BOTSWANA INNOVATION ee GUIDELINES aUaiges) Ae m ta UN) PaO Kel NON elena MUNROE ace SO Ny ELIGIBLE COSTS See eter De cue Roos Det Rocce Seed See eens Peete) Deo ee) Trials Dene Quality or performance certification Rg NON-QUALIFYING COSTS Se storied eros cco Pea Deuces ee er ceBOTSWANA INNOVATION FUND (BIF) ‘The Botswana Innovation Fund was established by the Government of Botswana through Statutory Instrument 97, 2017. BIH IS MANDATED TO DO THE FOLLOWING; eect) Teas Seer Perea Seo! ec eee ee tee erect er eee ny and businesses to commerci eee teri oo ee eee Pee ea Sree ee cee ee eee ee ee stimulate creat BACKGROUND ‘An innovation Fund has a critical role in the establishment of technology start-ups across the Innovation hubs globe. It is therefore, a key component of the current national strategy to diversity the economic base of Botswana and to push up productivity levels in current economic sectors through the ‘application of scientific and technological advances. ‘The financial institutions in Botswana have little or no appetite for {funding innovative start-ups mainly because of the risky nature of the sector hence this provided a huge gap in funding of start-ups, the Botswana Innovation Hub realised this gap and introduced the Innovation Fund as a baseline to prepare start-ups for funding, PURPOSE OF THE FUND ‘The purpose of the Fund is to {@) promote innovation through technology, product and business development in the private sector by providing cash grants to (0 companies and organisations registered with the Botswana Innovation Hub; and (i) universities and research organisations inside or outside the Botswana Innovation Hub, to which companies and organisations registered with the Botswana Innovation Hub may subcontract part of the research and development work; and encourage companies and organisations registered with the Botswana Innovation Hub to transfer skils to citizen employees by providing cash grants to be utlised for (0. institutionalised training, and/or (i) approved on the job training programmes. ) DEFINITION OF INNOVATION Innovation refers to new and unique products or processes that may be incremental, novel and radical. For ‘ product to be considered innovative, the following will be considered: * Funotionally unique and advanced + Efficient + Low cost + If process driven, it should be a substantial improvement of the original process ‘+ Predominantly be the result of technical development as ‘opposed to research or studies and should emphasise technical innovation. Innovation includes projects where: * Anew and unique product with clear benefits is developed. These benefits can range from new unique features to specific attributes that have not been seen in a product before. + A.unique improvement to a product with clear benefits is developed. The new features added to the product are ‘such that the entire product can be seen to be innovative. ‘+ Anew software development that provides substantial efficiency improvements. These improvements could include a product being substantially easier or faster touse. GENERAL FUNDING CRITERIA ‘The BIF will provide financial support to proposals based ‘on merit. All promising applications will be evaluated considering the following General Criteria: * The project seeks to develop a new product, process or new ‘echnical services which surpass existing products, processes Cr technical services in terms of their functions, parameters or features. * All intellectual Property (IP) rights shall reside in a Botswana-registered company. * Products developed must, where applicable, comply with relevant national and international standards. * Only one application may be considered from any company at a time. Subsequent applications will only be considered on completion, cancellation or withdrawal of a project. * The applicant must submit a valid Botswana Unified Revenue Services (BURS) Tax Clearance Certificate at the time of application and for each milestone payment request. * The sustainable competitiveness or marketability of the product, or service in the industry for targeted markets. * Alignment with BIH industry focus and or call objectives. * Social and Economic impact including increased taxation revenue, meaningful job creation, increased and value-added exports, increased competitiveness of industrial sectors, Increase in highly skilled capacity and knowledge base, lowered net intellectual property cost, increased capabilities for technology innovation, solutions to national needs and improvement in quality of life, and responsiveness to social and developmental needs. * The technical and commercial viability ofthe plan * The abilty ofthe team to implement the plan, including the commercial strength of management and the existence of sound management systems. * Financial viability of the business. * The business model should be replicable or scalable. ‘Approval of applications is always subject to availability of funding,EXCLUSIONS Ue aN ee eee oe a funding for the application, ed Which seek to expand any of the following market res pe eee Petes Cea’ eee ee a] eu Con e s eeu clccas oa forthe same pr of a military nature will not receive BIF support Poco nee) eens from a third party ete gee) Beet eect ELIGIBLE COSTS Salary and labour costs Only the costs of personnel directly involved in the project and contributing technical inputs are qualifying costs. Amounts Claimed must not be out of line with the amount of such salaries or ‘drawings prior to the date of application. Where there is inconsistency, a proper motivation must be provided, e.g. general salary increase or promotion, which should be to the satisfaction of BIF * Basis Qualifying remuneration is based on the total annual salary package of each individual. This would normally be the amount contained in the person's letter of appointment, Qualifying costs will also be determined for the project team based on the approved rate and hours