INDIVIDUAL CONSULTANT PROCUREMENT NOTICE (National Consultant To Develop RET Vendor Financing Manual) UNDP/PN/13/2016 Date: 27 April 2016 Country: Nepal Description of the assignment: In close consultation with Central Renewable Energy Fund (CREF) Secretariat, The UN Capital Development Fund (UNCDF) and the CleanStart Progarmme, the consultant is required to develop Renewable Energy Technology (RET) vendor financing manual as reference material for CREFs partners, financial institutions (FIs) with focus on household level/size: a. Solar Home System b. Biogas Plants c. Metallic Improved Cook Stoves d. Solar Water Pumping System Project name: Renewable Energy for Rural Livelihood (RERL) Period of assignment/services (if applicable): 47days spread over 3 months (May Aug 2016) Duty Station: Kathmandu with field visits Proposal should be submitted at the following address: Procurement Unit, UNDP (Ref.: UNDP/PN/13/2016: National Consultant To Develop RET Vendor Financing Manual), by email to procurement.np@undp.orgno later than 5:30PM, (Nepal Standard Time) on 8 May 2016. Any request for clarification must be sent in writing, or by standard electronic communication to the e-mail: query.procurement.np@undp.org mentioning Procurement Notice Ref: UNDP/PN/13/2016: National Consultant To Develop RET Vendor Financing Manual (SM), on or before 2 May 2016. The procurement unit will respond to the inquiries through a bulletin by 30 April 2016. The bulletin shall be posted in UNDP Website: http://www.np.undp.org/content/nepal/en/home/operations/procurement.html.inquiries received after the above date and time shall not be entertained. Any delay in UNDP s response shall be not used as a reason for extending the deadline for submission, unless UNDP determines that such an extension is necessary. 1
1. SCOPE OF WORK, RESPONSIBILITIES AND DESCRIPTION OF THE PROPOSED WORK Please refer to the attached ToR (Annex 1) Please submit your application at the following email address: procurement.np@undp.org 2. REQUIREMENTS FOR EXPERIENCE AND QUALIFICATIONS I. Education & Experience: At least postgraduate qualification in business, finance, marketing, economics, energy, or any other related field; At least seven years of professional experience with proven competence in the areas detailed in the scope of work; Experience with renewable energy finance and vendor financing; Knowledge of the financial sector and renewable energy section in Nepal; Experience with carrying out operational assessments and writing operations manuals for financial institutions; Experience in working with diverse set of stakeholders at different levels in the public, private and civil society sectors; Experience in working with development assistance projects (preferably those of the Un or international financial institutions) is an asset. II. Other competencies: Functional competencies: Experience with renewable energy finance and Vendor Financing; Knowledge of the financial sector and renewable energy sector in Nepal; Experience with carrying out operational assessments and writing operational manuals for financial institutions; Strong proven functional skills in analytical writing; experienced in producing concise, executive-level reports and presentations, training modules and materials; High-level communication and presentation skills, using PowerPoint, Word Processor software, often incorporating graphics, flow-charts, diagrams or other visual tools to convey information. Core Competencies: Serves and promotes the vision, values and strategic goals of UNCDF and the CleanStart programme; Focused on delivering results by taking calculated-risks and problem solving approach; Collaborates effectively in a team environment; Fair and transparent decision making; regularly shares information with team members; Organized and good with following-up on pending issues; meets deadlines Clear and upfront communication skills; Good inter-personal skills; Displays cultural and gender sensitivity and adaptability; Promotes learning and knowledge management/sharing; Demonstrates integrity and fairness by modelling UN values and ethical standards; 2
3. DOCUMENTS TO BE INCLUDED WHEN SUBMITTING THE PROPOSAL Interested individual consultants must submit the following documents/information to demonstrate their qualifications: Offeror s Letter to UNDP Confirming Interest and Availability for the Individual Contractor (IC) Assignment along with the completed financial proposal and PII template annexed to this letter. A cover letter with a brief presentation of your consultancy explaining your suitability for the work; Note: A brief methodology on how you will approach and conduct the work (limit to under 1500 words); a) Applicants of 62 years or more require full medical examination and statement of fitness to work to engage in the consultancy b) The candidate has to be an independent consultant (If the candidate is engaged with any organization, the organization employing the candidate will be issued with a Reimbursable Loan Agreement (RLA) to release the employee for the consultancy with UNDP.) c) Due to sheer number of applicants, the procurement unit will contact only competitively selected consultant. 3
