://www.ubs.com/global/en/ubs-society/philanthropy/optimus-foundation.html), and the [Grandy Duchy of Luxembourg.](https://mfin.gouvernement.lu/en.html)

The SDG Impact Finance Initiative aims to accelerate advancements in the impact investing market by supporting the launch of innovative solutions that address market failures, deploy financial products that are under-supplied or supplied at insufficient volumes, and mobilize funding into new sectors and regions.

It aims to achieve three key objectives:
- Support the design and development of innovative impact finance solutions;
- Scale impact investing solutions by mobilizing private capital at scale; and
- Strengthen the impact investing ecosystem, improve overall frameworks, and promote quality impact management practices to enhance impact investment flows. 

Under this third call for proposals, with support from Convergence, the Initiative will award grant funding for feasibility studies, proof of concept activities and expansion of existing solutions. Proposed solutions should target one or more of __SDG 3 (Good Health & Well-Being), SDG 13 (Climate Action) and SDG 16 (Peace, Justice and Strong Institutions)__. Convergence supports the Initiative in the pre-selection of applications and the engagement with the applicants during the selection process.

# Key highlights of the call for proposals

- __Application period & available funding__: Concept notes will be accepted until March 15, 2024. Full proposals (invite-only) will be due on April 22, 2024. Up to USD 2 million in total will be awarded to support up to 5 solutions. Winners are expected to be finalized and announced by early September 2024.

- __Funding types__: Both grants and conditionally repayable grants will be awarded to support the design, launch or scaling of solutions. Conditionally repayable grants and their repayment terms will be considered for Proof of Concept and Expansion applications on a case-by-case basis. Repayment is expected only if the solution successfully launches and meets key milestones such as financial close. See “Which type of grant should I apply for?” for additional details. 

- __Thematic focus__: This third call for proposals is seeking solutions targeting any one of the below SDGs. No preference will be given to solutions that target multiple SDGs.
  - [SDG 3 (Good Health & Well Being)](https://sdgs.un.org/goals/goal3#overview): *Ensure healthy lives and promote well-being for all at all ages*
    - Solutions can target any areas aligned with SDG 3, including but not limited to:
       - Maternal and Child Health Support;
       - Accessible healthcare services including medicines, vaccines and health coverage;
       - Mental health and well-being;
       - Improvement in Health infrastructure.

 - [SDG 13 (Climate Action)](https://sdgs.un.org/goals/goal13): *Take urgent action to combat climate change and its impacts*
    - Solutions can target any areas aligned with SDG 13, including but not limited to:
       - Strengthen climate resilience and adaptive capacity to climate-related hazards and natural disasters;
       - Supporting climate change mitigation, adaptation and impact reduction with a focus on marginalized groups;
       - Fostering inclusive climate action. 

 - [SDG 16 (Peace, Justice and Strong Institutions)](https://sdgs.un.org/goals/goal16): *Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels*
    - Solutions can target any areas aligned with SDG 16, including but not limited to:
       - Fostering global peace by prioritizing efforts to reduce violence and protect vulnerable populations; 
       - Advance justice and the rule of law;
       - Enhance global governance by strengthening relevant national and international institutions.

- __Geographical focus__: Solutions can target any developing country or countries eligible to receive official development assistance (ODA) according to the OECD-DAC List of ODA Recipients. We highly encourage solutions that target low-income and least-developed countries. 

- __Demonstrated potential to benefit predominantly children__: We highly encourage applications that can demonstrate direct benefits to children and adolescents. 

- __Developing country applicants and partnerships__: We highly encourage applications that fall into any of these categories:
  - Applications from __local__ organizations based in developing countries
  - Applications from a __consortium__ of organizations from both developing and developed countries
  - Applications that strongly focus on __building long-term partnerships__ with developing country actors

# Which type of grant should I apply for?
Applicants can apply for Feasibility, Proof of Concept, or Expansion funding depending on the stage of the proposed solution. 

|   Pre-launch   |     | Post-launch (operational) | 
| ---------- | ---------- | ---------- |
| Feasibility study     | Proof of concept     | Expansion     |
|<ul><li>Grants up to USD 200,000.</li><li>Funding to explore the feasibility of a new solution and validate:</li><ul><li>Its ability to attract private investors through market testing</li><li>Its likelihood of delivering the anticipated development impact</li><li>Its initial design, capital structure and financial model</li></ul><li>Early stakeholder engagement and an initial design of the capital structure should have already been completed before applying.</li></ul> |<ul><li> Grants and conditionally repayable grants up to USD 500,000.</li><li>If feasibility stage (or equivalent) has been achieved, funding to complete all design and structuring activities required to launch the solution. For example:</li><ul><li>Finalizing the capital structure and financial model</li><li>Produce key legal and marketing documents</li><li>Fundraising activities to secure potential anchor investor(s)</li><li>Develop an investment pipeline</li></ul></ul>|<ul><li>Grants and conditionally repayable grants up to USD 300,000.</li><li>If a solution has already launched but requires operational funding support to scale and reach a financially viable size. For example:</li><ul><li>Fundraising/marketing to reach capital raising targets</li><li>Produce key legal documents</li><li>Due diligence on initial pipeline and capital deployment</li><li>Hiring of key personnel</li></ul></ul>|

