20110209 GCI RO Seminar AHSt EN GV - Advantage Austria · SEMINAR PRESENTATION Bucharest, February...

0

Seminar EU-Funding, AHSt Bucharest, Feb 9th, 2011

A

Practical Guide for

Applicationof

EU Funded Projectsin

Romania

Mag. Gregor Vogrin

SEMINAR PRESENTATION

Bucharest, February 9th, 2011

1


Introduction GCI Management

General information on EU funds

Eligible costs and grant intensity

Project structure and approach

Check of the eligibility

SMEs vs. large enterprises

Example of a successful eligible project

Content of the application folder

AGENDA

Feasibility study

Project evaluation

Key elements in the implementation process

Success Factors - Do's & Don'ts

Outlook 2011

Service range + Contact GCI

2


Business Development• Strategies & Business models

• Internationalization & outsourcing

• Sales activation, new business development • Organization & growth

Performance Management• Development and optimization of organization

and processes• P/L effective improvement measures

• Business model optimization

Turnaround Management• Safeguarding liquidity

• Restructuring / recapitalization• Risk management & risk reporting

• Interim management

Corporate Finance• Target search, M&A

• Investment, spin-off, investor search

• Corporate valuation / due diligence

• Financing / re-financing• Capital market / IPO

• Capital market coach*

• Budgeting & controlling

• Financial models

• Subsidy and Grant management

GCI Management focuses on 4 integrative consulting practices.

GCI MANAGEMENT – AREAS OF COMPETENCE

* Vienna Stock Exchange - mid market segment

3


GCI FocusGCI Focus

GCI Management officesGCI Management offices

We follow a pragmatic hands-on-consulting approach clearly focusing the German speaking business community in Romania.

• Bucharest (est. 2006)• Vienna

• Munich

• Milano

• Rep-offices:• Prague - Bratislava

• Sofia

• Bucharest (est. 2006)• Vienna

• Munich

• Milano

• Rep-offices:• Prague - Bratislava

• Sofia

• Established 1991 as a consulting and investment

company, mother holding stock listed in the XETRA

segment / Frankfurt

• As an investment company GCI has always been interested in grants for own portfolio companies

• Funding consulting for clients in RO, AT, DE, CZ, SK,

HU, BG

• Funding consulting in Romania since 2006/2007

• Established 1991 as a consulting and investment

company, mother holding stock listed in the XETRA

segment / Frankfurt

• As an investment company GCI has always been interested in grants for own portfolio companies

• Funding consulting for clients in RO, AT, DE, CZ, SK,

HU, BG

• Funding consulting in Romania since 2006/2007

EuropeEurope

Regional coverage(partner network)

Core markets(D,A, CH,I,RO)

Coverage representativeoffices

GCI MANAGEMENT – INTRODUCTION

4


GCI Management Presentation








AGENDA

Feasibility study

Project evaluation



Outlook 2011


5


Operational Programs (OP)Operational Programs (OP)

EUR 23.411.000.000

Programming period 2007-2013

24.967 submitted projects (31.12.2010)

10.815 rejected projects (31.12.2010)

6.569 under evaluation projects (31.12.2010)

6.451 approved projects (31.12.2010)

RON 61.807.921.265 submitted value

RON 7.408.466.274 / ~ EUR 1,7 b paid to beneficiaries

EUR 23.411.000.000



10.815 rejected projects (31.12.2010)

6.569 under evaluation projects (31.12.2010)

6.451 approved projects (31.12.2010)

RON 61.807.921.265 submitted value

RON 7.408.466.274 / ~ EUR 1,7 b paid to beneficiaries

STRUCTURE OF EU FUNDS IN ROMANIA

7 operational programs, the rural development program and the cross-border cooperation

programs appeal to different kinds beneficiaries.

Inter-regional and cross-border cooperation programsInter-regional and cross-border cooperation programs

• Ukraine and Moldova

• Black Sea Region

• South East Europe

• Interregional (INTERREG IVC, URBACT II)

• Ukraine and Moldova

• Black Sea Region

• South East Europe

• Interregional (INTERREG IVC, URBACT II)

• Bulgaria

• Serbia

• Hungary, Slovak Republic, Ukraine

• Inter-Regional (ESPON 2013, Interact II)

• Bulgaria

• Serbia

• Hungary, Slovak Republic, Ukraine

• Inter-Regional (ESPON 2013, Interact II)

Rural Development Program (NPDR)Rural Development Program (NPDR)

EUR 9.971.000.000



28.632 selected projects (27.12.2010)

22.297 signed contracts (27.12.2010)

EUR 1.766.659.625 paid to beneficiaries

EUR 9.971.000.000



28.632 selected projects (27.12.2010)

22.297 signed contracts (27.12.2010)

EUR 1.766.659.625 paid to beneficiaries

6


OPERATIONAL PROGRAMS

From 7 operational programs only 3 address private beneficiaries. Additionally

private beneficiaries can apply also to the agriculture program.

Increase of Economic Competitiveness (POS CCE)Increase of Economic Competitiveness (POS CCE)

• Total Amount 3.011.000.000 €

• Origin of Funds: ERDF, State Budget

• Main benefficiaries: Large companies; SMEs; Local authorities; NGOs; Micro enterprises;

Partnerships (with universities or local authorities); R&D public institutions

• Total Amount 3.011.000.000 €


• Main benefficiaries: Large companies; SMEs; Local authorities; NGOs; Micro enterprises;

Partnerships (with universities or local authorities); R&D public institutions

Human Ressource Development (POS DRU)Human Ressource Development (POS DRU)

• Total Amount: 4.253.000.000 €

• Origin of Funds: ESF, ERDF, State Budget, Local Budgets, Private Financing

• Main beneficiaries: Schools, Universities; Training companies; Central Authorities; Industry

and Commerce Chambers; Large companies and SMEs

• Total Amount: 4.253.000.000 €

• Origin of Funds: ESF, ERDF, State Budget, Local Budgets, Private Financing

• Main beneficiaries: Schools, Universities; Training companies; Central Authorities; Industry

and Commerce Chambers; Large companies and SMEs

Regional (POR)Regional (POR)

