BPP Call for Carbon Markets Partnerships in Vietnam: Guidelines for Interested Applicants

BPP Call for Carbon Markets Partnerships in Vietnam: Guidelines for Interested Applicants

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What kind of proposals will be considered?

Target areas

The Business Partnerships Platform (BPP) invites the submission of proposals for BPP partnerships addressing one of the two target areas:

  1. Enabling Carbon Markets: focus on enabling the conditions, standards and practices for high-quality carbon finance projects with strong development outcomes to thrive in Vietnam.
  • Proposals must focus on addressing an identified market or inclusion barrier to developing or investing in high-quality carbon offset projects in Vietnam.
  • Indicative examples of barriers that could be addressed are: finding opportunities to enhance non-carbon social benefits from expansion of carbon markets, building local capacity in Measurement, Reporting and Verification (MRV) of GHG mitigation, supporting capacity building for carbon inventories and setting up MRV systems, advancing innovative and cost-effective data collection methods to measure non-carbon benefits, enabling innovative financial products to support standards certification, data collection supporting jurisdictional approaches to land use change projects, or facilitating participation in carbon markets by women and other underrepresented groups in the industry.
  1. Carbon Projects: support innovative partnerships to pilot or demonstrate best-practice models for generating verified carbon credits contributing to permanent carbon abatement and strong development outcomes.
  • Sectors: proposals should align with one or more sectors identified under Vietnam’s Nationally Determined Contribution (NDC): waste, land use, land-use change and forestry, agriculture or energy.
  • Carbon offsets: proposals must focus on generating carbon abatement with the intent to register verifiable offset units through developing new projects under rigorous methodologies and carbon standards, aligning with those accepted under Climate Active, for example Verra and Gold Standard. Alternative standards may be considered with justification provided by the applicants.
  • Measurable non-carbon benefits from expansion of carbon markets: proposals must demonstrate how measurable non-carbon benefits to communities are produced through economic opportunities and gender and social inclusion outcomes. These outcomes may extend beyond the direct BPP support period.
  • Time horizon: we recognise carbon abatement projects have significantly longer lifespans than BPP support. BPP support can be targeted to specific phases and challenges of early stage project development or execution. For example, support could help to pilot new technology, develop innovative MRV systems, or advance robust community engagement and social inclusion models.

What selection criteria are used to assess applications?

Key selection criteria

All applications to the BPP Vietnam Call for Carbon Markets Partnerships must demonstrate their alignment to five key selection criteria:

  • Development outcomes (non-carbon social benefits)
  • Carbon abatement outcomes
  • Contributing to commercially viable models and markets
  • Partnership
  • Value for money

1. Development Outcomes

Benefitting communities: Applicants must demonstrate how their proposal can support measurable non-carbon benefits to Vietnamese communities from expansion of carbon markets. It is recognized that some of these benefits may accrue beyond the period of BPP support.

Gender equality: The Australian Government has designated gender equality as an overarching principle for the Australian development program.  Women are particularly vulnerable to the impacts of climate change. All proposals should consider if there are particular barriers for women’s participation, risks that particularly impact women and girls, and identify opportunities to address these issues or create additional income streams or other benefits.

Social inclusion: The BPP is interested in supporting proposals that will include in their models how they can better engage with people with disabilities, men and women, ethnic minorities, or any group that may be marginalised in society. We are looking to support viable, commercial initiatives that tap into and foster the skills, assets, and resources of individuals and communities who are often locked out of economic participation.

Safeguarding: BPP is looking for proposals that can identify key risks to women and marginalised populations to ensure appropriate safeguards are put in place to meet their obligations and minimise harm.

2. Carbon Abatement Outcomes

Carbon Project proposals must focus on generating carbon abatement with the intent to contribute to offset units through developing new projects under rigorous methodologies and carbon standards aligning with those accepted under Climate Active, for example Verra and Gold Standard. Alternative standards may be considered on a case-by-case basis with justification provided by the applicants. We recognise new forms of credit are being recognised and developed and can have specific conversations with interested applicants to clarify on a case-by-case basis.

Enabling Carbon Markets proposals should address barriers that will unlock additional carbon abatement outcomes.

