Expression of Interest For Assessment Of Green Finance Opportunities

Expression of Interest are invited for Assessment of Green Finance Opportunities in Africa For the purpose of the study, the Consultant should conduct a country-specific analysis of the environment, the demand and the supply for green finance, the resulting financing gap and the potential opportunities broken down by type (mitigation, adaptation, other environmental, mixed), and by sector and/or asset class. The relevance of the segmentation by sector and/or asset class will be key to structure the whole study. As such, it is expected that the Consultant suggests a market segmentation based on a limited number of relevant sectors[4]. Within those sectors, the Consultant should then suggest an additional breakdown by asset class / sub-asset class[5] when this breakdown is useful to highlight specific market dynamics. A view by financing type (adaptation vs. mitigation vs. other environmental vs. mixed finance) is also expected. The initial approach will encompass all African countries for the enabling environment maturity and the opportunity sizing and then will focus on 10 key target countries to be analyzed with higher detail. The suggested scope of work consists of the following 3 main workstreams: I. The lay of the land Assessing countries overall potential and C&E environment The Consultant will first provide an assessment of country-specific C&E-related stakes, including both risks and opportunities. - Assessment of specific C&E stakes and consequences on the countrys economy - High-level assessment of C&E-related opportunities The Consultant will assess the national C&E finance enabling environment, including specific regulatory environment based on different elements including existence of laws, regulations, policies related to C&E finance both from a general perspective (government policies, green strategies, sectorial policies) and from a financial sector perspective (financial stability and climate-related financial risks, regulation and supervision). NB: Only a qualitative analysis is expected for the assessment of potential climate-related risks (no quantification) II. The demand side Assessing countries specific demand for green finance The Consultant will build a relevant categorization (to be pre-approved) of the green finance needs, detailed by sector, by asset class, by use (adaptation vs. mitigation) and by thematic (blue finance, decarbonization and transition finance, adaptation and resilience, and waste management and circularity). The Consultant will then provide a quantified assessment of the green finance needs for all countries, broken down according to the pre-approved categorization. Key expected activities include the following: - Define a relevant segmentation for the green finance needs: o Analysis of existing sectoral classification methodologies (NACE, NAICS, other relevant classifications...) o Selection of a limited number of economic sectors and, within those sectors, of a limited number of asset and/or sub-asset classes in order to focus on the most relevant sub-segments for green finance (E.g., based on the biggest current issuance exposures and investment requirements set out in NDCs). NB: The expected segmentation may be based on the 3-5 sustainable finance taxonomies or classifications of eligible assets that are being used in Africa to define green finance categories (Incl. the MDG-IDFC Common Principles for Climate Mitigation and Adaptation Finance Tracking; ICMA green, social, and sustainability bond principles; and Climate Bonds Taxonomy). - Assess the overall C&E finance needs (current and prospective) for each country: o Analysis of existing data regarding countries C&E finance needs, based on but not limited to latest releases of National Determined Contributions (NDCs) and additional documents to assess the overall needs for C&E related investment. o Analysis of potential by country according to the pre-approved categorization. - Assess country-specific key development growth drivers and challenges/barriers for green finance per country o Identification of major growth drivers and challenges (political, economic, social, etc.) identified in the country both at general and FI level that reduce the demand for green finance (including sectoral-specific challenges if relevant). o Forward-looking analysis on the potential to overcome those challenges (change in regulation, increased focus on C&E priorities, etc.). - As a result, provide a quantification of the potential needs for C&E finance, broken down by country, according to the pre-approved categorization. III. The supply side Assessing countries climate finance gap and provide recommendations for action The consultant will provide a detailed assessment of the current green finance supply in countries and derive the related green finance gap. Therefore, the key objectives of this workstream are the following: - Estimate the current supply of green finance, at an aggregate level and broken down according to the pre-approved categorization. This estimate should also include a breakdown by financier type (public, development institutions, financial institutions[6]), and by target segment (Retail, MSME, Corporate). - Identify major gaps between green finance needs and current supply (the Finance Gap) and identify course of action to bridge this gap. - Further inform the perspectives for green finance and assess the level of confidence for climate and environment as a strategic business sector for financial institutions and investigate the main drivers and obstacles to further development of green financing The consultant will further analyze the overall market offering in green finance for the 10 selected countries, by combining leverage of existing public data and targeted interviews: - Breakdown of current sources for green financing (Public, Private, MDBs etc.). - Listing of the actions already pledged and identification of additional actions (to be taken either by governments, regulators, private sector players, MDBs etc.), including key conditions for success (funding, enabling environment). - Key observed trends and strategic positioning of key FI players in green financing. - Overview of the current range of C&E finance products and services offered. - Quantitative or qualitative data regarding the success of current offerings and insights into the potential to boost the development of C&E finance. 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