Terms of reference - Business Advocacy Fund BAF, Phase III (BAF III) Kenya

Terms of reference - Business Advocacy Fund BAF, Phase III (BAF III) Kenya 2016 2020 Contract period Phase One: 1 July 2016 31 December 2018 Phase Two: 1 January 2019 30 June 2020 (Optional and Conditional) 1. Introduction These Terms of Reference (TOR) cover the appointment of a Fund Manager to administer and manage phase III of the Business Advocacy Fund (BAF). The Danish Government supported the establishment of the first phase of BAF (BAF I) from 2006 to 2010. This was an innovative initiative for the improvement of the business environment in Kenya. BAF I was the first attempt to support private sector institutions to take ownership and responsibility for the improvement of the business climate and to encourage them to engage more effectively in public private dialogue and private sector advocacy. The principal rationale of BAF is to enable Business Membership Organisations (BMOs) to develop policy positions, which they can then use to advocate policy reform to government. The expectations are: (a) that government is more inclined to change public policy as a result of dialogue with affected parties; (b) that reforming policy will improve the business enabling environment for business; and, (c) that an improved enabling environment will lead to a more vibrant and competitive private sector, more investments and job creation, and stimulation of more men, women and young people to start businesses. More businesses that generate more profit will lead to increased tax revenue thus reinforcing the government s desire to make a difference. Through BAF I support has been extended to Business Membership Organisations (BMO) and others to engage in public-private dialogue and advocacy with the objective of delivering policies, laws and regulations for an improved business climate at national and county level. BAF I funded advocacy proposals and training support to build advocacy competence; BAF II extended the scope with sustainability support to BMOs and pilot support to media. BAF I and II have fostered a whole range of results to improve the business climate in Kenya, and the return on investment in further support to BAF is still high. BAF II is administered by a Fund Manager whose contract has been extended through a no cost extension up to end of June 2016. The Danish support for BAF III is provided within the framework of the Danish Country Programme for Kenya 2016 2020 with a total budget of DKK 970.5 million. BAF III is an integral part of the thematic programme of green growth and employment with nine partners and a total budget of DKK 500 million. The Danish support is in the form of core funding of DKK 68 million for the implementation of BAF III. The support covers the period July 2016 to the end of June 2020. 2. BAF III Focus areas The two original main activities of BAF I, funding advocacy proposals and training support to build advocacy competence, were successfully delivered and did lead to policy change. This was an important achievement in that it demonstrated that the Government of Kenya was prepared to engage in dialogue, to entertain proposals for policy reform and to agree to and implement policy change. A third activity, to address BMO sustainability, was piloted in BAF I. A review of the 380+ BMOs that BAF had identified indicated that approximately 10 could be described as financially independent and organisationally sustainable. The implication was that unless more became sustainable there would be a continuing (and possibly growing) need for external support. 1

Sustainability Support was developed and piloted as a programme of support to encourage the building of new streams of income. The results of the pilot were encouraging. A second programme of support was provided (BAF II) starting in 2011, which will run to the end June 2016. BAF II focuses on three core activities: building competence to engage in dialogue; grants for advocacy, and sustainability support. BAF II has an increased focus on micro, small and medium (MSME) business climate issues since regulations designed to work for small businesses are also appropriate for larger businesses. BAF II aimed to assist more BMOs to become financially independent and organisationally sustainable and to create a greater critical mass of BMOs able to hold government to account and securing improved coverage in the media to raise awareness of the importance of the private sector to economic growth and the need to make it easier for them to do business. BAF III includes an explicit focus on improving the policy and regulatory framework for a green economy. BAF III will directly address the objective of the thematic programme, expand the media support and add a fifth component on knowledge management. BAF III Windows are as follows: Window 1 (Output 1): Capacity Building DKK Million 4.0 BAF provides capacity building, grants and mentoring support: capacity building to help develop the skills and knowledge required for advocacy; grants to pursue an advocacy project; and mentoring support to assist the implementation and helping to keep the project on track. Window 2 (Output 2): Advocacy, Networks DKK Million 30.0 Projects have to be advocacy oriented and their relevance must be demonstrated. The Fund may provide grants for projects designed to achieve at least one of the following: Developing research capability and undertaking research, Strengthening advocacy capability and undertaking advocacy and Developing a capability to monitor and evaluate activities which impact on the business environment Window 3 (Output 3): Knowledge Portal DKK Million 0.1 BAF III will increase support to knowledge sharing by the creation of a knowledge portal. The intention is to set up a knowledge portal, ideally with a research institution or a BMO. Window 4 (Output 4): Media DKK Million 1.5 BAF III will assist media to ensure that media will have improved their coverage of business enabling environment and green growth issues by engaging with journalists to enable them to be more effective advocates of the business agenda. In this way, policy makers decisions may be positively influenced by the media. These activities will be undertaken in such a way that the likelihood of successful outcomes is improved without attempting to change the media landscape itself. Window 5 (Output 5): Sustainability Support DKK Million 8.4 Associations are eligible for sustainability support if they can demonstrate that they have a project which has the potential to earn income and/ or to persuade members to pay their subscriptions. BAF undertakes an initial appraisal and can then assist with a process, geared to the needs of the association, which typically includes a strategic review and preparation of a strategy, a review of the organisational structure required to implement the strategy, preparation of a business plan for a 2

