Wood Biomass Harvesting Machinery Grant Scheme

Transcription

1 Wood Biomass Harvesting Machinery Grant Scheme 1) General Outline and Legal Basis: i) Wood biomass has the potential to play a major role in Ireland s climate change strategy. Energy from wood biomass is renewable, carbon neutral and sustainable. ii) The Department of Agriculture, Fisheries and Food wishes to stimulate the production of wood chip as a fuel through the introduction of a limited capital grant scheme to support the acquisition of suitable machinery under the National Development Plan 2007 to iii) The Department believes that the grant scheme will favour good silvicultural practice through early thinning, support the development of alternative use for Irish timber, promote forestry as an alternative and environmentally compatible land use, encourage diversification of agricultural activities, improve the marketing of forest products and promote wood biomass as a source of renewable energy in Ireland. iv) The Scheme provides grants to assist the development of the supply chain required to process and supply wood biomass to end-users. v) The Scheme is competitive. A Department of Agriculture, Fisheries and Food committee will assess applications according to their merit. Grant awards will be made at the Minister s discretion. 2) General Provisions: i) The Scheme shall be administered by the Department of Agriculture, Fisheries and Food and shall operate throughout the State. ii) The Exchequer funds the Scheme. Expenditure in respect of machinery funded will be provided annually in the estimates of the Department of Agriculture, Fisheries and Food. iii) Payments under the Scheme will be subject to the terms of Commission Regulation (EC) No. 1998/2006 of 15 December 2006 on the application of Articles 87 and 88 of the Treaty to de minimus aid published in the Official Journal of the European Union on L379. iv) The Scheme shall come into operation on 12 November 2007 for a period of 1 year, or an alternative period, at the discretion of the Minister. 1

2 3) Scope of the Scheme: i) The purchase of the following number and types of harvesting equipment will be considered for support under the Scheme: Category A: Category B: Front-Fed Mobile Wood Chipper Units (x7) Side-Fed Mobile Wood Chipper Units (x5) ii) A description of acceptable machinery combinations and technical specifications are set out at Annex 1. iii) The Minister reserves the right to change the number of machines grant aided within each category or the level of grant aid at any point in time during the operation of the Scheme. 4) Eligibility: i) Applications will be considered from individuals, organisations and corporate bodies resident in the State. ii) Eligible applicants are: (a) Producer groups being set up to supply wood biomass; (b) New or existing businesses supplying wood biomass; and (c) Established businesses diversifying into supplying wood biomass for the first time. iii) An individual, organisation or corporate body may submit one application only under this Scheme. A limit of one chipper unit (plus forwarder as appropriate) applies per application. iv) Applicants are encouraged to attend the information seminar associated with this scheme to be held on 7 th December 2007, in The Comfort Inn Hotel, Midway, Portlaoise, Co. Laois; participation in the seminar is free of charge. 5) Application Window: Applications for grant aid must be received between 12 November, 2007 and close of business on 16 January, ) Grant Aid Levels: i) Front-feeding mobile wood chipping units Grant support shall not exceed 60,000 or an amount equivalent to 40% of the actual cost (ex VAT) of the completed investment, whichever is the lesser. ii) Side-feeding mobile wood chipping units Grant support shall not exceed 30,000 or an amount equivalent to 25% of the actual cost (ex VAT) of the completed investment, whichever is the lesser. 2

