Foreign Direct Investment (FDI) Grants - Round 2

Request for Applications (RFA) No – 003

RFA Issuance Date: October 8, 2023

RFA Closing Date: November 30, 2023

Dear Applicant,

The USAID Investment Promotion Activity (IPA), implemented by Chemonics International, is seeking grant
applications for its current funding stream available under the USAID IPA Fund:

1) Foreign Direct Investment (FDI) Grants

USAID IPA will award and implement these grants in accordance with USAID and U.S. Government regulations
governing grants under contracts and USAID IPA’s internal grant management policies.

USAID IPA will organize multiple pre-application grant orientation sessions (approximately two hours in
duration) on the following dates and locations:

Location Dates

Gilgit Baltistan 17th October 2023 - Hunza

19th October 2023 - Skardu

Quetta 23rd October 2023

Karachi 25th and 26th October 2023

Lahore 31st October and 1st November 2023

Islamabad 6th and 15th November and 2023

Peshawar 8th November 2023

Please refer to Section IVA2 for more details on these sessions. Interested applicants can register for these
pre-application orientation sessions for their respective region through a link for registration, which has also
provided in the response email. Only two individuals may attend a session from each organization. USAID IPA
will not reimburse any cost for attendance. These sessions will allow eligible and interested applicants an
opportunity to ask questions about the RFA and receive guidance on how to complete the application form.

USAID IPA and Chemonics employees cannot ask for, and applicants are prohibited from offering, any money,
fee, commission, credit, gift, gratuity, thing of value, or compensation to obtain or reward improper favorable
treatment regarding this solicitation. Any improper request from a project employee should be reported
immediately to USAID IPA’s Chief of Party on info@pakistanipa.com or BusinessConduct@chemonics.com.
Annexes included with this Request for Applications:

• Annex A: Grant Application Template

• Annex B: Grant Application Budget Template
• Annex C: Applicant Self-Assessment Form
• Annex D: Mandatory and required as Applicable Standard Provisions Standard Provisions for
U.S. and Non-U.S. non-governmental organizations receiving a fixed amount award can be accessed
through the following URL:

 Standard Provisions for U.S. Nongovernmental recipients receiving all other types of grants
can be accessed through URL: Standard Provisions for U.S. Nongovernmental Organizations - A
Mandatory Reference for ADS Chapter 303 (usaid.gov)
 Standard Provisions for Non-U.S., Nongovernmental recipients receiving all other types of grants can
be accessed through URL: ADS Reference 303mab | Document | U.S. Agency for International Development
(usaid.gov)

SECTION I. PROGRAM DESCRIPTION

IA. BACKGROUND
USAID IPA is a five-year project that is helping to strengthen Pakistan’s business enabling environment and
build the capacities of Pakistani institutions which are focused on investment promotion activities especially
related to improving the ecosystem for FDI, and, most importantly, to increase the bilateral trade between
the United States and Pakistan.

IPA works closely with private sector stakeholders in the project’s four priority sectors (Information and
Communications Technology [ICT], Agricultural Technology and Processing, Manufacturing, and Tourism &
Hospitality) to ensure that the activities are implemented in collaboration with stakeholders and with an
approach defined by co-creation of ideas and effective implementation strategies. IPA promotes stability and
prosperity for Pakistan through achievement of the following objectives:

1) Business enabling regulatory environment for investment promotion improved.

2) Institutional reforms, ease of compliance and doing business, and transparency improved.
3) US-Pakistan Bilateral Trade and Investment increased.
4) Mobilization of FDI and U.S.-Pakistan Bilateral Trade enhanced.

The IPA Fund has a prime objective to leverage Pakistani private sector investment (PSI) to support FDI and
increase U.S.-Pakistan bilateral trade/investment. The IPA Fund will support firms to scale-up their business
solutions through innovative approaches to improve business processing standards. The IPA Fund
encourages that its funds are mobilized to benefit women and youth as well. Through the USAID IPA Fund,
the project will:

1. Leverage Pakistani PSI to support FDI.

2. Increase U.S.-Pakistan Bilateral Trade.

IB. OBJECTIVE AND TYPE OF GRANT

USAID IPA is awarding grants to firms registered in Pakistan that will support them to expedite FDI prospects
through innovative approaches, improve business processing standards, update technology, and enhance
U.S.-Pakistan bilateral trade and investment. The IPA Fund encourages inclusion of women and youth.

