TERMS OF REFERENCE
- About AECF
The AECF, LLC (Africa Enterprise Challenge Fund) is a leading non-profit development organisation that supports innovative enterprises in the agribusiness and renewable energy sectors with the aim of reducing rural poverty, promoting climate resilient communities, and creating jobs.
We catalyze the private sector by surfacing and commercializing new ideas, business models and technologies designed to increase agricultural productivity, improve farmer incomes, expand clean energy access, reduce greenhouse gas emissions, and improve resilience to the effects of climate change. We finance high risk businesses that struggle to access commercial funding; we are committed to working in frontier markets, fragile contexts, and high-risk economies where few mainstream financing institutions dare to go.
To date, we have supported over 400 businesses in 26 countries in Sub-Saharan Africa, impacted more than 30 million lives, and created over 27,000 direct jobs.
- Background and Rationale
AECF seeks to scale up its climate finance portfolio and support its investees to access the opportunities in the carbon markets space towards achieving the objectives of the Paris Agreement.
The unfolding climate change crisis calls for urgent and concerted efforts by nations across the globe to put in place measures to reduce greenhouse gas (GHG) emissions into the atmosphere. Scientific evidence generated through many years of work by the Inter-Governmental Panel on Climate Change (IPCC) and other scientific bodies has demonstrated beyond doubt that these anthropogenic gases are the key drivers of global warming and climate change.
As part of AECF’s commitments to build low carbon and resilient communities, contribute to the objectives of the Paris Agreement and the Sustainable Development Goals, AECF seeks to mobilise innovative climate finance through leveraging the opportunities of carbon markets. It is in this regard that the AECF is seeking for a consultant to assist develop the AECF Carbon Markets Framework, aggregation platform and assist in building the capacity of the AECF investees to tap into the carbon markets.
3.0 Objectives of the assignment
3.1 Overall objective
The overall objective of this assignment is to support the development of a carbon markets framework, value proposition, carbon product offering, aggregation platform, and first Programme of Activities (PoA) for AECF. These strategic elements will inform the design of an AECF Just Carbon Fund.
3.2 Specific objectives
The following are the specific objectives of the assignment:
- Assess the AECF’s Renewable Energy and Climate Adaptation Technologies (REACT) portfolio readiness for carbon and renewable energy carbon credit trading in up to 9 target country portfolios of AECF investments.
- Identify technical, institutional and investees capacity needs and gaps and develop a business case for AECF carbon finance Technical Assistance offering to its investees.
- Develop AECF’s value proposition to investees, investors and carbon markets.
- Develop AECF Carbon product offering.
- Develop the protocol, platform, contract basis and structure of AECF carbon credit aggregation platform.
- Develop a first Programme of Activities (PoA) for AECF investment in Somalia – most likely green mini-grids.
- Identify and formulate strategic elements to inform the design of the AECF Just Carbon Fund and AECF Carbon Transaction Advisory.
- Scope of work
The following are the terms of reference for the assignment:
- Understanding the needs and landscape for carbon and renewable credit monetisation
- The Consultant is required to undertake a detailed assessment in relation to deliverables 1 and 2 below, based on interviews and business reviews, of AECF’s Renewable Energy and Adaptive Climate Technologies (REACT) investments in the 9 focus countries to understand the technical, institutional and business gaps and opportunities for carbon and renewable energy credit monetisation, NDCs and the interlinkages with the emerging post-2020 climate market mechanisms. This is aimed at understanding the needs and demand of investee companies as well as the opportunities that carbon markets represent for them, and what are the challenges they face in harvesting those opportunities on their own.
- Capacity gaps and needs assessment.
- Understanding the needs and landscape for carbon and renewable credit monetisation
4.2.1. Conduct a regional situation analysis, capacity gaps and needs assessment for Internationally Transferrable Mitigation Outcomes (ITMO) and transfer readiness and voluntary trading to identify investees readiness to participate in carbon trading to inform deliverables 3 and 4 (refer to Section 5).
4.2.2. Identify technical, institutional and capacity building needs for AECF and the investees to develop and operationalize carbon market projects including the market demand, organizational needs, strategic opportunities for investees, ecological and social impacts, and regulatory requirements, and develop a business case for AECF carbon finance Technical Assistance offering for its investees to inform deliverable 4.
