The Challenge Fund provides matching grant funding to agribusinesses that have the potential to grow and create impact through scalable models. The strategy is to incentivize businesses to launch pro-poor innovative projects to increase staple food production, processing and marketing and enhance cross-border trade. The Challenge Fund aims to identify and co-invest in innovations that will not only expand their own businesses, but also strengthen smallholder supplier networks, national and regional markets.
The intention is to get funds to businesses or companies that truly need them and can use them effectively. The funds are to help the companies realize the broader aims of the programme, which are to increase availability of staple foods, increase purchasing power of farmers and consumers in food-insecure regions of the Sahel as well as their resilience to hunger and malnutrition during the regular hungry seasons and periodic shocks.
WAFM Challenge Fund runs competitions for for-profit private companies only. These companies are invited to submit proposals outlining the business idea or concept for which they are applying for funding.
Funding Round 3: What are we looking for?
In Round 3, the Challenge Fund is looking for innovative business models backed by large smallholder supply network in cassava, maize, millet and sorghum and in the following segments of the value chains:
- warehousing and storage,
- marketing and distribution,
- processing, and
- cross border trade.
Please clearly define which of the business models above your company will implement. Applications will be marked on the innovativeness of the concept notes and the potential for scale up.
Fortified Staple food Products: To meet with the overall WAFM objectives applicants proposing business models n processing must consider fortified staple food products.
Project Concept Note submission
At the beginning of each competition, the Programme Management Unit (PMU) launches a call for Project Concept Notes (PCNs) and publicises it.
The PCN is a short summary of the business idea proposed and its commercial viability, the capacity of the company to implement the idea, the innovative nature of the idea and its potential impact. The call for concept notes details the objective of the competition, the particular type of projects expected and the Evaluation Criteria to guide the applicants.
Concept Note review and short-listing
Once the PCN have been submitted, they pass through a three-step selection process with the most promising selected to fully develop their proposal. This process is managed by the WAFM Challenge Fund Management Team and its Internal Review Committee.
The eligibility check is carried out based on the following five (05) criteria listed and discussed in the manual, with specific assigned weights:
- The applicant must be a for-profit-company.
- The project must focus on activities that directly or indirectly stimulate cross-border trade of staplefood commodities.
- The project must be working in the target staple foods value chains (maize, sorghum, millet and cassava).
- The grant amount requested must be between GBP 100,000 and GBP 500,000.
- There is a requirement of co-financing of at least the same amount by the applicant.
- The applicant will have to meet all eligibility criteria. Ineligible applications are declined and a feedback letter sent to the applicant. Limited comments will be provided to unsuccessful applicants and they may be requested to contact the PMU where they require additional information.
Being selected is the first of a three-part second stage of the funding process. It is structured in 6 steps. During this stage, WAFM Challenge Fund Management Team (CFMT) engages with and visits all companies preparing proposals. The final proposals are presented to the Independent Assessment Panel (IAP) followed by the Programme Steering Committee (PSC) for approval of projects that will win the competition.
- Proposal Development
Applicants of PCNs short-listed will be provided with WAFM Challenge Fund Project Proposal templates and invited to submit a detailed proposal online via WAFM website or by email and within the stipulated deadline. Guidance on proposal length and details will be provided in the template.
- Business Support and Due Diligence
During proposal development WAFM will undertake a robust due diligence process involving meeting key individuals, reviewing key documentation and, if necessary and applicable, conducting walk-through testing and limited sample testing.
Alongside this process WAFM Business Consultants will undertake a visit to the company location to provide technical support in proposal development. This will include reviewing your business plan, governance structure and other management requirements. This process is as much an assessment as it is an opportunity to provide recommendations to strengthen your proposal.
- Submission, Evaluation and Selection
Once submitted, applicant proposals will be reviewed against key criteria and presents completed proposals to an Independent Advisory Panel (IAP). The IAP then evaluates the applications and makes a recommendations to the UK AID Project Steering Committee for projects to receive funding. This decision will include approval for funding, alongside terms and conditions for each selected project.
Cross-border trade: The project must facilitate and/or undertake trade along the following trade corridors: Ghana-Burkina Faso, Nigeria-Niger, and must involve production and/or marketing of maize, cassava, sorghum and millet.
Innovation: The project must demonstrate innovation and should have the potential to be scaled up.
Development Impact: The ultimate beneficiaries of the project must be poor farmers in WAFM countries and consumers who will benefit from reduced or more stable prices for staple food. Given WAFMs interest on women beneficiaries, projects are required to disaggregate data on their beneficiaries by gender.
Additionality: The applicant must demonstrate that without WAFM funding, the project is unlikely to take off, or it may happen but at a reduced scale.
Once awarded funding, successful businesses are informed and will receive guidelines on the process leading to the finalisation of the contract and fund disbursement. They will also be invited for an Induction Workshop prior to contract signing. The contracting process is followed by reporting and disbursement of funds.
- Induction workshop
The induction workshop introduces post-award processes and procedures, particularly claiming and accounting process as well as progress reporting, monitoring and measurement of development impact. It also provides an opportunity for grantees to network and share lessons.
- Contracting Process
The contracting stage officially commences when the PSC has approved the project proposal for funding. Grantees will each be given a grant agreement template to review terms and conditions, including the contract period, the disbursement schedule and the obligations to commit to by the grantee in terms of reporting and adherence to the terms of the contract. Depending on the amendments an applicant will request on the terms and conditions of the grant agreement, a revised agreement may need to be submitted to the PSC for approval.
- Disbursement Process
The Fund Manager facilitates this process while Palladium actualises disbursements. Grantees report on project progress as they request a disbursement in line with the disbursement schedule agreed with the Challenge Fund Manager during contracting. Not more than 35% of approved funds per project will be released in a single disbursement. In addition, not more than 65% of funds approved will be disbursed in the first year. Exceptions to these rules will have to be approved by the PSC.