Operating Plan for 2010 / 2011

Examples of some projects applying for funding in 2007/2008
Support Request Form

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1. Background on the EPF (How does the EPF Function)

The Environmental Protection Fund (EPF) was originally established in 1995 as the Egyptian government’s instrument to fund environmental projects. The EPF is an important support tool within the Ministry of State for Environmental Affairs and the Egyptian Environmental Affairs Agency (EEAA) as an innovative financial mechanism for backing serious private, public, and non-governmental organizations that aim at combating environmental problems in Egypt and increase compliance with Law 4.

The Fund Management Committee (FMC) which is considered the higher authority in the EPF sets out each year the environmental priorities according to the National Environmental Action Plan, the funding mechanisms as well as the areas of support based on the recommendations presented by the different departments within the Fund. (the NEAP 2002/2017 can be acquired from EEAA)

By the beginning of each year, the EPF launches a public awareness campaign aiming at promoting the EPF environmental priorities and the Competitive Projects Program (CPP). The CPP is the Fund's program for providing financial support to environmental projects. The CPP utilizes several support programs such as Grants, Soft Loans, Interest Rate Subsidy and Shareholding. The awareness campaign is carried out through advertising in mass media as well as conducting workshops for interested parties in the selected areas of support.

In course of the public awareness campaign, interested parties can apply for funding through filling in and submitting the Project Information Form (PIF) which can be acquired form the EPF Office or online (www.eeaa.gov.eg/epf). The Fund establishes deadlines for submitting applications to coincide with evaluation and selection schedules.

Upon receiving the PIFs, the Projects Department starts a preliminary evaluation based on the EPF eligibility criteria which are mentioned later on in this document. The evaluation process takes around 30 days after which the EPF notifies the applicants of rejection or approval.

In case of rejection, the applicant will receive a rejection letter from the Fund summarizing the basis for the rejection. In case of approval, the applicant will be requested to fill in a more detailed and descriptive form known as the Projects Application Form (PAF). The EPF will only consider properly filled in PAFs; which may in some cases require the applicant to use an external consultant for filling in such detailed forms. The applicant will be the one who undertakes the consultancy fees for the issue. A deadline is also set for receiving the PAFs.

The EPF Projects Department will then evaluate the received PAFs (i.e. projects) technical aspects in cooperation with EEAA concerned departments. The PAFs are evaluated according to a scoring system. The scoring scale is based on a set of criteria established by the Fund to reflect the environmental priorities determined for the year.

This evaluation process usually takes approximately 2 month before presenting the projects to the FMC. For soft loans and interest rate subsidies, an initial financial assessment will be completed by the Fund, while the final financial and credit assessment will be completed by the participating bank. In the event the bank rejects the project, the Fund will decline its support to the project.

The FMC is responsible for the final selection of the projects which will be funded by the EPF. Once the FMC decides, the Fund sends out letters of approval or rejection to the applicants.

The applicants whose projects are approved are then requested to sign the contract with the EPF and starts receiving their funding.

In some cases, the Ministry of State for Environmental Affairs, EEAA, or EPF might pinpoint projects that match the EPF priorities, for which the Fund has not received applications through the CPP. In such cases, a project concept paper, including a budget, would be submitted to the FMC. Upon the FMC approval, the EPF (EEAA) carries out an open tender and reserve funds to support the proposed project.

Subsequent to the FMC endorsement, the tender documents are prepared to match the requirements of Law 89/1998 and its executive regulations concerning the Organization of General Tenders and Auctions.

The recommendations of the tender team are then submitted to the FMC for approval, after which the successful tender proposals will be processed similarly to successful applications to the CPP.

Once the applicant/beneficiary receives the funding and start implementing the project, he will be required to submit a progress report describing the project implementation and expenditures. The beneficiary is the one responsible for the project implementation and the EPF is responsible for following up the project through conducting field visits to ensure the disbursement of funds on their allocations and that the project follows procedures.
 

2. Environmental Priorities

The following are the EPF environmental priorities approved by the FMC and selected for this year:

2.1 Air Pollution Control

The Fund’s priorities in the area of air pollution include initiatives that aim at reducing emissions of pollution from stationary sources and improving air quality especially in crowded residential and industrial areas.

The Fund encourages projects that aim at reducing air pollution resulting from industrial processes, controlling lead pollution, relocating small workshops engaged in polluting activities to new industrial areas, increasing the area of green spaces, and using renewable energy sources.

