PROGRAMME GUIDELINES

Capital projeCtsFeasibility programme

SA CPFP Guidelines

Issued: 06 March 2008

Disclaimer:

This guidelines document provides the criteria to assess proposals from potential capital feasibility projects and the process of

applying for the programme. The guidelines are approved and issued by the Director General of Trade and Industry for the purpose

of ensuring clarity on the aim and requirements of the incentive programme. the dti reserves the right to amend the guidelines as it

deems appropriate.

The Enterprise Organisation Department of Trade and IndustryPrivate Bag X86, Pretoria 0001 Website: www.thedti.gov.zaCall Centre: 0861 843 384 the dti Campus: 77 Meintjies Street, Sunnyside, Pretoria 0002Republic of South Africa

ConTenTsseCTIon Page

1. Background 5

2. Nature of the advance 5

3. Objectives of the Programme 5

4. Eligibility Criteria 5

5. Applicant Information Required 6

Appendix A” Glossary of Abbreviations, terms and definitions 8

Contact details for enquiries Back Page

SA CPFP Guidelines

1 BaCKgRoUnD

In many countries worldwide (both developed and developing), the capital goods sector has beenidentified as an appropriate sector to target due to its valuable contribution to industrial development. The Capital Projects Feasibility Programme is a cost-sharing scheme, providing a contribution to the cost of feasibility studies that are likely to lead to projects outside South Africa tha will increase local exports and stimulate the market for South African capital goods and services.

2 naTURe oF THe aDVanCe

The programme’s contribution is in the form of an advance of up to 50% of the study costs forprojects outside Africa and 55% for projects in Africa. Depending on the nature of the proposed project, a period of more or less 18 months may be allowed for funds to be sourced for the project.

3 oBJeCTIVes oF THe PRogRaMMe

The primary objective of the programme is to facilitate feasibility studies that are likely to lead to projects that will increase SA exports, stimulate growth for the local capital goods and services sector and allied industries.The secondary objectives of the programme include: • Attracting higher levels of domestic and foreign investment • Strengthening the international competitiveness of South African business • Creation of jobs in South Africa • Stimulation of project development in Africa and in particular the Southern African Development Community (SADC) countries as well as support for the objectives of the New Partnership for Africa’s Development • Promoting linkages with and development of small, medium and micro enterprises and black economic empowerment businesses.

4 eLIgIBILITY CRITeRIa

4.1 Feasibility study and Feasibility study Promoter Criteria Studies that fulfil the following criteria will be eligible to apply for an advance from the programme: • Studies must be undertaken by South African companies • Although a project should aim at achieving local content of 50% in the feasibility study and project, in terms of goods and professional services, this percentage will remain at the dis cretion of the Adjudication Committee.

4.1.1 The application will be evaluated according to the following: • The applicant for the feasibility study / service provider must be a South African registered company • The feasibility study service provider must supply the Adjudication Committee with a certificate from an accredited institution confirming its Broad Based Black Economic

page 05 / 10Capital Projects Feasibility Programme08 / 2008

Empowerment Scorecard in line with the BBBEE Codes of Good Practice that have been published by the dti • Such BBBEE scorecard must indicate a minimum score of 30% or such minimum score (in line with the ECIC’s agreement between the ECIC and the Minister or the Director General of Trade and Industry) • The size of advance must fall within the range of R 100 000 to R5 million, which can be a maximum of 55% for projects in Africa and 50% for projects outside Africa of the total feasibility study costs • The advance will then proportionally be reduced depending on the proposed percentage of local content.

4.2 PRoJeCT CRITeRIa The project must fulfil the following non-financial criteria: • New projects, expansion of existing projects and the rehabilitation of existing projects will be considered • All capital goods sectors are eligible for programme funding • The project that is anticipated to emerge from the study must fulfil the objectives of the programme (as specified above) • The minimum local content of the project should be 50%, but in cases where this is not achieved, the application will be evaluated as described in A.4.1.1 of ECIC requirements • Projects can be situated anywhere in the world (excluding South Africa), while projects in Africa will be encouraged • The project must have an adequate chance of being declared a success.

Additional motivating factors for the study may include aspects of the project, such as: • A positive impact on other development aspects, including linkages with small, medium and micro businesses as well as linkages with black economic empowerment businesses • The time period within which the project emanating from the study will be realised.

