Tuesday, 11 December 2018

Other Czech companies head to developing countries with financial assistance from CzechAid

Czech Development Agency |
30 April 2018

For 2018, the Czech Development Agency has declared a tender for the Development Cooperation Programme for the Private Sector (B2B Programme), which aims to support Czech companies in developing countries.

Companies may request a subsidy of up to CZK 5 million with 50% co-financing to create business plans, feasibility studies or project implementation. Within the tender, 42 projects were selected from the total of 77 subsidy applications, which will be implemented this year in 26 developing countries. Among them are priority countries for development cooperation, such as Georgia, where four projects will be implemented, and Bosnia and Herzegovina with three projects.

But with support from CzechAid, Czech companies are heading to even riskier markets. For instance in Mali, where GET s.r.o. will implement a project for the industrial use of sand and gravel from the Kirina deposit, in Mozambique where PRINCESTON s.r.o. is planning to elaborate a feasibility study for the transfer of desalination technology, or in Senegal where INCEWIT s.r.o. intends to analyse peanut shells for their sustainable use in the energy sector.

“The applicants must submit a business venture that will contribute to the development of the local region, e.g. by creating new jobs. The project usually solves a specific development problem in the given country by offering technology know-how and training local partners. The B2B Programme differs from conventional development cooperation in that we demand that the selected projects are financially sustainable, because only then is it sensible for companies to invest long-term in the target countries. This is why we select projects with clear financing, either through an investor, own contribution or a loan,” explains Ludmila Leškovská, who is in charge of the B2B Programme at the Czech Development Agency.

It is evident that the interest of Czech companies in development markets has been rising in recent years. In 2017 alone, Czech business entities submitted 170 subsidy applications within the B2B Programme, of which 58 were selected. “We are delighted by the increased interest among Czech companies in new markets in developing countries. With the growing offer of high-quality projects, we strive effectively to increase the available funds for their support. I am convinced that Czech companies have a lot to offer developing markets,” says Czech Deputy Minister of Foreign Affairs Martin Tlapa.

However, the B2B Programme is not just about providing subsidies; CzechAid also seeks to show companies other means of government support, including e.g., active cooperation with the employees of Czech representative offices (embassies), which can advise companies in their business ventures and warn them of potential risks. The condition for granting the subsidy for the implementation phase of the project is a high-quality business plan, which should identify these risks and propose measures to mitigate them.

“Risk is naturally reduced not only by the subsidy itself, but also by other financial instruments, and in this regard we rely on close cooperation with our partners Czech-Moravian Guarantee and Development Bank, Czech Export Bank and EGAP (Export Guarantee Insurance Company). Together, we are able to offer companies a wider range of support instruments to increase their motivation to enter riskier markets,” explains Pavel Frelich, Director of the Czech Development Agency.