The Local Competitiveness Facility (LCF) in Rwanda aims to stimulate partnerships between large, medium, small, and micro enterprises through grant funding. It has 4 objectives: 1) promote value chain development, 2) stimulate public-private partnerships, 3) have positive local economic development results, and 4) meet pro-poor development goals. The LCF provides grants through two windows, with different funding amounts and required own contributions from grantees. It was piloted in 4 districts and involved an awareness campaign, application process, and governance structure to evaluate proposals and monitor funded projects. The LCF aims to complement other local economic development approaches in Rwanda.

1. Local Competitiveness Facility
(Rwanda)
Sofie Geerts, International Technical Advisor on LED
Rwanda Decentralisation Support Programme

2. Stimulate partnerships
between large, medium,
small, micro enterprises
and cooperatives
.
Promote value chain
development: mitigate cost
and risk barriers by
partnering
Have positive LED results
Meet pro-poor
developmental objectives
4
objectives
What is LCF?
1.
2.
4.
3.
LCF = a grant fund with own-funding requirement for grantees: 4 objectives
2

3. Why LCF?
1.
2.
4.
3.
• Idea from South Africa – similar fund exists 16 years – positive LED
results
• Rwanda policy environment: private sector as engine of job
creation; government to create enabling environment
• Feasibility study for LCF conducted: no other similar fund, local
potentialities there but no access to finance; lack of finance main
barrier to keep small enterprises from growing
LCF: a complementary tool for business environment and LED
3

4. Different LED approaches:
• Value chain
development
• Skills development
• Cluster development
• Public-private
partnerships
• Branding of local
economy
• Etc.
LED
=
Job creation,
economic
growth,
higher
incomes
LCF grant
funding + CB
= means to
stimulate
private sector
development
LCF as complimentary economic model to achieve LED
4
LCF and LED

5. Different LED
APPROACHES
to be implemented
COORDINATION and
PLANNING:
• Planning
• Coordination
• Harmonisation
BASIC FACTORS in
PLACE like
infrastructure,
business
development
services, skills, etc.
ACTIVE ECONOMY
on the LOCAL
LEVEL
5
Contribution of RDSP and LCF to LED in Rwanda
5

6. TFF RDSP: initial
concept; GoR/BTC, LCF
South Africa
LCF assessment: feasibility,
stakeholders
LCF Programme Document:
Rationale, design and why,
governance, TC
LCF Operational manual
(including tools):
Consultant, LODA,
Districts, TC
LCF pilot implementation
LCF
develop
ment
process 1.
5.
2.
3.
4.
• Process started in 2015
• Many stakeholders consulted
• Strong ownership from MINALOC, LODA, local
government
• Feasibility assessment
• Quality assurance: LCF South Africa, TAs LODA,
BTC, WB, UNCDF, DFID
6
LCF development process

7. Funding windows available
WINDOW PROJECT VALUE GRANT OWN
CONTRIBUTION
(cash or in-kind)
Window 1: 5 000 000 - 10 000 000 Rwf
(6000 – 12 000 euro)
90% 10%
Window 2: 10 000 000 - 40 000 000 RwF
(12 000 and 50 000 euro)
70% 30%
LCF piloted in 4 Districts – 600 000 euro per District available
7

8. Who can apply?
WINDOW 1
Two possibilities:
• A medium or large company partners with
micro, small companies or cooperatives
The applicant company should be a formal
company, others are informal;
• An NGO partners with micro, small
companies or cooperatives
The NGO is the applicant organisation; other
companies are informal
Note:
• At least two companies per partnership
• TVET centres (public or private) can be part
of the partnership
WINDOW 2
Two possibilities:
• Micro, small companies or cooperatives
clustering together
• Large/medium companies partner with small
micro enterprises/cooperatives with focus on
value chain integration and linking small
companies to markets
Note:
• All companies should be formal
• At least two companies per partnership
• TVET centres (public or private) can be part of
the partnership
8

9. • Agribusiness: both agriculture and livestock
• Handcrafts: basketry and mats, embroidery and woven products, hand textiles, ceramics and
pottery, leather (products), wood products (carpentry), jewelry (products), metal products
(welding)
• Tourism: accommodation, development and operationalization of touristic sites, cultural
villages, cultural sites, guides, travel agents, water sports
• ICT: radio, television, cellular phones, computer and network hardware and software, satellite
systems, as well as services associated with them (videoconferencing, e-learning, MEIS, mobile
money, internet registration services, internet services…)
• Distribution and services sector: in partnership with any of the above sectors; companies
in the distribution or services sector alone cannot apply, it should be distribution and services
companies as part of a value-chain (e.g. a transport company partnering with an agribusiness
company)
Target economic sectors for LCF
99

10. Launch of LCF
Awareness
campaign
Notification to
applicants
Evaluation full
project proposals
Evaluation of
expressions of
interest
Call for expression
of interest
Notification of
provisional results
Due diligence
Investment
Committee
Award notice to
winning projects
Contracting
First
payment
Second
payment
Third
payment
Fourth
payment
Site visits and monitoring
reports
Financial
AUDIT
Steps for call for proposals 1
Selected projects
to submit full
proposal

11. Purpose:
• Build awareness of existence of LCF, how to apply, eligibility, criteria
• Mobilise private sector to apply for funding from LCF
WEBSITE
www.lcf.rw
RADIO
spot
TV spot
BROCHURES
POSTERS
BANNERS
AWARENESS
meetings
11
Awareness campaign

12. Technical
Committee
Investment
Committee
LODA/LED
LCF Secretariat
DISTRICT/BDEU
LCF Secretariat
BENEFICIARIES
Partnerships
LODA BoD
RDSP
Application
Feed
back
ContractMoU
MEIS
Advisory
Advisory
Evaluation
District
evaluation
committee
External
evaluation
consultants
Evaluation
Governance and management

13. Important lessons in setting up a new grant
fund to enhance LED
13
• Assess feasibility prior to confirming and designing the fund
• Start in a limited number of localities (pilot)
• Compare with other existing and closed funds – avoid overlap
• Involve all relevant stakeholders from the start
• Long decision-making process: ensure buy-in of crucial decision-makers at
all stages
• Envisage starting under co-management modality, with later shift to grant
agreement modality to ease design and share early risks; ensure ownership
• Ensure adequate role of central vs. local government in governance and
decision-making structure

14. Thank you
Questions?

15. Evaluation criteria….Expression of interest
LCF OBJECTIVE Criteria
1. LED IMPACT  Potential for extra jobs to be created
 Potential for increased salaries
 Market access
 Alignment with LED Strategy/DDP
2. PARTNERSHIP  Partners to prove their institutional capacity to implement;
 Demonstrate a win-win objective for all partners involved;
 Participation and ownership of all partners involved
 Own-funding requirement available
 Involvement of TVET Centre
3. INNOVATIVE IDEAS IN
VALUE CHAIN DEVELOMENT
 Contribution to innovation
 Focus on value chain development
4. PRO-POOR  Pro-poor impact to be shown: potential for job creation for poor people
(Ubudehe 1 and 2)

16. Evaluation criteria….Full proposal
CRITERIA KEY ELEMENTS
1. RELEVANCE  Appropriate activity schedule
 Contribute to the profitability of the partnership members
 Market analysis: competition, target clients, demand, sales
and distribution (only for window 2)
2. FEASIBILITY  Technical and organizational capacity of the members to
implement the project, including staff
 Own-funding requirement proven
 Financial viability of the project including cost benefit ratio
 Risk management (only for window 2)
3. SUSTAINABILITY  Sustainability of the businesses part of the partnership group
16