Introduction
PSOM is composed of the Programme for Cooperation with Emerging Markets, which is funded by the Ministry of Foreign Affairs (Development Cooperation), and the Programme for Cooperation with Eastern Europe (PSO), which is funded by the Ministry of Economic Affairs.

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In PSOM both ministries have combined their strengths while maintaining their own objectives. The Programme was initiated in order to share some of the initial financial risks that companies face when investing in new products and/or technologies in emerging markets in developing countries.

PSOM co-finances pilot projects, which are to catalyse long term investments and/or a lasting trade relation between the parties. PSOM funds are made available to consortia of Dutch companies and companies of the host country interested to undertake such an investment and trade project. A typical PSOM-project involves a mix of technical assistance, hardware supply and installation, marketing, demonstration and training. PSOM projects usually try out –on a pilot scale- a new line of production or production technology to see whether it is commercially feasible in the country concerned and whether (export) quality standards can be attained. Investors are expected to observe a high standard of corporate social responsibility.

Memorandum of Understanding
The legal basis for PSOM is provided by a Memorandum of Understanding (MoU) between the Dutch government and the government of Sri Lanka, in which the following priority sectors are mentioned (N.B. project proposals for other sectors are NOT excluded from consideration):
a. Agriculture and agro-business
b. Textile and garment industry
c. Physical infrastructure in Sri Lanka
d. Information Technology
e. Tourism The Ministry has appointed EVD, an executing agency of the Dutch government, to implement PSOM.

Objectives of the PSOM-programme The overall goals of the PSOM are:
• To encourage investments in the selected developing countries and promote lasting investment and/or trade relationships between Dutch and local companies.
• To contribute to the alleviation of poverty in the developing countries through transfer of knowledge and technology and strengthening and diversifying the local private sector.

The PSOM-programme will pay 50% of the costs (60% in least developed countries) of the projects, which most likely lead to long term investments and lasting trade relations in the selected countries and have the largest impact on poverty alleviation. Project are selected based on a call for proposals. The purpose of the pilot investment projects is to assess the commercial feasibility of investments in the PSOM country.

Selection procedures
Twice a year EVD invites companies to submit project proposals. The proposal are written according to the pending tender instructions. In 2006 there are two tender opportunities. The first one will be August 15th, 2006.

New tender instructions will be available in May 2006. The best projects are selected. The tender procedure has two stages of appraisal of the proposal. When a project proposal is received by the EVD it is first established whether basic conditions have been met for PSOM eligibility. Once this has been determined, a selection committee of EVD selects and ranks the proposals. PSOM proposals will be evaluated against the following set of criteria:
1. strategic interest (incl. sector choice and/or regional preference expressed by host country)
2. bussiness- and project plan
3. pilot character and additionality
4. development effects

For more information on PSOM procedure etc.  http://www.evd.nl/business/programmes/ProgrammaInt_psm.asp?land=psm