Tenders are invited for Consulting Services to Carry out Due Diligence on Financial Institutions for Pngs Green Finance Facilities Global Green Growth Institute in Papua New Guinea seeks to engage the services of a competent audit firm to conduct Due Diligence on Financial Institutions for PNGs Green Finance Facilities. ELIGIBILITY: This Request for Proposals (RFP) is only open to audit firms. ABOUT GGGI: The Global Green Growth Institute (GGGI) is a treaty-based international, inter-governmental organization dedicated to supporting and promoting strong, inclusive and sustainable economic growth in developing countries and emerging economies. To learn more please visit about GGGI web page. Since joining GGGI in 2012, Papua New Guinea (PNG) has embarked on a partnership to foster sustainable and inclusive economic growth. GGGI established its presence in PNG in 2018, working closely with the government to integrate climate-resilient green growth (CRGG) strategies and execute green growth projects by mobilizing climate finance and investments The GGGI PNG main office is strategically positioned within the Climate Change Development Authority (CCDA) of the Government of Papua New Guinea, with additional presence housed within the Bank of Papua New Guinea (BPNG) and seven select provincial governments. GGGI PNG is currently implementing several national and regional projects supported by bilateral and multilateral donor partners. One of the flagship projects under the GGGI PNG Program is the Inclusive Green Finance Project (IGFP) which has established the Green Finance Center (GFC) with funding from New Zealand and the Agence Française de Développement (AFD). The IGFP is being implemented by GGGI as the delivery partner in collaboration with the BPNG, CCDA and Department of Treasury (DoT). The GFC which is responsible for implementing the IGFP Policy and Roadmap which aims to enhance the financial ecosystem in PNG by integrating green finance principles, creating an enabling environment to mobilize climate finance, and promoting green investments in the country. The GFC office, strategically located within the BPNG, provides a platform for collaboration with financial stakeholders to advance green financing initiatives at both national and sub-national levels. Through the AFDs regional initiative, the Greening the Pacific Financial System (GPFS) program, AFD is providing critical support to the Green Finance Centre (GFC) in delivering priority components of Papua New Guineas Inclusive Green Finance Policy (IGFP) Roadmap. Under this program, GFC is leading the development and rollout of two key financial instruments: the Green Refinancing Facility (GRF) and the Green Guarantee Facility (GGF). To date, AFD has committed EUR 1.8 million in seed capital to operationalize the GRF. Beyond financial instruments, AFD is supporting several other GFC-led initiatives. These include the institutional strengthening of GFC through staff recruitment and capacity development, as well as technical assistance for integrating the Green Taxonomy into the lending practices of financial institutionssuch as through the development of a Green Catalogue to guide green loan eligibility. The GPFS program is a five-year regional initiative funded by AFD and implemented by the GGGI. It is dedicated to building climate-resilient financial systems and fostering green finance in Pacific Island Countries (PICs), with the broader aim of accelerating sustainable and climate-aligned investments across the region. PROJECT OBJECTIVES AND BACKGROUND: Background Bank of Papua New Guinea (BPNG) is developing Green Financial Instruments (GFI), a Green Refinancing Facility (GRF) and a Green Guarantee Facility (GGF) under the IGFP Roadmap. The objective of the GFI is to incentivize and scale up the volume of inclusive or green loans in Papua New Guinea, aligning with the countrys Inclusive and Green Taxonomy. Objective The GFI will provide additional resources and de-risk the financial sector in Papua New Guinea to develop a robust green portfolio. The GFI will work with every financial institution operating in PNG. However, at its inception, the GFI will work with 3 commercial banks: ANZ, BSP, and Kina Bank, and 2 microfinance banks: MiBank and Womens Micro Bank Ltd. A due diligence will be conducted on the five above-mentioned financial institutions operating in PNG to evaluate their ability to absorb and disburse funds for the development of their green finance portfolio. The aim of due diligence is to confirm the validity and integrity of all financial and accounting documents of the company. The due diligence exercise includes a review of the institutions documented policies and procedures and numerous interviews with senior management as well as bank staff. In that respect, a reputable audit firm implemented in Papua New Guinea will be contracted to undertake a due diligence exercise on the five local financial institutions mentioned