IPA Fund Grant opportunity is for existing firms registered in Pakistan to increase their competitiveness to
raise Foreign Direct Investment in at least one of the following USAID IPA’s priority sectors. However, firms
not from these sectors are also eligible to apply.

1. Information and Communications Technology (ICT) 1

2. Agricultural Technology and Processing
3. Manufacturing
4. Tourism and Hospitality

IPA is soliciting applications for Foreign Direct Investment (FDI) Grants opportunity through this RFA.

Foreign Direct Investment (FDI) Grants 2: FDI Grants focus on catalyzing potential matchmaking of a firm
based in Pakistan competitively with a global investor. The international investment is not limited to the U.S.
and can be from any other country. The applications for grant financial support through this funding stream
should positively contribute to buydown the risk of firms registered in Pakistan and increase competitiveness
and productivity along with the firm’s own and third-party contributions in the form of local private sector
investment (PSI) to leverage a successful deal with an international investor to raise FDI for the firm’s scale-
up plans. The IPA Fund grants program has successfully sparked significant interest and participation from
the private sector in raising investments. The competitive selection of grant proposals goes through a
rigorous process and is reviewed by multiple experts and extensive due diligence is performed before the
award of grants. This enhances the confidence of international investors and enables firms to meet
predetermined conditions and key performance indicators (KPIs) demanded by potential international
investors without compromising equity stakes or valuations. This strategic approach effectively increases
investor confidence and facilitates increased investment flows in favor of Pakistani firms.

USAID IPA offers FDI grants opportunity to legally registered firms that either anticipate or already are in the
process of an investment deal with foreign investors. USAID IPA is offering an award value of up to USD
$100,000 to applicants. Grants will be awarded in equivalent Pakistani Rupees (PKR), the prevailing exchange
rates at the time of the grant award will be applied. For applicant budgeting purposes, applicants should
develop the budget in PKR with an exchange rate relevant to the date of submission.

1
ICT includes proposals for ICT sector as well as a cross cutting intervention in any other sector.
2
Foreign direct investment (FDI) refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in a
country other than that of the investor, the investor's purpose being an effective voice in the management of the enterprise. It is the sum of equity
capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments/ commitments within executed
legal contract/agreement between the parties and other related sources) 3 Grants will be awarded in Pakistani Rupees (PKR), based on the
equivalent amount in USD, determined by the prevailing exchange rates at the time of the grant award.
The geographic coverage of the project is nationwide

USAID IPA recognizes that some grantees may need technical assistance to carry out the activity more
effectively. Therefore, applicants are encouraged to specify their needs for technical assistance,
certifications, and/or international accreditation etc. in their applications.

IC. AUTHORITY/GOVERNING REGULATIONS

USAID IPA grant awards are made under the authority of the U.S. Foreign Affairs Act and USAID’s Advanced
Directive System (ADS) 302.3.5.6, “Grants Under Contracts”. Awards made to non-U.S. organizations will
adhere to guidance provided under ADS Chapter 303, “Grants and Cooperative Agreements to Non-
Governmental Organizations”, and will be within the terms of the USAID Standard Provisions as linked in the
annexes, as well as the USAID IPA grants procedures.

ADS 303 references two additional regulatory documents issued by the U.S. Government’s Office of
Management and Budget (OMB) and the U.S. Agency for International Development:

• 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards, Subpart E (U.S. applicants are subject to 2 CFR 200 in its entirety) and;
• 2 CFR 700 Uniform Administrative Requirements, Cost Principles, And Audit Requirements For
Federal Awards, USAID IPA is required to ensure that all organizations receiving USAID grant funds
 comply with the guidance found in these circulars, as applicable to the respective terms and
conditions of their grant awards.

Under the USAID IPA Fund Grants, USAID always retains the right to terminate grants, in whole or in part.

SECTION II. AWARD INFORMATION

Number of Grants: USAID IPA anticipates awarding up to 6 grants. While each grant award may range up to
USD 100,000 3 , the final amount will depend on reasonable cost attribution to grant activities and final
negotiations and thus may be lower than this amount.