• Total Amount: 4.384.000.000 €

• Origin of Funds: ERDF, State Budget, Local Budgets

• Main benefficiaries: Local Authorities, Intercommunitary Development Agencies, Social

Services Providers, State Universities, CVT Providers, SMEs, Industry and Commerce

Chambers

• Total Amount: 4.384.000.000 €

• Origin of Funds: ERDF, State Budget, Local Budgets

• Main benefficiaries: Local Authorities, Intercommunitary Development Agencies, Social

Services Providers, State Universities, CVT Providers, SMEs, Industry and Commerce

Chambers

Environment (ENV)Environment (ENV)

• Total Amount: 5.611.000.000 €

• Origin of Funds: SCF, ERDF, State Budget, Local budgets

• Main beneficiaries: Local Administration, Intercommunitary Development Agencies; Water and

Sites Administrations

• Total Amount: 5.611.000.000 €

• Origin of Funds: SCF, ERDF, State Budget, Local budgets

• Main beneficiaries: Local Administration, Intercommunitary Development Agencies; Water and

Sites Administrations

Transport (T)Transport (T)

• Total Amount: 5.694.000.000 €

• Origin of Funds: SCF, ERDF, State Budget

• Main beneficiaries: Administrators of Transport Infrastructure; Ports and Airports

Administrators; Ministry of Transport

• Total Amount: 5.694.000.000 €

• Origin of Funds: SCF, ERDF, State Budget

• Main beneficiaries: Administrators of Transport Infrastructure; Ports and Airports

Administrators; Ministry of Transport

Administrative Capacity Development (ACD)Administrative Capacity Development (ACD)

• Total Amount: 246.000.000 €

• Origin of Funds: ESF, State Budget

• Main benefficiaries: Central and Local Administration; Centralised and Decentralised Services

• Total Amount: 246.000.000 €

• Origin of Funds: ESF, State Budget

• Main benefficiaries: Central and Local Administration; Centralised and Decentralised Services

Technical Assistance (TA)Technical Assistance (TA)

• Total Amount: 212.000.000 €


• Main beneficiaries: Management Authorities, Intermediate Bodies

• Total Amount: 212.000.000 €


• Main beneficiaries: Management Authorities, Intermediate Bodies

Rural Development Program (NPDR)Rural Development Program (NPDR)

• Total Amount: 8.022.000.000 €

• Origin of Funds: EFARD, State Budget, Local Budgets

• Main beneficiaries: agricultural and forestry firms

• Total Amount: 8.022.000.000 €

• Origin of Funds: EFARD, State Budget, Local Budgets

• Main beneficiaries: agricultural and forestry firms

7


Each Operational Program (OP) is divided in Priority Axis (PA), Key Areas

of Intervention (KAI) and Operations (Op).

Increase of Economic Competitiveness (POS CCE)Increase of Economic Competitiveness (POS CCE)

Priority AxisBtw. 4 and 7, depending on the OP

Priority AxisBtw. 4 and 7, depending on the OP

Key Area of Intervention btw .1 and 5, depending on the PA

KAI 1

KAI 3

Operation 1. An innovative and eco-efficient productive systemOperation 1. An innovative and eco-efficient productive system

1.1 Productive and environment friendly investments …

Operation 1.1.1 Support for strengthening and upgrading the productive sector by tangible and intangible investments

Operation 1.1.2 Support for the implementation of international standards

Operation 1.1.3 Support to access to new markets and internationalization

1.2. Access to finance for SMEs

1.3. Sustainable entrepreneurship development


It is very important to choose the right OP / PA / ST /Op among the many optionsIt is very important to choose the right OP / PA / ST /Op among the many options

KAI 2

Operation 1.3.1 Development of business support structures of national and international dimension

Operation 1.3.2 Consultancy support for SME

Operation 1.3.3 Support for enterprises’ integration in supplier chains and cluster

Example

8


The OPs are administered by 9 different ministries.

Ministry ofEnvironment

Ministry ofEnvironment

Ministry ofLabor, Family

& Social Protection

Ministry ofLabor, Family

& Social Protection

Ministry of Regional Development

& Dwelling

Ministry of Regional Development

& Dwelling

Ministry of Transport

& Infrastructure

Ministry of Transport

& Infrastructure

A MINISTRY MAY BE RESPONSIBLE FOR AN OP OR KAI


Ministry ofAdministration& Home Affairs

Ministry ofAdministration& Home Affairs

Ministry ofEducation, Research

& Innovation

Ministry ofEducation, Research

& Innovation

Ministry ofCommunication &Information Society

Ministry ofCommunication &Information Society

Ministry of Economy, Commerce& Business

Environment

Ministry of Economy, Commerce& Business

Environment

Ministry of Public Finance(National Coordinator of the European state-aid )

Ministry of Public Finance(National Coordinator of the European state-aid )

All the different agencies responsible for each program write their "own" guidelines.This explains the often large differences between OP/PA operations.

All the different agencies responsible for each program write their "own" guidelines.This explains the often large differences between OP/PA operations.

AM POS CCE (Part of Ministry of Economy)

Authority responsible for all POS CCE operations and administering one sub-operation 1.1.1.b

AM POS CCE (Part of Ministry of Economy)

Authority responsible for all POS CCE operations and administering one sub-operation 1.1.1.b

Example

9


FilingFiling Evaluation & ApprovalEvaluation & Approval

MAIN PHASES OF THE FILING PROCESS

EU FUNDING PROCESS CHAIN

• Money is distributed via calls:

- A beneficiary can file at any time

within an open calls

- A time window of normally 1 to 3

months is open for filings within

closed calls

• Open calls are ceased with the

complete distribution of allocated funds

or with a final deadline late in the year.

• Filing in the beginn or at the end of a

call time window has no impact in the

case of a closed call

• Money is distributed via calls:

- A beneficiary can file at any time

within an open calls

- A time window of normally 1 to 3

months is open for filings within

closed calls

• Open calls are ceased with the

complete distribution of allocated funds

or with a final deadline late in the year.

• Filing in the beginn or at the end of a

call time window has no impact in the

case of a closed call

• Open calls work based on the “first-

come-first-serve” principle, i.e. projects

are evaluated upon filing

• Closed calls to assess filed projects

after the call is closed.