4. EVALUATION Individual consultants will be evaluated based on the following methodologies: Cumulative analysis When using this weighted scoring method, the award of the contract should be made to the individual consultant whose offer has been evaluated and determined as: a) responsive/compliant/acceptable, and b) Having received the highest score out of a pre-determined set of weighted technical and financial criteria specific to the solicitation. * Technical Criteria weight; 70% * Financial Criteria weight; 30% Only candidates obtaining a minimum of 49 points in the technical evaluation would be considered for the Financial Evaluation. Criteria Weight Max. Point Technical Criterion A: At least Postgraduate in business, finance, marketing, economics, energy, or any other related fields. 10% 10 Criterion B: RET financing related experience and competencies 20% 20 Criterion C: Knwoeldge of the financial sector and RE sector of Nepal 10% 20 Criterion D: Experience with carrying out operational assessment 10% 10 and developing operational manuals for financial institutions Criterion E: Methodology proposed and innovation of the proposal 5% 05 Criterion F: Understanding and explanation of the ToR 5% 05 Financial Lowest financial proposal 30% 30 Contract will be awarded to the technically qualified consultant who obtains the highest combined score (financial and technical). Lowest Bid Offered X 30 Bid of the Consultant ANNEX ANNEX 1- TERMS OF REFERENCES (TOR) ANNEX 2- GENERAL CONDITIONS OF CONTRACT FOR THE SERVICES OF INDIVIDUAL CONSULTANT ANNEX 3-P11 Form ANNEX 4 - OFFEROR S LETTER TO UNDPCONFIRMING INTEREST AND AVAILABILITY FOR THE INDIVIDUAL CONTRACTOR (IC) ASSIGNMENT 4
ANNEX 1 UNITED NATIONS DEVELOPMENT PROGRAMME TERMS OF REFERENCE I. Position Information Job Code Title: Consultant for the design of a RET vendor finance manual for CREF, NEPAL Department: UNCDF CleanStartProgramme and UNDP/RERL Reports to: CREF Secretariat/UNCDF Nepal Duty Station: Kathmandu Duration: 3 months (47 working days) Expected Estimated Starting Date: 16 May 2016 II. Organizational Context The UN Capital Development Fund (UNCDF) is the UN s capital investment agency for the world s 48 least developed countries. It creates new opportunities for poor people and their communities by increasing access to microfinance and investment capital. UNCDF focuses on Africa and the poorest countries of Asia, with a special commitment to countries emerging from conflict or crisis. It provides seed capital grants and loans and technical support to help financial service providers reach more poor households and small businesses, and local governments finance the capital investments that will improve poor peoples lives. Financial inclusion means universal access, at a reasonable cost, to a wide range of financial services, provided by a variety of sound and sustainable institutions. The range of financial services includes savings, credit, insurance, payments, local money transfers and international remittances. The CleanStartProgramme s vision is to dramatically expand consumer and enterprise financing for lowincome consumers who want to transition to cleaner and more efficient energy. To make this happen it partners with microfinance institutions and energy enterprises offering seed capital and advice to test scalable financing solutions in varying market conditions. As a global programme, CleanStart aims to support low-income consumers in six countries to transition to cleaner and more efficient energy through microfinance by 2017. The programme is designed to provide risk capital and technical assistance to competitively selected financial service providers and energy enterprises to: Develop and refine scalable consumer/enterprise financing models (Output 1: Finance for Clean Energy); Increase the scale potential of these models by tackling critical bottlenecks in the value chain (e.g. distribution, consumer awareness) (Output 2: Technical Assistance for Clean Energy); 5
Make research and tools generated in the process widely available to the industry (Output 3: Global Knowledge and Learning); Advocate for positive industry-wide changes and broker partnerships with upstream value chain actors (e.g. investors, policy makers) (Output 4: Advocacy and Partnerships); CleanStart encourages the brokering of risk-sharing partnerships between downstream as well as upstream value chain actors, as well as de-risking some investment opportunities. In so doing, CleanStart is supporting a range of enterprises beyond microfinance institutions, and promoting financing solutions that go beyond credit for energy. CleanStart was launched as a global programme in 2012. CleanStart was first launched at the country-level in Nepal where it is partnering with four financial