3. Contributing to commercially viable models and markets

Commercial viability is a key consideration for any business partnership and a key indicator of sustainability. Commercial viability refers to the likelihood of activities becoming an ongoing component of the business model of the partners, rather than a stand-alone initiative or being reliant on grant funding for its continuation. Commercial viability also indicates the likelihood that partners will have the potential to adapt and scale-up activities.

Enabling Carbon Markets proposals can contribute to the broader creation or improved integrity of a market for carbon credits.

4. Partnership

Collaboration is important to solving complex challenges. Applicants should consider who are key actors/stakeholders they need to work/partner with and the roles they might play to support the long-term viability of the proposal.

For proposals that are bringing in multiple stakeholders, BPP would look for proposals that demonstrate:

  • Clear and complementary roles and contributions for all partners, with clear alignment to the requirements for delivery of the proposal.
  • Clear mutual benefits and investment in shared objectives and some demonstration of incentives to maintain objectives beyond BPP, and equitable/ collaborative governance mechanism to maintain objectives.
  • Demonstrable experience and/or recognition of value in partnering.

5. Value for money

Value for money is a critical consideration to achieving the strategic objectives of the Australian development program. It is a requirement under the Public Governance, Performance and Accountability Act (2013) and the Commonwealth Procurement Rules.  For more information on VFM Principles see: http://dfat.gov.au/aid/who-we-work-with/value-for-money-principles/Pages/value-for-money-principles.aspx

In selection, the BPP will consider two key factors in relation to value for money:

Additionality: Additionality is using BPP funding and DFAT resources to generate measurable environmental and development impact through BPP partnerships which would not have otherwise occurred. Partnerships can demonstrate additionality by articulating the need for BPP funding to catalyse investment (i.e. the investment provided by BPP would not have been provided by other sources), and how partners will benefit from DFAT resources and expertise in the partnerships.

Leverage: Leverage refers to the investment from partners through cash or in-kind co-contributions. Applications committing more than the required matching contribution may be preferenced.

Other factors to consider when applying

Who can apply?

Eligible applicants

Applications may be submitted by one entity or a consortium of partners. Applications may be submitted by businesses, non-governmental organisations, academic institutions or other entities. However, all proposals need to contribute to commercially viable business models.

Applicant organisations can originate from any country; however, they must be able to operate in Vietnam.

Applicant organisations need to be able to meet the requirements of DFAT’s due diligence process, including:

  • Registration with a business or other recognised registration/accreditation body
  • Established financial history
  • Not listed on sanctions lists, including those published by the Australian Government, the World Bank, Asian Development Bank, African Development Bank, European Bank for Reconstruction and Development, or the Inter-American Development Bank.
  • Other background criminal and reputational checks.

The BPP reserves the right to reassess any proposal if the partners change. This includes situations where the proposal is selected for BPP support, but previously identified partners withdraw from the partnership.

What is BPP’s partnership approach?

BPP’s partnership framework

The BPP will enable strategic partnerships between DFAT and other partners to catalyse and learn from new carbon market investments and business models in Vietnam, particularly those with significant non-carbon benefits to communities.

The BPP’s partnership framework recognises that DFAT, businesses and other partnering organisations have significant skills, expertise and resources they are able to bring to the partnership. Operating through a partnership versus purely transactional approach brings increased flexibility, mutual accountability and creative problem solving to achieve mutual objectives. For multi-stakeholder or complex partnerships, the BPP can help provide independent partnership brokers to support establishing and maintaining effective an adaptive ways of working. The BPP partnership principles and approach is described further in https://thebpp.com.au/how-we-partner/.

Funding details

How much funding can be requested from the BPP?

