REQUEST FOR EXPRESSIONS OF INTEREST AFRICAN DEVELOPMENT BANK CLIMATE CHANGE AND GREEN GROWTH DEPARTMENT (PECG)

Transcription

1 REQUEST FOR EXPRESSIONS OF INTEREST AFRICAN DEVELOPMENT BANK CLIMATE CHANGE AND GREEN GROWTH DEPARTMENT (PECG) 1. The African Development Bank hereby invites Consulting Firms to indicate their interest in the following Assignment: Evaluation of Alternative Private Investment Models for Commercial Forestry in Africa. 2. Through the Climate and Green Growth Department (PECG), AfDB seeks to invite expressions of interest from consulting firms with analytical and implementation expertise in forestry and in the structuring of complex financial investment vehicles with the objective of assisting AfDB in evaluating and designing alternative private investment models for commercial forestry in Africa with a view to ultimately establishing, or aiding the establishment of, a special fund (private equity fund, debt fund or any other viable structure) that invests in commercial forestry plantations. 3. The services to be provided under the Assignment include the following: The factors that enabled AfDB to approve its investment in the Forest Investment Program (FIP) Private Sector Set Aside project entitled Public-Private Partnership for the Reforestation of Degraded Forest Reserve, a project in Ghana that received a significant concessional loan that was designed in such a way that ensures the principle of minimum concessionality is respected and that no market distortions are created so as to avoid investor crowding-out. The consultant will be expected to undertake a critical review of the financial structure put in place to ensure that lessons can be learned; Based on publicly available information, how International Finance Corporation s project entitled Emissions Reductions in the Forest Sector Through Planted Forests with Major Investors plans to engage with out-growers in Mozambique to explore mosaic plantation models; Based on all information generated during the African Forestry Investment Conference (AFIC), explain how existing large-scale investors are approaching the establishment of greenfield plantations in Sub-Saharan Africa and identify the barriers they currently face and how could these be addressed; In conjunction with the recently approved Ugandan FIP Investment Plan, explain how small-scale plantation owners could become further engaged in plantation establishment leveraging off the highly successful Saw-log Production Grant Scheme, potentially, for example, entering into Public Private Partnerships with national forestry department to establish commercial plantations, whether in degraded gazette forest reserves such as the project mentioned in (ii) above or others. With support from World Wildlife Fund (WWF) Kenya, a registered CIF Observer, the study will assess the role that FSC Sustainable Forest Management Certification can play in successfully addressing social, environmental challenges and sustainability challenges; Based on best practice at the Multilateral Development Banks, the study should assess the role of women and youth in such extensive land use management projects, best practices

2 promoting gender equality and social cohesion and how such projects can be designed to maximize job creation for women and men, youth and adults and to ensure equitable and gender aware opportunities across the impacted communities; Study the appetite of commercial banks being involved in this type of investments by identifying current barriers at the local and international level and identifying best practices; and This initiative will then design, compare and contrast alternative financial models (fund vehicles) through which debt and/or equity can be invested into green-field and brownfield commercial forestry plantations in Africa. The results will inform the potential creation of the African Forestry Fund a tiered private equity fund or a debt fund that could benefit from junior equity or junior debt or any other credit enhancement mechanisms through the deployment of concessional resources with the ultimate goal of stimulating the development of commercially-led plantations on the continent. 4. PECG invites Consulting Firms to indicate their interest in providing the above-described services. Interested eligible Consulting Firms or associations of Consulting Firms shall provide information on their qualifications and experience demonstrating their ability to provide the services (documentation, references for similar services, experience in comparable Assignments, availability of qualified staff, etc.). 5. The eligibility criteria, the establishment of a short list and the selection procedure shall be in conformity with the Bank s Institutional Procedures for the Recruitment of Consultants. Please note that interest expressed by a Consulting Firm does not imply any obligation on the part of the Bank to include the firm in the shortlist. 6. The estimated duration of services is six (6) months and the estimated starting date is April Interested Individual Consultants may obtain further information at the address below during the Bank s working days, from 09:00 to 17:00 hours. 7. Expressions of interest must be delivered via to the address below no later than 28 th February 2018 at 17:00 Abidjan local time and specifically mention Evaluation of Alternative Private Investment Models for Commercial Forestry in Africa. For the attention of: Phillips Gareth Division Manager (PECG.1) African Development Bank Immeuble du Centre de commerce international d Abidjan Avenue Jean-Paul II 01 BP 1387 Abidjan COTE D IVOIRE g.phillips@afdb.org, l.azevedo@afdb.org b.ayissi@afdb.org