4.2.3. Design training manuals and build the capacity of the investees to understand and participate in carbon markets, including their role and responsibility in delivering quality carbon credits such as collecting data on carbon indicators and demonstrating additionality, negotiating partnership agreements for the trade of carbon credits, monitoring and reporting on carbon project indicators, and participate in validation and verification of mitigation activities by independent third-party bodies towards deliverable 4.
4.2.4. Establish the AECF business case and value proposition to investees, investors and carbon markets towards Deliverable 3 and formulate the AECF Carbon Markets Framework to guide the smooth implementation of carbon projects.
4.2.5. Design the protocol, platform, contract basis and structure of AECF carbon credit aggregation platform for bundling carbon credits under deliverable 5 from different related small and growing enterprises projects with clear governance principles to ensure transparency, accountability, avoid double counting, facilitate quality and permanent credits, flexible revenue sharing model (tripartite AECF, Investee and End consumers), robust procedures to avoid, identify and resolve conflicts of interest in its operations and the overall quality of carbon credits and register one PoA.
- Carbon trading
- Develop and register one PoA for Somalia towards deliverable five and participate in carbon markets trading.
- Map the key strategic tenets relevant to the design of the AECF Just Carbon Fund and AECF Carbon Transaction Advisory that will support (TA and financial) the SMEs to generate data, create baselines, design quality business models, engage in favourable contracts, bundle carbon credits and access the carbon markets in line with deliverable 6.
- Carbon trading
- Expected deliverables.
The Consultant is expected to deliver the following:
Format and description
Deliverable 1: Inception report
Written report including a final work plan, budget, and all tools that will be used to deliver the assignment
3 weeks after contract signature
Deliverable 2: Assessment report
Technical, institutional and investees capacity needs and gaps identified and mapped.
A detailed full opportunity assessment of carbon and RE credit monetisation of AECF investments in the 9 focus countries conducted.
An analysis of the business opportunity for AECF from this portfolio to set up a carbon / RE credits aggregation facility defined.
4 weeks after project inception
Deliverable 3: AECF value proposition and product offering document
Justification why AECF should pursue carbon markets opportunities, economic offering and a clear business case for AECF, Investees and the investors established.
A business case for AECF carbon finance Technical Assistance offering to its investees is outlined.
3 Weeks after assessment
Deliverable 4: AECF Carbon Markets Framework, Capacity Building and Training Manuals
AECF Carbon Markets Framework, supporting tools and governance principles.
Capacity building materials, support and mentorship addressing the gaps and needs identified in participating in carbon markets for AECF team and its investees.
Training manuals/Carbon trading guidance note to help investees actively participate in carbon markets trading.
6 weeks after defining value proposition and product offering
Deliverable 5: AECF Carbon Credit Aggregation Platform and One PoA developed
Pre-feasibility study, market study and design for the AECF Credit Aggregation Platform including business model, structure on carbon markets, revenue sharing models, value proposition and anticipated revenues over 5 years considering the opportunities from the AECF portfolio.
AECF carbon credit aggregation/bundling vehicle developed and one PoA registered in Somalia.
12 Weeks after defining value proposition and product offering
Deliverable 6: Document on Just Carbon Fund elements
Key strategic tenets relevant to the design of the AECF Just Carbon Fund and AECF Carbon Transaction Advisory mapped out and a clear road map outlined.
4 Weeks after the Aggregation Platform and PoA development
The work is for 90 days spread over a period of six months from the date of contracting.
The consultant/Consulting firm should demonstrate the following:
- Demonstrates integrity by modelling basic ethical standards.
- Displays cultural, gender, religion, race, nationality, and age sensitivity and adaptability.
- Ability to work in close collaboration with AECF staff, prioritize and meet strict deadlines.
- Demonstrates capacity to plan, organize, and execute effectively.
- Builds strong relationships with internal and external clients.
- Demonstrated ability to function in a team environment and to deal with a complex multi-stakeholder environment.
- Excellent written communication and presentation/public speaking skills focus on results, ability to interact productively in a teamwork environment.
- Qualifications and experience.
The Consultant/Lead consultantshould have the following qualifications:
- At least a master’s degree in environmental Auditing, Carbon Finance, Climate Change Mitigation, Carbon Accounting, Environmental Management, Environmental Engineering or another related discipline.
The consultant/consulting firm should have the following experience:
- Minimum of 10 years of professional experience in carbon finance, carbon projects design, and knowledge of the nexus of carbon finance and experience in compliance (CDM) and voluntary carbon markets (e.g. Gold standard/verra). Understanding of the Paris Agreement, Nationally Determined Contributions and UNFCCC carbon markets guidelines is an added advantage.
