Policy Design and Recommendations for Green Capital Market Incentives for Sustainable Development: Kazakhstan and Mongolia

Location:

Regional

Business sector:

Financial institutions

Funding source:

Not Yet Determined

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

07 Sep 2020

Closing date:

19 Oct 2020   at  16:00   London

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06/10/2020 - Closing Date to submit proposal has been extended until 19 October 2020.

23/09/2020 Closing Date to submit proposals has been extended by one week until 12 October 2020.

22/09/2020 Responses to Clarification Questions can be found on the following link: http://www.ebrd.com/documents/procurement/84545-clarifications.pdf

Single Stage Open Competitive Selection – Request for Proposals

Project Description:
One of the main functions of capital markets is to connect companies seeking capital with investors who are willing to invest into various types of securities such as debt and equity. However, it is questionable if capital markets have fully recognised the value of sustainability yet and allocate capital where it is most needed for long-term sustainable growth. Currently, capital markets do not fully reflect environmental considerations, thus the environmental impact of economic activity does not sufficiently influence the cost of capital for companies investing in sustainable technologies and businesses.
To address the important role of capital markets in sustainable development the European Bank for Reconstruction and Development (the “EBRD” or the “Bank”) is seeking to engage a firm to design a set of recommended capital market incentives for Kazakhstan and Mongolia. The aim of the incentives will be to create an enabling environment where green companies and projects can flourish and access capital markets at cheaper costs.

Assignment Description:
The specific objective of this project is to analyse how capital markets can narrow the existing financing gaps faced by sustainable businesses and projects with a set of various incentives. The incentives will include various policies, regulations and market practices that will facilitate and encourage more capital market investments into sustainable business. The consultant, therefore, will need to explore how financial market players, including central bank, banks, issuers, investors, intermediaries, insurers, rating agencies, stock exchanges and others, can be incentivised and incentivise others to increase the amount and efficiency of finance for sustainable growth. The public report will include the expected barriers, high-level roadmaps for implementation of each incentive and the expected quantitative results / outcomes. The study will cover Kazakhstan and Mongolia.

The selected Consultant is expected to provide the following services:

Activity 1: Provide a stock-take on the emerging local and international initiatives, policies and practices in greening the financial market worldwide. Present a set of various capital market incentives and policies that will successfully incentivise financial market participants to better and more support the growth of sustainable companies and projects via debt and equity instruments including chosen case studies. Conduct a review of past and present economic recovery plans that had green policy/market incentive measures with the aim of creating more jobs and stimulate greener growth. The importance of capital markets’ role in financing sustainable growth will be highlighted and a number of case studies from other countries will be included.

Activity 2: For each country, 1) develop a precise definition of sustainable growth and set quantitative sustainable growth targets that should be achieved by local capital markets including foreign investors (“Green Capital Market Targets”) compared to the status quo. 2) Analyse the current barriers in relation to capital market access faced by sustainable businesses from both quantitative and qualitative aspects. 3) Conduct a gap analysis, comparing the required financing needs based on Green Capital Market Targets and what can be achieved in the current capital market set-ups and overall financial sector environment. The Consultant will take into consideration other on-going development in Kazakhstan and Mongolia to avoid any unnecessary duplication of the efforts. 4) Suggest a set of country-specific capital market initiatives and policies. For each incentive and policy, the Consultant will identify the expected quantitative/ qualitative results, potential challenges, solutions, risks and possible mitigation methods. The consultant will examine the expected impacts on foreign investments with capital market incentives and propose new types of equity and debt instruments for sustainable growth for each country.

Activity 3: The Consultant will prepare a high-level roadmap for each country that describes the type, category, priority, cost, ease of implementation, urgency of each proposed measure and select the top three to five that can be and/or should be implemented immediately.