# Evaluation criteria
All applications received will be scored on a scale of __0-100__ depending on the stage of the solution. We regret that we are unable to provide feedback on applications.

|      | Maximum available scores     |
| ---------- | ---------- |

|  Criteria    |   Feasibility study   |  Proof-of-concept    | Expansion     |
| ---------- | ---------- | ---------- | ---------- |
|__Development impact__<ul><li>__Impact__: Potential social, economic, or environmental impact of the solution</li><li>__Measurement__: Does the proposal identify robust metrics and impact measurement practices to measure the potential development impact?</li><li>Does the concept demonstrate the rationale and business case for using blended finance for climate adaptation and/or mitigation?</li></ul>| 18 | 18 | 18 | 
|__Additionality__<ul><li>__Initiative’s funding__: To what extent will the funding be catalytic in achieving the targeted development impact?</li><li>__Target developing countries__: To what extent will the funding be catalytic in achieving the targeted development impact?</li></ul>| 17 | 17 | 17 | 
|__Scale of private capital mobilization__<ul><li>__Direct (high priority)__: How much private capital is expected to be mobilized directly through the solution?</li><li>__Indirect__: How much private capital is expected to be mobilized indirectly through the solution?</li><li>__Leverage ratio__: For every $1 of the Initiative’s funding, how much private capital is expected to be mobilized by the solution?</li></ul>| 14 | 14 | 14 | 
|__Pioneering innovation__<ul><li>__Relative to alternatives__: Why is the solution unique relative to existing alternatives in the market?</li><li>__Replicability__: If successful, can the model be applied in different contexts? What valuable learnings can the solution offer to the broader ecosystem?</li></ul>| 18 | 15 | 13 | 
|__Developing country partnerships__<ul><li>__Engagement__: What levels of engagement have been completed to date with potential stakeholders and local partners in developing countries, and with whom?</li><li>__Strategy__: How well thought out is the engagement strategy?</li></ul>| 8 | 9 | 10 | 
|__Likelihood of successful fundraise__<ul><li>__Capital raise__: How likely is the solution expected to attract sufficient funding to launch and meet its fundraising targets?</li><li>__Investors__: What type of investors has the solution attracted to date (private, public, philanthropic)?</li></ul>| 10 | 12 | 13 | 
|__Track record of applicant__<ul><li>Does the applicant have the relevant expertise, track record, and capacity required to succeed?</li></ul>| 10 | 10 | 10 | 
|__Financial sustainability__<ul><li>Does the solution demonstrate a pathway to commercial viability over the long-term without the need for concessionality?</li></ul>| 5 | 5 | 5 | 
|__Total__<ul><li>Does the solution demonstrate a pathway to commercial viability over the long-term without the need for concessionality?</li></ul>| 100 | 100 | 100 | 

# Application and review process
__Stage 1: Concept note (accepting until March 15, 2024)__
- Interested applicants can start their application on Convergence’s portal. Stage 1 includes the completion of screening questions and the submission of an online application. 
- All concept notes will be screened against the eligibility criteria (see below), and those that are eligible will then be reviewed against the evaluation criteria. Convergence will only contact applicants selected to submit a full proposal (Stage 2).

__Stage 2: Full proposal (by invitation only - due April 22, 2024)__
- Competitive concept notes will be invited to submit a full proposal. Those advancing to this stage receive instructions on how to submit a proposal. Final proposals must be submitted by the deadline in order to be considered. No exceptions will be made.

__Stage 3: Initial review and shortlisting__
- All full proposals will be reviewed and assessed against the evaluation criteria by Convergence. Shortlisted proposals will be recommended by Convergence to the funding partners of the SDG Impact Finance Initiative for further consideration and due diligence.

__Stage 4: Due diligence__
- Shortlisted proposals will undergo two types of due diligence in parallel:
  - *Proposal-level*: Convergence will request responses to detailed questions on the proposal, and introductions to key stakeholders for interviews.
  - *Applicant-level*: Applicants will undergo a compliance review led by Convergence’s Chief Financial Officer.