services providers that provide energy lending for solar and improved cooking solutions. CleanStartProgramme in Nepal Nepal is one of the first CleanStart countries in Asia. Since April 2014, the CleanStartProgramme has been working closely with financial services providers in Nepal to expand micro-loans for cleaner and more efficient energy such as solar lighting, improved cooking solutions and biogas digesters. In order to promote clean energy financing to low income people CleanStart has identified four financialinstitutions.the four partners are Ace Development Bank Ltd. (ACE); Jeevan BikasSamaj (JBS); Sana KisanBikas Bank (SKBB); and Clean Energy Development Bank Ltd (CEDBL), and together the partners aim to reach at least 102,000 households and microentrepreneurs throughout Nepal. By January 2015, these partners collectively provided energy loans to over 10,000 clients, with the bulk of loans financing solar home systems of 20 Watt peaks or higher. ACE, CEDB and SKBB are providing wholesale financing to microfinance intermediaries of various scales from one of the largest regulated microfinance institutions to small farmers cooperatives. JBS is a retail microfinance institution focused on seven districts in Eastern Nepal. CleanStart has also formalized a partnership with the Alternative Energy Promotion Centre (AEPC). Areas of collaboration include brokering partnerships between financial and energy service providers, quality assurance, advocacy and monitoring and evaluation. Partnership with AEPC is integral to the day to day implementation and monitoring of the programme. AEPC implements the National Rural and Renewable Energy Programme (NRREP). NRREP is the single national programme for off grid and small-scale decentralized energy in Nepal. CleanStart contributes to the goals and targets of NRREP, especially in the establishment of the Central Renewable Energy Fund (CREF). The CleanStart Business Plan for Nepal (endorsed by the Government of Nepal in September, 2012) guides the implementation of CleanStart in the country. CREF (Central Renewable Energy Fund) The Central Renewable Energy Fund (CREF) has been established as the financial intermediation mechanism for the renewable energy sector through the National Rural and Renewable Energy Programme (NRREP) of AEPC in Nepal. The objective of CREF is to function as the core financial mechanism responsible for the effective delivery of subsidies and credits to the renewable energy sector in Nepal. Once operational and proven as an effective financing mechanism for the sector, it is expected that further funds will be committed to CREF by the 6
Government and development partners given the importance of renewable energy in protecting the environment and contributing to rural livelihoods and development. The CREF Financial Management Mechanism 1 will be implemented through private commercial and development banks selected on a transparent and competitive basis, in accordance with well-defined eligibility criteria. Through this assignment, CREF plans to promote Vendor Financing Mechanism. Renewable Energy for Rural Livelihood (RERL) The RERL is a joint programme of the Alternative Energy Promotion Centre (AEPC), GEF and UNDP. The main objective of RERL is to support AEPC/NRREP to remove barriers for up scaling promotion of less disseminated renewable energy technologies such as mini hydro, large micro hydro and large solar PV systems. RERL is also working with CREF to design financing instruments to attract private sector funding and credit in off-grid renewable energy projects. RERL has support CREF to initiated vendor financing for small scale solar pumping in Chitwan district of central Nepal. A Working Group with representation from CREF, UNCDF and RERL will be formed to oversee this activity. III. Functions/ Key expected results Scope of Work The assignment has for objective to develop RET (renewable energy technology) vendor financing manual as reference materials for CREF s partners financial institutions (FIs) with focused on household level/sized: Solar Home System Biogas Plants Metallic Improved Cook Stoves Solar Water Pumping System The consultant will work independently but under the supervision of the CREF secretariat, UNCDF National Programme Coordinator and CleanStart Project Coordinator. The consultant will coordinate with the CREF Secretariat to deliver the outputs of the assignment. CREF will provide support to the consultant to meet with the financial institutions and RET vendors. The assignment will take place in Kathmandu at CREF s office and may include a short trip outside the valley (expected locations are Chitwan, Lamjung, Tanahu) to meet RET vendors. Methodology A. Desk study The desk study aims at identifying manuals, publications, case studies and good practices for RET (Solar, Micro hydro, Improved Water Mills, Biogas and Improved Cook Stoves) vendor financing online and review the current AEPC manual. The desk study will (i) present a list of the documents identified with a summary description of their content and relevance to the assignment; (ii) list the main good practices and lessons learned for RET vendor financing worldwide, (iii) provide an review/analysis of the current AEPC manual, (iv) review the APEC and CREF RET market assessments and (v) store all relevant publications in a Dropbox folder. 1 Please refer to: http://www.aepc.gov.np/?option=resource&page=subresource&mid=3&sub_id=23&id=1 7