Activity 4: Prepare a public report based on the deliverables from Activities 1-3. The report will present an overview of various green capital market incentives and include country specific analyses and recommendations. The report should be professionally edited according to EBRD style and published in British English, Russian and Mongolian. To promote the report and its key recommendations the Consultant will prepare visibility measures, including an infographic and a short video clip (up to maximum 2 minutes). The consultant will co-organise a public presentation of the report with the EBRD. The Consultant has to cover the costs for proof reading for all three languages, printing of the report, visibility measures and organisation of the public presentation including catering. It is planned to hold the public event on the premises of the EBRD Headquarters in London subject to applicable travel, health and safety guidelines.

The detailed scope of work and services (the “Services”) of the Assignment are further described in the Full Terms of Reference (the “ToR”) which can be accessed from the following link:

http://www.ebrd.com/documents/procurement/84545-tor.pdf

Consultant Selection Procedure: Single stage open competitive selection. Interested firms or groups of firms are invited to submit a Technical and Financial Proposal.

Assignment Start Date and Duration: The Assignment is expected to start in November 2020 and has an estimated overall duration of 8 months.

Cost Estimate for the Assignment: EUR 210,461.00 (exclusive of VAT).

Funding Source: It is anticipated that the contract will be financed by the Japan-EBRD Cooperation Fund (JECF). Selection and contracting are subject to the availability of funding.

Eligibility: There are no eligibility restrictions based on the consultant's country of origin.

Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms with previous project experience related to:

Environmental policy, green and sustainable finance, corporate finance, ESG (Environmental, Social and Governance) criteria and the capital market ecosystem.

The Consultant's expert team is expected to include the following key experts (the 'Key Experts'):

Key Expert 1, Sustainable Finance / Capital Market Expert / Team Leader
• Preferably more than 10 years of professional experience in sustainable finance with in-depth knowledge of global environmental policies;
• Profound understanding of overall capital market ecosystem;
• Excellent knowledge of debt and equity capital markets in emerging and developing economies;
• Preferably 5 years of previous project management experience including acting as Team Leader on similar assignments;
• Excellent communication, analytical, report writing and presentation skills; and
• High proficiency in written and spoken English.

Key Expert 2, Environmental Economist
• Preferably more than 10 years of professional experience in environmental economics and green policy analysis and advisory services, including in emerging and developing countries;
• In-depth knowledge of green fiscal and monetary policy and related international best practices and initiatives, including the EU Sustainable Finance, TCFD, NGFS, Coalition of Finance Ministers for Climate Action, Green Fiscal Policy Network and others;
• Strong understanding of economy-wide decarbonisation pathways and scenarios, as well as understanding of carbon market mechanisms and instruments and social costs of carbon and environmental degradation;
• Excellent analytical and writing skills;
• Proficiency in written and spoken English.

Key Expert 3, ESG Investment Expert
• A demonstrable previous investment track record with recent experiences in integrating ESG factors in investment decision-making and fund-manager selection;
• Familiar with international best practices of analysing and reporting ESG factors and their impact, and ESG related benchmarks;
• In-depth knowledge of capital markets and additional knowledge and experience in emerging/developing markets;
• Proficiency in written and spoken English language.

Key Expert 4, Quantitative Analyst
• Ability to conduct quantitative analysis on topics related to sustainable investing while understanding and analysing various sources of sustainability data using a range of statistical and econometric methods; and
• Extensive experience with 1) visualisation and quality assurance of data and 2) quantitative analysis of sustainability factors and financial metrics

The key experts may be complemented by other team members and support services to cover all tasks specified in the Terms of Reference. As such the list of key experts is not an exhaustive list of all skills and competencies needed to fulfil this assignment. Consultants should note that one person could have more than one role (e.g., the Team Leader could also be a specialist) and one role could be filled by more than one person.

All experts should be fluent in English and have experience in the countries which have been selected in this assignment.

Submission Requirements: The consultants are now invited to submit a completed Technical and Financial Proposal as per the standard templates and instructions available at:

http://www.ebrd.com/documents/procurement/single-stage-procurement-package-for-firms.docx

Interested Consultants should make themselves familiar with these Standard Templates, Standard Instructions and Conditions of Contract in preparation of their proposals.