above. The five due diligence exercises will be done in two parts: (i) in September and October 2025 for Kina Bank, MiBank and Womens Micro Bank (ii) in November and December 2025 for BSP and ANZ. Project Summary & Impact To engage Audit consulting firms to provide expert services in conducting due diligence on financial institutions for the purpose of participating in the GFI. The project scope involves supporting the establishment and operation of the GFI and enabling the initial capital injection of EUR 1.8 million from AFD into the GRF as a component of the IGFP. The project will be managed by GFC under the guidance of the IGFP Steering Committee in close collaboration with BPNG. The facility will lead to increased volume of green and/or inclusive loans (as determined with reference to PNGs Inclusive and Green Taxonomy) by participating financial institutions citizens. Project Context Summary of IGFP Phase I (2020-2023). The first phase of IGFP project involved the following: Establishment and operationalization of the IGFP Steering Committee (chaired by BPNG), Establishment and operationalization of the IGFP Technical Working Group (comprised of line ministries, local financial institutions, bilateral/multilateral development agencies, and NGOs) Development of the Inclusive and Green Finance Policy (IGF Policy) of PNG, which includes: o A Diagnostic Report on the State of Inclusive and Green Finance in PNG, o Inclusive and Green Taxonomy, and, o IGFP Implementation Roadmap Establishment and operationalization of the GFC to be responsible for implementing the IGF Policy and all future initiatives related to green finance in Papua New Guinea. Summary of IGFP Phase II (2024-2027). The second phase of IGFP project involves the following: Enhancing the readiness of local financial institutions to apply the taxonomy to their lending operations and receive/utilize funding (e.g., grants and concessional loans) from donors to increase their portfolio of inclusive or green loans, and, Developing green loan products aligned with the taxonomy with participating financial institutions. Development of GRF and GGF to incentivize and scale up the volume of inclusive or green loans in PNG. Establishing a robust and user-friendly Green Catalogue PROPOSED ACTIVITIES & DETAILED SCOPE OF WORK: 1. Proposed Activities: The GFI will be implemented in 2025-2026 to incentivize and scale up the volume of inclusive or green loans in PNG. The GFI will work with local financial institutions through the extension of credit lines that will be used by these financial institutions to extend green loans (sub-loans) to targeted MSMEs, individuals and entrepreneurs. The final selection of the participating financial institutions (FIs) will be based on a due diligence exercise. A due diligence exercise assesses both the institutional and financial performance of a financial institution. The institutional assessment covers financial management, corporate governance, and risk management, and identifies the financial and operating risks faced by the participating financial institution. The financial performance assessment evaluates the likely financial sustainability of the financial institution by analyzing various financial data points. It is a quantitative assessment that determines both the historical and the projected financial performance of the financial institution. The historical financial performance review helps evaluate the financial institutions track record in (i) delivering sub-loans, (ii) efficiently recovering sub-loans, and (iii) covering all operating and other costs to make a reasonable profit on the invested capital. The capital adequacy, asset quality, management quality, earnings quality, liquidity and sensitivity (CAMELS) framework is to be used to assess the historical financial performance of the financial institutions. Financial projections help assess whether (i) the proposed credit line is sized appropriately considering the market demand, and (ii) the financial institution has the capacity to absorb the proposed credit line. Finally, the assessment will consider the support (training, capacity building, technical assistance) to be provided to the financial institution. The management quality assessment is common for both commercial banks and microfinance banks and is completed first; the financial performance is conducted on completion of the management quality assessment. The due diligence exercise will focus on the following key areas: Management, Board, and Staff. Most important element of a due diligence is the assessment on the quality of the management team and staff of the bank. Through interviews and numerous discussions, the audit firm will attempt to gauge the mission, qualifications, and overall attitude of the staff and will seek to understand the financial institutions current governance structure. Financial. The fi Tender Link : https://in-tendhost.co.uk/gggi/aspx/Tenders/Current
