We were commissioned by AusAID to assess the potential of a challenge fund to support innovative responses to mineral sector skills gaps in Africa, under the African Mineral Skills Initiative (AMSI). The fund had a specific focus on building the capacity of tertiary and vocational skills / educational institutions in Africa. This included undertaking a review of the lessons learned from other challenge fund mechanisms in use in low and middle income countries, in particular those in Africa. Combined with market analysis of the mineral skill sector in Africa, OPM developed an options paper for establishing a fund; recommended which options would be most appropriate to achieve the desired objectives; and developed design summaries for the options identified by key stakeholders for further consideration. These papers were presented to AMSI stakeholders in South Africa in July 2013.