- Though in most of the calls the

evaluation time should not be longer

than 2 months, we experience delays

up to 10 months

- The learning curve on Authority side

can be very well seen: POS CCE

1.1.1.b reduced its evaluation time

from initially 14 month to 5 month

- We expect further optimization and

speed up of the evaluation process in

2011

• Open calls work based on the “first-

come-first-serve” principle, i.e. projects

are evaluated upon filing

• Closed calls to assess filed projects

after the call is closed.

- Though in most of the calls the

evaluation time should not be longer

than 2 months, we experience delays

up to 10 months

- The learning curve on Authority side

can be very well seen: POS CCE

1.1.1.b reduced its evaluation time

from initially 14 month to 5 month

- We expect further optimization and

speed up of the evaluation process in

2011

EU funds are applied for and distributed in three steps.

1 to 3 months or open call1 to 3 months or open call 2 to 12 months2 to 12 months

ImplementationImplementation

• Upon approval the financing contract

has to be signed

• After signing the implementation is

allowed to start

- Downpayment of grants

- Tendering

- Reporting

- Separate accounting

- Reimbursement

• Upon approval the financing contract

has to be signed

• After signing the implementation is

allowed to start

- Downpayment of grants

- Tendering

- Reporting

- Separate accounting

- Reimbursement

Up to 24 monthsUp to 24 months

10










AGENDA

Feasibility study

Project evaluation



Outlook 2011


11


ELIGIBLE COSTS

Unfortunately not all costs are eligible.

Each project has to be assessed on eligible cost structures in order to maximize the funding lever. Each project has to be assessed on eligible cost structures in order to maximize the funding lever.

• Land

• Construction

• Equipment

• Computer

• Software

• Licences / patents

• Training / Consulting

• Land

• Construction

• Equipment

• Software

• Licences

• Patents

• Others

• Total cost of labour

• Travel expenses

• Equipment

• Consumables

• R&D services

• Software

• Licences

• Overheads

Innovation / R&DInnovation / R&DEnergyEnergyInvestmentsInvestments

DIFFERENT OPERATIONS FUND DIFFERENT COSTS

12


GRANT VOLUMES FOR DIFFERENT PROGRAMS

Up to 70% of eligible costs can be granted.

SOME EXAMPLES OF NON-REIMBURSABLE GRANT QUOTAS

POS CCE 2.3.3Innovation / R&D

POS CCE 2.3.3Innovation / R&D

Maximum grant

RON 20.000.000 ~ EUR 4.600.000

Maximum grant

RON 20.000.000 ~ EUR 4.600.000

Pe

rson

nelco

sts

R &

D-s

pecific

in

ve

stm

en

ts a

nd

co

nsum

able

s

70%

Gra

nt

OtherCosts

Eligible

investment

EU

Fund

0%

25%

50%

75%

100%

Eligible

investment

EU

Fund

POS CCE 4.2Renewable Energy Investments

POS CCE 4.2Renewable Energy Investments

Ma

ch

ine

ry,

Bu

ildin

gs

70%

Gra

nt

Maximum grant

RON 80.000.000~ EUR 18.700.000

Maximum grant

RON 80.000.000~ EUR 18.700.000

POS CCE 1.1.1.bInvestments of large enterprises

POS CCE 1.1.1.bInvestments of large enterprises

0%

25%

50%

75%

100%

Eligible

investment

EU fund

Bulid

ing

sm

ax.

50

%

Mach

inery

10

0%

possib

le 50%

Gra

nt

Maximum grant

RON 20.000.000~ EUR 4.600.000

Maximum grant

RON 20.000.000~ EUR 4.600.000

Landmax. 10%

Landmax. 10%

Example

Example

Example

13










AGENDA

Feasibility study

Project evaluation



Current situation + Outlook 2010


14


APPLICATION FOR EU FUNDS

Ideal EU funded projects are structered in 4 stages.

Filing phase(months)

Filing phase(months)

Implementation(depends on project)

Implementation(depends on project)

3 4

Submission &Awarding

Receiving all the amountgranted

A folder with all the requireddocumentation

Financing Concept and Documentation

(weeks)


(weeks)

2

• Project implementation

• Accounting

• Reimbursement claim

• Project implementation

• Accounting

• Reimbursement claim

• Filing of a completeapplication

• Answering possiblequestions from Authority-

side after filing

• In the case of approval

signing the financingcontract

• Filing of a completeapplication

• Answering possiblequestions from Authority-

side after filing

• In the case of approval

signing the financingcontract

• Structuring of the project

• Development of the entireapplication documentation

• Structuring of the project

• Development of the entireapplication documentation

Eligibility check(days)

Eligibility check(days)

1

• Identification of thematching program, key

area of intervention, and operation for the project

• Verification of the eligibilityof the company and the

project for the respectivecall

• Identification of thematching program, key

area of intervention, and operation for the project

• Verification of the eligibilityof the company and the


GO / NOGOfor submission

IMPORTANT: Start of implementation is allowed only AFTER signing of the financing contractIMPORTANT: Start of implementation is allowed only AFTER signing of the financing contract

15








Example of an successful eligible project


AGENDA

Feasibility study

Project evaluation



Outlook 2011


16


General eligibility is assessed on some few basic criteria.

CAEN - CodeCAEN - Code Is the CAEN code corresponding to the respective call?Is the CAEN code corresponding to the respective call?

Company sizeCompany size Is it a large company?Is it a large company?

State taxes / duesState taxes / dues Beneficiary should not owe any taxes / debts to the state. Beneficiary should not owe any taxes / debts to the state.

Financial statusFinancial status The beneficiary can not be in financial difficulties.The beneficiary can not be in financial difficulties.

Insolvency / BankruptcyInsolvency / Bankruptcy The applicant must not be in insolvency status.The applicant must not be in insolvency status.

EU-side requiremetsEU-side requiremets There should not be any illegal proceedings pending against the EU

applicant.

There should not be any illegal proceedings pending against the EU

applicant.

Other criteria may be requested within other operationsOther criteria may be requested within other operations

ELIGIBILITY CHECK - EXAMPLE „POS CCE 1.1.1:b“

BeneficiaryBeneficiary Is the applicant a legal Romanian person?Is the applicant a legal Romanian person?