Implementation Duration: The duration of implementation of any grant award under this solicitation is
expected to be not more than eight (8) months. The estimated start date of grants awarded under this
solicitation is March/April 2024.

Type of Award Agreement: The grants award agreement will be Fixed Amount Awards (FAA) and payments
will be made on a reimbursement basis upon completion of performance-based milestones mutually agreed
during the pre-award stages. Each grant can have between 1 to 2 milestones.

Grant Process Timelines:

Following are the essential grant processing steps with estimated timelines, which may vary on a case to case
basis and on external factors beyond USAID IPA’s control.

Grant Processing Steps Estimated Timelines

Solicitation Valid until November 30, 2023

Pre-Application Orientation sessions 1-2 weeks

Application Submission 6 weeks

Merit Review of Grant Applications 1-2 weeks

Pitch Sessions 1-2 weeks

Pre-Award Risk Assessment 2-3 weeks

USAID Approval and Grant Award 2-3 weeks

3 Grants will be awarded in Pakistani Rupees (PKR), based on the equivalent amount in USD, determined by the prevailing exchange rates at the
time of the grant award.
SECTION III. ELIGIBILITY

IIIA. ELIGIBLE RECIPIENTS

• USAID IPA Fund grant support is for firms registered in Pakistan of any size that are legally registered
under the laws of Pakistan.

• Firms in deal stage for international investment prospects with a confirmed/potential investor or are
already in the process of raising FDI from a foreign-based firm/Venture Capital /Angel/Individual
investor/other investor are encouraged to apply. This may also include local firms/enterprises,
innovation centers, and private sector entities that have the objective to drive innovation and quality
in their respective industries and scale-up their capacity to identify and cultivate external funding
(FDI) streams so that they can continue operating after the successful completion of the grant award,
thus ensuring sustainability of the grant program. Any element of technology transfer along with FDI
will be looked upon favorably.

IIIB. INELIGIBLE APPLICANTS

USAID IPA grant support will not be extended to the following types of organizations:

• Any entity that has been found to have misused USAID funds in the past.
• Political parties, groups, institutions or their subsidiaries and affiliates.
• Organizations that advocate or promote anti-democratic policies or illegal activities.
• Faith-based organizations whose objectives are for discriminatory and religious purposes, and whose
main objective for the grant is of a religious nature.
• Any entity included in any supplementary information concerning prohibited individuals or entities
that may be provided by USAID.
• Any entity whose name appears in ‘visual compliance’ with an active exclusion. Visual compliance
refers to the screening process of the potential grantee and authorized signatory against the SAM
(System for Award Management) and the United Nations (UN) Security Council Consolidated Lists
• Any organization that refuses to sign any or all required certifications and assurances.
• Non-registered firms.
• Firms that are under the process of registration.
• Firms/applicants who fail to provide documentary evidence for their registration, evidence of
potential FDI, and the detailed budget annexure related to the grant application.
• Staff and sub-contractors of USAID IPA and/or any business that has already established a working
relationship with USAID IPA.