In this field, the EPF for instance funded a project in Keeman Faris Village in Fayoum Governorate to switch Al-Aklass Brick factory from operating with regular fuel to natural Gas so as to reduce the factory emissions; the Fund has also switched 50 brick factories to operate with natural gas instead of Mazout at Arab Abu Saeed in Giza Governorate.
  

2.2 Solid Waste Management

The Fund’s priorities includes initiative that aim at protecting the environment and public health from pollution caused by all types of wastes including municipal solid waste, agricultural waste, industrial waste, and hazardous and non-hazardous health- care waste.
 
In this field, the Fund encourages projects that aim at reducing the amount of waste generated, sorting and segregating waste at the source for recycling and reuse, as well as environmentally safe transfer, treatment and disposal of solid waste. The Fund also encourages private sector investment initiatives in this area and the importance of establishing cost recovery systems for effective solid waste management.
 
Some projects funded by the EPF in this area include recycling of agriculture solid waste & producing compost, establishment of a new land fill for solid waste in Sharkya governorate and the establishment of a solid waste management system at Dairb Negem in Shaqia Governorate.
 

2.3 Water Quality and Quantity

The Fund’s environmental priorities in this area include initiatives that aim at the protection of water resources, especially the River Nile, the marine environment, and coastal marine waters from pollution resulting from industrial and tourism activities as well as from the discharge of untreated domestic wastewater into these water bodies. In this domain, the Fund particularly encourages projects that aim at:

• Reduction of water consumption in industry and other sectors.

• Prevention and abatement of pollution resulting from domestic and industrial wastewater. This category also includes projects aiming at preventing pollution, cleaner methodologies, waste reduction, conservation of resources (water, energy, chemicals…etc), sound environmental management, environmental awareness and improve sanitation systems in rural and remote areas. 

Some projects funded by the EPF in this area include Cleaning of Water pollution in canals in Fayoum city, sanitation network at Seflaq village in Souhag Governorate and establishment of a waste water treatment Unit at Alban village in Suez Governorate.

3. Support Programs

The EPF provides financial support through different forms of mechanisms according to the Fund's policies and each project needs. Out of the EPF support programs the following is a description for the ones approved and selected for this year: 

3.1 Grants

Grants are mainly EPF funds given out to specific parties without the need to be refunded.

 3.1.1 The Applicant

• Governmental Agencies

• NGOs

• Universities and research centers in condition that the projects are applicable and not researches.

 3.1.2 The Project

• The project targets any of the Fund’s environmental priorities

• The project has to achieve revenues sufficient to recollect the investment cost after a specific time period in order to ensure continuity of operation, maintenance, replacement and renewal.

 3.1.3 Financial Information

Grants are offered to non-profit/non-investment type environmental projects on the cost-sharing basis.

1. The maximum grant is according to the presented study.
2. Purchase the equipment and machines.
3. Row materials – training of the technical and administrative staff.
4. Certain tasks which can be agreed upon.

3.1.4 Method of Payment

3.2 Soft Loans Program

Soft Loans are loans provided by the EPF with lower interest rate than the market.

3.2.1 The Applicant

Applicants to the soft loan program include any small or medium sized organization that plans to undertake a project within the Fund’s environmental priorities, provided that the applying organization is legally established, and demonstrates seriousness, sound reputation, and capacity for project execution and long-term project sustainability. 

3.2.2 The Project

• The project targets any of the Fund’s environmental priorities

• Project has to achieve revenues to achieve long term sustainability and be able to meet loan payments

• Approval of the loan by the lending participating bank

3.2.3 Financial Information

Costs Covered by the Support Programs

(i.e. Grants, and Soft Loans)

The funds may be used to finance the purchase of equipment and machinery pertaining to the project. The funds may also be used to cover the operating expenses including power supply, raw materials and training of the project’s administrative and technical units. Other expenditures necessary for the project execution may as well be covered by the funds provided by the EPF such as cost for project design, project implementation.. etc (equivalent to a maximum of 50% from the EPF share). Any other expenditure has to be identified and approved first by the EPF according to the internal procedures. This does not include any taxes or customs imposed.
 

Disbursement Procedures for the Support Programs

• Grants are disbursed in accordance with the project implementation time-schedule.

• Disbursement is conditional on fulfillment of all conditions stated in the contract agreement between the project (project holder) and the EPF.

• Funds can be disbursed up to the allocations made in each item. No transfer of cash allocations among the various items is authorized without the EPF’s approval.

• Upon contract agreement and the Fund’s approval, a bank account is opened for the project in one of the banks.

