AFRICAN DEVELOPMENT BANK GROUP CLIMATE CHANGE AND GREEN GROWTH DEPARTMENT

Financial Sector Credit Facility for SMEs (FSCFS)

Request for Expressions of Interest (REOI)

  1. Introduction

The Paris Agreement on Climate Change mandates all countries, including those in Africa, to submit Nationally Determined Contributions (NDCs) as their commitment to keeping global warming below 2oC for which 53 African countries have obliged with a project cost of about USD 1.2 trillion by 2030. All projections indicate that about 75% of this cost will come from the private sector. However, the private sector in Africa is lagging in mobilising the financial resources required to support the implementation of NDCs on the continent. To support the private sector, the Bank’s Climate Change and Green Growth Department (PECG) launched the Private Sector Investment Initiative for NDCs in Africa in six pilot countries – Angola, Egypt, Morocco, Mozambique, Nigeria and South Africa – financed by the Fund for Private Sector Assistance (FAPA). The initiative aims to boost private sector participation in climate action through profitable direct and indirect green investments through financial intermediaries in the following key sectors: agri-business, renewable energy and energy efficiency, waste management, water and irrigation, green buildings and cities, transport and infrastructure. Under the initiative, PECG carried out seven scoping studies in Angola, Egypt, Mozambique, Morocco, Nigeria, South Africa and one Africa-wide study to identify entry points for private sector participation in the implementation of NDCs in Africa and each pilot country. The studies also highlight challenges to private sector participation in NDC implementation and recommend solutions.

Among the key challenges identified in the scoping studies include limited access to affordable finance for African small and medium-sized enterprises (SMEs) with green bankable projects and limited climate change mainstreaming capacity among African financial institutions to identify, screen and build pipelines of bankable green investments. In this regard, PECG and the Bank’s Financial Sector Development Department (PIFD) are joining forces to create a credit facility to support African financial institutions and SMEs to. access climate finance and promote green investment in the continent.

Additionally, the Bank is launching the Youth Adapt initiative – a commitment to boost sustainable job creation through support to entrepreneurship and youth-led innovation in climate change adaptation in Africa. Youth Adapt is one of the four approved flagship initiatives arising from the recent high-level partnership signed between the Bank and the Global Centre on Adaptation (GCA) under the Africa Adaptation Acceleration Program (AAAP). The objectives of the Youth Adapt initiative are to: (1) unlock USD 500 million in credit for adaptation action by innovative youth-owned enterprises (50% women-led); (2) directly strengthen the productivity and growth of youth-owned enterprises to increase community-level climate resilience and boost job creation; (3) develop the skills of 1 million African youth to prepare them for climate resilient jobs and climate change adaptation entrepreneurial opportunities; and (4) work with African governments to support reforms to remove structural barriers to create an enabling environment for resilient enterprise development. Under the Youth Adapt initiative, the Bank is launching the ‘Youth Adapt Finance’. The Youth Adapt Finance will leverage the Bank’s credit line facility to boost lending to youth entrepreneurs that have innovative mitigation and adaptation solutions.

In line with this, the African Development Bank (AfDB) requires the service of a consulting firm to contribute to the development of the Financial Sector Credit Facility for SMEs (the Credit Facility) and mobilization of resources from the Green Climate Fund (GCF). In the initial phase, seven pilot countries are targeted: Nigeria, Mali, South Africa, Gabon, Egypt, Kenya, and Seychelles. The selected countries have demonstrated high levels of awareness and ownership of NDCs across branches of government, national civil societies and private sector stakeholders.

  1. OBJECTIVES OF ASSIGNMENT

The overarching goal of this credit facility is to scale up SMEs’ access to climate finance and promote green investment in agri-business, renewable energy and energy efficiency, waste management, water and irrigation, green buildings and cities, transport and infrastructure on the continent through the mobilization of concessional and non-concessional resources to be channelled to African SMEs including those own or led by youth.

  1. SCOPE OF CONSULTANCY ASSIGNMENT

The expected duration of the consultancy is 5 months. Its main deliverables are:

  • Market assessments in the targeted countries to assess, among other things, the current green investment landscape in each country, the current scale of private sector participation in the implementation of NDCs, the challenges faced by the private sector, sectoral market potentials, the role of financial institutions and solutions to scale up the participation of the private sector and financial institutions in the implementation of NDCs. These assessments will include a jobs creation assessment of the credit facility.
  • The firm will also assess the policy, legal, regulatory environments in the target countries to inform the design of the Youth Adapt Finance and Youths led businesses and will contribute to building a pipeline of projects to be funded when the Credit Facility is in place.
  • Support the AfDB in the design of the Credit Facility by providing guidance and technical input to ensure its successful roll-out. This deliverable will include support to the AfDB to select a pipeline of projects to be funded based on the outcomes of the market assessments.
  • Prepare the proposal to be submitted by the AfDB to the GCF. The firm will in fact be required to draft, revise and finalize the proposal to the GCF including its various required attachments and all annexes such as the financial model and an assessment of the expected outcomes of the Credit Facility.

The expected outputs and deliverables of the consultancy include:

  • Comprehensive market assessment report.
  • Policy environment assessment report.
  • Support to the AfDB to design the Credit Facility.
  • Completed GCF funding proposal with its required attachments.

  1. Eligibility

This expression of interested is targeted at the public and private research centers/institutions, universities, NGOs, national or regional climate and technology centers and private firms with a specialization in green investments, private sector development and clean technology development and transfer in African countries.

The eligibility criteria, the establishment of a short list and the selection procedure shall be in conformity with the Bank’s Rules and Procedure for the Use of Consultants under projects financed by the Bank Group, May 2008 Edition, revised on July 2012 available on the AfDB Website

  1. Submission of the EOI

The selection process is divided in two phases:

  • Submission of the Expression of Interest containing an outline of the project proposal.
  • Submission of the full proposal by the shortlisted institutions

Please, note that interest expressed by a party does not imply any obligation on the part of the Bank to include it in the shortlist.

Expressions of interest must be received by e-mail to the below address no later than 30 June 2021, with the subject line ” Financial Sector Credit Facility for SMEs (FSCFS)– Call for proposals”. All submitting parties will receive a confirmation email. If you do not receive a confirmation email, your EOI might not have been received.

For the Attention of:

Mr. Al-Hamndou Dorsouma,

Division Manager

Climate Change and Green Growth Division

African Development Bank

E-mail: [email protected]

Please copy all emails to: [email protected] and [email protected]