Assignment Background / Description: In order to finance the transition to sustainable and low-carbon economies, consistent with the Paris Agreement, a substantial capital re-allocation from business as usual towards green investments will be required, together with an estimated USD 6-7 trillion in annual green investments over the next 15 years in key sectors such as green buildings, energy efficiency, clean energy, clean transportation and environmental remediation. Despite substantial growth, with more than USD 100 billion issued in 2017, Green Bonds still represent less than 1% of debt securities issued globally.
While the Green and/or Sustainability Bond issuances out of emerging markets are scaling up, driven by the vast investment needs in green technologies, issuers in the European Bank for Reconstruction and Development ("EBRD" or the "Bank") region are lagging behind.
The Bank is therefore establishing a dedicated Green and Sustainability Bond Technical Cooperation Program (the "TC Program") to accelerate the rate of Green and Sustainability Bond issuances in the EBRD region that are aligned with internationally recognized standards, the Green Bond Principles and the Sustainability Bond Guidelnes under the administration of ICMA. The key objectives of the TC Program will be to assist existing and administration of ICMA. The key objectives of the TC Program will be to assist existing and potential financial institution clients ("the Client") of the EBRD in identifying performance gaps that need to be addressed prior to issuing a Green and/or Sustainability Bond and addressing these gaps through the provision of the targeted technical assistance.
Phase 1: Green Bond Readiness Assessment
The objective of the Green/Sustainability Bond Readiness Assessment ("Readinesss Assessment") is to identify the key gaps in the operation of selected financial institutions ("FIs") that need to be addressed in order to align its potential issuance with the Green Bond Principles and/or the Sustainability Bond Guidelines as well as with the most up to date market trends and green investor expectations.
This analysis will be undertaken through (i) review of the overall sustainability profile of the potential issuer and their approach to management of environmental, social, and climate risks associated with their operations; (ii) a review of the FI's procedures, policies and strategies related to both green and non-green investments; (iii) a review of the FI's portfolio and processes for assessment, selection, evaluation, and tracking of individual projects; (iv) review of internal monitoring and reporting systems from the perspective of earmarking green use of proceeds and reporting on the environmental benefits of green investments.
As a result, a detailed Action Plan will be prepared by the Consultant, which includes outlining new processes, as well as resources and skills required together with estimates of the associated costs. The Readiness Assessment is undertaken through a desktop-based review and an interview with the Client. The outputs of this activity will assist the Client to identify necessary steps to take prior to a potential issuance and will assist the EBRD in defining the scope of targeted support to be provided to potential issuers as part of the Phase 2 of the TC Program (the "Assignment").
Phase 2: Action Plan Implementation Support
Dedicated TC can be delivered to target specific gaps listed in the Action Plan, including but not limited to: (i) implementation of ESG safeguards and screening processes; (ii) use of proceeds tracking and reporting; (iii) qualitative and/or quantitative impact reporting and development of programme specific environmental KPIs; and (iv) support of an issuer's first annual green bond. The support to be provided on a slective basis to Clients depending on the commitment to implement the full Action Plan defined as part of the Readiness Assessment (Phase 1) and the Client's willingness to conduct the issuance in alignment with the Green Bond Principles, subject to market conditions.
The above will be undertaken in the context of Green and/or Sustainability Bond issuances which will often be of public nature, therefore, the Consultant is expected to adhere to prevailing confidentiality and material and non-public information related standards.
By providing this new TC Program, the EBRD will be able to assist its clients in (i) reviewing Green and/or Sustainability Bond issuance opportunities, (ii) identifying key gaps to be addressed prior to their issuance, and (iii) assist with addressing these gaps through targeted technical assistance to individual potential issuers.
The Program will cover EBRD technical support for issuing Green and/or Sustainability Bonds by Financial Institutions in the EBRD region, with the portfolio covering a broad range of green and social projects including but not limited to renewable energy, energy efficiency, green residential and non-residential buildings, sustainable transport, sustainable water supply, environmental protection, and climate change adaptation.
The overall objective is to assist the Clients in the preparation, issuance, and reporting of the Green and Sustainability Bonds. The Bank wishes to establish a register of competent and qualified consultants (Green / Sustainability Board Register) that can be called upon when services for specific projects/assignments are requred. The register will be non-exclusive.
Services Required: The main aims of the TC Program are to stimulate the Green and Sustainability bond issuances from the EBRD region.