approved for the project, supported by relevant payslips and other documentation. * Overtime Overtime will only qualify if this is specifically paid and the maximum hourly rate will be the salary rate. No double or improved time willbe allowed * Management costs Only the costs of executive or managerial personnel, including ditectors, who are directly involved in the project qualify and only to the extent that such personnel are contributing technical inputs, Shareholders, directors, members and owners Material costs Direct materials for prototype or mode: qualifying material costs ‘comprises material of a non-capital nature consumed during the direct development and manufacture of prototypes and models. ‘Subcontractors Where the subcontracted items are eligible for support (i. the ‘costs would be regarded as qualifying costs ifthe subcontracted ‘work was carried out by the applicant) and the subcontractor is at ‘arm's length’, the subcontracting costs are regarded as qualifying ‘costs. It is further required that the Intellectual Property (IP) developed as result of the project is wholly owned by the recipient. In instances where it is considered that @ subcontractor is not at “arm's length’, expenditure by the subcontractor is to be treated as, if incurred by the applicant and must be subject to the same rules as applied to the applicant. * Subcontractor costs ‘Subcontractors must at the time of the project evaluation, provide a quotation that sets out the following: * A detailed description of deliverables; + Itemised costing using the cost headings as per BIF project Costing with unit costs shown (e.g. machine time x hours @ BWP xx per hout). Unit costs could include overheads and ‘mark-up or these could be shown separately; and + Anundertaking that it will carry out the work as prescribed in the olient’s business plan approved by the BIF Committee and will not claim any IP resulting in the execution of such subcontracted work, BIF reserves the right to audit the subcontractor costs at the time Cf milestone audits if it deems such an undertaking necessary. + Government funded institutions as subcontractors Government funded institutions such as Universities, and Research institutes may act as subcontractors. * Foreign subcontractors In exceptional cases, where foreign subcontracting is a crucial ‘component of the development project and the subcontracting cannot be done in Botswana, such costs may be regarded as qualifying costs. ‘Tooling costs: General The costs of design, compiling mechanical drawings, building models and prototypes of tooling up to the stage of the completion Of the project are qualifying costs. * Tooling costs: Specialy approved items ‘Tooling that is purchased, or the manufacture of which is ‘subcontracted, and that can be used for both development and ‘commercialsation, may be considered as a special approved item. * Capital equipment: Specially approved items Capital items that are required specifically for the development project are qualifying costs. Where a capital item may also be used (hired during the production or commercialisation phase, or where the item will Rave a realisable market value at the end of the development phase, the cost of such capital items are considered as qualifying costs. * Computer hardware and software costs In general, any costs related to computer hardware or software are 1non- qualifying costs. Software (e.g. process software) will be approved as a qualifying cost, on a case-by-case basis, ifit forms ‘an integral and inseparable part of and is essential for the functioning of the prototype and eventual product. This will not include any licensed software ‘Computer hardware and software costs used in the development process will ually Patent costs Costs incurred in respect of the lodging of patent applications are regarded as qualifying costs. The type of patent, registering authority and the applicable country or countries must be specified. Patent costs are treated as a specially approved item. The patentmust be registered in the company's name. Travel costs * Acceptable travel costs Qualifying travel costs are restricted to those required for development purposes and are limited to economy-class airfares for one person per trip. That person must be an ‘employee of the company who is directly involved with the technical development. Cost for car hire, travel by buses and taxis are also qualifying, Licensing costs Costs for licences or royalties for technology (excluding software) that is required in the development phase of a project will be considered on merit as qualifying costs Trials ‘The cost of product technical development trials may be accepted as qualifying costs and will be regarded as a specially approved iter, Documentation Preparation of development-related, user, maintenance and ‘specification manuals. The cost of the preparation or compilation of development related operating, user, maintenance and specification manuals are qualifying costs. Quality or performance certification The costs of product quality or other certification (e.g. BOBS) are qualifying and specially approved items. Proof of market During the last milestone, the applicant must include the proof (of market as one of the deliverables. The cost for undertaking the proof of market is qualifying, NON-QUALIFYING COSTS oer production, administration, support personnel, comm interest, allocated costs of overheads and services (e.g. rent, electricity, telephone), statutory costs, consultant fees and foreign exchange contingencies are non-qualiying costs. PoE W EUS I Co ngry Cee ee non-qualifying costs. Any non-guaran profit or performance bonuses and share opti eon inert ence The costs of defending patents are non-qualifying cost Reon eet Se ue at) the marketing of the produ Se eu ceo eet Costs for laundry and tips are non-qualifying c¢ Rr See eee cee ete Cae Seen oe et oe eet et ener e enets Tue All maintenance and related