INVITATION AND GUIDANCE NOTE FOR APPLICANTS FOR WINDOW 4 OF THE EXPORT READINESS FUND The Export Readiness Fund management unit would like to invite interested firms in the four target sectors mentioned below to submit an application for a matching grant in order to assess Environmental, Social and Quality (ESQ) gaps from Window 1 of the Export Readiness Fund (ERF). Guidelines for submitting applications are below. 4. Introduction to the Export Readiness Fund (ERF) ERF is a support program of the Export Competitiveness for Jobs (EC44) Project, funded by the World Bank and implemented by the Ministry of Commerce, Government of the People's Republic of Bangladesh. The ERF has a grant funding allocation of up to US$10 million and will be implemented over 42 months. The Export Readiness Fund will provide grant-based incentives for advisory services, training, and equipment that enables firms to identify and address Environmental, Social and Quality (ESQ) compliance gaps and upgrade their factory, improve production processes and enhance product quality, as required by large buyers/brands and the regulatory standards of the major export markets, The target export industries for the ERF, which are Government priorities for diversifying the export basket, are SMEs operating in the leather and leather goods, footwear (leather and non-leather), plastics, and light engineering (covering electronics and electrical goods, automobiles and parts, bicycles, motorbikes, accumulators and batteries) sectors. The development of ESQ standards is expected to both expand export opportunities and improve the quality of products for local markets. 2. Window 4 — ESQ Assessments The ERF Grants under Window 14 will cover relatively brief technical assessments at the firm- level to identify gaps and actions required to improve compliance with ESQ standards, including firm’s own management capabilities for meeting and maintaining compliance. The assessment will be undertaken by qualified ESQ service providers. The ERF management unit has developed a pool of service providers which can provide such assessments. In Window 1, the maximum grant limit will be up to US$5,000 per enterprise, for which the enterprise will bear 10% and the remaining 90% will be paid as a grant from the project. ic the grant will be a maximum of 90% of the ESQ assessment cost or US$5,000, whichever is the lower. Subsequently, there will be a later call under ERF for Windows 2 and 3 which will provide grants to firms for services and equipment to help them upgrade ESQ standards in their factory. Grants will be up to US$40,000 and US$200,000 respectively. Firms that participate in the ESQ compliance assessments under Window 1 may have an advantage in the Window 2 and 3 application process (as equipment and service needs which can be addressed in Windows 2 and 3 will be largely determined under Window 1 diagnostic assessment reports) but the compliance assessments are not mandatory in order to make further applications.3. How will an Environmental, Social and Quality (ESQ) assessment help your firm? Companies in Bangladesh are required by law to conform to various ESQ regulations according to local legislation, while overseas markets also have certain regulations that need to be met. These are mandatory. Compliance to these is only the start in reaching ESQ compliance necessary to access export markets and global supply chains. Many multinational companies/brands require adherence to voluntary standards developed by international organizations such as ISO or private standards which can be a ‘quality mark for businesses. With increasing concern from consumers on how products which they buy are made, multinationals do not want the reputational damage from buying from firms which do ot meet high standards in environmental, social (occupational health and safety (OHAS)) and quality standards so failure to obtain such standards may constrain the export opportunities of your business. An ESQ assessment will help your firm to understand what standards might help in opening Up higher-value export opportunities to multinational brands in your sector, will help to understand what are the underlying constraints that your firm needs to overcome to be able to get certified to these standards, and provide recommendations on how to remove these constraints (e.g. advice on new management systems, training and/or equipment required). 4. Window 4 Eligibility Criteria Eligible Applicants © The applicant firm must be within the supply chain of leather, leather goods & footwear, plastic products’, or light engineering products (electronics and electrical goods, automobiles and parts, bicycles, accumulators? and batteries) and have an operational factory (the firm should note if it is a member of any sector association and provide the address of a factory which can be verified if required) * All applicant firms must be eligible to do business under a Trade License (or Registration) (the trade license / company certificate of incorporation document should be provided), and be majority privately owned (ownership details must be provided) unless an effective private-public partnership is in place (through licensing, leasing or contract) + Firm must be a small or medium enterprises (SMEs) (>30 employees) (proof of staff numbers may be requested). * Applicant