The European Bank for Reconstruction and Development (the EBRD or the Bank) has recently launched the Albania Agribusiness Support Facility ("AASF" or the "Facility") a framework operation of up to EUR 100 million.
AASF is a comprehensive programme that includes the following components: (i) Agribusiness Credit Lines; (ii) Agribusiness Risk-Sharing Facilities; (iii) First Loss Risk Cover ("FLRC") through grant funds provided by the Albanian Government, and (iv) a Technical Assistance programme ("TA" or the "Programme"), which will consist of two components:
(1) PFI Capacity Building TA – to support PFIs developing and enhancing their internal capacities to lend to the agribusiness sector; and
(2) Agribusiness sector-specific TA, comprising a comprehensive assessment of potential sector bottlenecks hindering access to finance (led by the Agribusiness team) and advisory services to PFIs’ sub-borrowers and potential sub-borrowers (led by the EBRD’s Advice for Small Businesses (ASB).
Through the Facility, the Bank aims to enhance access to finance for local agribusinesses by combining funding and/or risk-sharing support to Albanian banks and microfinance institutions (collectively the “Participating Financial Institutions” or “PFIs”) to increase lending to the agribusiness sector on one hand, with support for agribusiness entities with business advice and know-how on the other. As the Facility is rolled out, the Bank will engage with the Government, investors and other donors on the development of a roadmap for future sector interventions.
The Bank is now seeking to retain the services of a Project Consultant to implement Component A) above. PFIs will benefit from specific tailor-made assistance to address the challenges they face in financing the sector, including, among others: development of new products or enhancement of existing agribusiness products, enhancement of underwriting policies and procedures for agribusiness lending, staff training, potential operational/organisational changes to accommodate new focus on agribusiness lending, introduction of innovative financing schemes and delivery channels, processing, monitoring and reporting systems, as well as general Facility implementation support. The TC will be customised and tailored to the needs and requirements of each PFI.
Agriculture is a key economic sector in Albania generating c.20% of GDP (vs. 2% average in the EU) and is the main source of employment in rural areas, counting for about 48% of the employed population (vs. 3% in the EU). The key challenge remains transforming agriculture from a subsistence-oriented production into a modern, commercial and competitive sector.
Despite the favourable climate and soil composition which offer advantageous conditions for the development of agriculture in Albania, the sector is characterised by low productivity and underdeveloped rural areas which is due to several structural and legal issues as well as very limited access to finance. Reasons for such low levels of financing are rooted to both supply and demand factors.
On the supply side, local financial institutions have been conservative with agriculture lending. Financing of this sector carries higher risks which require specific skills to manage and high operational costs. As a result, banks have not generally invested in products and technical know-how to build effective agro-lending capacities.
On the demand side, agribusinesses often do not meet the necessary requirements to access financing. Lack of collateral, absence of licences and business plans and overall high level of informality in the sector are serious barriers for obtaining financing. In this context of market failure, an integrated mechanism to connect sources of funding with businesses in need of funding would appear to be critical in closing the gap between demand and supply and contribute to the overall Albanian agribusiness sector growth by providing both dedicated financing and advisory services to these businesses.
The selected Project Consultant is expected to provide, among others, consultancy services as follows:
1) Review existing agribusiness lending processes and product(s) as well as map the target client base, including identifying gaps and analysing rejection rates.
2) Help improve PFIs’ understanding of enterprises operating in the agribusiness sector, their business and cash-flow cycles, inherent risk factors differentiated by sub-sectors and patterns of use of financial services and products; help compile (if not already existing) analysis of historical performance of agribusiness portfolio by sub-sector in each PFI.
3) Develop sustainable credit mechanisms as appropriate to enable PFIs to develop and deliver financial products and services tailored to Agribusiness SMEs – Institutional capacity building.
4) Optimise existing agribusiness lending product(s), where applicable, based on the analysis of competitiveness and market potential. Assess the potential to improve collateral mix requirements at each PFI and support PFIs in implementing the necessary changes.
5) Develop, test and roll out new product(s), if and as necessary, tailored to the target group, and tailored for each PFI, taking into account specific barriers faced by agribusinesses to access finance as identified by the initial review (see point 1) above).
6) Product development and introduction of other credit delivery solutions should be supported with adequate IT/MIS infrastructure. Introduce or enhance, as the case may be in each PFI, agribusiness loan underwriting policies and procedures, taking into account existing experience, network structure and staff capacity; provide staff training - including training of trainers.
7) Optimise business processes and organisational structure for agribusiness lending, aiming at increasing efficiency while maintaining adequate risk taking levels and provide bank staff training to specifically address the target group needs. If necessary, design and develop appropriate operational changes in organisational structures, business models and strategies, and procedures to assist the PFIs to efficiently start or continue and expand lending to the target agribusiness group.
8) Assist PFIs in marketing and outreach to the target group;
9) Provide general Programme management support functions including risk sharing claims and administration functions.
Status of Selection Process: Interested firms or groups of firms are hereby invited to submit their expressions of interest.
Assignment Start Date and Duration: The Assignment is expected to start in September 2016, and has an estimated overall duration of 36 months.