IIIC. OTHER INSTRUCTIONS:

• This grant funding opportunity is open to firms registered in Pakistan from across Pakistan, Azad Jammu
and Kashmir (AJK) and Gilgit Baltistan (GB)
• USAID IPA encourages firms with women and/or youth-led businesses to apply for grant funds along
with firms who can mobilize grant funds to benefit women and youth. The grant merit review criteria
include dedicated scores for firms led by youth and women. Please refer to Section V for details.
• Construction and working capital (cost of raw material) is not an allowable cost under USAID IPA Fund.
However, the applicant may carry out such activities through their own and/or third-party
contributions.
• Purchase of livestock is not allowed through these grants.
• Purchase of motor vehicles is not allowed using grant funds.
• Pursuant to Section 153 of the Income Tax Ordinance, USAID IPA will deduct withholding tax from grant
milestone payments and deposit it in the government treasury and provide tax deduction certificates
to grantees upon submission.
• Applicants must display sound management in the form of financial, administrative, and technical
policies and procedures and present a system of internal controls that safeguard assets; protect against
fraud, waste, and abuse; and support the achievement of program goals and objectives. USAID IPA will
assess this capability prior to awarding a grant during pre-award risk assessment stage.
• USAID’s branding and marking regulations will apply. The project will work with successful grantees to
draft a branding and marking plan which will be annexed to the grant agreement.
• Required Certifications: The grantee is required to sign these certifications prior to grant award. As a
prerequisite to receiving a grant from a U.S. Government source, USAID requires that recipients sign
certifications regarding terrorism, narcotics, procurement, and other eligibility factors. These include
Representation by Organization Regarding a Delinquent Tax Liability or a Felony Criminal Conviction,
Regulations Governing Nondiscrimination in Federally Assisted Programs, Certification on Lobbying,
Certification Regarding Terrorist Financing, Key Individual Certification Narcotics Offenses and Drug
Trafficking, Participant Certification Narcotics Offenses and Drug Trafficking, Certification of Recipient,
FFATA Subaward Reporting Questionnaire and Certification.
• Activities can only begin upon signature of the agreement between the applicant and USAID IPA. Costs
incurred before execution of the agreement (including signed certifications and assurances) will not be
reimbursed.
• This funding will be subject to all applicable USAID rules and regulations and availability of funds.
• In case of eligible applicants exceeding the number of grants offered, USAID IPA will evaluate
applications on the pre-defined review criteria (grants will be awarded to top-ranked applicants till the
number of grants targets are met).
• USAID IPA reserves the right to accept/reject any or none of the applications submitted, with or without
providing the reason.
• The applicant shall ensure that the proposed project activity is not funded by any other USAID assisted
project/program or any other donor/investment.
• An applicant may submit more than one application for same funding stream or multiple sectors, but
only one grant will be awarded subject to merit review .
• For any grant award(s) resulting from this solicitation that is other than in-kind and equivalent to
$25,000 USD or more, grantees will be required to provide a Unique Entity Identifier (UEI) created in
www.SAM.gov. This transition allows the US government to streamline the entity identification and
validation process, thus making it easier and less burdensome for entities to do business with the
federal government. If the applicant already has a UEI number, then it should be included in their
application. Otherwise, applicants will be expected to get a UEI number before an award is made.
 USAID IPA will assist successful applicants with this process.
• Faith-based and community groups will receive equal opportunity for funding in accordance with the
mandated guidelines laid out in ADS 303.3.28 except for faith-based organizations whose objectives
are for discriminatory and religious purposes, and whose main objective of the grant is of a religious
nature.
• For any grant award(s) resulting from this solicitation that is equivalent to $25,000 USD or more,
grantees will be subject to vetting as per Mission Order 300.6

SECTION IV – APPLICATION AND SUBMISSION INFORMATION

IVA. INSTRUCTIONS TO APPLICANTS

Applicants must propose activities which shall result in complimenting the key objective of USAID IPA which
includes:
i) Realizing Foreign Direct Investment (FDI) by leveraging Private Sector Investment (PSI).
ii) The proposed activities should also be appropriate to their organizational strengths.
iii) Instructions and a template for the full application are in Annex A. Applicant firms that submit
full applications and meet or exceed the merit review criteria will be notified of next steps in the
application process.

IVA1. APPLICANT SELF-ASSESSMENT

All organizations selected for award are subject to a pre-award risk assessment that will be carried out by
USAID IPA to ascertain whether the organization has the minimum management capabilities required to
handle U.S. government funds. The applicant self-assessment is the first step in the pre-award risk
assessment process. The Applicant Self-Assessment Form is provided in Annex C.

IVA2. GRANT APPLICATION

Please read the instructions before you start filing in the template for the application identified as Annex
A and Grant Budget Template Annex B. Applicants shall present their technical application and budget in
the formats provided and shall follow the instructions and guidelines listed in the annexes.