5 aPPLICaTIon InFoRMaTIon ReQUIReD

To apply for a Capital Projects and Feasibility Study, the study promoter must submit the following: • Application Form • Valid Tax Clearance Certificate • Financial statements • Curriculum Vitae of study team • Company references • Where the study promoter represents a client, a letter from the client confirming this is required.

5.1 aPPLICaTIon An application must be submitted by the study promoter and must cover (although not be limited to) the following information:

page 06 / 10

SA CPFP Guidelines

5.1.1 applicant Information • Name and address of project promoter or initiator • Business registration number and date (i.e. Republic of SA Company Number) • VAT number and income tax number • Background and nature of business • Management and ownership • References regarding previous feasibility studies conducted.

5.1.2 Project Background • Location of the project (country / city) • Owner of the final project and whether a public or private sector organisation and credibility at local level • Credit rating of the country • Political, economic and currency risks • Analysis of competition • Description of basic project idea and study parameters • Motivation for the study / project objectives • Likely impact of the project (exports/ jobs/ BEE/ SMEs) • Maximum financial exposure • Detailed review of investment code issues.

5.1.3 Project Information • Market analysis - description of demand and market • Owner capacity, local knowledge and ability to operate • Operator capacity and local knowledge – if owner is not also the operator • Ability to secure financing • Resources and infrastructure – availability of critical inputs and possible strategies • Location and environmental impact • Engineering and technology – project engineering and availability of the technology and equipment • Financial analysis – estimated costs of project implementation; possible sources and structuring of programming for the project • Details of potential take-off agreements • Other requirements for project to be successful (e.g. additional infrastructure, export credit insurance cover).

5.1.4 Work schedule • Proposed work schedule for the study including Gannt chart

5.1.5 Feasibility study Costs • Study costs • Key study milestones and anticipated payments associated with these • Evidence that study promoter has resources to undertake study

page 07 / 10Capital Projects Feasibility Programme08 / 2008

5.1.6 study Team • Details of study team, roles and responsibilities and experience • Details of sub-contractors, roles and associated costs.

aPPenDIx a:

Glossary of abbreviations, terms and definitions

DeFInITIons

aBBReVIaTIons

the dti Department of Trade and Industry

ECIC Export Credit Insurance Corporation of South Africa

IDC Industrial Development Corporation of South Africa

MoU Memorandum of Understanding

TEO The Enterprise Organisation

TISA Trade and Investment South Africa

EIDD Enterprise and Industry Development Division

DeFInITIons

adjudication Committee A committee composed of members as discussed in Section 2.1 with duties

as described in Section 2.1.4

Bankable Project A project certain to bring profit or a project proposal which is deemed viable

and acceptable for a financial institution to finance

Complete study A complete study or complete feasibility study is one which the final milestone

payment has been made

Programme Manager The manager responsible for overseeing the administration of the fund in TEO

Feasibility study or study A study of the practicability of a proposed project that fulfils the criteria as

specified in Section 1.4

Feasibility study Promoter A person or company that promotes the development of a Feasibility Study or

Study Promoter on behalf of himself or a client

Project A planned commercial undertaking or long term task that fulfils the criteria as

discussed in Section 2.3.2

Project promoter A person or company that promotes the development of a project on behalf

of himself or a client / developer

Compliance with Broad- Compliance with Broad-Based Black Economic Empowerment in terms of the

Based Black economic Black Economic Empowerment Act (53 of 2003) and the Codes of Good

empowerment Practice for Broad-Based Black Economic Empowerment, as issued in

Government Gazette 09 February 2007

page 08 / 10

SA CPFP Guidelines

Compliance to Broad-Based Black economic empowerment

Please read on. Page 12 contains the Application Form

Level Bee score Bee Recognition Level

1 >100 135 % (e.g. R1= R1.35

2 85 ~ 100 125%

3 75 ~ 85 110 %

4 65 ~ 75 100 % (e.g. R1 = R1)

5 55 ~ 65 80 %

6 45 ~ 55 60 %

7 40 ~ 45 50 %

8 30 ~ 40 10 %

Not Complaint < 30 0 % (e.g. R1 = R0)

page 09 / 10Capital Projects Feasibility Programme08 / 2008

noTes

page 10 / 10

SA CPFP Guidelines

Capital Projects Feasibility Programme08 / 2008

CaPITaL PRoJeCTsFeasIBILITY PRogRaMMe

aPPLICaTIon FoRMPLEASE NOTE THE FOLLOWING BEFORE COMPLETING THE FORM:

1. Be sure to have read the form fully and understood it.

2. The application form must be submitted before any activities applied for are started.

3. Applications must be signed by the authorised representative of the company and dated.

4. Before submitting your application, be sure to have attached all the required documents

(see Section 7).