specific income earning project, and a revenue support grant, tapered over a period of one to two years, to cover the costs of implementing the project whilst the association attracts paying clients. 2.1. Outputs Four outputs are stipulated for the Engagement: i. BMOs and Civil Society Organisations (CSOs) have improved their skills and capabilities to engage with government and participate effectively in dialogue and advocacy on a sustainable basis (delivered through two activities: Capacity Building & Mentoring support; and Sustainability Technical & Financial Support). ii. BMOs and Ministries, Departments and Agencies have worked together to achieve changes in public policy (delivered through provision of Advocacy Grants). iii. Knowledge and information related to regulation, regulatory reform, government data and good practice in dialogue is more widely available (delivered through creation and management of a Knowledge Portal). iv. The media is more aware and has improved coverage of business enabling environment and green growth issues (delivered through Media Awareness Creation). Kindly refer to the Development Engagement Document (DED) for a detailed listing of the outputs of the engagement annex 8.1 3. Management of BAF III BAF is not a legal entity in its own right (being a donor funded project). The first two phases of BAF were implemented by a fund manager contracted under an international competitive tender process. BAF III will be implemented in the same way. A Fund Manager will be appointed through a EU tender process to administer and manage the BAF III. The initial contract period will be from 1 July 2016 31 December 2018 with possibility for extension until the end of June 2020. The current Fund Manager for BAF II has contract up to end of June 2016, and the above timing allows for a seamless handover. It is envisaged that other donors may agree to provide additional funds to support the BAF III, and arrangements will in such situation be worked out ad hoc with the Fund Manager. The Danish Embassy will appoint BAF Board members through a formal letter of appointment. The Board will ensure that the objectives and strategies are realised and that the fund remains fully aligned to and supportive of national policies and strategies. It will oversee the implementation of the Fund by the Fund Manager; this will include submitting the annual work plans and budgets to the BAF Board for discussion and approval. The Board will be responsible for approving grants under the fund and for the overall monitoring of supported activities and outputs, and monitoring of auditing procedures and results. The BAF Board will comprise (but will not necessarily be limited to) six members: i. Four prominent business leaders from the private sector, with the chairperson appointed from this group; ii. A representative from the Treasury; iii. A representative from the RDE. Should other development partners agree to contribute to the BAF; options for their participation on the Board will be considered. The Fund Manager will refer to the Ministry of Foreign Affairs in Copenhagen on all contractual issues related to his own contract with Danida. On professional issues, the Fund Manager will report to the BAF III Board. 3

4. Objectives and Activities of the BAF III Fund Manager The objective of engaging a firm or a consortium of firms (Fund Manager) to manage the fund and provide the technical assistance is to ensure that BAF III is managed in the most efficient and effective way with an optimal impact on the strengthening of BMOs, CSO and NGOs participating in the programme, and to ensure that financial management and controls adhere to the Danida Aid Management Guidelines (AMG) and to internationally accepted accounting practices. This Fund Manager is therefore expected to be able to demonstrate international experience and exposure to similar tasks and responsibilities. 4.1. Responsibilities and activities of the BAF III Fund Manager The Fund Manager will be responsible for all the operations of BAF III and shall serve as Secretary to the Board. This entails a whole range of activities. The responsibility includes monitoring and reporting on the progress and achievements of the development engagement using a results framework and Monitoring and Evaluation (M&E) system developed by the Fund Manager. The M&E system will focus on the key information required for effective management of the BAF at each level: BAF operations, projects supported by BAF, and BAF s achievement of its outputs and outcomes. The objectives of M&E will be to: Measure the results and effectiveness of the BAF in meeting its objectives to help ensure informed decision making; Measure the achievement of objectives and assess their impacts on the development of target BMOs; Enhance organisational sustainability and learning; and Generate information to disseminate learning arising from the BAF and stimulate replication among the BMOs as a whole. The activities of the Fund Manager will include but not necessarily be limited to - the following: Maintain the office in Nairobi; Periodically update the policies and procedures that govern the management of the fund and present these to the BAF III Board for approval; Ensure that the necessary financial management, accounting and reporting systems for the Fund are established and maintained; Actively market the fund to raise awareness among potential applicants and attract appropriate applications; Offer targeted assistance to enable BMOs, who might otherwise be unable to apply to the Fund, to prepare applications, particularly targeting priority groups, which are currently underrepresented in policy processes, recognising the need for proposals to complement the objectives set out in the Private Sector Development Strategy; Screen applications against the eligibility criteria; Submit applications that pass the screening process, together with (non-binding) recommendations to the BAF III Board for approval; Notify successful applicants following Board decisions; Gather and consolidate monitoring information on utilisation of grants; Provide monitoring information on applications and on grants made as needed by the established M&E system and incorporate lessons learnt through evaluation and impact assessment; Prepare and submit work plans, budgets and reports on progress against agreed performance indicators; Build effective stakeholder relationships; 4