Earnings in the previous yearEarnings in the previous year The applicant must show a positive operating result or net profit.The applicant must show a positive operating result or net profit.

17










AGENDA

Feasibility study

Project evaluation



Outlook 2011


18


ExplanationExplanation

• SMEs vs. Large enterprises

(law 46/2004 with the succesive modifications and additions)

- Small enterprise: 10-49 employees, < EUR 10 m turover

- Medium enterprise: 50-249 employees, < EUR 50 m turnover

- Large enterprise: > 250 employees, > EUR 50 m turnover

• Enterprises may be autonomous, partners or linked

- If the participation of other companies is < 25% then it is autonomous

- If the participation of other companies is between 25% and 50%, the

company is considered partner company

- In the case of > 50% participaiton the company is linked

• SMEs vs. Large enterprises

(law 46/2004 with the succesive modifications and additions)

- Small enterprise: 10-49 employees, < EUR 10 m turover

- Medium enterprise: 50-249 employees, < EUR 50 m turnover

- Large enterprise: > 250 employees, > EUR 50 m turnover

• Enterprises may be autonomous, partners or linked

- If the participation of other companies is < 25% then it is autonomous

- If the participation of other companies is between 25% and 50%, the

company is considered partner company

- In the case of > 50% participaiton the company is linked

ELIGIBILTY CHECK

OPERATIONAL PROGRAMS TARGET DIFFERENT COMPANY TYPES

Small, Medium or Large Enterprise?

• Company A is applying for funding

• A has participations of 55% in C and 35% in D

• B has a participation of 40% in A and 30% in E

• Company A is applying for funding

• A has participations of 55% in C and 35% in D

• B has a participation of 40% in A and 30% in E

80%

20%

Company B200 Employees25 M Turnover

60%

40%

Company A100 Employees7 M Turnover

45%

55%

Company C40 Employees1,5 M Turnover

65%

35%

Company D30 Employees1 M Turnover

70%

30%

Company E350 Employees48 M Turnover

Stop

• Consolidation practice

- Autonomous: NO consolidation

- Partner: To the next participation stage

- Linked: All the way through the participation chain till blocked by a

minority share

• Consolidation practice

- Autonomous: NO consolidation

- Partner: To the next participation stage

- Linked: All the way through the participation chain till blocked by a

minority share

Example

19


ExplanationExplanation

PARTNER AND LINKED COMPANIES ARE CONSOLIDATED DIFFERENTLY

As an example we calculate the size of the applicant

Partner companies will be consolidated with its share,

linked companies are fully consolidated.

The indicators of the number of employees and turnover are

calculated in our example as follows:

A = 100%×A + 100%×C + 35%×D + 40%×B

Obviously A figures count, then you add the figures of the linked

companies (C) and, proportionally the figures of partner companies

(B+D)

Employees = 100 + 40 + 11 + 80 = 231

Turnover = 7 + 1,5 + ,35 + 10 = 18,85 Mil

As the company has under 250 employees, it is considered as

medium sized enterprise.

Partner companies will be consolidated with its share,

linked companies are fully consolidated.

The indicators of the number of employees and turnover are

calculated in our example as follows:

A = 100%×A + 100%×C + 35%×D + 40%×B

Obviously A figures count, then you add the figures of the linked

companies (C) and, proportionally the figures of partner companies

(B+D)

Employees = 100 + 40 + 11 + 80 = 231

Turnover = 7 + 1,5 + ,35 + 10 = 18,85 Mil

As the company has under 250 employees, it is considered as

medium sized enterprise.

ELIGIBILTY CHECK

80%

20%

Company B200 Employees25 M Turnover

60%

40%

Company A100 Employees7 M Turnover

45%

55%

Company C40 Employees1,5 M Turnover

65%

35%

Company D30 Employees1 M Turnover

70%

30%

Company E350 Employees48 M Turnover

Stop

Example

20










AGENDA

Feasibility study

Project evaluation



Outlook 2011


21


Present situationPresent situation The company canreceive grants?

The company canreceive grants?

A FILED INVESTMENT SHALL MEET A DEMAND

INVESTMENT EXAMPLE

• Invest into a new offsetpress with 10 color groups

- It will increase theproduction capacity

- New products can be

printed

- It will deliver higher

product quality

- It will reduce the bad runs thus the waste of

ink and paper

• Revamp the productionhall with a air conditioning

system to maintain theoptimal temperature for

the new equipment

• Invest into a new offsetpress with 10 color groups

- It will increase theproduction capacity

- New products can be

printed

- It will deliver higher

product quality

- It will reduce the bad runs thus the waste of

ink and paper

• Revamp the productionhall with a air conditioning

system to maintain theoptimal temperature for

the new equipment

Financing conceptFinancing conceptAction planAction plan

• A printing company has problems acquiring new

clients and expandingbusiness due to a

capacity shortage

- The existing clientscover the entire capacity

of the company

• There are demands for

higher quality printing thatare not possible with theexisting equipment

• A printing company has problems acquiring new

clients and expandingbusiness due to a

capacity shortage

- The existing clientscover the entire capacity

of the company

• There are demands for

higher quality printing thatare not possible with theexisting equipment

• Total investment:

- 5.1 Mill. €

- 4 Mill. € the new press

- 0.5 Mill. € the installationof the press

- 0.6 Mill. € the new airconditioning system

• No tax debts

• Operating profit a year earlier

• Total investment:

- 5.1 Mill. €

- 4 Mill. € the new press

- 0.5 Mill. € the installationof the press

- 0.6 Mill. € the new airconditioning system

• No tax debts

• Operating profit a year earlier

• It is a medium sizedcompany

- 231 employees

- Turnover is 18.85 mill. €

• The CAEN code is 1812

• There can be filed an application in SOP IEC 1.1.A2

• Investment location Ilfov, 50% funding rate

• It is a medium sizedcompany

- 231 employees

- Turnover is 18.85 mill. €

• The CAEN code is 1812

• There can be filed an application in SOP IEC 1.1.A2

• Investment location Ilfov, 50% funding rate

Ideal investments shall be structured with an significant portion of equipment.