5. It is advisable to read through the document: Capital Projects Feasibility Programme Application

Guidelines (the document is obtainable on the dti website).

How did you find out about the the Capital Projects Feasibility Programme?

Please return completed forms by registered mail or by courier / hand deliver to:

ConFIDenTIaL

the dti Group

Word of Mouth

the dti Website

Other

Road Show / Exhibition / Presentation

the dti Regional Office

Advertisement: TV / Radio / Print

Private Sector Consultant

the dti Customer Contact Centre

FOR the dti USE ONLY

Date of Receipt:

Unique reference number:

Postal Address Physical Address Courier Address Web AddressPrivate Bag X84 77 Meintjies Street 12 Esselen Street (Ground Floor) www.thedti.gov.za

Pretoria Sunnyside Shared Service Centre

0001 Pretoria Sunnyside, Pretoria

0002 0002

SA CPFP Guidelines

page 13 / 24

Sect

ion

1: A

PPLI

CA

NT

INFO

RM

ATIO

N

1. R

egis

tere

d na

me

of e

ntity

in

full:

1.1

Trad

ing

nam

e (w

here

ap

plic

able

):2.

Pos

tal a

ddre

ss:

3. P

rinci

pal p

hysi

cal a

ddre

ss:

4. B

usin

ess

Reg

istra

tion

num

ber:

(Rep

ublic

of S

A co

mpa

ny n

umbe

r)

4.1

Dat

e of

Reg

istra

tion:

5. In

com

e ta

x re

fere

nce

num

ber:

6. V

AT R

egis

tratio

n nu

mbe

r:7.

Stu

dy P

rom

oter

:(o

r nam

e of

con

tact

per

son

in a

pply

ing

com

pany

)

Nam

e:D

esig

natio

n:Te

leph

one:

Fax:

Mob

ile:

Em

ail:

8. W

here

a s

tudy

pro

mot

er

repr

esen

ts a

clie

nt:

(whe

re th

e bu

sine

ss o

pera

tions

are

loca

ted)

Nam

e of

clie

nt:

Con

tact

per

son:

Pos

tal a

ddre

ss:

Phy

sica

l add

ress

:

Fax:

Mob

ile:

Em

ail:

9. S

hare

hold

er %

Ow

ners

hip

Rac

e G

ende

rR

ace

Gen

der

page 14 / 24

Sect

ion

2: P

RO

JEC

T B

AC

KG

RO

UN

D10

. Fut

ure

owne

r of t

he P

roje

ct

11. I

s th

e ow

ner a

Priv

ate

or P

ublic

Sec

tor c

lient

? W

hat i

s th

eir c

redi

bilit

y at

loca

l lev

el?

12 T

itle

and

desc

riptio

n of

the

proj

ect

13. A

ims

and

obje

ctiv

es o

f the

feas

ibili

ty s

tudy

14. O

utco

me

of th

e pr

ojec

t (lik

ely

impa

ct)

15. L

ocat

ion

of th

e pr

ojec

t (co

untry

, city

)

16. C

redi

t rat

ing

of th

e co

untry

SA CPFP Guidelines

page 15 / 24

Sect

ion

2: P

RO

JEC

T B

AC

KG

RO

UN

D17

. Pol

itica

l, ec

onom

ic a

nd c

urre

ncy

risks

18. A

naly

sis

of c

ompe

titio

n, p

oten

tial o

r exi

stin

g. P

leas

e al

so p

rovi

de n

ames

of m

ajor

com

petit

ors,

if a

ny

19. D

etai

ls o

f pre

-feas

ibili

ty s

tudy

/ies

(if c

ondu

cted

)

19.1

Cos

t of p

re-fe

asib

ility

stu

dy/ie

s co

nduc

ted

20. M

axim

um fi

nanc

ial e

xpos

ure

Sect

ion

3: P

RO

JEC

T IN

FOR

MAT

ION

21. B

rief d

escr

iptio

n of

the

mar

ket a

nd d

eman

d

22. O

wne

r cap

acity

, loc

al k

now

ledg

e an

d ab

ility

to o

pera

te

23. C

apac

ity a

nd k

now

ledg

e of

ope

rato

r (if

owne

r not

ope

rato

r)