  • The level of funding requested under the BPP can range between AUD 250,000 and AUD 1,000,000.
  • Proposals may be funded for up to a maximum of two years and must be completed no later than September 2024.
  • Partners would be expected to at a minimum match DFAT contributions through cash or in-kind contributions.
  • The BPP is unable to provide funding for any taxation purposes. Any taxation requirements are the responsibility of the applicant(s) and cannot be paid for with grant funding from the BPP. It is recommended applicants seek legal and/or financial advice including on eligibility for tax exemptions, before applying to the BPP.
  • If the contracting partner is registered in Australia for tax purposes, including NGOs/NFPs who may serve as contracting partner, Goods and Services Tax (GST) is payable by the BPP in addition to the grant funding awarded.
  • In addition to grant financing, partners will potentially be able to benefit from the emission reduction credits that will ultimately be produced by the individual projects over years or even decades after the conclusion of BPP support.

Are there any ineligible costs?

BPP is unable to fund:

  • Management
  • Free/discounted samples
  • Fundraising
  • Advocacy (unless specific to the BPP objective then should be attributable)
  • Corporate or organisational marketing and communications (communications specific to disseminating project outcomes and learning are eligible and should be attributable to BPP)
  • Retroactive expenses: i.e. costs incurred prior to the effective start date of the contract
  • Taxes and import duties applied by governments and public authorities.

What kind of co-contribution is required?

  • Applicants must commit to match or exceed BPP funding.
  • Co-contributions pledged by the applicants may either be cash or a combination of cash and eligible in-kind contributions. Co-contributions can be split between partner applicants, allowing multiple organisations to contribute.
  • Contributions can be provided over the length of the proposal and should be reported every six months during implementation.
  • Co-contributions from applicant organisations must be specific to the proposal and not part of activities the organisation(s) are already undertaking. Donor or philanthropic funds cannot be counted as part of a partner co-contribution.
  • For BPP purposes, cash contributions are defined as funds provided by the applicant organisations for the purposes of undertaking the proposal.
  • In-kind contributions consist of non-monetary inputs committed by the applicant organisations. These normally include staff hours, facilities, equipment and services provided by a partner organisation from its own resources. BPP will recognise in-kind contributions at the fair market value normally expected to be paid for the good or service.

What is the period of funding?

  • Proposals may be funded for up to a maximum of two years and must be completed no later than September 2024.
  • The BPP recognizes that carbon abatement projects have significantly longer lifespans than the period of funding provided. BPP support can help in the testing and development of models that can exemplify high quality carbon projects with significant social and environmental non-carbon benefits. For example, support could help to pilot new technology, develop innovative MRV systems, or advance robust community engagement and social inclusion models. BPP supported projects can – and indeed are encouraged – to continue participating in the carbon market beyond the end date of BPP support.

Application Process

What are the steps in the application process?

Concept note

Interested applicants are invited to submit a short concept note in a template provided by the BPP. The final date for submission of concept notes is at 8:00 p.m. AEDT / 5:00 p.m. ICT on 18 May 2022.

Full proposal

Applicants who are successful in proceeding to the next stage of the application process will be invited to prepare a full proposal using a form provided by the BPP. Applicants may be invited to a Zoom session to discuss their proposal. Deadline for full proposals is at 8:00 p.m. AEDT / 5:00 p.m. ICT on 20 June 2022.

Final selection

After applicants submit their full proposals, the BPP will assess and make a final selection. Both successful and unsuccessful applicants will be notified of the outcome.

Due diligence

Due diligence will be conducted on all partners for selected proposals.  Due diligence assessments are designed to highlight and mitigate potential fiduciary, safeguarding and reputational risks that may arise. Partners will need to provide appropriate documentation to assist with due diligence assessments. DFAT may decide following due diligence conducted by the BPP not to continue with a proposal that represents significant fiduciary or reputational risk to the Australian Government.

Estimated timelines

The below dates are indicative only and subject to change.

19 April 2022: Applications open

18 May 2022: Deadline for submission of concept notes at 8:00 p.m. AEDT / 5:00 p.m. ICT

20 June 2022: Deadline for submission of full proposals at 8:00 p.m. AEDT / 5:00 p.m. ICT

July/August 2022: Final proposals are selected and proceed to due diligence and contracting

September 2022:  Kick-off meetings and implementation begins

How will BPP Carbon Markets Partnerships be implemented?

Implementation

The BPP will organise kick-off workshops with selected partners. Workshops will address partnership “ways of working,” detailed work planning and monitoring and results measurement.