3 iii) The successful applicant/s shall make satisfactory arrangements for provision of the balance of capital required to meet such expenditure. Evidence of the availability of this capital shall be made available to the Minister on request. 7) Application Procedure: i) Applicants will be required to complete the Biomass Harvesting Machinery Grant Scheme application form together with the documents detailed at Annex 2 and a Business Plan that meets the requirements of Annex 3. ii) Applications must be submitted in the original form to the Forest Service before the deadlines specified at paragraph 5 above. If possible, please also submit electronic versions of the application. 8) Appraisal of Applications i) A Proposal Appraisal Committee chaired by the Forest Service of the Department of Agriculture, Fisheries and Food will consider the information available and decide whether an application is to be approved or rejected. The Scheme is competitive and applications will be assessed on the basis of the information contained in the application form, supporting documents and the business plan. ii) The Committee may request further information or clarification relating to the project proposal from the applicant and attach a time limit to its submission to the Committee. The request for additional information may result in a delay in deciding on grant aid. iii) The Committee may approve an application but attach certain conditions. iv) A decision will be made on each application within 6 weeks of the closure of the application window, unless additional information is required. v) Proposals for financial support will be evaluated according to the following criteria: (1) Value added to supply chain: The scale and value of the proposed improvement to wood biomass supply and energy end-use infrastructure. (2) Costing and value for money: (a) Total cost of the proposal. (b) Value for money, competitiveness and proposed running costs. (c) Appropriateness of proposed scale of operation. (3) Information relating to the buying and selling prices of the biomass, i.e the price of the timber when bought and the price of the fuel when sold expressed in Euro/ton with the indication of their moisture content at the time of purchase and sale. (4) Suitability of the equipment according to the description in Annex 1. (5) Experience and Capacity: (a) Experience and expertise of the enterprise. 3

4 (b) Capacity of applicant to deliver. (6) Geographical Location: (a) Proximity to other operators of biomass harvesting machinery. (b) Proximity to potential end-users. (7) Other criteria: (a) State of readiness. (b) Availability of funds. 9) Evidence of Biomass Supply: i) Applicants must demonstrate the location and extent of an existing sustainable biomass supply. Information regarding access to the supply should be provided in the Business Plan accompanying the Application Form. ii) Machinery grant aided under this Scheme must process wood from forest stands or from a sawmill (machinery to process post-consumer wood is not eligible) 10) Evidence of Energy End-User: i) Applicants must demonstrate an existing or potential energy market. ii) A minimum of 75% of the machinery s output must be supplied to dedicated biomass heating or energy generation. iii) End-users must be within a reasonable distance of the biomass source. The distance should be justifiable on economic, practical and environmental grounds. iv) The following may be provided as acceptable evidence of end-user(s) commitments: (a) A contract from the end-user(s) detailing the volume of fuel required, frequency of deliveries and the start date and duration of the contract; OR (b) A letter of interest from the end-user(s). This should be on endusers headed paper and signed by an authorised signatory. The letter should include information on the volume and frequency of fuel deliveries anticipated, an estimate of the distance the fuel will travel and the dates on which supply is expected to start. 11) Offer of Grant Aid: i) The Committee s decision will be conveyed to the applicant by letter. Where an applicant has been successful the letter will be a Letter of Offer. ii) The Letter of Offer sets out the conditions attaching to the offer of grant aid and constitutes a formal agreement with the Minister. 4

