LuxAid Challenge Fund

We’re seeking groundbreaking projects that address country-specific societal challenges, aligning with the themes outlined in the open call for proposals. The LuxAid Challenge Fund aims to strengthen innovative and inclusive economic models addressing the vicious circle of poverty and access to basic socio-economic goods and services. Examples include improving access to education, enhancing food security, and access to essential resources such as water and energy. Ideally, the projects propose systemic solutions that target the root causes rather than just the symptoms of structural problems.

The LuxAid Challenge Fund supports enterprises in executing projects spanning 1-2 years, addressing challenges such as expanding marketing efforts and customer base, aligning business models with market needs, bolstering teams, and preparing for initial external investments.

The selected partnerships can benefit from an average co-financing of EUR 120,000, representing a maximum of 70% of the total proposed project budget.

Support can be used for any expense related to marketing, equipment acquisition, or intangible needs such as technical assistance.

The LuxAid Challenge Fund aims to achieve the following:

• A proven and cost-effective solution that delivers direct and measurable commercial, financial, social, and/or environmental results;
• A strengthened business model ready to be accelerated/scaled, expand its impact on the target community, and achieve commercial viability;
• Additional capital mobilised (ideally private) to enable the expansion of the solution within two years of the end of the project.

In the longer term, the objectives include:

• Contribute measurably to identified societal goals;
• Leverage external capital to facilitate its scale-up for the benefit of local populations.

Applications are assessed against the following selection criteria:

• Innovation and cost-effectiveness: For a solution to be considered innovative, it must sufficiently distinguish itself from products, services, or approaches already present in the local market. This may involve differences in design, distribution, target audience, economic model, and anticipated resilience to future developments;
• Societal impact and futureproof: The solution must contribute to the Sustainable Development Goals, such as job creation, poverty reduction, access to healthcare, preservation of ecosystems and biodiversity, and combating climate change, etc. Projects must take into account adaptation to future risks and trends;
• Project viability and financial sustainability: Partners must demonstrate that the project will be able to generate revenue in the short or long term, ensuring its continuity beyond the co-financing period. Projects with opportunities for additional funding after the project ends will be prioritised;
• Additionality and neutrality of co-financing: Projects must provide added value that would not have been created without the financial support of the LCF. However, the LCF cannot create market distortion by co-financing projects similar to initiatives already present in the market;
• Execution capacity: enterprises must demonstrate sufficient execution capacities for the size of co-financing granted. This includes but is not limited to management capacities, production knowledge and accounting standards.