__Stage 5: Investment Committee__
- Shortlisted proposals that satisfactorily clear due diligence will be recommended by Convergence to the Investment Committee.
- The Investment Committee is composed of independent experts and the CEO of the SDG Impact Finance Initiative who will recommend proposals to the Initiative Executive Board for final approval.

__Stage 6: SDG Impact Finance Initiative Executive Board__
- Proposals recommended by the Investment Committee will be reviewed for final approval by the SDG Impact Finance Initiative Executive Board.

__Stage 7: Contracting__
- Following final approval from the SDG Impact Finance Initiative Executive Board, the contracting stage is initiated with the selected awardees.

# Eligibility criteria

| Criteria     | Description     |
| ---------- | ---------- |
|Developing countries| <ul><li>Solutions must target activities that benefit ODA-eligible countries as defined by the OECD Development Assistance Committee.</li><li>Solutions must target activities that benefit ODA-eligible countries as defined by the OECD Development Assistance Committee.</li><li>The Initiative will not fund solutions targeting any countries subject to financial sanctions.</li></ul> | 
|SDGs| <ul><li>Solutions must clearly and directly address [SDG 3 (Good Health & Well-Being)](https://sdgs.un.org/goals/goal3#overview), [SDG 13 (Climate Action)](https://sdgs.un.org/goals/goal13) and [SDG 16 (Peace, Justice and Strong Institutions)](https://sdgs.un.org/goals/goal16)</li><li>No preference will be given to solutions that target multiple SDGs.</li></ul> | 
|Impact Finance solution| <ul><li>Feasibility Study and Proof of Concept applications must focus on the design and structuring of new impact finance solutions that have not yet launched.</li><li>Expansion applications must focus on the scaling of existing impact finance solutions that have already launched. </li><li>*Examples*: bonds, facilities, funds, capital markets instruments, private companies, project finance structures, results-based financing instruments etc.</li></ul> | 
|Minimum Progress | <ul><li>Proof of early stakeholder engagement (Example: draft or signed MoU, partnership agreement, EOI etc.) and an initial design of the capital structure should have been completed for all application types.</li></ul> | 
|End beneficiaries in developing countries | <ul><li>Impact finance solutions must clearly and directly benefit end beneficiaries in targeted developing countries.</li></ul> | 
|Private Capital mobilization| <ul><li>Solutions must show strong potential for private capital mobilization on a direct and/or indirect level. Direct private capital mobilization is preferred.</li></ul> | 
|Type of applicants| <ul><li>Applications will only be accepted by organizations or consortia of organizations. Organizations must have proof of incorporation and audited financial statements from the most recent fiscal year.</li><li>Ineligible applicants<ul><li>Individuals</li><li>The Initiative will not fund solutions targeting any countries subject to financial sanctions.</li></ul><li>Applicants can be based anywhere in the world. We highly encourage locally-based institutions in developing countries to apply.</li></ul> | 
|Target size | <ul><li>Solutions must demonstrate a credible plan to scale to a size of at least USD 25 million over the medium to long term.</li></ul> |
|Budget and ‘skin in the game’ | <ul><li>At least 50% of the project’s total budget should be covered by a source other than the SDG Impact Finance Initiative. This can be either financial and/or in-kind support.</li></ul>
|International ESG practices | <ul><li>All applications should adhere to international practices regarding environmental, social and governance (ESG) standards.</li></ul>

# Additional notes
- Multiple applications from the same organization are accepted if the proposed solutions are different.
- At this time, proposals must be submitted in English.
- Applicants can access frequently asked questions [here](https://www.convergence.finance/frequently-asked-questions) and submit additional questions to design.funding@convergence.finance. The SDG Impact Finance Initiative and Convergence will update the FAQ regularly to address recurring questions from applicants.


SDG Impact Finance Initiative - Design Funding - Expansion Template (FINAL)

SDG Impact Finance Initiative - Design Funding - Proof of Concept Template (FINAL)

SDG Impact Finance Initiative - Design Funding - Feasibility Study Template (FINAL)

The SDG Impact Finance Initiative’s Innovation Window awards grants for innovative impact finance solutions to mobilize private capital for sustainable development in emerging and frontier markets. The Initiative is funded by the State Secretariat for Economic Affairs (SECO), the Swiss Development Cooperation Agency (SDC), the UBS Optimus Foundation, and the Grand Duchy of Luxembourg. From 2022 to 2024, Convergence supported the design, set-up, launch, and management of the Innovation Window as the strategic implementing partner for the Window’s first three funding cycles,  awarding USD 4.6 million to 19 solutions ranging in maturity from feasibility studies to proof of concepts and expansion stage grants across multiple SDGs and the Global South. Review the grant portfolio to learn more.