5 iii) A successful applicant must sign and return the letter to the nominated contact at the Forest Service within 4 weeks of the date of the Letter of Offer. iv) The applicant must meet any terms and conditions attached to the Letter of Offer in order to qualify for payment of the grant. 12) Letter Of Offer: A Letter of Offer shall include, inter alia, the following conditions: (a) The machinery shall not be used as security against any loan raised for its purchase and shall not be acquired by means of a hire purchase agreement. (b) Where the machinery is acquired through a leasing agreement with a finance company, grant aid shall be paid to the finance company. The beneficiary and the finance company shall be required to enter a Tripartite Agreement with the Minister as set out in Annex 5. (c) No other application for financial assistance towards the purchase of the machinery shall be made to any other publicly-funded agency. (d) Only expenditure on new machinery shall be eligible for grant aid. (e) The machinery shall not have been purchased or leased prior to the date of acceptance of the Letter of Offer. (f) The machinery shall not, without the consent in writing of the Minister, be sold or disposed of by the Grantee within four years. (g) Other than with the explicit approval of the Minister, the applicant shall be required to use the machinery for the purpose for which grant-aided for a minimum of 4 years after the date of application. Failure to do so may result in all, or such portion of aid, as the Minister may determine, being recouped. (h) The machinery shall operate only within the State, or for no less than 80% of its operating time in any 12 months. (i) The machinery shall be kept insured against theft, loss or damage for an amount approved by the Minister. (j) The Grantee shall indemnify the Minister against all and any liabilities arising in respect of the death of or injury to any person or damage to any property arising out of the use of the machinery. (k) The Grantee must satisfy the Minister that the operatives engaged in the operation of the machinery are adequately trained or shall be. (l) A Health and Safety Statement for the company operating the machinery must be submitted at the time of making a claim for payment of the grant aid awarded. (m) The grantee shall keep the machinery in good repair and condition. (n) The Grantee must hold a Tax Clearance Certificate, current at the time of making a claim for payment of the grant aid awarded. (o) The Minister, or her/his representatives, may inspect the machinery, at any time and at any location, prior to or following payment of grant. (p) The machinery shall be operated in full compliance with the following environmental standards: (i) The Code of Best Forest Practice; (ii) The principles of Sustainable Forest Management as outlined in the National Forest Standard; and 5

6 (iii) The Forestry Environmental Guidelines. 13) Claiming the Grant: i) Payments will be made following receipt of a request for drawdown from the Applicant that meets the requirements of Annex 4. ii) A claim for payment of the grant that meets the requirements of Annex 4 must be made within 3 months of the date of the Letter of Offer, subject to any extension approved by the Minister. Failure to meet the prescribed timescale may result in the offer of grant aid being withdrawn. iii) The grant will be paid directly to the Applicant s bank account or to the nominated by electronic funds transfer. 14) Record Keeping: The Applicant must retain all records relating to the application, grant offer and agreement for a period of 6 years from the date of the final payment of the grant. 15) Monitoring and Inspection: i) Monitoring of individual projects by the Department of Agriculture, Fisheries and Food will be based on the business plan and the targets proposed for the project by the Applicant. ii) Monitoring may be carried out by paper checks or site visits as appropriate. iii) Authorised officers of the Minister may carry out control visits to verify an Applicant s claim for grant aid. An applicant must allow access at any reasonable time for such visits, announced or unannounced, and provide access to records, receipts or equipment as requested. iv) An applicant may be required by the Department of Agriculture, Fisheries and Food to provide information relating to the development of the grantassisted enterprise. 16) Technical support. Technical support from COFORD will be available to successful applicants freeof-charge. 17) Research. i) The successful applicant shall make his equipment available for research purposes on request from the Minister for a duration of maximum 5 days per year during the first 4 years after grant aid has been given. The research work will be paid according to the normal rates for that type of machinery and will be negotiated with the owner of the machine. ii) Chips from the operations should be made available for research into and monitoring the quality of wood fuels in Ireland. 6

7 18) Non-Compliance i) If a beneficiary of the Scheme cannot meet any element of the conditions of the grant aid, the Department must be immediately informed. ii) The approval of aid may be withdrawn if the applicant fails to abide by the terms of the Scheme or in the event of any material change in the circumstances of the applicant or of the business or in any other respect that would be in conflict with the terms or the condition of the Scheme. In such event, all or such portion of aid given or to be given, as the Minister may determine, shall be reimbursed or withheld. 19) Financial Guidelines: Applications will be approved by reference to national regulations and guidelines. 20) Tax compliance procedures. Successful applicants will be required to provide an original tax clearance certificate at the time of making a claim for payment of the grant aid awarded. 21) Ownership All grant-aided equipment must remain an asset of the producer group or business, subject to the terms of the tripartite agreement. 22) Publicity Beneficiaries will acknowledge the contribution of the National Development Plan in any promotional material, annual reports, websites etc., by use of appropriate logo and text references. 23) Freedom of Information Information supplied to the Department of Agriculture, Fisheries and Food may be disclosed in response to a request under the Freedom of Information Act, If an applicant considers that any information supplied to the Department is either confidential or commercially sensitive, the applicant should identify such information when submitting his/her application and specify the reasons for its sensitivity. The Department will consult with the applicant about this information before making any decision in relation to any request received under the Freedom of Information Act, ) Procedures. The Minister shall lay down the procedures to be followed in the operation of this Scheme and reserves the right to alter these procedures from time to time. 25) Cumulation of Agriculture State Aids Any Applicant who has raised finance under the Business Expansion Scheme (BES) and/or the Seed Capital Scheme (SCS) tax incentives must make the necessary declaration on the application form. 7