B. Stakeholders consultations Meeting with CREF and its partner banks in Kathmandu to understand their interest in RET financing, their current level of activity on RET vendor finance (experience, number of staff trained in the FI, number of vendor selected, outstanding loan portfolio with vendors, number of training of vendors organised, etc.) and assess the technical knowledge they lack to develop RET vendor financing further. Meeting with selected RET vendors to understand their processes and need for financing. Mapping of the financial institutions in Nepal already providing RET vendor financing with an overview of the approaches selected, their current portfolio and lessons learned. C. Vendor Finance manual Based on the desk-study and consultations, the consultant will draft a vendor finance manual presenting the concepts and operations for RET vendor finance. For each section the manual will be divided in two sub-parts: one describing vendor financing in an international context and one proposing specific needs and adaptations for the Nepalese environment (as presented in the proposed table of contents below). With the help of this manual; when any Financial Institution (FI) receives a proposal from potential vendor in order to implement the vendor financing model for renewable energy systems, the FI will be in a better position to do the due diligence of the proposed model, vendor s preparedness in implementing the model and at the same time guide them in making the proposed model better. This manual can also serve as reference manual for the potential vendors for designing the vendor financing scheme for renewable energy systems. The manual will include case studies and examples for each section. The manual will follow the index presented below (adjustments and additional modules are possible and subject to discussion with CREF and UNCDF CleanStart). Proposed table of content for the RET vendor financing manual: a) A brief assessment of the national framework for RET financing and subsidy policies // Overview of the RET subsidy policy of AEPC/ GoN. b) Methodology for vendor to conduct the market assessment of its end-customers for RET financing c) Assessment of the RET vendor market // Mapping of RET vendors (AEPC-approved and non-aepc approved) in Nepal in terms of number and volumes of sales. d) Criteria for banks in order to identify/screen potential vendor identification and screening // Overview of the need for finance from vendors in Nepal (including location, tenor, etc. and general financing conditions for vendor accessing financing from financial institutions). e) Good practices for loan delivery methodology and operational processes // Overview of current vendor financing approaches and processes in Nepal + proposed loan flow process and requirements for RET vendor financing in Nepal. f) Guidelines for Vendors to develop Vendor Financing schemes for RETs - Feasibility assessment: what make the vendor financing scheme feasible, checklist for vendors before starting this model - appropriate locations, clients concentration, clients income profile, renewable energy technologies appropriate for promoting through this model, supply network of the vendor etc. - Marketing approach - Application process application form, document checklist 8
- Appraisal of the application- energy need, sources of income, capacity to pay, client s attitude to repay the loan - Agreement between client and the vendor: determination of appropriate loan terms and conditions, equity contribution, instalments, advancement payment option, - Repayment of loan: repayment liked with after sales services, instalment collection, actions to be taken in case of non-payment of instalment etc. - Necessary tools and templates g) Mapping of the funding flows from CREF to end-customers including bank financing and subsidies - Application - Appraisal - Approval - Disbursement - Collection and delinquency management - Prepayments h) Design of RET vendor financing loan products // Proposed product for CREF and partners banks RET vendor lending (from the financial institutions perspective) - Type of Loan - Use of Loan - Eligibility Criteria and financial analysis of vendor applicants - Preferred Applicants - Loan Amount - Tenure - Pricing (Interest Rate and Service Fees) - Security Required - Documentation Required - Processing Time - Disbursement - Repayment and Account Monitoring i) Evaluating Risks and their mitigation // Risk mapping and mitigation measures for the Nepalese market including the