A filed project has to be structured in order to fulfill / meet the eligibility criteria as good as possible.

A filed project has to be structured in order to fulfill / meet the eligibility criteria as good as possible.

22


AGENDA









Feasibility study

Project evaluation



Outlook 2011


23


POS CCE 4.2 – Renewable energy

Applications with 700 A4 pages

Development time of 5 to 12 months (incl. preliminary measurements and permits)

POS CCE 4.2 – Renewable energy

Applications with 700 A4 pages

Development time of 5 to 12 months (incl. preliminary measurements and permits)

APPLICATION

The complexity and effort of an application vary depending on relevant operations

for funding

From our experience the required data and information already exists in the case of middle and large enterprises

From our experience the required data and information already exists in the case of middle and large enterprises

POS CCE 1.1.1.a2 – SME large investment

Applications with up to 400 A4 pages

Development time of 2 to 3 months

POS CCE 1.1.1.a2 – SME large investment

Applications with up to 400 A4 pages

Development time of 2 to 3 months

Financing documents

Technical drawings

Legal documents

Budgeting

Technical description

Market Analysis

Project Plan

Project Presentation

Company Profile

Application form

Preliminary measurements

Financing documents

Technical drawings

Legal documents

Budgeting

2 Technical scenarios

Potential Study

Project Plan

Project Presentation

Company Profile

Application form

ATR (Connection to Grid)

Contracts with Suppliers

Quantitative Risk Analysis

Sensitivity Analysis

24


COMPLETE APPLICATION CONTENT – EXAMPLE POS CCE 1.1.1.b

The entire application consists of numerous documents.Example! Other calls may ask

for different documents

Depending on the investment structure complete application documents comprise between 400 and 700 DIN-A4 pages.

Depending on the investment structure complete application documents comprise between 400 and 700 DIN-A4 pages.

LIST OF DOCUMENTS FILED FOR POS CCE 1.1.1.b

25


AGENDA









Feasibility study

Project evaluation



Outlook 2011


26


Feasibility Study is the core of submission and contain several sections.

General InformationGeneral Information Description of investment and companyDescription of investment and company

Technical SolutionTechnical Solution Technical specification; 2 feasible technical scenarios to meet the project

objectives, justification for the chosen scenario

Technical specification; 2 feasible technical scenarios to meet the project

objectives, justification for the chosen scenario

Project Plan Project Plan Detailed project plan (eg MS Project, ...)Detailed project plan (eg MS Project, ...)

Investment CostsInvestment Costs Cost Estimates (equipment costs, construction costs, utilities costs, land

costs, etc.)

Cost Estimates (equipment costs, construction costs, utilities costs, land

costs, etc.)

Market AnalysisMarket Analysis Presentation of the market, market characteristics, customers, potential,

dynamic, competition, market risk, sales strategy, pricing policy

Presentation of the market, market characteristics, customers, potential,

dynamic, competition, market risk, sales strategy, pricing policy

Cost-Benefit-AnalysisCost-Benefit-Analysis Financial planning (revenue, cost, financing, cash flows, IRR, …) 3 financial

scenarios, investment period and 10 years

Financial planning (revenue, cost, financing, cash flows, IRR, …) 3 financial

scenarios, investment period and 10 years

Financing StructureFinancing Structure Financial requirements and funding structureFinancial requirements and funding structure

AttachementsAttachements Necessary permits, approvals, GANTT diagram, cost estimates, CBA tables, drawings, etc.

Necessary permits, approvals, GANTT diagram, cost estimates, CBA tables, drawings, etc.

Professional Romanian Feasibility studies - depending on project scope and structure of the investment - a coverage of about 70 to about 200 A4 pages

Professional Romanian Feasibility studies - depending on project scope and structure of the investment - a coverage of about 70 to about 200 A4 pages

STRUCTURE FEASIBILTY STUDY

27


Feasibility study consists of three main parts: Technical Solution, Market Analysis

and Financial Analysis / CBA.

Technical solutionTechnical solution

There are presented the investment objectives and at least two technical scenarios to meet

those objectives. In this part there is presented the entire technological process and there

are detailed the phases in which the investment is made.

The scenarios are compared from the technical point of view and there must be justified the

choosing of one scenario.

This part presents also the land and environment studies (e.g. Geotechnical Study,

Environmental Impact Assessment, Biodiversity Study).

There are presented the investment objectives and at least two technical scenarios to meet

those objectives. In this part there is presented the entire technological process and there

are detailed the phases in which the investment is made.

The scenarios are compared from the technical point of view and there must be justified the

choosing of one scenario.

This part presents also the land and environment studies (e.g. Geotechnical Study,

Environmental Impact Assessment, Biodiversity Study).

Market AnalysisMarket AnalysisIt is presented the market context and size, market drivers, the customers, the competitors

(including the SW Analysis), market risks, marketing strategy, price policy. The data from

this part are entry data for financial analysis.

It is presented the market context and size, market drivers, the customers, the competitors

(including the SW Analysis), market risks, marketing strategy, price policy. The data from

this part are entry data for financial analysis.

Financial AnalysisFinancial Analysis

This parts contains the financial planning, cost-benefit analysis (sales, operational costs,

financing sources, investment costs, calculation of indicators) in three financial scenarios

(business as usual, with investment with grant support, with investment without grant

support).

This parts contains the financial planning, cost-benefit analysis (sales, operational costs,

financing sources, investment costs, calculation of indicators) in three financial scenarios

(business as usual, with investment with grant support, with investment without grant

support).

Coherence within these three main chapters is key. A beneficiary must avoid discrepancies between the market, the technical solution and the financial analysis to present a coherent picture of the project.

Coherence within these three main chapters is key. A beneficiary must avoid discrepancies between the market, the technical solution and the financial analysis to present a coherent picture of the project.