30. D

escr

iptio

n of

any

oth

er re

quire

men

ts fo

r pro

ject

to b

e su

cces

sful

page 16 / 24

Sect

ion

3: P

RO

JEC

T IN

FOR

MAT

ION

21. B

rief d

escr

iptio

n of

the

mar

ket a

nd d

eman

d

22. O

wne

r cap

acity

, loc

al k

now

ledg

e an

d ab

ility

to o

pera

te

23. C

apac

ity a

nd k

now

ledg

e of

ope

rato

r (if

owne

r not

ope

rato

r)

24. B

rief d

escr

iptio

n of

reso

urce

s an

d in

frast

ruct

ure

requ

ired

for p

roje

ct a

nd a

vaila

bilit

y of

thes

e

25. E

nviro

nmen

tal i

mpa

ct o

f the

pro

ject

(lik

ely

or o

bvio

us im

pact

s) a

nd/o

r det

ail o

f Env

ironm

enta

l Im

pact

Ass

essm

ent/

Sco

ping

stu

dies

com

plet

ed

26. P

ossi

ble

linka

ges

to e

xist

ing

or fu

ture

pro

ject

s

27. B

rief d

escr

iptio

n of

the

engi

neer

ing

and

tech

nolo

gy re

quire

men

ts fo

r the

pro

ject

28. E

stim

ated

cos

ts fo

r the

pro

ject

, pos

sibl

e so

urce

s, s

truct

urin

g of

fund

ing

for t

he p

roje

ct a

nd a

bilit

y to

sec

ure

finan

ce- i

nclu

ding

any

loca

l fin

anci

ng,

deve

lopm

ent f

unds

, for

eign

fina

nce,

ple

ase

also

indi

cate

equ

ity

29. I

f the

loca

l con

tent

is le

ss th

an 5

0%, p

leas

e in

dica

te y

our B

BB

EE

sta

tus-

scor

ecar

d, c

rede

ntia

ls e

tc a

ttach

e

30. D

escr

iptio

n of

any

oth

er re

quire

men

ts fo

r pro

ject

to b

e su

cces

sful

SA CPFP Guidelines

page 17 / 24

Sect

ion

4: F

EASI

BIL

ITY

STU

DY

WO

RK

SC

HED

ULE

21. M

ilest

one

Exp

endi

ture

(exc

ludi

ng V

AT)

Sta

rt D

ate

End

Dat

e

page 18 / 24

Inst

ruct

ions

Ple

ase

list e

ach

mile

ston

e to

be

com

plet

ed. T

he d

urat

ion

(in w

eeks

) of e

ach

mile

ston

e is

to b

e gr

aphi

cally

repr

esen

ted.

For

exa

mpl

e, in

the

illus

trativ

e sc

hedu

le, M

ilest

one

I is

to b

egin

in W

eek

1 an

d

end

in w

eek

3. P

repa

ratio

n of

the

Fina

l Rep

ort b

egin

s in

Wee

k 6

and

is c

ompl

eted

in W

eek

9.

Sect

ion

4: F

EASI

BIL

ITY

STU

DY

WO

RK

SC

HED

ULE

Mile

ston

e C

ompl

etio

n Sc

hedu

le

Wee

ks

12

34

56

78

9

Mile

ston

e I

Mile

ston

e II

Mile

ston

e III

Fina

l Rep

ort

SA CPFP Guidelines

page 19 / 24

Sect

ion

5: F

EASI

BIL

ITY

STU

DY

CO

STS

22. A

ctiv

ityD

escr

iptio

n of

Act

ivity

Cos

t/R (e

xcl.

VAT)

page 20 / 24

PRO

JEC

T C

OST

EST

IMAT

ES:

Cos

t bre

akdo

wn:

(

sub

tota

ls)

(tota

ls)

(sub

tota

ls)

(tota

ls)

RA

ND

RA

ND

% %

Bud

gete

d pr

ojec

t cos

ts:

- man

pow

er (d

etai

ls to

be

prov

ided

in A

nnex

ure)

XX

- m

ate

rials

(d

eta

iled lis

t to

be p

rovid

ed s

epara

tely

)X

X

- Tra

vel

XX

- Cap

ital E

xpen

ditu

reX

XX

XX

- Doc

umen

tatio

nX

X

- Pat

ents

XX

- App

licat

ion

prep

arat

ion

Con

sulta

nt fe

esX

X

- Mar

ketin

gX

XX

XX

- Sub

-con

tract

ors:

- #1

XX

- #2

XX

- #3

XX

Sub

-tota

lX

XX

XX

Tota

l pro

ject

cos

tsX

XX

10

0

Min

us q

ualif

ying

cos

ts:

- Mar

ketin

gX

XX

- Tra

vel

XX

X

- Man

pow

erX

XX

- Pro

duct

ion

XX

X

- App

licat

ion

prep

arat

ion

fee

XX

X

- Cap

ital E

xpen

ditu

reX

XX

Sub

-tota

lX

XX

Qua

lifyi

ng p

roje

ct c

osts

XX

App

lican

t’s c

ontri

butio

nX

X

Tota

l pro

ject

cos

tsX

XX

10

0

SA CPFP Guidelines

page 21 / 24

Sect

ion

6: S

TUD

Y TE

AM

23. N

ame

Qua

lific

atio

nR

ole/

resp

onsi

bilit

yE

xper

ienc

e

page 22 / 24

sect

ion

7: s

UPP

oR

TIn

g D

oC

UM

enTa

TIo

n R

eQU

IReD

The

follo

win

g in

form

atio

n m

ust b

e at

tach

ed to

this

app

licat

ion

form

:1.

Val

id ta

x cl

eara

nce

certi

ficat

e2.

Lat

est fi

nanc

ial s

tate

men

ts3.

3 (t

hree

) Com

pany

refe

renc

es4.

Let

ter o

f aut

horis

atio

n fro

m c

lient

, con

firm

ing

appo

intm

ent o

f Stu

dy P

rom

oter

to a

ct o

n be

half

of c

lient

5. C

V o

f stu

dy p

rom

oter

sect

ion

8: D

eCLa

RaT

Ion

BY

aPP

LIC

an

T

DeC

LaR

aTIo

n:

I her

eby d

ecla

re th

at th

e in

form

atio

n in

this

app

licat

ion

is a

fair

and

true

refle

ctio

n of

my i

nten

ded

proj

ect a

nd th

at a

ll rel

evan

t info

rmat

ion

has b

een

disc

lose

d. I

am a

war

e of

the

cont

ents

of t

his

appl

icat

ion

and

I dec

lare

that

the

appl

icat

ion

has

been

com

plet

ed in

full,

and

are

as n

ot c

ompl

eted

, hav

e be

en d

elet

ed, b

efor

e m

e af

fixin

g m

y si

gnat

ure

here

to. I

am

aw

are

that

the

info

rmat

ion

whi

ch I h

ave

subm

itted

abo

ve, w

ill h

ave

a m

ater

ial b

earin

g on

the

adju

dica

tion

of th

e ap

plic

atio

n an

d if i

t sub

sequ

ently

tra

nspi

res t

hat a

ny in

form

atio

n in

the

appl

icat

ion

and

adde

nda

was

not

corr

ect,

or th

at ce

rtain

info

rmat

ion

was

om

itted

, the

Cap

ital P

roje

cts F

easi

bilit

y Stu

dy A

djud

icat

ion

Com

mitt

ee s

hall b

e en

title

d to

with

draw

or a

men

d its

app

rova

l and

with

out p

reju

dice

to it

s rig

hts,

reco

ver a

ny a

mou

nts

alre

ady

paid

or w

ithho

ld fu

rther

pay

men

ts d

ue.

This

app

licat

ion

(with

any

add

enda

), if

succ

essf

ul, w

ill fo

rm p

art o

f you

r con

tract

to th

e dt

i.

PLE

AS

E F

ILL

IN B

LOC

K L

ETT

ER

SN

ame

of A

pplic

ant:

Des

igna

tion:

Sig

natu

re:

Dat

e:

SA CPFP Guidelines Department:Trade and IndustryRePUBLIC oF soUTH aFRICa

Department:Trade and IndustryRePUBLIC oF soUTH aFRICa

Department:Trade and IndustryRePUBLIC oF soUTH aFRICa

CONTACT DETAILS FOR ENQUIRIESFor further information on, please contact:

The Enterprise Organisation Private Bag X86 Pretoria 0001

the dti Campus, Building A, 2nd Floor77 Meintjies Street SunnysidePretoria 0002

Website: www.thedti.gov.zaCall Centre: 0861 843 384

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