Technical Assistance Fund KFW

The Technical Assistance Fund (TAF), one component of the Programa Empresa Renovable, implemented by Bandesal and executed by Centromype, is a subsidy to companies granted by funds from the  KFW German cooperation. The funds are intended to help implement projects that contribute to preserve environment, mitigate negative environmental impact, foster energy efficiency, renewable energy or other  environmental projects. The grant specifically is used to co-finance the preparation of technical studies designed to measure environmental impact and the economic and environmental benefits of total investment. The program also investments in projects that lead to efficient management of resources and renewable energy. The program is aimed especially at small and medium enterprises (SMEs), but micro or large enterprises are also considered.

 

Among its objectives are:

  1. Support enterprises to conduct proper planning of technical measures based on their own needs, quantifying investment and technical requirements
  2. Encourage that the planning of environmental measures consider:
    • Cleaner production practices
    • Future business needs due to growth
    • Handling and disposal of residues and wastes, both solid and liquid, as well as gas emissions.
  3. Contribute to guide credit to fund investments.
  4. Contribute in the building of a better technical services market oriented to serve SMEs, and create a database of technical consultants that can enhance future efforts in similar specialized programs.
  5. Integrate the efforts of the institutions involved towards improving the competitiveness and sustainability of SMEs.

To be eligible as beneficiaries of the Technical Assistance Fund and / or a line of credit, companies must meet the following criteria:

  1. The target group of the project are primarily small and medium enterprises with economic activity in El Salvador. This, however, does not limit the possibility of financing projects with large or micro enterprise. Governmental institutions and municipalities are excluded from the project. The project includes a new phase of the Technical Assistance Fund (FAT) to support the preparation and implementation of investments in energy efficiency, renewable energy and other environmental investments. To establish eligibility, interested parties must complete the "Project Eligibility Form".
  2. Credit grade of A or B in the national financial system or the least qualification required by the financial institution granting the credit.
  3. Sign a letter of commitment to only use funds in investments defined by the Technical Assistance Credit Line KFW.
  4. The beneficiary may use the Technical Assistance Fund only once. A second time may be accepted for an entirely different investment. For third participation to be accepted, KfW´s “no objection” is required.
  5. Amounts of loans above US $ 500 000 requires "no objection" from KFW, for which a study of the investment project is necessary.
  6. "No Objection" clearance from KfW is also required for those projects that are "exclusively environmental", meaning that there are no Energy Efficiency or Renewable Energy components. For example, this would be  required for cleaner production projects, water treatment plants, recycling, and soil, air or water mitigation projects. Such projects will require a project investment analysis or a resourse optimization study in order to be evaluated.

Other eligible entrepreneurs are:

  1. Those who have performed an Energy Diagnosis, Adaptation Plan for Energy, Environmental Adjustment Plan or an Environmental Assessment and want to implement it.
  2. Those who have obtained a related credit line and request for Technical Assistance, provided that it is with the aim of improving the current situation of the company in environmental terms; or if the Technical Assistance is destined to perform an audit of the investment made with the approved funds.

For tourist projects that require environmental impact, energy efficiency or renewable energy investment, up to  60% of the maximum amount of the available credit lines can be used for these pourposes; while the remaining 40% may be assigned to other project-related investments.

In micro enterprises, the investment for energy efficiency projects can be up to 70% of maximum fundable amount, assigning the remaining 30% to other project-related investments.