potential support to accelerate vendor financing model in RET market. j) Management Information System for RET vendor finance // Excel templates of data to be collected by CREF partners banks for portfolio management and monitoring k) List of resources and links for RET vendor financing for financial institutions D. Training materials The consultant will develop 3 training curriculum based on the manual: The first curriculum will be a 1-day training for financial institutions managers overseeing the development of RET vendor finance in their institution The second curriculum will be a 2 to 3 days training for loan officers/credit officers dedicated to vendor financing in financial institutions. The third curriculum will be a half-day workshop/training for financial institutions to inform/promote and train RET vendors. 9
The consultant will provide a training of trainers (ToT) to CREF and 3 selected banks (1 common training) presenting the 3 curriculum. The TOT would be of 2 days and will be organized in Kathmandu. The estimated number of participants would be around 10-15. The consultant will be responsible only for delivering the sessions. Other necessary logistic arrangement like venue, training materials and lunch will arranged by the project. E. Review process The manual will be distributed to CREF banks and a few selected vendors for review. A half-day workshop will be organised at CREF to collect feedback from the banks and vendors. The consultant will adjust/correct the manual and training materials after the workshop including the feedback received during the ToT. 3. Expected Outputs/Deliverables: 1. A desk study report containing a list of the documents identified with a brief description of their content and relevance to the assignment; a review of international good practices and lessons learned for RET vendor financing worldwide, an analysis of the current AEPC manual, an overview of the RET market in Nepal (offer and demand) and recommendation towards the adjustment of the proposed table of content for the manual. 2. A report mapping the (CREF and non-cref) financial institutions in Nepal providing RET vendor financing with an overview of their operations, processes, their assessment of the vendor finance market size, the lessons learned and technical needs to develop RET vendor financing further and an overview of the feedback from the RET vendors (AEPC approved and non-aepc approved) interviewed. 3. Vendor finance manual A draft manual for vendor financing with a chapter dedicated to the Nepalese context for each section. 4. Training materials Three complete training curriculum (one for FIs managers, one for FIs loan/credit officers, one for vendors) 5. Review process A final version of the desk study report after comments from CREF, UNCDF and stakeholders A final version of the RET vendor finance manual A final version of the three training curriculum V. Competencies Functional competencies: Experience with renewable energy finance and Vendor Financing; Knowledge of the financial sector and renewable energy sector in Nepal; Experience with carrying out operational assessments and writing operational manuals for financial institutions Strong proven functional skills in analytical writing; experienced in producing concise, executive-level reports and presentations, training modules and materials. High-level communication and presentation skills, using PowerPoint, Word Processor software, often incorporating graphics, flow-charts, diagrams or other visual tools to convey information. 10
Core Competencies: Serves and promotes the vision, values and strategic goals of UNCDF and the CleanStartprogramme; Focused on delivering results by taking calculated-risks and problem solving approach; Collaborates effectively in a team environment; Fair and transparent decision making; regularly shares information with team members; Organized and good with following-up on pending issues; meets deadlines Clear and upfront communication skills; Good inter-personal skills; Displays cultural and gender sensitivity and adaptability; Promotes learning and knowledge management/sharing; Demonstrates integrity and fairness by modelling UN values and ethical standards; VI. Recruitment Qualifications Education and experience: Postgraduate qualification in business, finance, marketing, economics, energy, or related fields. At least seven years of professional experience with proven competence in the areas detailed in the scope of work; Experience with renewable energy finance and Vendor Financing; Knowledge of the financial sector and renewable energy sector in Nepal; Experience with carrying out operational assessments and writing operations manuals for financial institutions; Experience in working with a diverse set of stakeholders at different levels in the public, private and civil society sectors; Experience in working with development assistance projects (preferably those of the UN or international financial institutions) is an asset; 11