Launch of SDG Impact Finance Initiative's first impact finance design portfolio

Launch of SDG Impact Finance Initiative's first impact finance design portfolio focused on SDGs 4, 8, 12, and 13

A partnership between Convergence and Climate Policy Initiative (CPI) focused on scaling sustainable climate finance.

Gates Foundation Logo

Bill & Melinda Gates Foundation

Global Affairs Canada

DFAT Logo Hi-res

Australian Department of Foreign Affairs and Trade

Ricardo Nogueira

Rick Nogueira, Photo, Leadership Page

Member, Green Climate Fund's independent Technical Advisory Panel  

Paul Currie

Advisor, Office of the CEO, Development Bank of Southern Africa

Sergio Gusmão Suchodolski

Executive Vice President VR Investments

Kaylene Alvarez 

cropped head shot K Alvarez

Co-founder, BIDUK Indonesia; Founder & CEO, Athena Global Alliance

The Catalytic Climate Finance Facility (CC Facility) is a partnership between Climate Policy Initiative (CPI) and Convergence focused on scaling sustainable climate finance by providing grant funding and dedicated acceleration services to early-stage and market-ready financial solutions in sectors that are severely under-financed in developing countries.

Design Funding

RSgroup

RS Group

*The application deadline for the Window is September 30, 2022.* 

The Asia Natural Capital Design Funding Window provides grant funding for the design and launch of catalytic blended finance solutions focused on natural capital in Asia. This Window is funded by the [RS Group](http://www.rsgroup.asia/ "RS Group Website"), a family office based in Hong Kong.

This Window will support blended finance solutions that find new ways to enhance and protect the world's stock of natural assets, including water, land, soil, air, plants and animals, by attracting private investment at scale. For example, solutions could be aimed at:

- Protecting biodiversity
- Reducing ecosystem degradation (e.g. deforestation)
- Mitigating and adapting to climate change
- Reducing unsustainable use of land and oceans 
- Restoring and rehabilitating impaired terrestrial, coastal and aquatic ecosystems

...while providing a fair and sustainable living to local communities.

Please refer to the [Factsheet](https://assets.ctfassets.net/4cgqlwde6qy0/2fAif1fxOzJ0yszbFQIdTR/8f9bba93376aa10588434cbd4f614f1d/Asia_Natural_Capital_Design_Funding_Factsheet.pdf) on the Asia Natural Capital Design Funding Window for more information

---

## Types of Applications
Practitioners can apply for feasibility study or proof of concept funding:

- __Feasibility study:__ Funding to explore the feasibility of the vehicle. For example, assessing the investability/bankability of the transaction, conducting market scoping and developing the vehicle structure.  Convergence will award __grants__ between $50,000 and $200,000 for feasibility studies. Promising feasibility studies funded through the Design Funding Window will be considered for follow-on proof of concept funding.
- __Proof of concept:__ If a feasibility study (or equivalent) has been completed, funding to complete all design and structuring activities to launch the vehicle. For example, finalizing the capital structure and financial model, establishing the legal structure, and producing key documents.  Convergence will award __repayable grants__ between $200,000 and $500,000 for proof of concept work. Determination of whether a grant is repayable will be made on a case-by-case basis.
---

## Eligibility Criteria
To be eligible for consideration for the Asia Natural Capital Design Funding Window, proposals must meet the following criteria:

- The proposal must be for a __blended finance vehicle__. The vehicle must aim to use catalytic capital from public or philanthropic sources to attract private sector investment to the identified development challenge.
- The vehicle must __focus on the natural capital sector__.
- The __target region__ for the blended finance vehicle must be in __Asia__. Preference would be given to proposals targeting Southeast Asia. Practitioners should have on the ground presence or partnerships in Asia.
- Practitioners __can only use the awarded grant funding for the design and launch of the blended finance vehicle__ – not for investment capital or to fund operational activities of an already established vehicle. See [grant portfolio](https://www.convergence.finance/design-funding/grant-portfolio "Grant Portfolio") for examples of previous grants made by Convergence.
- The __proposal must adhere to the applicable proposal template__, detailing the development challenge, proposed blended finance vehicle, key risks and mitigation strategies, design activities and costs, and the applicant's relevant experience.
  - [__Feasibility study proposals__](https://assets.ctfassets.net/4cgqlwde6qy0/21d74dIpc0SttdLxJ32REl/0bd2dd841c2da2c5b0af9d918bbfde4d/Convergence_Template_Feasibility_Study_Asia_Natural_Capital_Window__Final_.docx) must 1) include an initial vehicle structure and investment thesis, and 2) have initiated engagement with potential funders and relevant stakeholders.
  - [__Proof of concept proposals__](https://assets.ctfassets.net/4cgqlwde6qy0/6SgUlDodejwJgMwUGlh951/5868c953a70ebbf0e775531a30486705/Convergence_Template_Proof_of_Concept_Asia_Natural_Capital_Window__Final_.docx) must 1) detail interest and ideally commitment to participate, from funders and relevant stakeholders, and 2) include an initial financial model.
- Convergence aims to select the strongest proposals based on the eligibility and evaluation criteria. __Convergence does not prioritize repayable grants and selection of proposals will not be based on whether a grant is repayable or not__. If a grant is structured as repayable, the terms of repayment will be determined on a case-by-case basis with the grantee. Repayment is often contingent upon the launch of the proposed blended finance solution.
- Proposals are only accepted from __organizations or consortiums of organizations__. The lead organization must be able to provide 1) proof of incorporation, and 2) financial statements for the previous fiscal year.
- Practitioners awarded funding are expected to __regularly report key challenges, learnings, and results__. This will be synthesized into a case study or learning brief and published to support market-wide learning.

---

## Evaluation Criteria
Proposals will be evaluated on the following criteria:

- __Scalability and/or replicability:__ How much private capital does the vehicle aim to catalyze? If the vehicle is successful, can other practitioners use a similar approach? Will the vehicle contribute to creating a pipeline of investable deals/projects in natural capital in Asia?
- __Demonstration effect:__ Is the vehicle testing a new design? Is the vehicle replicating an existing approach in a new market? Is the vehicle attracting partners that have not participated in the blended finance space before?
- __Impact:__ Does the vehicle propose to drive a significant amount of natural capital impact? Will the vehicle have a measurable impact on an ecosystem? How will environmental impact and risk be measured and will it have a scientific basis? Are there other social, economic, or environmental impacts of the vehicle? 
- __Additionality:__ Does the vehicle aim to deploy financial instruments that are under-supplied and will therefore catalyze financing with a high degree of additionality? Does the vehicle have strong potential to address a market failure in the short term, and catalyze broader market financing in the long term?
- __Stakeholder support:__ Does the vehicle have the support of key stakeholders in the target region / country (e.g., government)?
- __Likelihood to achieve financial close:__ Is the vehicle likely to attract investors and close within the short or medium term?
- __Contributions to portfolio and development risk-return:__ Does the vehicle represent a strong development risk-return (i.e., high risk vehicles should have the potential to achieve significant natural capital impact)?
- __Field Building:__ Does the vehicle contribute to field building? Does is it contribute to building local capacity and strengthening breadth and depth of local markets and communities? Does the applicant have a strong local presence in Asia? 

---

## Application Process

Our application process has three distinct stages:
- Stage 1: Application questionnaire, proposal submission, and initial shortlisting
- Stage 2: Detailed due diligence to shortlist proposals for Funding Committee review
- Stage 3: Compliance review and approval by Convergence’s Board of Directors

__Further details are provided below.__ 

Stage 1: Proposal Submission and Shortlisting
- Applicants are required to submit a proposal to the Asia Natural Capital Design Funding Window using either the [feasibility study](https://assets.ctfassets.net/4cgqlwde6qy0/21d74dIpc0SttdLxJ32REl/0bd2dd841c2da2c5b0af9d918bbfde4d/Convergence_Template_Feasibility_Study_Asia_Natural_Capital_Window__Final_.docx "Convergence Feasibility Study Template") or [proof of concept](https://assets.ctfassets.net/4cgqlwde6qy0/6SgUlDodejwJgMwUGlh951/5868c953a70ebbf0e775531a30486705/Convergence_Template_Proof_of_Concept_Asia_Natural_Capital_Window__Final_.docx "Convergence Proof of Concept Template") template. Convergence reviews proposals according to eligibility and evaluation criteria and shortlists the most promising proposals.

Stage 2: Due Diligence & Funding Committee
- If shortlisted, applicants will be asked to respond to due diligence questions from Convergence, and if required, provide additional information. Based on the proposals and supplementary information provided, Convergence selects the strongest proposals to present to Convergence’s Funding Committee. The Funding Committee, composed of independent experts, assesses shortlisted proposals and recommends proposals for funding. 

Stage 3: Compliance & Board Approval
- Following a recommendation from the Funding Committee, selected applicants will undergo a compliance review. Following this review, proposals are presented to Convergence’s Board of Directors for final approval.