Assignments conducted under the TC Program will include the following tasks:
Phase 1: Assessment of Green or Sustainability Bond Issuance Readiness
- Discuss with relevant departments of the potential issuer the following key areas of the issuers operation and potential green bond issuance:
a. Issuer sustainability profile: including (but not limted to) review of sustainability strategy, understanding of the role of the entity in global sustainability initiatives (UNPRI, GRI, TCFD), current practice on disclosure on green and non-green aspects of the portfolio, approach to the overall Environmental, Social, and Climate risks of the green and non-green portfolio.
b. Use of proceeds: status of the project portfolio, evaluation of the green assets in the existing portfolio and the pipeline, providing guidance on environmental performance of green assets in the green bond portfolio.
c. Project evaluation and selection system, including relevant environmental, social and climate risk assessment procedures, overview of responsibilities within the organization for project evaluation and selection.
d. Management of proceeds, tracking of proceeds in the internal systems, review of internal IT systems and their capabilities to track additional aspects of projects related to their environmental profile.
e. Current reporting capability of the FI for reporting on green use of proceeds.
f. External review provision.
g. Documentation and envisaged marketing strategy.
- Based on the above analysis the Consultant will compile an Action Plan identifying key gaps in the operations of the Client to be addressed prior to the green bond issuance, taking into account best practice in the current green bond market, identify potential costs, expertise required and tentative timeline for implementation of the relevant activities.
- The readiness assessment shall be undertaken following the most up to date Green Bond Principles and Sustainability Bond Guidelines, following a Readiness Assessment Checklist guidance of the EBRD, and reflecting the evolving market best practice.
Phase 2: Technical Assistance
- Assist with implementation of activities in specific areas related to green bonds and associated internal processes in issuers operations. The targeted technical assistance will be delivered in the areas of:
a. Issuer sustainability profile and overall ESG systems.
b. Use of proceeds
c. Project evaluation and selection system
d. Management of proceeds
e. Reporting
f. Provide an external review
- The specific activities which may be covered will include (but not be limted to):
- Assess the status of the clients portfolio, pipeline and systems vis-a-vis GBP and SBG alignment, and alignment with green performance criteria of investors such as the EBRD;
- Providing in-depth technical studies for specific use of proceeds categories to validate adequate expected environmental performance.
- Support the client in developing relevant internal systems and procedures;
- Capacity building and training of clients' professional staff;
- Support the clients in strengthening their corporate governance e.g. related to their sustainability reporting systems, ESG processes, and climate risk assessment procedures, etc.;
Consultant Profile: Both firms, consortia of firms, and individual experts are eligible to apply for inclusion in the EBRD Green and Sustainability Bond Register.
Interested firms / consortia / individual experts (the 'Consultant') for the Readiness Assessment will have wide knowledge of green bond structuring, underwriting, Green and/or Sustainability bond ratings, ESG ratings, external reviews, existing green bond standards, global voluntary sustainability standards and initiatives, market expectations on green investment criteria and exclusions (such as those of the EBRD, but understanding of general green investor expectations will be critical). Additional areas of expertise are specified in the attached form.
Interested Consultant for the Green and/or Sustainability Bond Targeted Assistance Implementation will have expertise in specific areas detailed in the attached form.
The Consultant should have experience of working in the EBRD region, or at least demonstrate that they can leverage on a network of strong local partners in these countries.
Individual experts will have a proven experience (preferably at least 10 years) in the specific subsector of the assignment (financial institutions), with experience in the Bank's region and preferably familiar with the project appraisal approach the Bank uses.
Assignment Duration: It is anticipated that assignments will be delivered over a period of three years. The assignments under the TC Program are envisaged to be under EUR 75,000.
Maximum Budget: The total maximum budget of the TC Program is EUR 900,000, subject to approval and availability of funds.
Consultant Profile:
Phase 1: Assessment of Green Bond Issuance Readiness
- The Consultant will have experience as an underwriter, arranger or external review provider in Green Bond issuances by Financial Institutions.
- The Consultant must demonstrte as a minimum that they have sufficient competence and experience in these key areas: (i) Issuance of debt instruments in the capital markets and management of funds within issuing organizations, (ii) Technical characteristics and performance green projects & assets, (iii) Experience in working with financial institutions as issuers in emerging markets; (iv) Experience with a variety of green bond standards, in particular with those of Climate Bonds Initiative and Green Bonds Principles; (v) Understanding best practice environmental and social assessment procedures in FIs and current practice in the EBRD region.