- Experience in carbon accounting, and development of GHG inventories in the Energy and Agriculture IPCC sectors.
- Familiarity with international development issues, including an understanding of technical and regulatory matters in the areas of climate change, Article 6.2, 6.4 and sustainable development.
- Demonstrated experience with the development of carbon finance projects in developing countries with at three similar projects conducted in the past.
- Experience in undertaking Capacity Gap and Needs Assessment for carbon market readiness in developing countries. Experience working with SMEs is an added advantage.
- Understanding of monitoring, reporting and verification requirements
- Proven knowledge of the development of carbon markets-related guidance manuals.
- Proposal submission
The bid submission should include the following:
- Methodology and approach for operationalizing. Provide a detailed work program for the scope of work, including the approach that you will be using and the methods to be applied to deliver the set objectives, including reconnaissance survey and field work related to applicable tasks. Cross cutting issues such as environmental, social, governance and gender issues should be considered.
- A detailed schedule for all work with clear timelines, roles and responsibilities and the planned work will be achieved in six months.
- A detailed CV of the Lead consultant should be provided and the summary CVs of the other delivery team members, highlighting related work and experience to this work.
- Statutory documents (Certificate of Registration/Incorporation, Tax Compliance Certificate, VAT Certificate & Business Permit)
- Details of past experience aimed at managing funding of co-operatives/ groups in South Sudan
- Detail of branch network/ agent to facilitate funds transfer within the two operational states.
- Technical and financial proposals must be submitted as separate documents and will need to be submitted in English.
- The preferred currency for the financial proposal is USD.
- EVALUATION CRITERIA FOR TECHNICAL AND FINANCIAL PROPOSALS
An evaluation committee will be formed by the AECF. The same standards of confidentiality will bind all members. The applicant should ensure that they fully respond to all criteria to be comprehensively evaluated.
The AECF may request and receive clarification from any consultant when evaluating a proposal. The evaluation committee may invite some or all consultants to appear before the committee to clarify their proposals. In such an event, the evaluation committee may consider clarifications in evaluating proposals.
In deciding the final selection of a qualified bidder, the technical quality of the proposal will be given a weighting of 70% based on the evaluation criteria. Only the financial proposal of those bidders who qualify technically will be opened. The financial proposal will be allocated a weighting of 30%, and the proposals will be ranked in terms of total points scored.
- Clearly articulated and detailed technical proposal showing clear understanding of the TORs.
- The proposal must respond comprehensively to the tasks outlined in the TORs.
- Bidder must show a schedule of activities with clear milestones, time schedule (only working days).
- A methodology providing details on how each component of the study from item 4.1 – 4.3 will be executed must be provided.
- The methodology must demonstrate a clear understanding of carbon finance, project design (PDD) and the accounting process.
- Data analysis methods to be employed must also be outlined.
Company/Individuals profile and capability statement describing organizational experience
At least 3 projects of similar nature successfully undertaken and completed in the past five (5) years) must be included.
At least 3 contactable references from the previous 3 projects cited above.
Relevant experience, qualifications and capacity to deliver the assignment
AECF reserves the right to determine the structure of the process, number of short-listed participants, the right to withdraw from the proposal process, the right to change this timetable at any time without notice and reserves the right to withdraw this tender at any time, without prior notice and without liability to compensate and/or reimburse any party.
How to apply
The AECF is an Equal Opportunity Employer. The AECF considers all interested candidates based on merit without regard to race, gender, colour, national origin, religion, age, marital status, disability or any other characteristic protected by applicable law.
- Interested firms/individuals are requested to submit their proposal to: firstname.lastname@example.org by 14th April 2023, 5pm (EAT).
- The Subject of the email should read “DESIGN OF AECF CARBON MARKET FRAMEWORK, SME CARBON CREDIT AGGREGATION PLATFORM AND FIRST PROGRAMME OF ACTIVITY 2023”. The AECF shall not be liable for not opening proposals that are submitted with a different subject.
- All questions and clarifications should be sent to email@example.com by 31st March 2023, 5pm (EAT). For more information on AECF, please visit www.aecfafrica.org.
The AECF is obliged by the Kenyan tax authorities to withhold taxes on service contract fees as well as ensure VAT, is charged where applicable. Applicants are advised to ensure that they have a clear understanding of their tax position with regards to provisions of Kenya tax legislation when developing their proposals.
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