The Technical Proposal shall be submitted in English electronically via eSelection not later than the Closing Date, as one single PDF file. The technical proposal should not exceed 25 pages excluding the Declaration Form and CVs (Form 1- TP 1 and Form 1 – TP 6).

The Financial Proposal (Form 2 – FP 1 and FP2) shall be submitted in English separately by email only to the following e-mail address: PODDprocurement@ebrd.com

Please indicate the Project number and title in the subject of your e-mail. Consultants are reminded of the requirement to ensure the confidentiality of the Financial Proposals.

A Technical Proposal that contains elements of a financial proposal shall be declared non-responsive.

A Financial Proposal submitted together with the technical proposals via e Selection shall be declared non-responsive.

For the avoidance of doubt, technical proposals should be sent through eSelection and NOT to the above email address. Financial proposals should be sent to the above email address and NOT through eSelection or Bank Contact Person.

Bank Contact Person:
Aleksandra Lewandowska
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
e-mail: lewandoa@ebrd.com

Deadline to Submit Clarification Questions is 17 September 2020 via e-mail to: PODDprocurement@ebrd.com

Selection Method and Evaluation Criteria:

Technical Proposal Evaluation Criteria

(a) Firm's previous project experience in similar assignments (30%)
(b) Quality of the methodology proposed for the Assignment (30 %)
(c) CVs of the Key Experts (40 %).

The minimum technical score (St) required to pass is 70.

Interviews (as part of the Technical Evaluation)

Following the evaluation under the technical criteria from (a) to (c) inclusive above, up to five firms with a combined score of 70% or above will be invited to interviews. The interviews must be attended by key experts of the Project, including the Team Leader, the Environmental Economist, the ESG Investment Expert and the Quantitative Analyst.

The EBRD will advise the Consultant regarding the format (e.g. video call, conference call etc.) and date of the interviews at the time of the invitation. Please note that all and any costs incurred by the Consultant in connection with attendance to interviews shall be borne by the Consultant.

Combined Technical and Interviews Evaluation and Ranking:

The weights given to the Technical (T) and Interview (I) evaluation are:
T = 80 and I = 20

Submissions will be ranked according to their combined technical (St) and interview (Si) scores using the weights (T=the weight given to the Technical; I = the weight given to the Interview; T+I=1) as following: S=St x T% + Si x I%.

Opening of Financial Proposals

After the technical evaluation is completed, only the submissions which score 70 or above of the total marks available for the technical criteria will be eligible to have their financial proposals opened.

Combined Technical and Financial Evaluation

The lowest evaluated Financial Proposal (Fm) is given the maximum financial score (Sf) of 100. The formula for determining the financial scores (Sf) of all other Proposals is calculated as follows:

Sf = 100 x Fm/ F, in which “Sf” is the financial score, “Fm” is the lowest evaluated Financial Proposal, and “F” the price of the Proposal under consideration.

Proposals are then ranked according to their combined technical (St) and financial (Sf) scores using the weights (T = 80; F = 20) T + F = 100 as follows: S = St x T% + Sf x F%.

Important Notes:

The proposal validity period is 120 days from the deadline date for the receipt of submissions. During this period, the Consultant shall maintain its original Proposal without any change, including the availability of the Experts, the proposed rates and the total price.

The selection will be made from the Proposals received in response to this notification only, on the basis of the submission requirements and selection criteria set out in this Procurement Notice. The highest-ranked Consultant will be selected and invited to negotiate the contract, subject to availability of funding.

Any updates of and clarifications on this procurement notice shall be announced as updates on this notice, without any other notification. In the event of changes consultants will need to download the updated versions. Consultants are required to periodically check the notice for updates. Failure to take the updates into account while preparing the Proposal may result in disqualification or penalties to the scores in the evaluation.