- For Consultants applying as a firm or consortium there must be clear allocation of projec tmanagement responsibility.
- Fluent spoken and written English is essential; knowledge of French / Arabic would be an advantage.
Phase 2: Targeted technical assistance
More specifically, the EBRD is looking for Consultants with excellent expertise in at least one of the areas below and good understanding of the remaining areas:
- Financial Expertise: (i) experience in working in a management role in a financial institution; (ii) good understanding of product structuring, monitoring and reporting processes within FIs; (iii) expertise in structuring and marketing of green/sustainability bonds; (iv) experience in working with financial institutions as issuers in emerging markets; (v) experience with a variety of green bond standards, in particular wth those of Climate Bonds initiative and Green Bond Principles (including experience with social bonds), (vi) experience with issuance of debt instruments in the capital markets and management of funds within issuing organizations;
- Engineering/technical Expertise: (i) experience in developing sustainable energy projects, including assessment of project investment plan including its risks and mitigation strategy; (ii) commercially based sustainable energy projects financing, and (iii) calculation of energy savings and greenhouse gas emission reduction for such projects; (iv) experience of explaining engineering measures in financial terms; (v) understanding of MRV procedures for green bond issuances (including best practice in impact and use of proceeds reporting); (vi) understanding of technical characteristics and performance of low carbon, climate resilient, and other environmental projects and assets; (vi) good knowledge of external initiatives such as CPD, TCFD.
- Environmental Expertise: (i) experience in implementing environmental and social procedures in the context of emerging market FIs; (ii) in-depth understanding of E&S policies and exclusions of multilateral development banks; (iii) in-depth understanding of potential calculation of energy savings and greenhouse gas emission reduction for such projects; (iv) experience with relevant voluntary standards and initiatives (e.g. GRI, UNPRI, CDP, TCFD)
- Fluent spoken and written English is essential; knowledge of French / Arabic would be an advantage.
- For Consultants applying as a firm or consortium of firms there must be a clear allocation of project management responsibility.
The Green and Sustainability Bond Register will be non-exclusive.
EBRD will contract registered firms/experts (or other consultants, if appropriate) if and when suitable consulting opportunities arise. Selection of consultants for each assignment under the Program will follow the Bank's standard procedures and be governed by the EBRD's Procurement Policy and Rules ("PP&R"). Link to PP&R is as follows: http//www.ebrd.com/news/publications/policies/procurement-policies-and-rules.html.
For assignments with total estimated costs of less than EUR 75,000 (or equivalent) direct selection of any consultant will be permitted.
For all contracts with total estimated cost in excess of EUR 75,000, competitive selection processes will be conducted in accordance with the Bank's procedures.
For any assignment, the Bank reserves the right to draw a shortlist (as it considers appropriate taking into account project needs) including experts from the Green and Sustainability Bond Register, other consultants or publish a procurement notice with a formal invitation for expressions of interest.
Funding Source: EBRD Special Shareholder Fund, Luxembourg ODA TC Fund
Eligibility: There are no eligibility restrictions.
Submission Requirements: Firms and individual experts are hereby invited to submit expressions of interest (EoIs). All applicants must submit the following documents:
- Consultant Information Sheet
- Company profile outlining key areas of expertise (individual experts should provide a fully-updated CV); and
- Confirmation of sector/area of expertise and project references
The above documentation should not exceed 15 pages in total. Link to templates are as follows: http://www.ebrd.com/documents/climate-finance/get-additional-forms.doc
Failure to meet the above submission requirements, in part or in full, is likely to result in the automatic rejection of the application.
Expression of interest should be submitted in English, by e-mail to the following email address: DeJongF@ebrd.com. There is no deadline for the submission of expressions of interest. Please note that the EBRD is under no obligation to accept or contract firms/experts following this process, All expressions of interest will be reviewed and consultants selected for inclusion in the register will be advised by email.
Notes:
1. The EBRD reserves the right to modify or withdraw the registration system described above for any reason and without prior notice.
2. Submission of an Expression of Interest does not guarantee selection for nay assignments under the Program.
3. It is the Consultant's responsibility to ensure that their contact details are correct.
