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FISClimat Incorporating Climate Change Policy Scenarios into National Budget Planning



Business sector:

Sustainable Resources and Climate Change, Other

Funding source:

EBRD Shareholder Special Fund

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

04 May 2016

Closing date:

31 May 2016   at  23:59   London

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Assignment Description: The European Bank for Reconstruction and Development (the "EBRD" or the "Bank") considers the need for governments to better understand and prepare for the fiscal impacts of climate change mitigation policies, particularly in the aftermath of the United Nations Conference on Climate Change ("COP21") of Paris in December 2015. Given that approximately 70 per cent of fossil fuel reserves and related assets worldwide are owned or controlled by governments, most of the adjustment required to reach the 1.5oC to 2oC target will end up being reflected in national budgets and other fiscal accounts. Despite this fact, very few countries now consider the impact of climate change policies as part of their fiscal planning exercises, and this may hinder their capacity to act strategically to find the tools to reduce exposure or make the most of the opportunities linked to a low-carbon transition.

For these reasons, in 2015, the EBRD started working on the development of a methodology for calculating governments’ fiscal exposure under alternative climate change mitigation policy scenarios. The methodology was designed to identify the direct impacts of climate change mitigation policies, and not on the impacts derived from damages from climate risks or the costs of adaptation policies. The analysis was carried out with the support of sectorial and partial equilibrium models, and thus the methodology does not capture the broader, indirect macroeconomic effects that reduced (or increased) economic activity will have on individuals and companies, which will ultimately reflect on the country´s fiscal accounts (tax collection, employment benefits, etc.). Only national budgets were discussed, and this excludes regional or municipal budgets, which for some types of infrastructure could be relevant. The results of the study were disseminated at a high-level workshop that took place during the COP21. The full report ‘Government Assets: Risks and Opportunities in a changing climate policy landscape’ that was prepared by the Climate Policy Initiative is now available on EBRD website.

The Bank now intends to engage a consulting company (the "Consultant") to expand the work done previously by refining and applying the methodology to two of its countries of operation (the "Assignment"), in line with the Green Economy Transition approach approved by the Board of Directors in September 2015. This will allow to road-test and eventually improve the methodology, if flaws are found. It will also allow widening the range of assets that can be analysed in detail, mainly infrastructure assets, which are country-specific and difficult to frame in a general methodology. Emphasis will be put in helping national authorities see how different climate policy options may have different impacts on their budgets, and on finding solutions to minimise potential negative impacts or optimise positive impacts. Ultimately, the EBRD seeks to promote a methodology that can be broadly used by governments in all of its countries of operation as a tool for prudent fiscal management and asset diversification.

The core objectives of the Assignment are: (a) to critically review the existing methodology for assessing the fiscal impacts of climate change policies, proposing improvements and broadening the range of assets that the methodology can look into; (b) to apply the methodology to two EBRD countries of operation where this issue can be of relevance due to their exposure to fossil fuel or energy-intensive assets; and (c) to work with the national authorities to develop a set of recommendations on how to optimise the fiscal impact of climate change mitigation policies.

Status of Selection Process: Interested firms or groups of firms are hereby invited to submit expressions of interest.

Assignment Duration: The Assignment is expected to start mid August 2016 and has an estimated overall duration of 12 months.

Cost Estimate for the Assignment: EUR 150,000; exclusive of VAT. Subject to availability of funding, the performance of the selected Consultant and the specific needs of the Bank, the Assignment may be extended beyond the current scope.

The consultant must determine whether any VAT would be chargeable on the services and the basis for that determination, without taking into consideration the Bank's special status as an IFI and state this to the Bank in their response to the Invitation for Expressions of Interest. To the extent that a consultant incurs input VAT on goods and services purhcased in connection with the provision of services (e.g. VAT on airline ticket) which is not otherwise recoverable by the consultant from the local tax authority, the gross cost to the consultant of such expenses shall be treated as a reimbursable expense.

Funding Source: This Assignment is funded by the EBRD Shareholder Special Fund (SSF).
Eligibility: There are no eligibility restrictions.

Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms with previous project experience related to:
1) The analysis of stranded assets, both private and state-owned;
2) Estimating fiscal impacts of policy changes, preferably in the fields of energy and/or climate change;
3) The analysis of drivers and barriers affecting low carbon investments, linked with the climate change negotiation;
4) Partial equilibrium models in carbon-entangled sectors, notably fossil fuel reserves and energy infrastructure;
5) Financial tools for sustainable energy and low carbon emission sectors.

Experience in developing climate change and financial assessments for public authorities in EBRD countries of operation will constitute an advantage. Knowledge of the specific policy, energy and economic drivers in the countries that may be selected for the pilots is a strong advantage.

The experience above should be backed by a list of the delivered reports, preferably international/scientific publications, as well as citations in reputed forums.

The Consultant's expert team is expected to include key experts as follows:
a) Expert(s) on energy, infrastructure and climate change policies, with preferably 10 years of experience.
b) Expert(s) on assets valuation, particularly on what the specialised literature has called stranded assets, with preferably 5 years of relevant experience.
c) Expert(s) on energy and infrastructure modelling, with preferably 3 years of relevant experience.
d) Fiscal expert(s), with preferably 3 years of relevant experience.

Submission Requirements: In order to determine the capability and experience of Consultants seeking to be selected for this Assignment, the information submitted should include the following:

1. Company/group of firms' profile, organisation and staffing (max. 2-4 pages);
2. Details of similar experience of firm or group of firms and related assignments undertaken in the previous five years, including information on contract value, contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, percentage carried out by consultant in case of association of firms or subcontracting, main activities, objectives;
3. CVs of key experts who could carry out the Assignment detailing qualifications, experience in similar assignments, particularly assignments undertaken in the previous five years, including information on contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, main activities, objectives.

4. Completed Consultant Declaration Form and Contact Sheet, the template for which is available from the following web-link:
The above information should not exceed 25-30 pages excluding CVs.

The complete expression of interest (including CVs, Contact Sheet and Consultant Declaration Form) shall be one file (pdf or Word) to be uploaded to eSelection. EBRD reserves the right to reject applications of firms submitting more than one file. Only if the permissible file size (4MB) is exceeded, the Consultant may split the expression of interest into further files.

Expressions of Interest shall be submitted, in English, electronically through e-Selection, to reach the Bank not later than the closing date and time indicated above.

Bank Contact Person:
Jenny Scheffel
Principal Advisor, Technical Cooperation Team
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN, United Kingdom
Tel: + 44 20 7338 7088
e-mail: (submissions should be sent through eSelection and NOT to this email address)

1. Following this Invitation for Expression of Interest, a shortlist of qualified firms will be formally invited to submit proposals. Shortlisting and selection will be subject to the availability of funding from an appropriate donor.

2. The evaluation criteria are as follows:
(a) Firm's or group of firms' previous project experience in similar tasks as described in section Consultant Profile (30%);
(b) Firm's or group of firms' previous project experience in the region (20%);
(c) CV of proposed key experts (50%).

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