---

## Application Submission Instructions

__Please read through the following steps carefully before submitting an application:__

-	__Step 1:__  To start an application, fill out our questionnaire and submit a concept note in the [Application Portal](https://designfunding.convergence.finance/en/ "Convergence Design Funding Portal").

-	__Step 2 (Optional):__ Submit the draft application atleast two weeks before the application deadline, if you would like feedback from the Convergence team.

-	__Step 3:__ Submit the final proposal by the deadline.**

All proposals will follow the [feasibility study](https://assets.ctfassets.net/4cgqlwde6qy0/21d74dIpc0SttdLxJ32REl/0bd2dd841c2da2c5b0af9d918bbfde4d/Convergence_Template_Feasibility_Study_Asia_Natural_Capital_Window__Final_.docx "Convergence Feasibility Study Template") or [proof of concept](https://assets.ctfassets.net/4cgqlwde6qy0/6SgUlDodejwJgMwUGlh951/5868c953a70ebbf0e775531a30486705/Convergence_Template_Proof_of_Concept_Asia_Natural_Capital_Window__Final_.docx "Convergence Proof of Concept Template") template provided, unique to each Design Funding Window.

* Convergence staff may reach out to your team for a brief call to ensure alignment with the window if necesssary.

** An applicant can directly submit the final proposal without completing Step 2.

Please note that Convergence will only consider one application per organization per round. Convergence is unable to provide detailed feedback on applications that are not shortlisted for funding.

---

## Application Submission Deadlines
Applications to the Asia Natural Capital Design Funding Window will be considered on a rolling basis. The next application deadline is September 30, 2022. 


Convergence Template Feasibility Study Asia Natural Capital Window

Convergence Template Proof of Concept Asia Natural Capital Window

The Asia Natural Capital Design Funding Window provided grant funding for the design and launch of catalytic blended finance solutions focused on natural capital in Asia. This Window was funded thanks to the support of the RS Group, a family office based in Asia. It is closed and no longer accepting applications.

MAS Monetary Authority of Singapore.svg

Monetary Authority of Singapore

UBS optimus colour

UBS Optimus Foundation

Olayan-logo transparent

Olayan Group

Flora Ji

Global Vice President, Nature Based Solutions, Shell

Geoffrey Seeto

Head of Emerging Markets, New Forests Asia (Singapore) PTE LTD.

Jesse Ang

Independent Director, BPI/ACEN

Karen Tsang-Hounsell

KarenTsangHounsell hs cropped

Head of Business Development, InfraCo Asia

*This Window is closed and no longer accepting applications.*

The Indo-Pacific Design Funding Window provides grant funding for the design and launch of catalytic blended finance solutions in certain countries in the Indo-Pacific region, focused on any of the following:

1) __Climate Finance__ - Addressing climate change mitigation, climate change   adaptation or both. Blended finance solutions with co-benefits of climate   action are encouraged.

Must align with at least one of the following: SDG 7 (Clean Energy), SDG    11 (Sustainable Cities), SDG 12 (Responsible Consumption), SDG 13 (Climate Action), SDG 14 (Life Below Water), SDG 15 (Life on Land).

2) __Gender Equality__ -  Aim to make a significant contribution to gender     equality outcomes.

Must align with SDG 5 (Gender Equality).

3) Blended finance solutions that also lead to climate action co-benefits like job creation are encouraged.

This Window is funded by the Australian Government. 

For the upcoming deadline, we will give preference to -

- Proof of concept stage applications that can attract private sector capital at scale and launch within 12 months of receiving the design funding grant. 

- For applications focused on climate finance, those focused on sustainable and resilient infrastructure, climate-smart agriculture and climate insurance. 

Each application will be evaluated in context of the geographic and sectoral focus of the proposed financial structure. 

---

## Types of Applications
Practitioners can apply for feasibility study or proof of concept funding:

- __Proof of concept:__ If a feasibility study (or equivalent) has been completed, funding to complete all design and structuring activities to launch the vehicle. For example, finalizing the capital structure and financial model, establishing the legal structure, and producing key documents. Convergence will award repayable __grants up to $350,000__ for proof of concept work. Determination of whether a grant is repayable will be made on a case-by-case basis.

- __Feasibility study:__ Funding to explore the feasibility of the vehicle. For example, assessing the investability/bankability of the transaction, conducting market scoping and developing the vehicle structure. Convergence will award __grants up to $200,000__ for feasibility studies. Promising feasibility studies funded through the Design Funding Window will be considered for follow-on proof of concept funding.

