TERMS OF REFERENCE Belarus - Innovation Vouchers scheme for climate technologies and services: programme preparation and definition of possible implementation approaches 1. BACKGROUND Technology innovation and deployment is key to help the world address climate change challenges. In the landmark 2015 Paris Agreement, the Parties to the United Nations Framework Convention for Climate Change (UNFCCC) recognised this in no uncertain terms: Accelerating, encouraging and enabling innovation is critical for an effective, long-term global response to climate change and promoting economic growth and sustainable development ; and Parties share a long-term vision on the importance of fully realizing technology development and transfer in order to improve resilience to climate change and to reduce greenhouse gas emissions. Innovation Vouchers are an established mechanism for supporting businesses to innovate especially small and medium-sized enterprises (SMEs). The first such scheme was set up in 1990, and by 2010, the number of schemes had increased to at least 25, implemented at national and regional levels all across Europe (www.greenovate-europe.eu/sites/default/files/publications/kispims_brochure.pdf). In Belarus, an Innovation Voucher Competition was held in 2016 as part of the Energy Research to Innovation program (https://ener2i.eu/innovation_vouchers/belarus). Innovation vouchers help overcome the presence of information and co-ordination failures that inhibit businesses from investing in innovation. SMEs also tend to have many innovative ideas but often lack the necessary capital, technical expertise and/or business expertise to transform their innovation project into a market success. In line with its Green Economy Transition ( GET ) approach, the European Bank for Reconstructions and Development (the Bank or EBRD ), is committed to promote green innovation across its Countries of Operation. In this context, in 2017 two innovation vouchers scheme have been deployed by the Bank in Serbia and in Ukraine: over 80 innovative companies (SMEs and start-ups) have been awarded with Innovation Vouchers supporting Research and Development services in the countries. Through this TC assignment, the Bank is now willing to hire a consultant (the Consultant) to assess the possibility of setting up a new Innovation Voucher scheme in Belarus. 2. OBJECTIVES This TC activity will define the relevance and the scope of an innovation vouchers scheme for Belarus focused on climate technologies 1 (energy, water and material efficiency). It will include an assessment of costs and benefits and the definition of appropriate implementation arrangements. 1 As defined by the Intergovernmental Panel on Climate Change (IPCC) climate technologies cover any piece of equipment, technique, practical knowledge or skills for performing a particular activity that can be used to face climate change. 1
An innovation vouchers programme could be set up in order to support Belarusian private/public sector to manufacture and deploy state-of-the-art climate technologies. This will help Belarusian industry become more competitive through lowering its cost base and helping it meet international standards. The Belarusian industry currently faces multiple barriers to the adoption of best practice technologies and services on resource efficiency. Empirical evidence from EBRD activities in the country shows that financial barriers (e.g., high upfront costs, and/or high financing costs) are the biggest barrier to the uptake of climate technologies. This is followed by knowledge and technical barriers: most firms have limited awareness and capacity to implement new advanced climate technologies. Within the climate technology sector, Belarus has under-developed local supply chains. Currently, many technologies have to be sourced from other countries, with associated incremental costs for local companies. Supporting the development of local companies in climate technologies will help develop local supply chains, lower costs and increase competition. The activity will define costs/benefits and the appropriate implementation arrangements for an Innovation Vouchers scheme in the country. The EBRD's investments in the technological innovation and development of value chains are closely integrated with its technical cooperation (TC) activities. Donor partnerships are needed to address local barriers and specific market failures that hinder the competitiveness of local technology providers and the development of an efficient service industry. The technical support given in this way to governments, regulators and private sector clients is an intrinsic part of the Bank's work and contributes substantially to its transition mandate. The provision of support in the area of R&D and technological innovation can unlock local resources, promote knowledge based economic development patterns and help creating new skills. 3. TASKS AND SCOPE OF WORK The Consultant will carry out the following tasks: Analysis of current status of the local market for climate technologies and services (in terms of availability and implementation) and identification of existing gaps. Assessment of the broad R&D capabilities in the country in the area of climate technologies with a focus on universities, research centres, laboratory test centres, etc. and mapping of relevant stakeholders. The analysis should identify the main gaps in terms of R&D resources, infrastructures and competences in the country. Review of previous/current/upcoming innovation vouchers scheme implemented in Belarus and neighbouring countries. Assessment of the most appropriate innovation voucher scheme to be set up in the country with definition of areas of focus, eligibility criteria, and governance. The Consultant will identify as a minimum: target sectors, eligible beneficiaries (technologies users and/or providers, private/public), eligible R&D service 2