A contract will be negotiated and signed between the Contracting Partner and the BPP. The contract will define funding milestones, and establish the terms, conditions and requirements for acquittal of the funds. Tranche payments will be linked to the completion of milestones.

BPP support

The BPP can provide limited additional technical support to BPP partners throughout the funding period of the proposal from partnership, business, climate, gender, communications, and monitoring and results measurement advisers.

Brief results and financial reports are submitted by BPP partners every six months. A final report is required at the end of the implementation period.

Ready to apply?

How do I apply?

Ready to get started? Follow these steps to apply:

  1. Create a profile on SmartyGrants.
  2. Download the Concept Note application template from SmartyGrants.
  3. Follow the steps provided, including uploading your completed Concept Note no later than 8:00 p.m. AEDT / 5:00 p.m. ICT on 18 May 2022.
  4. Applicants who are invited to proceed to the next stage of the process will be notified. Full proposals are due by the deadline of 8:00 p.m. AEDT / 5:00 p.m. ICT on 20 June 2022.

Note: All application data will be kept in the strictest confidence. All DFAT officers and BPP personnel that review applications are bound by confidentiality/non-disclosure arrangements.

Applications will be assessed by the BPP in accordance with the key selection criteria.

Have questions or need help?

Contact

Frequently asked questions

Can I view the concept note templates without signing up for SmartyGrants?

The concept note templates are available below. Please note that the concept note templates are different based on which target area your proposal addresses:

Concept Note Template for Enabling Carbon Markets Proposals

Concept Note Template for Carbon Project Proposals

Submission of the concept note template and the rest of your application will need to be done through SmartyGrants.

Can BPP funding be used to pay tax?

The BPP is unable to provide funding for taxation purposes. Any taxation requirements are the responsibility of the applicant(s) and cannot be paid for with grant funding from the BPP. It is recommended applicants seek legal and/or financial advice including on eligibility for tax exemptions, before applying to the BPP.

For example:

Partner A buys a medical equipment from overseas to Vietnam at original price of AUD 22,000. It is required to pay for import tax and customs duty at 15% of the equipment’s value when the medical equipment is imported to Vietnam. The BPP may fund the original price of AUD 22,000 but will not cover 15% extra cost (AUD 3,300 equivalent) of import and customs taxes. It will be partner’s responsibility to cover the extra cost of tax and customs duty.

What about the Goods and Services Tax (GST) for organisations registered in Australia?

If the contracting partner is registered in Australia for tax purposes, including NGOs/NFPs who may serve as contracting partner, Goods and Services Tax (GST) is payable by the BPP in addition to the grant funding awarded. 

For example:  

Partner B has been awarded a grant funding amount of AUD 200,000. Partner B is an eligible organisation registered in Australia for tax purposes and nominated as a contracting partner with Palladium. The total amount provided by the BPP including payable GST will be AUD 220,000. 

Are past recipients of BPP support eligible for funding through the BPP Call for Carbon Markets Partnerships in Vietnam?

Yes, past BPP partners are eligible to apply.

How will I be notified of outcomes?

Both successful and unsuccessful applicants will be notified to the prime email listed on the SmartyGrants application. Please check your email’s inbox and spam folders to access the notification.

What specific standards or ownership structures should be incorporated into the proposal?

This BPP round is intended to support, accelerate and enable the development of carbon projects in Vietnam that meet high standards – providing permanent credible abatement outcomes as well as sustainable social co-benefits.

The BPP is open to a variety of proposals that may be utilising differing credit standards and models. Each applicant should explain how their proposal would link to domestic, regional or global voluntary or compliance carbon markets. At the concept note stage applicants will be asked to describe the overall idea and to list which standards and methodologies the proposal will intend to use.

Neither the BPP program nor the Department of Foreign Affairs and Trade will be seeking any credit ownership or direct claim of carbon credits and will not enforce the retirement of carbon credits in any particular jurisdiction. Project proponents will need to ensure that their projects align with local laws and regulations.

Can I submit more than one concept note?

Yes, you are welcome to submit more than one concept note should you have multiple ideas for consideration.

The Business Partnerships Platform is supported by the Australian Government and implemented by Palladium.

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