Criteria for the soft loan eligibility of products/projects according to the OECD Consensus and the Austrian soft loan policy.
Soft loan eligibility of the product/project according to the OECD Consensus
- projects which lack capacity with appropriate pricing determined on market principles to generate cash flow sufficient to cover the projects operating costs and to service the capital employed (Financial Non-Viability, First Key Test)
or
- projects for which no financing on market or Arrangement terms is available from other OECD-countries (Availability of Funds, Second Key Test).
For information purposes and to get an idea whether a product/project can possibly qualify for soft loan financing, the OECD publication "Ex ante Guidance for tied aid" may prove useful. The Ex Ante Guidance is a collection of experience concerning the soft loan eligibility of products/projects gained since 1992.
Soft loan eligibility of the product/project according to the Austrian soft loan policy
Services
If pure/predominant services shall be financed on concessional terms, special criteria are used for assessment.
The service must be customised, clearly identifiable, shall not be consumed right after its performance and endure for a long time. The service must stand for itself and must not be a perparatory measure for a possible soft loan project which follows this service.
Market entry
Soft loans should be a "door-opener" into a new market with the expectation that in the foreseeable future soft loan projects will be followed by transactions financed on commercial terms. Soft loans will not be granted on a continual basis.
For the assessment of this criterion, Austrian exporters have to submit a concept, which explains how the new market will be opened up, including a timeframe. Such a concept is only required for projects with a contract value above SDR 2 million.
Relevance in terms of economic policy
including technological spill over effects
In this context the product's/service's or the exporting firm's/producer's impact on other sectors of the Austrian economy is examined. The result of this study enters into the overall assessment of a soft loan application.
In the case of healthcare projects an intensified Austrian reference is needed:
- Special attention will be given to the actual Austrian added value,
- in an individual project the delivery of non-Austrian equipment must not exceed on a value basis the Austrian deliveries according to the regulation of the certificate of origin,
- as a matter of principle healthcare projects which encompass the delivery of equipment only and/or which shall be implemented in multiple locations will not be supported.
For projects with a contract value below SDR 2 million a simplified procedure is applied.
Sustainability of the project
Projects that benefit from Austrian soft loan terms and conditions should foster economic growth and consequently contribute to the sustainable development in the recipient country. Therefore, aspects relevant to sustainable development are incorporated in the assessment of a product/project.
The evaluation of the sustainability of the project is made after delivery/implementation of a project. For projects with a contract value below SDR 2 million a final report is demanded.
Projects with a contract value above SDR 2 million require a monitoring procedure. Magnitude and intensity of the monitoring are set individually for each project.
Differences in procedures between projects with a contract value below/above SDR 2 million can be seen in the questionnaire.