STRUCTURE FEASIBILTY STUDY

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Project evaluation



Outlook 2011


29


Administrative VerificationAdministrative Verification

• Verification that:

- the filing document of the project

contains all required documentation

- all required documents are attached in

proper order and the correct format

- all documents are valid at the moment

of filing

• If a project has fulfilled all conditions of

the checklist the applicant is informed

about this fact and the project advances

to the next step

• If a project has not fulfilled all of the

conditions, the project is rejected

• This step should last about one week but

this period was underestimated according

to our experience

• Verification that:

- the filing document of the project

contains all required documentation

- all required documents are attached in

proper order and the correct format

- all documents are valid at the moment

of filing

• If a project has fulfilled all conditions of

the checklist the applicant is informed

about this fact and the project advances

to the next step

• If a project has not fulfilled all of the

conditions, the project is rejected

• This step should last about one week but

this period was underestimated according

to our experience

Eligibility VerificationEligibility Verification Project EvaluationProject Evaluation

MANAGEMENT AUTHORITY CLARIFIES AND EVALUATES IN DETAIL

PROJECT APPROVAL PROCESS

• The projects that have advanced from the

first step are verified for:

- the eligibility of the project

- the eligibility of the applicant

• If a project has fulfilled all the conditions

of the checklist it passes to the final step

• Administrative and Eligibility verification

should be finished within 2 weeks.

Experience shows that due to limited

ressources this timeline is often delayed.

• The projects that have advanced from the

first step are verified for:

- the eligibility of the project

- the eligibility of the applicant

• If a project has fulfilled all the conditions

of the checklist it passes to the final step

• Administrative and Eligibility verification

should be finished within 2 weeks.

Experience shows that due to limited

ressources this timeline is often delayed.

• The projects that have advanced into the

final step are evaluated by an expert

commission against the criteria matrix.

- There are usually several matrix

sections wherein the project in some

cases must have a minimum number of

points in order to be ranked

• The top-ranked projects are approved

• The successful applicant is invited to sign

the financing contract and, in some

cases, to provide additional documents.

- The timeline for evaluation is around 2

months. This period was

underestimated by the management

authorities. We witness continuous

improvements of the situation as the

authorities gain experience.

• The projects that have advanced into the

final step are evaluated by an expert

commission against the criteria matrix.

- There are usually several matrix

sections wherein the project in some

cases must have a minimum number of

points in order to be ranked

• The top-ranked projects are approved

• The successful applicant is invited to sign

the financing contract and, in some

cases, to provide additional documents.

- The timeline for evaluation is around 2

months. This period was

underestimated by the management

authorities. We witness continuous

improvements of the situation as the

authorities gain experience.

A filed project is approved in three steps.

DEPENDING ON THE PROGRAM BETWEEN 1 AND 12 MONTHSDEPENDING ON THE PROGRAM BETWEEN 1 AND 12 MONTHS

During any of the three phases the Management Authority may ask for further clarification.During any of the three phases the Management Authority may ask for further clarification.

30


Using a scoring logic the technical and economical evaluation is based on 5 key

criterias.

CRITERIA MATRIX

RelevanceRelevanceHow the project contributes to operation’s objectives and targets (employment effect, increase of competitiveness, level of innovation, increase of exports, etc.)

Project Quality and-Coherence

Project Quality and-Coherence

Justification of public support by non reimbursable funding, the quality of financial solution, correlation between objectives and results, technical solutions, market analysis, the project budget

Project MaturityProject MaturityStatus of the technical documentation for permits, notifications and permits already obtained, start date of the project after financing contract signing

ProjectSustainability

ProjectSustainability

The financial capacity to sustain the project after end of the implementation period (organizationally and financially)

Implementationcapacity

of the beneficiary

Implementationcapacity

of the beneficiaryFinancial, technical, human capacity

31


PROJECT EVALUATION

The application is evaluated through the scoring method based on

particular technical-economical criteria

1b. The project implements technology or acquisition of certified quality standards for international equipment with an age of > 2 years

ahead

5a. The project implements technology or acquisition of certified quality standards for international equipment with max. 2 years ahead

5I.2.2. Grade of innovation of the project

2b. < 10%

4a. ≥ 10%

4I.2.1Initial value for licenses, patents and trademarks in a total value of the eligible costs (weight)

9I.2. Level of innovation of the project

0d. <1%

2c. ≥1% und <5%

5b. ≥5% und <10%

7a. ≥10%

7I.1. Increasing the sales volume of the company within 5 years after the completion of the project (in percent proportional to the last

annual turnover before submission)

35Project contribution to complete the POS CCE objectives, Priority Axis 1, Area of Intervention 1, Operation a)

Max.

pointsCriteria & sub-criteria

This is an example for technical-economical

evaluation criteria.

In total we look within the POS CCE 1.1.1.b call on

5 major and 30 sub-criterias totalling to maximum

100 points and multiplied with the location factor.

In previous calls projects with a score of 88 points

have been approved.

An application on a program should meet a minimum score in order to be ranked. The final score is calculated using a location factor,

which favors underdeveloped regions, that depends on the location of the investment: e.g. projects in the regions of South, South-West

and North-East will be multiplied by a factor of 1.2, all other regions by 1.1., Bucharest 1.0

An application on a program should meet a minimum score in order to be ranked. The final score is calculated using a location factor,

which favors underdeveloped regions, that depends on the location of the investment: e.g. projects in the regions of South, South-West

and North-East will be multiplied by a factor of 1.2, all other regions by 1.1., Bucharest 1.0

32


AGENDA









Feasibility study

Project evaluation



Outlook 2011


33


Environment Decision (Acord de Mediu) or the proof that the

documentation for issuing it was

filed to the relevant authority

Environment Decision (Acord de Mediu) or the proof that the

documentation for issuing it was

filed to the relevant authority

Excerpt of the land decision with the mention “free of charges”

Excerpt of the land decision with the mention “free of charges”

Building permitBuilding permit

Fiscal record of the companyFiscal record of the company

Tax certificate - Proof of payment of

national taxes (assuming also 1 / 12 of the Annual Rate of debt

obligations)

Tax certificate - Proof of payment of

national taxes (assuming also 1 / 12 of the Annual Rate of debt

obligations)

Land: Land ownership title / lease /

concession for at least 10 years beginning with the date of signing

the financing agreement

Land: Land ownership title / lease /

concession for at least 10 years beginning with the date of signing

the financing agreement

Tax certificate as a proof of the

local tax paid (1/6 of the term

debt tax)