• All receipts and bills pertaining to the various expenditures must be maintained by the project holder. For each payment, the project holder is responsible for submitting to the Fund an original copy of all bills and receipts along with a detailed expenditure statement.

4. Evaluation and Selection Criteria 

The EPF eligibility criteria - upon which the PAFs are evaluated - are as follows:

• Project targets one or more of the environmental fields that address the Fund’s environmental priorities as mentioned in the environmental priorities.
• Applicant's institution is a legally registered local entity.
• Applicant demonstrates the availability of own-resources to contribute its share of project cost in accordance with financial conditions established for each support mechanism.
• Applicant’s institution/organization is of sound reputation (approval of Social Affairs for NGOs, and a no objection of the lending bank for loans).
• Absence of any restrictions such as problems related to the applicant’s current activities or relationship with banks (if applicable).
• Project ensures sustainability after receiving the loan or the grant.
• Commitment to disburse the funds on the allocated items.
• The project data has to include a list of job opportunities which will be provided by the project implementation.

 5. Main Activities of the EPF Departments

The EPF organizational structure is composed of four departments; Communication Department, Projects Department, Financial Department and Carbon Fund Unit.

Communication Department:

The communication department plays a vital role in promoting and strengthening the EPF image through various tools so as to attract local and international entities to invest in the environment.

The communication department activities includes conducting workshops for interested parties to promote the EPF funding mechanisms, present the environmental priorities and answer any inquires regarding the kind of support provided by the EPF.

The communication activities also include advertising in mass media, issue press releases about the EPF achievements and preparation of the EPF Annual Report.

The department is also responsible for maintaining the EPF (www.eeaa.gov.eg/epf) website which contains up to date information and documents as part of the EPF transparency.

The Fund Management Committee meetings is also one of the main activities conducted by the department as it is responsible for the coordination and preparation of the agenda and necessary documents.

Projects Department:

The project department is considered the heart of the EPF as it responsible for receiving the projects applications and evaluating them according to the EPF criteria.

The department selects the environmental priorities for the year according to the National Environmental Action Plan (NEAP) and EEAA priorities. Some national projects that benefit a wide sector of the society and have a high environmental impact might also be selected by the department.

The department receives the Project Information Forms (PIF) and conducts a primary evaluation based on the EPF eligibility criteria. In case of approval, the applicant will be required to fill in a more detailed application (PAF); in case of rejection, the department will send a rejection letter to notify the applicants.

The selected projects are then technically studied by the department in cooperation with EEAA concerned departments as well as external consultants when required.

The projects are then evaluated according to the EPF scoring system in order to be presented to the FMC. The FMC is responsible for approving which projects will be funded based on each project score and the Projects Department recommendations.

During the implementation of the environmental projects funded by the EPF, the Projects Department in cooperation with the Financial Department conducts field visits to follow up the progress of the projects implementations.

Financial Department:

The Financial department deals with the EPF Operational Budget which includes the estimated costs of the CPP, administrative expenses, EEAA infrastructure support and contingencies.

The Financial department established a shadow account to keep track of the EPF accounts within EEAA Financial Unit.
A database for projects financial monitoring has been developed by the Financial department in order to achieve continuous projects monitoring including the ACI and EMG projects. This database will be available on the intranet to achieve transparency.

The Department is also responsible for projects financial control so as to ensure the allocated funds disbursement in their purposes. This type of control includes conducting field visits to follow up the projects implementation in coordination with the Projects Department. A report is prepared by the end of each visit to provide the management with an overview on the projects progress.

The Navision Accounting system which is used by the ESP is being upgraded to be used for EPF with Arabic interface and according to the chart of account tolerated for EPF. This financial system could be used as shadow system account for EPF.

Carbon Fund Unit:

The Carbon Fund Unit (CFU) is a newly set up Unit located within the EPF and was established under the Environmental Pollution Abatement Project II (EPAP) to finance pollution abatement activities and other legitimate sustainable development activities other than those programmed under EPAP II Project. The CFU will function in accordance with Law 4-1994 and any amendments for this law.
Income to the CFU will come from portions of the revenues for the sale to the World Bank and other buyers of Carbon Emission Reductions (CERs) generated under the Kyoto Protocol’s Clean Development Mechanism (CDM).

The CFU work plan is under development as the Unit is not yet fully operative.

Examples of some projects applying for funding in 2007/2008

 Download Related Documents

EPF Operating Manual EPF Business Plan 2007 - 2010 EPF Progress Report