8 26) De Minimis Payments: i) Payments made under this Scheme are considered as de Minimis payments under the State Aid provisions of the EU. An individual, organisation or body corporate may receive up to 200,000 in de Minimis payments over a 3- year period. De Minimis payments received under any grant scheme from any organisation over the previous 3 years must be detailed on the application form. Any payments made under this Scheme will be entered on the De Minimis Payments Register operated by the Department of Enterprise, Trade and Employment. ii) An Applicant is required to make a declaration regarding de Minimis payments on the Application Form for grant aid. 8

9 Annex 1 Machinery Specification 1. All machinery must be new when purchased under this Scheme. 2. For the purposes of this Scheme, chipper means a machine that cuts wood with sharp knives and that meets the specification for chippers at paragraph 3 or 4 of this Annex. Machines that process wood with blunt tools, like hammermills, crushers etc. are not supported by this Scheme. 3. Mobile Wood Chippers front-fed (Medium Scale) means tractor-mounted crane-fed chippers, with tractor and trailer. Grant to aid purchase of chipper, crane and in forest trailer but not for the tractor. A tractor-mounted chipper must be capable of: Producing approximately 30 cubic metres loose volume of wood chip per working hour. Chipping material up to at least 20 cm diameter. Producing wood chip suitable for both domestic and commercial use, i.e. p16 and p45 wood chip (reference CEN TS Solid Biofuels Fuel Specifications and Classes (March 2005, Table 7 Specification of Properties for Wood Chips), available from the NSAI). The tractor-mounted chipper should be suitable for crane-feeding (hand-feeding is not permitted) and should have an in-feed opening to the front of the machine that facilitates in-line feeding of the biomass (i.e. not at right angles to the direction of travel). The trailer should be suitable for in-forest operation to collect chips which are blown into it from the chipper. A high tipping trailer is preferred, so that the chips can be off loaded into a silage trailer or truck for road transportation or delivery to an above ground storage silo. Trailers for road transportation only will not be grant-aided. Mobile Wood Chippers, side fed, means tractor mounted crane-fed chipper with tractor and trailer. Grant to aid purchase of chipper, crane and road transportation trailer, but not for tractor A tractor-mounted side-fed chipper must be capable of: Producing approximately 30 cubic metres loose volume of wood chip per working hour. Chipping material up to at least 20 cm diameter. Producing wood chip suitable for both domestic and commercial use, i.e. p16 and p45 wood chip (reference CEN TS Solid Biofuels Fuel Specifications and Classes (March 2005, Table 7 Specification of Properties for Wood Chips), available from the NSAI). 9

10 The tractor-mounted chipper should be suitable for crane-feeding (hand-feeding is not permitted) and should have an in-feed to the side of the machine i.e. at right angles to the direction of travel). 10

11 Annex 2 Application Form Requirements The following documents must accompany the Application Form for Grant Aid under this Scheme. A Business Plan that meets the requirements of Annex 3 of the Wood Biomass Harvesting Grant Scheme. Copy of Certificate of Incorporation / Articles of Association / Constitution, where appropriate. Original Quotation for the Machinery. Evidence of a supply contract with an end-user or a Letter of Interest, as appropriate. Signed audited accounts for the last two trading years, where applicable Projected profit and loss accounts, balance sheet and cash flow projections for the next three trading years. 11