Excerpt from trade register

Documents proving the financing

capability (bank statement /

credit agreement / letter of comfort

covering the own contribution andnon eligible funds)

In the event of funding approval, the applicant will be notified and asked to submit

the following contract documents:

CONTRACT DOCUMENTS

The complete list of required documents is provided by the guidelines of the relevant operation, in which the project was filed

The complete list of required documents is provided by the guidelines of the relevant operation, in which the project was filed

34


During project implementation, please pay attention to the following:

CORE ELEMENTS IN THE IMPLEMENTATION PROCESS

the partial or total non-compliance with

contract terms will

have the following

consequences:

• the partial payment of the

grant

• Stopping of the payments

• Full or partial pay back of the grant already received

the partial or total non-compliance with

contract terms will

have the following

consequences:

• the partial payment of the

grant

• Stopping of the payments

• Full or partial pay back of the grant already received

Reimburse-

ment

Reimburse-

ment

Depends on:

• Project implementation according to the contract terms and conditions• Compliance with the binding indicators

• Investment Compliance (location, ownership, technical parameters),

including the monitoring period

Depends on:

• Project implementation according to the contract terms and conditions• Compliance with the binding indicators

• Investment Compliance (location, ownership, technical parameters),

including the monitoring period

AccountingAccounting

ReportingReporting

• Progress report every quarter

• Final Report

• Yearly monitoring reports

• Estimates on the cash flows

• Progress report every quarter

• Final Report

• Yearly monitoring reports

• Estimates on the cash flows

The accounting must be separated in analytical accounts to preserve

tracability and payment documents must be kept to at least 5 years after the implementation

The accounting must be separated in analytical accounts to preserve

tracability and payment documents must be kept to at least 5 years after the implementation

TenderTenderMust be organized according to the purchasing requirements of the financing contract or according to the public purchasing requirements

(OUG 34/2006)

Must be organized according to the purchasing requirements of the financing contract or according to the public purchasing requirements

(OUG 34/2006)

35


Supplier BeneficiaryIntermediate

Body Management

Authority

Reception of the goods, services, works (keyphase of construction)

Filing of reimbursement claimsaccording to the sche-dule in the contract

Checking and authoriza-tion of the reimburse-ment claims

Payment of the authori-Zed amounts

Bills beneficiary

withRON 100

Reimbursmentof

RON 100

RON 50 Lei in

the projectaccount

RON 100

RON 50

Eligible costs are firstly pre-financed by the beneficiary and thenreimbursed.

REIMBURSEMENT SCHEME

15 – 30 days

50 –

65 days

The Management Authority authorizes the payment request after the intermediar Body has checked the supporting documents filed by the benificary (about 80 days) and reimbursementsis done by the payments department within MA (10 days after the authorization of the amount)

The Management Authority authorizes the payment request after the intermediar Body has checked the supporting documents filed by the benificary (about 80 days) and reimbursementsis done by the payments department within MA (10 days after the authorization of the amount)

RON 100

Pays bill

of RON 100

10 days

36


In addition to reimbursement claim the following supporting documents

must be attached:

TRANSFER DOCUMENTS

Timely and complete reimbursement depends on a correct preparationof the reimbursement file and filing it in time

Timely and complete reimbursement depends on a correct preparationof the reimbursement file and filing it in time

Project Progress Report /Final Report

Project Progress Report /Final Report including documents of the machinery / equipment / technologiesincluding documents of the machinery / equipment / technologies

Information and publicityInformation and publicity Press conferences, press releases, billboardsPress conferences, press releases, billboards

Tender documentsTender documents Proof of publicity, selection and awarding criteria (tender specification) awarding protocol,

Proof of publicity, selection and awarding criteria (tender specification) awarding protocol,

Payment documentsPayment documents Reception protocols, invoices, payment orders, bank statements and

accounting records - Account Summary, Balance Sheet

Reception protocols, invoices, payment orders, bank statements and

accounting records - Account Summary, Balance Sheet

Documents concerning the Reception of goods, services, works

Documents concerning the Reception of goods, services, works

Delivery and commissioning protocol, service acceptance protocol, control protocol, quality reception protocol, etc.

Delivery and commissioning protocol, service acceptance protocol, control protocol, quality reception protocol, etc.

37


AGENDA









Feasibility study

Project evaluation



Outlook 2011


38


EU

Funding

Optimize the ApplicationKeywords and -issues have to be optimally

placed in order to meet evaluation criteria and

get top ranked

Maximize Grants / SubsidyIncrease of the eligible costs as part of

the entire project

State-of-the-art presented projectHigh quality documentation both from technicaland economic points of views

Romanian Business StyleRomanian way of preparing business documents

and presenting information and data

Organisational Project SetupAnticipation of future purchasing

procedures, financial and project accounting

Proper Programme SelectionCorrect identification of the programme that

can provide funding for a specific project

Success factors are very similar all over EU memberstates.

SUCCESS EU FUNDING IS A MATTER OF COHERENT WORK

11

22

33

44 55

66

The detail level of the Romanian presentation approach is considerably higher than used in Western European business environments

The detail level of the Romanian presentation approach is considerably higher than used in Western European business environments

39


Professional preparation and a longer period of development are prerequisites for a

successful EU funding application.