3 Introduction AFRICAN DEVELOPMENT BANK CLIMATE CHANGE AND GREEN GROWTH DEPARTMENT (PECG) TERMS OF REFERENCE FOR CONSULTANCY SERVICES Evaluation of Alternative Private Investment Models for Commercial Forestry in Africa 1. The African Development Bank (the Bank or AfDB ) is a continental multilateral development institution established in 1963 by an international Treaty. The Bank s membership currently consists of 54 African states and 26 non-african states. AfDB s mandate is to contribute to the sustainable economic development and social progress of its regional members individually and jointly. Additional information on the Bank is available on the website ( 2. Through the Climate and Green Growth Department (PECG) AfDB administers and manages, as an implementing agency of the Climate Investment Funds (CIF), projects and programs in African Pilot-Countries on a number of sub-funds. The Forest Investment Program (FIP) one of such funds - aims to support developing countries efforts to reduce emissions from deforestation and forest degradation by providing scaled-up financing for readiness reforms and public and private investments. It finances efforts that address the underlying causes of deforestation and forest degradation and to overcome barriers that have hindered past efforts to do so. 3. The CIF Evaluation and Learning (E&L) Initiative, established in 2015, focuses on four priority learning themes: (i) transformational change, (ii) private sector investment, (iii) local stakeholder engagement and benefit, and (iv) CIF design and approach. The two rounds of Call for Proposals have been issues to fund CIF implementing institution and stakeholder-driven ideas for evaluation and learning that are consistent with the CIF E&L Business Plan and contribute strategic learning on the potential for or realization of transformational change. Parallel to the 2 rounds of Call for Proposals, the E&L Initiative has also been pursuing cross-cutting, strategic evaluation and learning activities to support priorities that were identified through stakeholder consultations. 4. In June 2017, the CIF E&L Initiative launched a Transformational Change Learning Partnership (TCLP) in order to support learning about transformation both within and beyond CIF. The primary purpose of the TCLP, which involves approximately 30 CIF stakeholders, is to increase the transformative impact of CIF investments and those of other funds by establishing a more robust understanding of transformational change across sectors, countries and programs. To date, this TCLP work has included defining concepts and theories of change for CIF-supported transformation toward low-carbon, climate-resilient development, a review of the CIF portfolio, facilitated group learning and deep dive analyses. The TCLP will culminate in 2018 with a capstone synthesis report on transformational change in the CIF context and will include corresponding recommendations to strengthen CIF s role in supporting transformational change going forward. 5. The Evaluation and Learning Partnership on Financing Forest-Related Enterprises (ELPFFRE) was established in The purpose of this partnership is to help increase the viability and scale of investments in sustainable forest-related enterprises by harvesting lessons from different types and models of financing tested in the FIP, as well as related investments beyond the FIP, and applying learning to ongoing and planned forest investments. The scope of work examined includes grant investments upstream, but largely focus on non-grant investments into both public and private sector organizations and institutions.

4 6. The 2012 World Wildlife Fund report Forests for a Living Planet highlighted that in order to fight and stabilize climate change, there was a need to plant 5 million hectares of new forests worldwide per year. In addition, the 2011 Bonn Challenge by the Global Partnerships on Forest and Landscape Restoration calls on governments to restore 150 million hectares of degraded and deforested land by However, over the course of the last five years the progress in this space has been very limited. At the African Forestry Investment Conference (AFIC) in Ghana in June 2017 hosted by AfDB with FIP support, private sector participants highlighted that there was a lack of both equity and debt investors in the space given the long-term nature of a commercial plantation business. Meanwhile, FIP Investment Plans throughout Africa have highlighted the need for better forest management and sustainable production of raw materials to feed important value chains. With the exception of the FIP s investment into the Public-Private Partnership for the Reforestation of Degraded Forest Reserve project implemented by AfDB and a FIP project implemented by the International Finance Corporation (IFC) in Mozambique, large scale private sector investment has been largely absent from these plans and co-financing deployed from Multilateral Development Banks is marginal. 7. AfDB seeks to invite expressions of interest from consulting firms with analytical and implementation expertise in forestry and in the structuring of complex financial investment vehicles with the objective of assisting AfDB in evaluating and designing alternative private investment models for commercial forestry in Africa with a view to ultimately establishing, or aiding the establishment of, a special fund (private equity fund, debt fund or any other viable structure) that invests in commercial forestry plantations. Objectives of the Assignment 8. This study starts from the premise that FIP funding to Private Sector forestry projects proved that there is a need for some form of concessional finance that is capable of addressing particular challenges faced by forestry businesses in Sub-Saharan Africa. In addition to a market assessment of the sector, the study will evaluate the particular barriers faced by small and large scale investors into commercial forestry plantations and how concessional finance can be structured at a special fund (e.g. private equity fund and/or debt fund) level so that financial resources can be channeled into the sector. 9. Learning and building on the early results of the ongoing International Institute for Environmental Development (IIED) study entitled Evaluation and Learning Partnership on Financing Forest-Related Enterprises (ELPFFRE) and research into forestry activities in three countries (Uganda, Mozambique and Ghana), the study will assess the demand for concessional financial resources conditional on the application of environmental, social, gender, climate and risk management design criteria including inter alia Forest Stewardship Council (FSC) Sustainable Forest Management Certification as well as gender and youth dimensions. 10. In particular, the study shall consider the following: i. The factors that enabled AfDB to approve its investment in the FIP Private Sector Set Aside project entitled Public-Private Partnership for the Reforestation of Degraded Forest Reserve, a project in Ghana that received a significant concessional loan that was designed in such a way that ensures the principle of minimum concessionality is respected and that no market distortions are created so as to avoid investor crowdingout. The consultant will be expected to undertake a critical review of the financial structure put in place to ensure that lessons can be learned; ii. Based on publicly available information, how International Finance Corporation s project entitled Emissions Reductions in the Forest Sector Through Planted Forests