Adjust and maintain the financial management, accounting and reporting systems for the Fund in accordance with the expanded scope of the BAF III and within Danida AMG and with internationally accepted accounting standards and practices including setting up accounting, payments and administration system internal control procedures; Provide overall financial management supervision of the application of the Fund; Provide a bank guarantee for any funds advanced to it under the Green Growth and Employment programme; Maintain the dedicated Green Growth and Employment bank account for the Fund; Receive funds from the Danish Embassy and from other donors channelled through the Embassy into the account and issue grants directly to grantees identified and approved by the Fund. The Fund Manager will ensure that bank guarantees are issued for all funds received from the Embassy; Prepare quarterly and annual financial reports. The financial reports should comprise of actual, budget and forecast expenditure; Prepare accounts for external audit; Maintain and provide all necessary documents and information including invoices from providers, suppliers, air ticket stubs etc., for the purpose of verification and audit; Refund to the Embassy any amount spent contrary to the instructions and regulations issued by the Green Growth and Employment programme management, and Repay any unspent part of the BSPS II programme funds with any interest accrued to the Embassy while submitting the final audited accounts in connection with the completion of the contract. Transfer of funds for the BAF III Engagement will follow two routes: Funds for all grants to be awarded by BAF III as well as other costs agreed by the BAF Board will be transferred from the Embassy of Denmark to a dedicated account to be established by the BAF III Fund Manager. The bank account will be managed jointly by the BAF III Fund Manager and the Board; Funds related to all operational costs of the BAF III Secretariat, including salaries, will be transferred directly from Danida Copenhagen to the BAF III Consultant according to the conditions of the contract between the two parties. Funds will be managed according to the Danida Financial Management and Procurement guidelines, which follow internationally recognised accounting and auditing principles. When an application is approved the Fund Manager will disburse funds to the concerned organisation or business service provider. The Fund Manager will monitor that funds are utilised by the organisation/service provider that has received the support, whereas the concerned organisation/service provider will be responsible for managing the funds. 4.2. Expected Results The Fund Manager will be expected to deliver a range of results in relation to the operations of BAF III. Please refer to the detailed results framework attached to this document under annex 8.2 BAF III Fund Manager will report to the Board on the following: Annual work plans (for approval) Progress reports (for approval) Annual audits (for endorsement) 5

5. Inputs by the BAF III Fund Manager 5.1. List of Key Personnel and profile for Key Personnel Key personnel While the staffing components of the BAF III will be contained in the proposals presented by the tendering parties, it is anticipated that the following key positions will be included: - Fund Manager: This person will be responsible for managing all operations of the BAF III. The manager will report to the BAF III Board. - BMO Capacity Building Officers (Two): These are new positions created in the BAF III to coordinate and oversee BAF s support for capacity building (Output 3). One of the BMO Capacity Building Officers will act as deputy and will be responsible for the Fund in the absence of the Fund Manager. Both BMO CB-Officers will be responsible for recruiting and utilising a team of consultants, trainers and mentors who can provide one-on-one support, as well as delivering training courses addressing all of the development needs of supported BMOs. Key functions of both officers will include: Design of tools and processes for the selection of BMOs to participate in the capacity building programme; Design of training courses and mentor support services to selected BMOs; Field supervision of consultants, mentors, trainers and other capacity building activities; Organise review meetings and business processes; Implementation of internal and external milestones and monitoring and evaluation procedures, and Documentation of lessons learnt. - Financial Controller: This person will ensure that the financial aspect of BAF III is adequately recorded and monitored. - Grant Officer: This person will assist the Fund Manager on all BAF III operations. - IT and Communications Specialist: This person will lead the BAF III strategy on IT and communications. Fund Manager - Profile A Fund manager with at least 10 years of leadership experience in relation to the management of business advocacy challenge funds and private sector development issues; The fund manager should have a minimum of a post graduate degree in Economics, Finance or a related discipline. Must demonstrate proven competency with tools of fund managements and grants administration within a business advocacy context targeted BMOs and related broader business environment stakeholders; Experience in providing leadership and guidance to a team; manage, mentor, and periodically evaluate the performance of the staff in accordance with laid down policies and procedures and international best practices; Proven experience with interacting with Boards of Directors or steering committees as a fund manager within a private sector development context; Proven experience from working with multiple donors/development partners and/or development banks in the context of a delegated cooperation agreement is important; Experience working as a facilitator/convener of dialogue between the Public and the Private Sector and the establishment of PPP Platforms are highly desirable. 6