All grant activity costs must be within the normal operating practices of the applicant and in accordance with
its written policies and procedures. The applicant firm shall focus on cost efficiency and ensure that the costs
mentioned in the budget are reasonable, allowable, and allocable to the proposed activities, applicants shall
have proper rationale for the estimated costs proposed in the budget shall be supported by valid quotes from
the vendors for the proposed activities. For applicants without an audited indirect cost rate, the budget may
include direct costs that will be incurred by the applicant to provide identifiable administrative and
management costs that can be directly attributable to supporting the grant objective. The application must
be signed by an authorized agent of the applicant organization.
USAID IPA will hold multiple pre-application orientation sessions (about 2 hours in duration) on the following
dates and locations:
Location Dates

Gilgit Baltistan 17th October 2023 – Hunza

19th October 2023 - Skardu

Quetta 23rd October 2023

Karachi 25th and 26th October 2023

Lahore 31st October and 1st November 2023

Islamabad 6th and 15th November 2023

Peshawar 8th November 2023

Interested applicants can register for these pre-application orientation sessions for their respective region
through the link provided in the email sent by USAID IPA. Only two persons may attend from each
organization. USAID IPA will not reimburse any cost for attending these sessions. These sessions will allow
eligible and interested applicants an opportunity to ask questions about the RFA and receive guidance on
how to complete the application form.

These sessions will provide applicants with an opportunity to:

 Explore and understand about the funding streams available under the USAID IPA Fund.
 Receive overall guidance on how to fill in the application.
 To understand and map their ideas that supports the objectives of USAID IPA.

IVA3. INELIGIBLE EXPENSES

USAID IPA grant funds may not be utilized for the following:

• Construction or infrastructure activities of any kind. Note that Per ADS 303.3.30 and the ADS 303
Mandatory Reference entitled, “USAID Implementation of Construction Activities” dated August 22,
2013, construction is not eligible for reimbursement under grants resulting from this solicitation.
Construction also includes improvements, renovation, alteration, and refurbishment.
• Ceremonies, parties, celebrations, or “representation” expenses.
• Purchases of restricted goods, such as: restricted agricultural commodities, motor vehicles including
motorcycles, pharmaceuticals, medical equipment, contraceptive products, used equipment etc.
• Covered telecommunication and video surveillance equipment or services – Per ADS 303.3.35.2 and as
further explained in 2 CFR 200.216 for U.S. organizations and the standard provision entitled,
“Prohibition on Certain Telecommunication and Video Surveillance Services or Equipment” applicable
to non U.S. organizations, grant funds including direct and indirect costs, cost share and program
 income may not be used to purchase covered telecommunications equipment and services produced
by or provided by Huawei Technologies Company or ZTE Corporation, Hytera Communications
Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any
subsidiary or affiliate of such entities).
• Purchases of goods or services restricted or prohibited under the prevailing USAID source/nationality
regulations per 22 CFR 228 and relevant Standard Provisions; or from countries or suppliers as may be
identified by USAID's consolidated list of debarred, suspended, or ineligible subcontractors at
www.sam.gov.
• Any purchases or activities deemed unnecessary to accomplish grant purposes as determined by USAID
IPA, including any grantee headquarters expenses that are not directly linked to the implementation
of the proposed program.
• Previous obligations and/or bad debts.
• Fines and/or penalties.
• Creation of endowments.
• Other costs unallowable under USAID and/or federal regulations, such as alcoholic beverages.
• Purchases of goods or services restricted or prohibited under the prevailing USAID source/ nationality
(Cuba, Iran, North Korea, and Syria).

IVB. APPLICATION AND SUBMISSION INFORMATION

• Applications shall be submitted in English.

• A duly signed grant application along with budget and supporting documentation should be
submitted to USAID IPA on ipafund@pakistanipa.com no later than the submission deadline - 11:00
PM (Pakistan Standard Time) November 30, 2023.
• Late/ineligible/incomplete/unresponsive applications will not be considered for further steps.
• Due to large volume of applications, USAID IPA may not be able to respond to every applicant.
However, in case you do not hear back from USAID IPA within 3 months of submission of your
application, please assume that the application did not qualify among the top ranked applicants as
per the review criteria and the number of grants available.

SECTION V. APPLICATION MERIT REVIEW CRITERIA

Applications for USAID IPA Fund will be reviewed by an internal review panel comprising of USAID IPA
appointed technical staff and recommendations may be vetted by a larger group. Applications will be
evaluated against the following criteria.