5 with Major Investors plans to engage with out-growers in Mozambique to explore mosaic plantation models; iii. iv. Based on all information generated during AFIC, explain how existing large-scale investors are approaching the establishment of greenfield plantations in Sub-Saharan Africa and identify the barriers they currently face and how could these be addressed; In conjunction with the recently approved Ugandan FIP Investment Plan, explain how small-scale plantation owners could become further engaged in plantation establishment leveraging off the highly successful Saw-log Production Grant Scheme, potentially, for example, entering into Public Private Partnerships with national forestry department to establish commercial plantations, whether in degraded gazette forest reserves such as the project mentioned in (ii) above or others. v. With support from World Wildlife Fund (WWF) Kenya, a registered CIF Observer, the study will assess the role that FSC Sustainable Forest Management Certification can play in successfully addressing social, environmental challenges and sustainability challenges; vi. vii. viii. Based on best practice at the Multilateral Development Banks (MDBs), the study should assess the role of women and youth in such extensive land use management projects, best practices promoting gender equality and social cohesion and how such projects can be designed to maximize job creation for women and men, youth and adults and to ensure equitable and gender aware opportunities across the impacted communities; Study the appetite of commercial banks being involved in this type of investments by identifying current barriers at the local and international level and identifying best practices; This initiative will then design, compare and contrast alternative financial models (fund vehicles) through which debt and/or equity can be invested into green-field and brown-field commercial forestry plantations in Africa. The results will inform the potential creation of the African Forestry Fund a tiered private equity fund or a debt fund that could benefit from junior equity or junior debt or any other credit enhancement mechanisms through the deployment of concessional resources with the ultimate goal of stimulating the development of commercially-led plantations on the continent Deliverables and Timetable 11. All deliverables will be submitted to AfDB in accordance with an indicative schedule to be included in the detailed TOR. The consultants will, in their final proposal, propose a timeline and a list of deliverables that reflect, in their view, the needs of the assignment. At this stage it is expected that the services will last for no longer than 6 months during which an inception and final report shall be issued and vetted by AfDB. Selection Criteria 12. AfDB now invites eligible Consultancy Firms to indicate their interest in providing these services. Interested firms must provide information indicating that they are qualified to perform the

6 services (experience documents / brochures, description of similar assignments, experience in similar sectors, availability of appropriate skills among staff, etc.). 13. The eligibility criteria, the establishment of a short list and the selection procedure shall be in conformity with the Bank s Institutional Procedures for the Recruitment of Consultants. Please note that interest expressed by a Consulting Firm does not imply any obligation on the part of the Bank to include the firm in the shortlist. 14. Expressions of interest must be delivered via to g.phillips@afdb.org, m.sales@afdb.org and b.ayissi@afdb.org by no later than 28 th February 2018 at 17:00 Abidjan local time and specifically mention Evaluation of Alternative Private Investment Models for Commercial Forestry in Africa. 15. Following the establishment of a short-list, a Request for Proposals (RFP) including detailed TOR will be submitted to the short-listed candidates only. Among other things, short-listed companies will be requested to propose a detailed methodology explaining how the assignment will be undertaken. AfDB will make its selection based on the technical quality of each proposal by undertaking an evaluation of the experience of the firm, the qualifications and experience of key members of the proposed team and the proposed methodology. 16. The team of consultants will be hired to work directly with the Manager, Climate Finance Division (PECG.1) as well as any other colleagues he/she may appoint from time to time. The Consultant firm will propose a project team of no more than three members including up to two senior consultants and junior consultant(s). 17. Detailed Curriculum Vitae of the proposed personnel should be included. 18. The Evaluation Criteria for the technical proposal are: Consultant s Experience Relevant to the Proposed Assignment 20% Understanding of the Terms of Reference and Proposed Methodology 35% Qualifications and Relevant experience of Key Personnel 40% Experience with Development Financial Institutions 5% TOTAL 100% 19. The points given to the evaluation of sub-criteria for the qualifications and experience of key personnel include: General Qualifications 30% Competences and Experience in the Field of the Assignment 45% Experience with Development Financial Institutions 10% Language Proficiency in English (preferably) but also French 10% Knowledge of the African Region 10% TOTAL 100%