Technical assistance

On the 15th of January 2016, the Belgian Council of Ministers gave its approval for the creation of a new Finexpo instrument: the grant for technical assistance. Technical assistance is one of the instruments for which tied aid is allowed even in countries where one should normally untie aid.

Technical assistance consists in financing services related to an investment project in a developing country.

These services:

  • Give the opportunity to civil servants and employees from the recipient country to build expertise related to an investment project
  • take the form of technical trainings,advise and support by personnel from the donor country

Criteria:

  • The grant can only be obtained by a Belgian firm;
  • The client needs to be a public institution;
  • Maximum amount of the grant: 1 million Special Drawing Rights (SDR) or 3% of the transaction amount (the lowest amount is taken into account). Belgian companies can only solicit the grant for technical assistance for services:
  • Related to investment projects executed by the same Belgian company that are financed by untied development aid;
  • Related to investment projects executed by the same Belgian company that are financed under commercial conditions.

Therefore the grant for technical assistance cannot be combined with an interest bonification or a tied State to State loan. However, it can be combined with an untied State to State loan or an interest stabilization. For instance, a Belgian company that wishes to export buses on a commercial basis to a developing country can request a grant for technical assistance. With this grant the Belgian company can offer trainings to local bus drivers without having to put the cost of training in the commercial contract. The company can thus lower its prices which gives a competitive advantage compared to other foreign competitors. The same can be done if the company participates in an international tender related to untied aid.

The company can take the training out of the offer and thus reduce her prices giving the company a competitive advantage.

Countries that can benefit from technical assistance: all countries on the DAC-list of ODA recipients.

 

 

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