12 Annex 3 Business Plan Requirements The business plan should demonstrate how the enterprise will be: Feasible Value for money; Self-sustaining after grant aid has ceased; and Beneficial to the rural community, economy and environment. The business plan should include information under the following headings: 1. Name and location of the applicant and enterprise. Describe briefly the nature of your current business. 2. Need for the project. a. Describe the existing forestry activity in the region, including biomass harvesting/processing. Will you be competing or co-operating with others in the area? b. Where available, summarise any market research on opportunities in your proposed area of operation. c. Where available, include any documented support for the project from relevant organisations. d. Detail the type of evidence you are attaching as proof of a link with endusers. See paragraph 10 of the Scheme for standard of evidence required. e. Identify by location the existing source of biomass available to applicant. Describe the scale and age of the biomass. f. Justify the distance between the source of biomass and the end-user. 3. Project Objectives, Targets and Outputs a. Describe what you are proposing to do and the results you expect. Set out detailed objectives (including sales targets), milestones, projected jobs created/preserved and growers recruited (where appropriate). b. Describe the longer-term strategy for the enterprise, giving particular attention to viability beyond grant aid. c. Confirm that a minimum of 75% of the machine s output will be supplied to dedicated biomass heating or energy generation. 4. Economic Impact a. Describe the project s contribution to the overall economic development of the region and the involvement of other businesses. Detail any consultants, advisers or other third parties who may be involved in delivering the project. b. Provide figures of existing jobs where the project will provide security and/or the number of new jobs created for each of the next three years. 5. Financial Viability Set out in a table the projected cash flow and profit and loss forecasts for each financial year 2007/8 to 2010/11. 12

13 Document the purchase and sales price of the biomass. Specify the prices per tonne and the actual moisture content at the moment of purchase and sale. 6. Project Costs and Funding a. Detail the grant required under this Scheme. b. Break down projected costs as appropriate. c. Describe efforts undertaken to secure competitive quotations. d. Give details of the sources of public or private funding that has already been secured, including any conditions on which that funding is dependent. e. A copy of the facility letter or a letter of support from the provider of any finance must be attached, where relevant. f. Give details of the sources of public or private funding applied for but not yet secured. 7. Need for Machinery Describe how and where the machinery will be deployed. Describe other machinery available or to be purchased to complement grantaided machinery. 8. Need for Grant Aid a. Explain why your enterprise needs the grant. b. Describe any links to either previous projects supported by public funds or schemes you are currently applying for, including the source and amount of any funds received. 9. Project Management and Delivery: Describe: a. The roles and responsibilities of those involved in the enterprise. b. The experience of those involved in the enterprise, including any relevant training or qualifications. c. The financial management system to be used. Auditable accounts must be available for future audit purposes. 10. Risk Assessment: a. Describe any new or untried activities involved in the enterprise. b. Describe any possible risks that have not been fully addressed elsewhere in the business plan. c. Explain how any risks might be mitigated or managed. 11. Additional Information: Include any further information, not covered elsewhere in the business plan. 13

14 Annex 4 Making a Claim The following documentation must be submitted when a grant under this Scheme is being claimed from the Department. 1. Statement from the Applicant declaring that the terms and conditions of the Scheme and Letter of Offer have been met and requesting payment of the grant. 2. Statement of the grant amount requested. 3. Statement of VAT status of applicant. 4. Evidence of expenditure 5. Proof of insurance. 6. Health and Safety Statement. 7. Tax Clearance Certificate. 14