Experience in the region and language International Exposure is a must. Experience from working in East Africa or in Kenya with Kenyan BMOs is an advantage. Fluency in English. Senior BMO Capacity Building Officer (Deputy) Must have a minimum experience of 5 years of BMO provision and or management of BMO providers to SMEs and Business Associations at a senior level on a donor funded project; Must have a minimum of a post graduate degree in business management, economics or a related discipline; Experience with programme management and team leadership. Proven track record in the main responsibilities of the CB Officer including Designing of tools and processes for the selection of BMOs to participate in the capacity building programme; Designing of training courses and mentor support services to selected BMOs; Field supervision of consultants, mentors, trainers and other capacity building activities; Organise review meetings and business processes; Implementation of internal and external milestones and monitoring and evaluation procedures, and Documentation of lessons learnt. Experience in the region and language Experience from working in East Africa or Kenya within a Fund Management setup providing BMO services is a significant advantage; Fluency in English. BMO Capacity Building Officer Must have a minimum experience of 5 years of BMO provision and or management of BMO providers to SMEs and Business Associations at a senior level on a donor funded project; Must have a minimum of a post graduate degree in business management, economics or a related discipline; Proven track record in the main responsibilities of the CB Officer including Designing of tools and processes for the selection of BMOs to participate in the capacity building programme; Designing of training courses and mentor support services to selected BMOs; Field supervision of consultants, mentors, trainers and other capacity building activities; Organise review meetings and business processes; Implementation of internal and external milestones and monitoring and evaluation procedures, and Documentation of lessons learnt. Experience in the region and language Experience from working in East Africa or Kenya within a Fund Management setup providing BMO services is a significant advantage; Fluency in English. 7

Financial Controller Must have a minimum of 5 years of financial management experience at senior level on a donor funded project. Must have a minimum of a post graduate degree in finance and or accounting; a chartered accountant will have a distinct advantage. Hands on experience in providing oversight for bank reconciliations, accounts, ledgers, and reporting systems plus ensuring compliance with appropriate Generally Accepted Accounting Principles, regulatory requirements, budget and audit requirements; Experience from managing the financial obligation process on a daily basis, which includes creating, modifying and obligating fund accounts and managing cross-activity transfers where appropriate; Must be practically familiar with concepts of liquidity management, asset-liability management and treasury management; Working knowledge in data report extraction, preparing quarterly reports, and any other financial information and resolve any discrepancies as required; Proven experience from working with multiple donors/development partners and/or development banks in the context of a delegated cooperation agreement is important. Experience in the region and language Experience from working in Kenya within a fund management setup serving Kenyan Business Associations, Institutions and funds providers is a significant advantage. Fluency in English. Grant Officer Must have a minimum of 5 years of grant management experience at senior level on a donor funded project. Must have a minimum of a graduate degree in finance, economics or a related discipline; post graduate will be an added advantage Must have hands on experience with grant administration and management to Business Associations and Media organisations for Business Advocacy; Must demonstrate competency with project implementation, supervision and appropriate documentation in relation to contractual obligations under grant agreements; Experience from managing grantees and monitors, fostering relationships between grantees and monitors, receiving and screening reports from grantees and monitors, including field visits to ensure attainment of advocacy goals. Experience in ensuring appropriate systems are in place for filing and input to computerised databases are accurate plus experience in preparing grant disbursement schedules and managing errors and delays. Experience in the region and language Experience from working in Kenya within a fund management setup serving Kenyan Business Associations, Institutions and funds providers is a significant advantage. Fluency in English. 8

