Regional: Methodology to Incorporate Climat Change Policy Scenarios into Prudent State Budget Management



Business sector:

Financial institutions

Funding source:

Not Yet Determined

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

31 Mar 2015

Closing date:

17 Apr 2015   at  00:59   London

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Assignment Description: The European Bank for Reconstruction and Development (the EBRD or the Bank) aims at developing the following study: Methodology to Incorporate Different Climate Change Policy Scenarios into Prudent State Budget Management (the Assignment).

The Bank intends to engage a consulting company (the Consultant) to carry out the above mentioned Assignment.

The expected outcomes of the Assignment are:
• To provide an analytical framework and a solid methodology to understand, estimate and manage the fiscal implications of climate change policies on Governments budgets.
• To help Governments design appropriate risk management strategies, so that they can prudently manage their national budgets under uncertain (policy, technological, socioeconomic) circumstances related to climate change.
• To encourage Governments to act more strategically and proactively by mainstreaming climate change considerations into their budgets and fiscal policies.

The methodology will be a major deliverable of the EBRD for the COP21 of Paris. It is intended to increase the Bank’s profile in climate change negotiation, and to reinforce its traditional role of policy guidance and dialogue with its countries of operation.

The selected Consultant is expected to provide the following services:
a) Prepare a detailed methodology that describes the channels through which climate change policy agreements - or other events such as technological progress that makes energy efficiency and renewable technologies more competitive versus coventional fossil fuels - will impact Governments’ public accounts (mainly annual budgets). The analysis will cover the most relevant assets and income types, such as natural resources and carbon-related infrastructure in the hands of Goverments or in private hands but which affect their national budgets through direct taxation and royalties. Indirect and economy-wide impacts (such as those covered by general equilibrium models) are not the object of this assignment.
b) Discuss sensitivity parameters that will affect results (taxation levels, dividend payments, royalties, ownership levels & independence of the State-owned companies for Government; share of revenues from exports, etc.). The study will not only focus on the costs faced by Governments that are rich in fossil fuel resources or have significant carbon-entangled infrastructure assets (power plants, transport infrastructure), but also on the assets and incomes whose value will increase as a consequence of such changes, like renewable energy assets, or income derived from recyling strategies of carbon taxes/credits.
c) Identify relevant data, which looks into the State ownership of main assets types and income souces, and tentatively quantify –subject to data availability and budget constraints- the impact of the climate change policy scenarios on the national accounts of the main EBRD countries of operation. The data will feed into a wider study that the EBRD is carrying out with the World Bank Group, which uses the WBG ENVISAGE general equilibrim model.
d) Propose solid risk management strategies (portfolio-based) that help Goverments that are exposed to significant asset valuation changes and volatility as a consequence of climat change policy developments or equivalent circumstances make a prudent management of their budget and seek for counterbalancing meaures. A proposal of a recycling strategy for revenues derived from carbon taxes or auctions as well as a diversification strategy away from carbon intensive assets are some of the aspects that could be covered.

All these tasks will be collated into a final report (60 pages approx., word format, including appropriate images, tables, graphs) written in English. The report will later turn into a publication that will be presented at the COP 21. Please note that the publication of the report will not be covered through this assignment.

Subject to the Bank’s specific needs, the availability of funding and the satisfactory performance of the Consultant, this assignment might be extended through the implementation of case studies in EBRD countries of operation, which will allow the methodology to be expanded and tested. The case studies will possibly have a budget more or less similar than the one that is provided for this assignment.

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

Assignment Start Date and Duration: The Assignment is expected to start on 1st May 2015 and has an estimated overall duration of five months.

Cost Estimate for the Assignment: EUR 74,700 (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 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: It is expected that the Assignment will be funded through EBRD's Technical Cooperation Funds. Please note selection and contracting will be subject to the availability of funding.

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 or international/ scientific publications related to:
1. The analysis of "stranded assets", focusing on assets ownership and with a budget management angle.
2. The analysis of drivers and barriers affecting low carbon investments, linked with the climate change negotiation.
3. Partial equilibrium models preferably in carbon-entangled sectors, notably fossil fuel reserves and energy infrastructure.
4. Financial tools preferably for sustainable energy and low carbon emission sectors.

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

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 previous project experience or similar assignments particularly 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 (if different from duration) , 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 12 pages excluding CVs and contact sheet.

The complete expression of interest (including CVs, Consultant Declaration and Contact Sheet) should be submitted, in English, electronically through e-Selection, to reach the Bank not later than the closing date. The expression of interest shall be one file (pdf). The EBRD reserves the right to reject applications of firms submitting more than one file. Only if the permissible file size is exceeded (4MB), the Consultant may split the expression of interest into further files.

Bank Contact Person:
Sophie Medert
Technical Co-operation
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
Tel: + 44 20 7338 7371
e-mail: (submissions should be sent through eSelection and NOT to this email address)

1. The selection will normally be made from responses to this notification only. Consultants will not be asked to submit a proposal. The highest-ranked Consultant will be selected from a shortlist and be invited to negotiate the contract, subject to availability of funding.
2. The evaluation criteria are as follows:
(a) Firm’s previous project experience in or international/ scientific publications on analysis of "stranded assets", with a budget management angle (50%);
(b) Firm’s previous experience in the development and implementation of partial equilibrium energy models and related financial tools, preferably in carbon-entangled sectors (20%)
(c) CVs of key experts (30%)