Cost Estimate for the Assignment: EUR 2,000,000; exclusive of VAT. An initial contract of 1.5 years will be for up to €944,000 with a possibility of extension by up to €1,056,000 for a further 1.5 years subject to project needs, the Consultant’s satisfactory performance and the availability of funding.
Subject to availability of funding, the performance of the selected Consultant and the specific needs of the project, 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 special status of the Bank 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 purchased 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: The Project will be financed using funds made available through the Bank's Donor funded Technical Co-operation Programme.
Eligibility: There are no eligibility restrictions.
Consultant Profile: Corporate services are required. The Consultant should be a firm or a consortium of firms with:
• Proven, substantial and a strong track record in the development and implementation of agribusiness lending;
• Ability to implement multi-faceted TC projects of similar size, complexity and duration;
• Experience in the design and marketing of tailored agribusiness loan products;
• Experience in delivering training courses for loan officers in agri-lending;
• Experience in development/use of credit scoring as a decision-making tool;
• Access to technical agronomic expertise;
• Relevant experience in Albania and other emerging markets or similar operating environments.
• Expertise in value chain finance, including experience in identifying value chains and developing value chain finance, will be an advantage.
Certain tasks (e.g., surveys) may be outsourced (sub-contracted) to other firms. However, the Consultant will remain ultimately responsible for all activities and outputs under the Assignment.
The Consultant team should include, but not be limited to:
• a Project Manager/Team Leader with proven track record in successfully managing the implementation of agribusiness lending schemes, including product development, at commercial banks in emerging markets and similar operating environments, including in managing multi-bank/complex programmes; excellent communication, training, presentation and linguistic skills; proven experience in negotiating with third parties including banks, associations, ministries, regulatory authorities and other stakeholders on behalf of International Financial Institutions;
• Agribusiness Financing Expert(s): Proven track record as agribusiness lending specialist (preferably in Albania or similar operating environments), in particular in agricultural lending capacity building in the financial sector/commercial banks. It is envisaged that the agribusiness specialist(s) will advise on the analysis and design of specific products to agribusinesses; Extensive knowledge on the challenges for agribusiness in obtaining access to finance in Albania and/or similar operating environments; proven skills in qualitative research and analysis of the agribusiness sector; analytical, facilitation and communications skills; relevant language skills will constitute an advantage;
• International and local agronomist(s)and sub-sector specialists with experience in various agribusiness sub-sectors and proven track record in working with commercial banks advising on business cycles, inherent risks, market characteristics and opportunities related to each relevant agribusiness sub-sector, contributing in product development;
• IT/MIS Specialist with practical experience in helping commercial banks in emerging markets and similar operating environments in implementing SME/ agribusiness lending schemes, including in multi country/complex programmes; project work involving agribusiness lending would constitute and advantage; analytical, facilitation and communications skills; relevant language skills will constitute an advantage;
• Training Specialist with experience and proven track record in organizing and delivering professional bank training programmes and development of curricula and training materials;
• Marketing Specialist with knowledge of the agribusiness sector in Albania and relevant experience working with commercial banks active in SME/agribusiness lending operations, with good knowledge of key agri-lending risks, marketing to and credit assessment of agribusinesses and understanding of commercial banks’ loan allocation processes.
Submission Requirements: In order to determine the capability and experience of consulting firms, the information submitted should include the following:
a) Brief overview of the firm/group of firms including company profile, organization and staffing.
b) Details of required 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;
c) 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.
d) Completed Consultant Declaration Form and Contact Sheet, the template for which is available from the following web-link: http://www.ebrd.com/pages/workingwithus/procurement/notices/csu/contact_sheet.doc.
The above information should not exceed 20 pages, excluding CVs and Consultant Declaration Form and Contact Sheet.
The complete expression of interest (including CVs and Contact Sheet) shall be one file (pdf or Word), not exceeding 4MB, to be uploaded to eSelection. The EBRD reserves the right to reject applications of firms submitting more than one file. Only if the permissible file size is exceeded, the Consultant may split the expression of interest into further files.
Expressions of interest shall be submitted in English through eSelection and not directly to the contact person given below, to reach the Bank not later than the closing date for submissions indicated above.
Bank Contact Person:
Principal Advisor, Technical Cooperation Team
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
Tel: +44 20 7338 7185Fax: +44 20 7338 7451
Submissions should be sent through eSelection and NOT to this email address)
1. Following this invitation for Expression of Interest, a short list of qualified consultants will be formally invited to submit proposals. Consultant selection and contracting will be subject to availability of funding.
2. Evaluation of the Expressions of Interest will be based on the following criteria and their respective weightings:
a) Firm’s experience in successfully managing the implementation of Agricultural and SME lending schemes at commercial banks in emerging markets and similar operating environments, including in managing multi country/complex programmes and the development and marketing of financial products 25%
b) Firm’s experience in emerging markets and similar operating environments of agricultural lending institutional development in the financial sector/commercial banks and product development that addresses market needs in terms of agribusinesses access to products/services – 25%
c) Firm’s experience working in Albania or similar environments – 10%
d) CVs of key experts with relevant experience as per the key expert descriptions give above. Language skills will constitute an advantage – 40%