15 Annex 5 TriPartite Agreement (draft) AGREEMENT made the XX day of XXX 2007 BETWEEN THE MINISTER FOR AGRICULTURE AND FOOD of JOHNSTOWN CASTLE ESTATE, CO. WEXFORD (herein called the Minister) of the First Part and XXXX having its registered address at XXXX (herein called the Grantee) of the Second Part and XXXX having its registered address at XXXX of the Third Part (herein called the Bank). WHEREBY it is agreed as follows:- 1. The Grantee has applied to the Minister for a grant to be applied towards the cost (excluding V.A.T) of acquisition by the Grantee of machinery and equipment (herein called the Machinery) particulars of which are set out in the First Schedule hereto. 2. The Minister has agreed subject to the terms and conditions hereof to pay a grant (herein called the Grant) to the Grantee in the sum of XXX or an amount equivalent to 40% of the actual cost (excluding V.A.T) of the completed investment (whichever is the lesser) to enable the Grantee to acquire the Machinery. 3. The Bank has agreed to purchase the Machinery and to lease it to the Grantee. 4. The Grantee and the Bank have requested the Minister to pay the Grant to the Bank and the Bank has agreed to apply the benefit of the Grant to the Grantee reducing the rentals payable by the Grantee to the Bank by the amount of the Grant as set out above. 5. The Grantee agrees with the Minister that in the event of the breach of or noncompliance with any of the Conditions of the Letter of Offer of the Wood Biomass Harvesting Machinery Grant Scheme 2007 dated the XX day of XXXX 2007, that the Minister will have the right, within four years from the date of payment of the Grant, to recover from the Grantee all sums received in respect of the Grant, or so much thereof as the Minister may determine, in accordance with the provisions set out in the Second Schedule hereto and that in default of such repayment, such sums shall be recoverable by the Minister as a simple contract debt in a Court of competent jurisdiction. 6. The Bank agrees with the Minister: - (a) (b) (c) That all the Machinery in respect of which the Grant is payable will be purchased new. To submit to the Minister such vouched statements of expenditure made by the Bank in respect of the Machinery as the Minister may reasonably require accompanied by an Auditor's Certificate of expenditure. That the Minister shall be entitled to inspect the Machinery when purchased by the Bank, if s/he so desires. 15

16 (d) (e) (f) That in the event that the Bank comes into possession of the Machinery in respect of which the Grant is payable by virtue of the terms of the lease or by any other means, or sells the Machinery or otherwise disposes of the Machinery, the Minister will forthwith have the right to recover from the Bank all sums received in respect of the Grant, or so much thereof as the Minister may determine, in accordance with the provisions set out in the Second Schedule hereto. That in the event of the Minister at her/his sole discretion, deciding that s/he is unable to recover from the Grantee any sum due to her/him in accordance with paragraph 5 above, the Minister will forthwith have the right to recover from the Bank all sums received in respect of the Grant, or so much thereof as the Minister may determine, in accordance with the provisions set out in the Second Schedule hereto and that in default of such repayment by the Grantee such sums shall be recoverable by the Minister from the Bank as a simple contract debt in a Court of competent jurisdiction. These Conditions shall be governed by Irish Law and shall be subject to the exclusive jurisdiction of the Irish Courts. FIRST SCHEDULE Description of Machinery Cost (Excluding VAT) Maximum Percentage Grant 40% SECOND SCHEDULE Proportion of the Grant Repayable % One Two Three Four Five Six Seven Eight Nine Ten Eleven Twelve Thirteen Fourteen Fifteen Sixteen End of the month number from date of payment of the Grant 16 Amount repayable per 000

17 Seventeen Eighteen Nineteen Twenty Twenty One Twenty Two Twenty Three Twenty Four Twenty Five Twenty Six Twenty Seven Twenty Eight Twenty Nine Thirty Thirty One Thirty Two Thirty Three Thirty Four Thirty Five Thirty Six Thirty Seven Thirty Eight Thirty Nine Forty Forty One Forty Two Forty Three Forty Four Forty Five Forty Six 8 80 Forty Seven 4 40 Forty Eight 0 Nil SIGNED on behalf of the ) Minister by [ASSISTANT PRINCIPAL] ) (a person authorised on that behalf ) PRESENT when the Common Seal of ) Xxxxxxx ) was affixed hereto:- ) PRESENT when the Common Seal of ) XXXXXXXX ) was affixed hereto:- ) 17