---

## Eligibility Criteria
To be eligible for consideration for the Indo-Pacific Design Funding Window, proposals must meet the following criteria:

- __Focus__ - The proposal must be for a blended finance vehicle. The vehicle must aim to use catalytic capital from public or philanthropic sources to attract private sector investment to the identified development challenge. The vehicle must have a primary focus on at least one of the following: 1) climate finance 2) gender equality 
- __Geographic Eligibility__ - The target region for the blended finance vehicle must be one or more of the following "Eligible Countries" in the Indo-Pacific region:  Afghanistan, Bangladesh, Cambodia, Indonesia, Laos, Mongolia, Myanmar, Nepal, Pacific Nations (Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Nauru, Niue, Papua New Guinea, Republic of Palau, Republic of the Marshall Islands, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu and Vanuatu), Pakistan, Philippines, Timor-Leste, Vietnam and Sri Lanka. The proposal will be eligible for funding only if at least 80% of the target region consists of one or more of the Eligible Countries. 
- __Use of Funds__ - Practitioners can only use the awarded grant funding for the design and launch of the blended finance vehicle – not for investment capital or to fund operational activities of an already established vehicle. See [grant portfolio](https://www.convergence.finance/design-funding/grant-portfolio "Grant Portfolio") for examples of previous grants made by Convergence.
- __Proposal Format__ - The proposal _must adhere to the applicable proposal template_, detailing the development challenge, proposed blended finance vehicle, key risks and mitigation strategies, design activities and costs, and the applicant's relevant experience.
  - [__Feasibility study proposals__](https://assets.ctfassets.net/4cgqlwde6qy0/48ki0G6M9IW7vba6HHRG59/5b1b364a2c3df2289e95c53a9a09fd77/Proposal_Template_for_Feasibility_Study_Indo-Pacific_Design_Funding_Window.docx) must 1) include an initial vehicle structure and investment thesis, and 2) have initiated engagement with potential funders and relevant stakeholders.
  - [__Proof of concept proposals__](https://assets.ctfassets.net/4cgqlwde6qy0/6ZL3iznvTeheT35yD7iseK/498b7fea3c31932191df90cd74a8f580/Proposal_Template_for_Proof_of_Concept_Indo-Pacific_Design_Funding_Window.docx) must 1) detail interest and ideally commitment to participate, from funders and relevant stakeholders, and 2) include an initial financial model.
- __Type of Grant__ - Convergence aims to select the strongest proposals based on the eligibility and evaluation criteria. _Convergence does not prioritize repayable grants and selection of proposals will not be based on whether a grant is repayable or not_. If a grant is structured as repayable, the terms of repayment will be determined on a case-by-case basis with the grantee. Repayment is often contingent upon the launch of the proposed blended finance solution.
- __Application Requirements__ - Proposals are only accepted from organizations or consortiums of organizations. The lead organization must be able to provide 1) proof of incorporation, and 2) financial statements for the previous fiscal year.
- __Reporting__ - Practitioners awarded funding are expected to regularly report key challenges, learnings, and results. This will be synthesized into a [case study](https://www.convergence.finance/resource/2Pj91GkMpWc9hdmqWSxwm3/view) or learning brief and published to support market-wide learning.

---

## Evaluation Criteria
Proposals will be evaluated on the following criteria:

- __Scalability and/or replicability:__ How much private capital does the vehicle aim to catalyze? If the vehicle is successful, can other practitioners use a similar approach?
- __Demonstration effect:__ Is the vehicle testing a never-before-tested design? Is the vehicle replicating an existing approach in a new market? Has the need for using a blended finance vehicle been demonstrated? Is the vehicle attracting partners such as institutional investors that have not participated in the blended finance space before?
- __Development Impact:__ What is the intended social, economic, or environmental impact of the vehicle? Who will be the ultimate beneficiaries of the vehicle and how will they benefit?
- __Gender considerations:__ How will gender considerations be incorporated into the vehicle’s design and operations? What will be the gender impact of the vehicle? 
- __Additionality:__ Does the vehicle aim to deploy financial instruments that are under-supplied and will therefore catalyze financing with a high degree of additionality? Does the vehicle have strong potential to address a market failure in the short term, and catalyze broader market financing in the long term?
- __Stakeholder support:__ Does the vehicle have the support of key stakeholders in the target region / country (e.g., government)? 
- __Likelihood to achieve financial close:__ Is the structure of the vehicle bankable/investable? Is the vehicle likely to attract investors and close within the short or medium term? Have investors been actively involved in the design of the vehicle? 
- __Response to Covid-19:__ How does the vehicle respond to Covid-19? How does the vehicle address economic reconstruction & resiliency in the medium term?