Foreign Direct Investment (FDI) Grants Merit Review Criteria: The review of FDI Grants will be based on
economic growth, innovation and sustainability, and inclusion of women and youth. Following is the
breakdown and rationale of each segment:

1. Economic Growth: This section has 65% weightage and evaluates the application based on:
o FDI Potential – The applicants’ ability to materialize international investments. This may
include the status of deals in the pipeline with foreign investors.
 o FDI Maturity Timelines – The timelines associated with securing/materializing the FDI deal,
this shall be achieved during the proposed grant implementation timelines (6-8 months).
o PSI Potential – the applicants’ potential to leverage local Private Sector Investment including
but not limited to founders’ equity/financial assistance through banks/third party
contributions.
o FDI Received – Previous FDI received by applicant (proof required).

2. Budget and Operational Strength: This section has 10% weightage and evaluates the grant budget
(Annex B) based on how complete, accurate, and reasonable the proposed budget is. Applicants are
encouraged to provide cost breakdowns. To evaluate operational strengths, financial viability is
paramount; examine the sustainability and diversity of the revenue model, along with the realism
of its financial projections. Operational efficiency is equally vital—assess resource utilization and
the efficiency of processes and workflows. Lastly, reviewing the firm’s management team and their
qualifications, ensuring they possess the necessary skills and experience to execute the proposed
activities effectively. Applicants are encouraged to provide latest financial statement/ audit reports
(if available) to better evaluate the operational strength.

3. Innovation and Sustainability: Innovation that can unlock new value chains and market
opportunities and support sustainable businesses to further grow and develop their potential is a key
criterion. These grants are not meant for experiments and must demonstrate a clear path for raising
FDI withing the grant implementation timeline This section has 15% weightage and evaluates the
application based on:
o Innovative approach towards utilization of grants fund as a catalyst to meet international
investors expectations to close the deal. For example, international investors might be
interested in scaling USD-based revenues, potential to expand in cross regional, become cash
positive company etc.
o Business Sustainability beyond grant implementation.

4. Inclusion of Women and Youth: The IPA Fund Grants place a special emphasis on inclusion to ensure
that the grants provide opportunities for Pakistani women and youth. This section has a 10% weightage
and evaluates the application based on:

o Firms owned and run by women and/or youth

o Firms where women and/or youth make up most employees
o Firms whose products or services affect women and/or girls positively
o Firms committed to increasing women in management leadership roles
 Merit Review Criteria – FDI Grants Ratings

Foreign Direct Investment - ability to materialize international

investments, this may include the status of confirmed/potential 40
deals in the pipeline with foreign investors.

Economic Expected FDI deal maturity timelines - Foreign investment deals 65

10
Growth materializing during the proposed grant implementation.

Potential to leverage Private Sector Investment (Local

10
Investments)

Previous FDI received by applicant (proof required) 5

Budget & Completeness, accuracy and reasonability of budget 5

Operational 10
Operational Strength (Financial Viability, Operational Efficiency, 5
Strength Team and Talent)
Innovative approach towards utilization of grants fund as a
Innovation & catalyst to attract international investors interest and expedite 5 15
Sustainability the investment deal closure.

Business sustainability beyond grant implementation 10

Firms owned and run by women and/or youth 4

Firms where women and/or youth make up most employees 3

Inclusion: 10
Firms committed to increasing women in management
Women & Youth 2
leadership roles.

Firms whose products or services affect women, young women,

1
and/or girls positively

Overall Ratings 100

USAID IPA will award grants to the highest ranked applicants as per the target. Potential grantees may be
requested to submit additional information before a grant award is signed. (un-registered organizations will
not qualify for grant awards). Furthermore, USAID IPA will ensure environmental soundness and compliance
in design and implementation as required by 22 CFR 216.
SECTION VI. AWARD AND ADMINISTRATION INFORMATION

All grants will be negotiated, denominated, and funded in Pakistani Rupees (PKR). All costs funded through
the grant must be allowable, allocable, and reasonable. Grant applications must be supported by a detailed
and realistic budget.

Issuance of this RFA and assistance with application development does not constitute an award or
commitment on the part of USAID IPA, nor does it commit USAID IPA to pay for costs incurred in the
preparation and submission of application. Furthermore, USAID IPA reserves the right to accept or reject
any or all applications received and reserves the right to ask for further clarifications from the offerors.