providers; eligible R&D services, vouchers amount and co-financing, size of companies to be supported; potential delivery agency (e.g. local chamber of commerce) and suggested timeframe. The Consultant will review and justify alternative implementation approaches, including an analysis of related costs and expected benefits. Local consultation on the relevance of an innovation voucher scheme in the country with relevant stakeholders identified. 4. DELIVERABLES The Consultant s work will result into a MS Power Point based report which will include all the findings of the activity. The Consultant will submit the following deliverables: Within 2 weeks from the starting date of the contract: methodological note and proposed structure of the PPT report (in English). Within 8 weeks from the starting date of the contract: o Climate technologies gap analysis; o Assessment of the broad R&D capabilities in Belarus in the area of climate technologies; o Database of local universities, research centres and laboratory test centres which could be involved in the programme; o R&D gap analysis. Within 10 weeks from the starting date of the contract: draft final PPT (in English) will all findings and proposed innovation vouchers scheme. The final report will also be translated in a local language (with prior confirmation from EBRD). The Consultant will also provide a final presentation of all main findings in a dedicated session to be organised either in Minsk or at the EBRD HQ in London indicatively within 12 weeks from the starting date of the contract. 5. IMPLEMENTATION ARRANGEMENTS The work of the Consultant will be primarily based on existing available information including country specific reports and publications. The Consultant conducts at least 2 country missions to complete the collection of information and the determination of the inputs needed to finalise the analysis. The EBRD main technical counterparts in the development of the assignment would be based in in London and in Moscow. 6. CONSULTANT PROFILE The Consultant should have established expertise in manufacturing of climate technologies especially in respect to R&D requirements and in the development of supply chains in manufacturing. 3
In addition, previous experience in setting up innovation programmes in the area of technology and industrial processes is essential. Local knowledge is also a requirement especially in connection to the local support mechanisms for R&D and in respect to the capacity and expertise in Belarus on research, testing, supply chain development. 4
ANNEX Description of an Innovation Voucher Programme What is an Innovation Voucher? A voucher provided to a business, worth between EUR 5,000 and EUR 50,000, to partially or fully pay for an external expert to help the business innovate to adopt/expand their manufacture or use of climate technologies. The voucher will pay for between 50% and 100% of incurred costs. What services can be accessed? R&D technology design, customisation, applied research. Testing Certification Market research Developing and protecting intellectual property Innovation advice covering any part of the business related to climate technologies Who can provide these services? Pre-selected organisations and experts, which include: Universities and further education colleges Research and technology centres Technical consultancies Design advisers Intellectual property advisers A list of pre-selected organisations and experts will be developed as part of project preparation activities, and made available to potential and existing clients. The list will kept live during the operational phase to keep open the possibility of adding service providers, in order to meet clients needs as best as possible. What activities would not be eligible? Purely theoretical research Standard business advice not related to innovation Any services not related to climate technologies VAT cannot be paid for using the vouchers Technologies that are widely used in the Belarusian market Who could be eligible? Private, domestic companies. The business will demonstrably need help with innovating in order to either begin or upscale manufacture of climate technologies; or adopt or increase deployment of climate technologies. How would the process work? The scheme will be run by an EBRD-selected consultant ( Managing Consultant ). The steps for beneficiaries will be: Application register and apply online Applicant eligibility is assessed Offer is made to selected companies The company accepts the offer and receive a voucher The company contracts the work and gets it completed 5
After the work is complete the company requests and receives a short report (following EBRD guidelines) from the supplier with a copy to the EBRD and the managing consultant. The managing consultant verifies the work. The company pays for the work and then redeems their voucher with the EBRD. 6