About OMDF grants

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Non-refundable subsidies to distributors of qualified products...

OMDF’s grant facility at a glance

OMDF will provide subsidies to distributors of qualified products. Participating companies receive a subsidy for each qualified solar product distributed in Madagascar (“results-based financing”, RBF). The subsidy is disbursed after the reporting and verification of sales.

Distributors of solar products which have comprehensive sales records, a successful sales strategy, and after-sales service.

Who can benefit from the RBF subsidies?

Companies that:

  • Distribute certified products AND
  • Have a commercial strategy AND
  • Provide adequate after-sales services AND
  • Provide data relating to sales made,

Can apply for and receive subsidies.

Quality products

Which products are eligible?

Any product that:

  • Is certified by Lighting Global / Verasol (see https://verasol.org/) AND
  • Offers at least 200 lumen-hours (not a requirement for the F4S component) and

Has at least one light point (fixed or portable lamp).

QS or PAYGO or F4S or Start-up components depending of the situation.

What are the types of subsidies offered?

4 types of subsidies are offered:

  • Quality and Service Component (“QS Component”), composed of a base subsidy and a geographic bonus for each sale made;
  • Pay-as-you-go Component (“PAYGO Component”) for each sale made which is accompanied by consumer financing;
  • Fee-For-Service Component (“F4S Component”) for each product supplied other than through a sale (for example rental) and
  • Start-Up Component which is a prepayment of the other three components.

QS, PAYGO and F4S subsidies are paid after being reported by the company and verified by an independent verification agent.

Incentivizes sales based on product quality or geographic impact.

QS Component

The QS Component pays companies for each product sold (certified by Lighting Global) with an adequate after-sales service.   Base Subsidy The base subsidy is based on the products lumens-hours, as shown on the product specification on the Lighting Global website, and the number of light points. The base subsidy has a maximum value cap.  

Number of light points Base subsidy Cap
1 light point 0,01 USD par lm-h 10,00 USD
More than 1 light point 0,02 USD par lm-h 35,00 USD

  Example: Solar Lantern (1 light point) with 1310 lm-h è 1310 lm-h * 0,01 USD per lm-h = 13,10 USD à Cap reached è Base subsidy: 10,00 USD   Solar Home System (3 light points) with 1100 lm-h è 1100 lm-h * 0,02 USD per lm-h = 22,00 USD à Cap not reached è Base subsidy: 22,00 USD   Geographic bonus   OMDF will provide an additional geographic bonus (“geo bonus”) for sales made in regions that are more difficult to access and / or less interesting to serve in order to offset the additional costs associated with the sale. The following regions are eligible for the geographic bonus: ·         Androy ·         Atsimo-Atsinanana ·         Vakinankaratra ·         Amoron’i Mania ·         Anosy ·         Sofia ·         Atsimo-Andrefana ·         SAVA   The geographic bonus represents 20% of the capped base subsidy.   Example Solar Lantern with a base grant of 10.00 USD, sold in a listed region è Geographic bonus: 2,00 USD Solar Home System with a base grant of 22,00 USD, sold in a listed region è Geographic bonus: 4,40 USD

Additional grant for any product sale accompanied by consumer financing

PAYGO Component

All product sales made with consumer financing benefit from the PAYGO component. “Financing” refers to different consumer financing solutions (microcredits and pay-as-you-go) with a minimum term of six months and an amount of at least 70% of the final price. The PAYGO Component is an additional subsidy to the QS Component. The PAYGO Component represents 50% of the capped base subsidy. The PAYGO subsidy is paid six months after the sale provided that the product is still actively used by the end customer and that usage is verified by an independent verification agent. Example Solar Lantern with a base grant of 10,00 USD, financed by a microcredit PAYGO grant: 5,00 USD Solar Home System with a base grant of 22,00 USD, financed by pay-as-you-go PAYGO grant: 11,00 USD

Incentivizes distribution models for certified solar products other than classic sales.

Fee-For-Service Component

The Fee-For Service subsidy is available to distributors offering rental of charged and certified lamps or batteries or battery charging for a fee. Base subsidy The F4S base is calculated from the lumen-hours (lm-h) as indicated in the specifications of Lighting Global / VeraSol and the number of light points. The subsidy is capped.

Number of light points Base subsidy Cap
1 light point 0,015 USD par lm-h 7,50 USD
More than 1 light points 0,03 USD par lm-h 15,00 USD

  Example: Solar Lantern (1 light point) with 1310 lm-h

  • 1310 lm-h * 0,015 USD per lm-h = 19,65 USD à cap reached
  • Base subsidy : 7,50 USD

Solar Home System (2 light points) with 400 lm-h

  • 400 lm-h * 0,03 USD per lm-h = 12,00 USD à Cap not reached
  • Base subsidy : 12,00 USD

  Geographic bonus OMDF will pay an additional geographic bonus for distributions made in regions with a poverty ratio greater than or equal to 80%, in particular:

  • Androy
  • Atsimo-Atsinanana
  • Vakinankaratra
  • Amoron’i Mania
  • Anosy
  • Sofia
  • Atsimo-Andrefana
  • SAVA

The geographic bonus is 20% of the capped F4S base. Example Solar Lantern with Base F4S grant of 7,50 USD, distributed in a listed region

  • Geographic bonus: 1,50 USD

Certified battery with base F4S grant of 22,00 USD, rented in a listed region:

  • Geographic bonus: 4,40 USD

Prepayment to finance start-up costs

Start-Up Component

The Start-up Component is a partial prepayment of the QS, PAYGO and F4S component to finance activities that will accelerate the development of the distribution of certified solar products. Since traditional RBF mechanisms only make payments once sales have been confirmed, the Start-Up Component will provide financial support in the form of prepayment to meet the initial needs. Being a partial prepayment of the QS, PAYGO and F4S component, the start-Up subsidy received will be, gradually and partially, compensated by each disbursement request of the QS and / or PAYGO and / or F4S component submitted by the company. Example The Start-Up component can be used to finance marketing campaigns and the training of sales agents.

Subsidies will be phased out.

Phasing-out

To ensure that the market will develop in a sustainable way, the subsidy will be gradually reduced before the end of the RBF subsidy program on June 30, 2024. The subsidy levels described above will be guaranteed for sales made until 31 December 2021.

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If you are interested in the different types of funding offered, please contact us.