IT and Communications Specialist Must have a minimum of 5 years experience in Communications and IT related issues at a senior level on a donor funded project related to Business Advocacy; Must have a minimum of a graduate degree in project management, IT, communications or a related discipline; post graduate will be an added advantage. Must be practically familiar with the production and issuance of communications, to multi stakeholders plus logistics planning for promotional events, exhibitions, workshops and conferences; Experience in monitoring local and foreign media and the creation of a media library that tracks issues to aid Business advocacy in a local context; Must demonstrate competency in website management in collaboration with webmaster, developing and publishing of audio-visual and written materials plus; Experience from providing IT related support (software and hardware)to a team of consultants within a Fund Management setup; Experience in the region and language Experience from working in Kenya within a Fund Management setup as an IT and Communications Specialist is a significant advantage. Fluency in English International and national specialists In addition to the permanent staff of the BAF III Secretariat, the BAF Consultant is supposed to provide ad hoc short-term international and national technical assistance according to identified needs. In total, the BAF III Consultant s technical proposal should include 14 months of international short-term technical assistance (5 months optional). Support staff The BAF III Consultant will provide all necessary support staff required for the implementation. 6. Requirements to the Consultant s Home office management technical back-up, quality assurance and business integrity management The Consultant s home office shall provide the following, to be covered by the Consultant s overhead: General home office administration and professional back-up; The Consultant shall nominate an Assignment Manager with overall responsibility for the Consultant s assignment, normally stationed at the Consultant s home office, but making regular (e.g. semi-annual) management visits to the BAF III office in Nairobi and to liaise with relevant stakeholders including but not limited to the Danish Embassy. Quality assurance (QA) of the consultancy services in accordance with the Consultant s quality management and quality assurance system, as described in the application for qualification and specified in the technical tender. 7. Financial proposal The budget should be prepared in line with the requirements outlined in the Tender Document, Appendix 3 Remuneration and Payment. The price proposal should therefore include (A) 9

Breakdown of fees and (B) Project related expenses. It is important that all costs related to the full and flexible operation of the BAF III Fund Manager are included as other project related expenses in the price proposal, i.e. office rent and equipment, office expenses, communication, vehicle operation and maintenance etc., covering the first phase until 31 December 2018 and the possible extension of 18 months. The consultant s financial proposal shall include all costs for fee and staff related expenses as well as short-term consultancies, local travel, equipment, local support staff and office running costs, office rent, QA visit and assignment manager visit. Key personnel in person months Key Personnel 2016 1 2017 2018 Phase 1 2019 2020 Phase 2 Total Fund Manager 6.0 10.5 10.5 27.0 10.5 6.0 16.5 43.5 BMO CB Officer (Deputy) 6.0 10.5 10.5 27.0 10.5 6.0 16.5 43.5 BMO CB Officer 6.0 10.5 10.5 27.0 10.5 6.0 16.5 43.5 Financial Controller 6.0 10.5 10.5 27.0 10.5 6.0 16.5 43.5 Grant Officer 6.0 10.5 10.5 27.0 10.5 6.0 16.5 43.5 IT Communication 6.0 10.5 10.5 27.0 10.5 6.0 16.5 43.5 Specialist Short term consultant 1 4 4 9 4 1 5 14 Total 37 67 67 171 67 37 104 275 7.1. Special Consideration i. The contract will have an initial duration of two and a half years (1 July 2016 to 31 December 2018) with the possibility of an extension for another year and a half (1 January 2019 to 31 June 2020). The 2018 mid-term review will make a recommendation to the Embassy on the extension of the contract. Should an extension be approved based on review, recommendations and results, the Fund Manager shall sign an extension of contract. ii. iii. iv. Should the Embassy find it necessary to replace the Fund Manager, this shall be notified in writing six months before the end of the phase I contract. This tender has a maximum budget of 24 million DKK for both phases. The Fund Manager will be expected to take over an active running projects portfolio from BAF II. The incumbent shall hand over the active portfolio and the fund manager shall work with this active portfolio as they work on new projects. v. The Fund Manager will be taking over an inventory from the existing BAF II setup. Please refer to annex 8.3. It will be expected that the Fund Manager will have to replace 15% of the existing inventory upon commencing the assignment in order to continue a smooth implementation of BAF III. 8. List of attached background documents 8.1. Annex: Development Engagement Document for BAF III 8.2. Annex: Results Matrix 8.3. Annex: Current Office Inventory List 8.4. The Kenya Country Programme (Including annexes) 1 as defined in the 3.2 - Terms of Remuneration point 2 Frees 10