---

## Application Process

Our application process has three distinct stages:
- Stage 1: Application questionnaire, proposal submission, and initial shortlisting
- Stage 2: Detailed due diligence to shortlist proposals for Funding Committee review
- Stage 3: Compliance review and approval by Convergence’s Board of Directors

__Further details are provided below.__ 

Stage 1: Proposal Submission and Shortlisting
- Applicants are required to submit a proposal to the Indo-Pacific Design Funding Window using either the [feasibility study](https://assets.ctfassets.net/4cgqlwde6qy0/48ki0G6M9IW7vba6HHRG59/5b1b364a2c3df2289e95c53a9a09fd77/Proposal_Template_for_Feasibility_Study_Indo-Pacific_Design_Funding_Window.docx "Convergence Feasibility Study Template") or [proof of concept](https://assets.ctfassets.net/4cgqlwde6qy0/6ZL3iznvTeheT35yD7iseK/498b7fea3c31932191df90cd74a8f580/Proposal_Template_for_Proof_of_Concept_Indo-Pacific_Design_Funding_Window.docx "Convergence Proof of Concept Template") template. Convergence reviews proposals according to eligibility and evaluation criteria and shortlists the most promising proposals.

Stage 2: Due Diligence & Funding Committee
- If shortlisted, applicants will be asked to respond to due diligence questions from Convergence, and if required, provide additional information. Based on the proposals and supplementary information provided, Convergence selects the strongest proposals to present to Convergence’s Funding Committee. The Funding Committee, composed of independent experts, assesses shortlisted proposals and recommends proposals for funding. 

Stage 3: Compliance & Board Approval
- Following a recommendation from the Funding Committee, selected applicants will undergo a compliance review. Following this review, proposals are presented to Convergence’s Board of Directors for final approval.

---

## Application Submission Instructions

__Please read through the following steps carefully before submitting an application:__

-	__Step 1:__  Before drafting an application, fill out the [design funding questionnaire](https://www.convergence.finance/design-funding/open-window/application "Design Funding Questionnaire") on our website.

-	__Step 2:__ Following submission of a questionnaire, email [design.funding@convergence.finance](mailto:design.funding@convergence.finance "Design Funding Email") to schedule a brief call with the Convergence team to ensure alignment of objectives and mission. If available, please attach a concept note or presentation to the email. 

-	__Step 3:__ After speaking to the Convergence team, applicants are encouraged to send a draft proposal to [design.funding@convergence.finance](mailto:design.funding@convergence.finance "Design Funding Email") at least 2 weeks before the application submission deadline. Feedback will be provided within 7 business days. Draft proposals must use the standard [feasibility study](https://assets.ctfassets.net/4cgqlwde6qy0/48ki0G6M9IW7vba6HHRG59/5b1b364a2c3df2289e95c53a9a09fd77/Proposal_Template_for_Feasibility_Study_Indo-Pacific_Design_Funding_Window.docx "Convergence Feasibility Study Template") or [proof of concept](https://assets.ctfassets.net/4cgqlwde6qy0/6ZL3iznvTeheT35yD7iseK/498b7fea3c31932191df90cd74a8f580/Proposal_Template_for_Proof_of_Concept_Indo-Pacific_Design_Funding_Window.docx "Convergence Proof of Concept Template") template provided, unique to each Design Funding Window.

-	__Step 4:__ Submit the final proposal by following the link provided to you via email.

Please note that Convergence will only consider one application per organization per round. Convergence is unable to provide detailed feedback on applications that are not shortlisted for funding.

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## Application Submission Deadlines
Applications to the Indo-Pacific Design Funding Window will be considered on a rolling basis.

*The next submission deadline is to be confirmed. Please visit this page for updates. *


Proposal Template for Feasibility Study Indo-Pacific Design Funding Window

Proposal Template for Proof of Concept Indo-Pacific Design Funding Window

The Indo-Pacific Design Funding Window provided grant funding for the design and launch of catalytic blended finance solutions focused on climate finance and gender equality in certain countries in the Indo-Pacific region. This Window was funded by the Australian Government. It is closed and is not accepting applications.

Jennifer Buckley

Founder and Managing Director, Sweef Capital

Vipul Bhagat

Vipul Bhagat- hs

Senior Advisor, Castalia

The Global Emerging Markets Design Funding Window provided grant funding for the design and launch of catalytic blended finance solutions across emerging markets. This Window was funded by Global Affairs Canada. It is closed and no longer accepting applications.

Design Funding

Convergence offers design funding grants to blended finance practitioners looking to secure feasibility, proof of concept, or expansion stage funding alongside support to develop and launch early-stage financial structures that aim to attract private capital.

Portfolio Summary

Grant Portfolio