SUCCESS FACTORS

DON‘TsDON‘Ts -

• Pressure and lack of time to draft a professional application

• Wrongly estimated timeframe between the end of the project application and the start of the project

• Negligent drafting of the financing application and theformal mistakes that result from this

• Using only the western European methods and and not respecting the structure and format of romaniandocumentation

• Being thin in information quality and quantity

• Pressure and lack of time to draft a professional application

• Wrongly estimated timeframe between the end of the project application and the start of the project

• Negligent drafting of the financing application and theformal mistakes that result from this

• Using only the western European methods and and not respecting the structure and format of romaniandocumentation

• Being thin in information quality and quantity

DOs+

• Time and patience in the preparation, financing concept and development of documentaton

• Understand and comply with all requirements of form and content

• Communicate clearly project coherence, maturity and and project sustainability

• Be as detailed as possible

• Discuss and clarify any ambiguities with the authorities

already before filing

• Consider a larger time puffer between the end of the

project application and the start of the project

• Consider rather complex requirements regarding the

project organization / implementation / accounting / reporting

• Time and patience in the preparation, financing concept and development of documentaton

• Understand and comply with all requirements of form and content

• Communicate clearly project coherence, maturity and and project sustainability

• Be as detailed as possible

• Discuss and clarify any ambiguities with the authorities

already before filing

• Consider a larger time puffer between the end of the

project application and the start of the project

• Consider rather complex requirements regarding the

project organization / implementation / accounting / reporting

Uniquely, the intensity and the volumes of grants available for Romania are higher, compared to other European countries. „The grapes are sweet, but they are hard to reach.“

Uniquely, the intensity and the volumes of grants available for Romania are higher, compared to other European countries. „The grapes are sweet, but they are hard to reach.“

40


AGENDA









Feasibility study

Project evaluation



Outlook 2011


41


POS CCE 2011 schedule provides attractive calls.

2011 OUTLOOK

Since the authorities have collected a great deal of experience during the last calls, we expect faster evaluation times and easier handling in 2011


Support for enterprises’ integration

in supplier chains and cluster1.3.3.

Consultancy support for SMEs1.3.2.

Development of business supportstructures of national and international dimensio

1.3.1.

Support to access to new marketsand internationalization1.1.3.

Support for the implementation of international standards1.1.2.

Financial support for large companies

1.1.1.B

Financial support granted forinvestments in SMEs of up to

1.075 million lei

1.1.1.A2

Financial support granted forinvestments in SMEs amountingbtw. 1,075,001 - 6,450,000 lei

1.1.1.A1

1. Increase of Economic Competitiveness

DecNovOctSepAugJulJunMayAprMarFebJanDescriptionOp.

42


POS CCE 2011 will open calls in all priority axes.

2011 OUTLOOK




Interconnection networks4.3.

Renewable energy resources4.2.

Investments in upgrading electricity, natural gas networks4.1.B

Energy efficiency improvements4.1.A

4. Increasing energy efficiency and security of supply, in the context of combating climate change

E-commerce systems and other

Internet based solutions3.3.2

Support for integrated ICT businesssystems

3.3.1

Supporting access to Internet and to connected services3.1.1

3. ICT for private and public sectors

Promoting enterprise innovation2.3.3

High-tech start-ups and spin-offs2.3.1

Poles of excellence2.2.2

R&D partnerships btw universities/research institutes, and enterprises

2.1.1

2. Research, Technological development and Innovation for competitiveness

43


Agricultural calls within PNDR start soon.

2011 OUTLOOK



EUR 156 Mil

Village renewal and development..for ruralpopulation3.2.2.

EUR 85 Mil

EUR 85 MilEncouraging of tourism activities3.1.3.

EUR 89 Mil

Support for the creation and

development of micro-enterprises3.1.2.

EUR 50 Mil

EUR 50 Mil

EUR 50 Mil

EUR 50 Mil

First afforestation of agriculturalland2.2.1.

EUR 333 Mil

Developing the infrastructure

related to the development and adaptation of agriculture and forestry1.2.5.

EUR130 Mil

Adding value to agricultural and forestry products1.2.3.

EUR

150 Mil

Modernization of agricultural

holdings1.2.1.

EUR 50 Mil

EUR 50 MilSetting up young farmers1.1.2.


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Feasibility study

Project evaluation



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45


GCI PROVIDES CLEAR ADDED VALUE

We support our clients throughout the entire development and

implementation process with our know-how and ressources

Application Support(Months)

Application Support(Months)

Implementation Support(depends on project)

Implementation Support(depends on project)

3 4

Filing of the financing

application

Receiving all the amountgranted

A folder with all the required

documentation


(Weeks)


(Weeks)

2

• Support for fulfilling of all

obligations from thefinancing contract

• Support for the reportingand reimbursement

• Supervision of the meetingof the organizaitonal and

formal requirements

• Reimbursement of the

grant

• Avoiding the partial loss of

the awarded grant

• Support for fulfilling of all

obligations from thefinancing contract

• Support for the reportingand reimbursement

• Supervision of the meetingof the organizaitonal and

formal requirements

• Reimbursement of the

grant

• Avoiding the partial loss of

the awarded grant

• Verification of the

completeness of theapplication documentation

• Operational filing

• Keeping contact with the

authorities

• Supporting the client to

answer any questionsrelated to the filed

documentation

• Support during the

financing contractnegotiations

• Verification of the

completeness of theapplication documentation

• Operational filing

• Keeping contact with the

authorities

• Supporting the client to

answer any questionsrelated to the filed

documentation

• Support during the

financing contractnegotiations

• Definition of the

appropriate projectstructure to optimize the

financing level

• Selection of information

needed for drafting of therequired documentation forfiling

• Drafting of all the

documents in Romanianformat and style in order to file the project due to local

patterns

• Maximizing eligibility by

finetuning eligible criteriasand key words

• Definition of the

appropriate projectstructure to optimize the

financing level

• Selection of information

needed for drafting of therequired documentation forfiling

• Drafting of all the

documents in Romanianformat and style in order to file the project due to local

patterns

• Maximizing eligibility by

finetuning eligible criteriasand key words

Eligibility Check(Days)

Eligibility Check(Days)

1

• Identification of the exact

programme and key areaof intervention for the

project

• Verifying the formal

requirements for therespective call

• Verifying of the eligibility of the company and the


• Evaluation of successchances of the project

• Identification of the exact

programme and key areaof intervention for the

project

• Verifying the formal

requirements for therespective call

• Verifying of the eligibility of the company and the


• Evaluation of successchances of the project

A grant project

46


CONTACT GCI MANAGEMENT & ADVISORY SRL

Bucharest

Str. Racota Nicolae, nr.5RO-011364 Bucharest, sector 1

Tel: +40 21 310 35 79Fax: +40 21 310 35 80

[email protected]

Bratislava*

Vienna

Miilan

Munich

Prague*

Sofia*

* rep-office

Do not hesitate to contact us at any time!

Gregor VogrinManaging Director, [email protected] │ +40 (720) 219686 │ +43 (699) 13816064

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