firm must have a TIN and VAT number. * Firms (or holding the holding group) which also have operations in the following sectors will be excluded: arms, tobacco, alcohol and gambling (and any other areas as excluded by the World Bank/IFC Exclusion List). Eligible Expenditure Categories (must give details of the type of ESQ assessment sought, the chosen service provider (from the approved ERF list), and the budget "In the plastics sector, given current global concemns, it should be noted that the objective is to improve the environmental attributes of products thal firms within the sector produce. E.g, reduction in amount of plastic used er product. including packaging, increase in the potential to recycle products, upeycling, and a shift to biodegradabies 2 An apparatus for storing energy 2 Large firms (2300 employees) may be eligible on an exceptional basis. E.g. Ifthe factory is a subsidiary of a larger group. Also, on exceptional basis, enterprises having employees between 15-30 will be considered for grants if they have an automated/computerized manufacturing process. This is subject to submission of Supporting evidence by the applicants and verification by the ERF Management Unit. 2‘supported by the ESQ provider quote) * Environmental Standards/Requirements Assessment + Social Standards/Requirements Assessment © Quality Standards/Requirements Assessment Taxes for the purchase of services can be included as eligible expenditure. Note: ‘© The application should state if the assessment report provided to it by the service provider is to be submitted in Bangla, in addition to English. 5. Steps to submit an Application for Window 1 Step 1 — decide on whether an ESQ assessment will help your business to export, and what type of ESQ assessment you want. E.g. specifically in environment issues, or in all areas of ESQ. Step 2 — select an ESQ service provider which can provide the type of assessment you want from the approved list held by the ERF management unit (also available on the ERF website www.eri-bd.com). If you would like to use another service provider, which is not on the ‘approved list, then please submit its details to the ERF management unit so that it can be assessed and added to the approved list. It will be up to you to negotiate a fee with the service provider. You can contact more than one service provider to compare prices if needed. Contact the ERF management unit if you want help in finding a service provider right for your business. The ERF management unit can then provide recommendations of which provider may be best suited to your needs. Step 3 — fill in the application form (available for download on www. com) and submit to the ERF management unit (contact details at the bottom of these guidelines) 6. The Grant Evaluation and Contracting Process Evaluation will be undertaken by the ERF management unit using an assessment checklist to check that all eligibility criteria have been met. If all criteria have been met the grant will be approved, or more information will be sought from the applicant so a decision can be made. You will then be informed of the outcome of your application. Successful applicants will be sent a tripartite grant contract agreement to be signed by the ERF management unit, the ESQ assessment service provider and yourselves, the applicant (titled ‘grantee’). This will detail the responsibilities of each party. if unsuccessful firms feel they have been unfairly treated they can raise objections through the Grievance Redress Mechanism (details are available on the ERF website) 7. Implementation and Payment Procedures You, the grantee, will be responsible for paying your 10% contribution (or more if above US$5000) in advance to the Service Provider within 10 working days of signature by all parties to the agreementThe service provider will then mobilise its team for undertaking an assessment within 10 working days and provide its report within 1 month of grant agreement, You (the grantee) will provide access to your facilities and systems for the service provider to undertake its assessment. You (the grantee) will then review and approve the ESQ assessment report The ERF management unit will then pay the service provider the remaining amount within 10 working days of approval of the report by yourselves (the grantee) and our own review and acceptance of the report 8. Feedback on the Service Provider Feedback forms on the quality of the assessment will be provided to yourself (the grantee) to help us ensure we maintain a database of high-quality ESQ assessment service providers. 9. Deadline for Applications ‘The Window is open on a continuous basis for 12 months (up to 31% December 2020) and applications can be submitted at any time but before the deadline date. However, assessments will be done on a first-come, first-served basis therefore you are encouraged to submit your application as soon as you can. 10. Submission details and request for help Applicants can request support from the ERF management unit through email, phone or in person (assuming an appointment is made), with queries on how to fill in the application or on eligibility Please submit your application by email to info@erf-bd.com or in person to the ERF management unit located at Ville Akbar, Apartment-A2, House # 257 (2 Floor), Lake Road # 19/8, New DOHS, Mohakhali, Dhaka-1206.