Expression of Interest For Feasibility Study On The Green Transformation Of Egyptian Smes Supply Chains Through Carbon Markets

Expression of Interest are invited for Feasibility Study on the Green Transformation of Egyptian SMEs Supply Chains through Carbon Markets Description: Over the last 10 years, around 98% of carbon credits in the VCM have been generated in EMDEs. Hence, innovative tools that encourage SMEs to capitalize on the benefits of carbon markets need to be explored, assessed and implemented if deemed successful. In the dynamic landscape of Egyptian SMEs, this feasibility study aims to analyze supply-side and demand side factors, assess targeted sectors and subsectors, identify potential off-takers, and finally evaluate and design tailored financial instruments for each. This would allow SMEs to better access and benefit from both voluntary and compliance carbon markets. This innovative financing mechanism aims at incentivizing and supporting SMEs to green their businesses with emission mitigation activities and capitalize on their adaptation co-benefits to contribute to the global combat against climate change. The proposed financing mechanism for each sector/subsector will aim to support SMEs in greening their operations by leveraging their participation in a supply chain. This model brings together financiers, SMEs, and a major company (off-taker) at the top of the supply chain to create a mutually beneficial tripartite arrangement. In this framework, banks provide financing to SMEs to implement environmentally friendly practices. In turn, these green practices generate carbon credits, which represent reduced carbon emissions. The off taker then agrees to purchase these carbon credits from the SMEs, creating a guaranteed future income stream that banks can use as collateral. As an alternative, instead of the off-taker directly purchasing the carbon credits, an alternative arrangement could involve pooling the credits into a special-purpose vehicle (SPV) owned by the participating SMEs and managed either by the off-taker or the financing bank. The SPV would then sell the aggregated carbon credits on the open market, with the resulting income directed toward repaying the loans. This arrangement allows banks to extend loans more confidently, helping SMEs to transition to greener production. The model also has the potential to achieve economies of scale by aggregating the carbon credit certification process. This collective approach can lower the per-SME certification cost, making the process more accessible. The specific deliverables of the assignment include: (i) an Inception report (ii) a supply-side diagnostic assessment; (iii) a feasibility assessment of targeted sectors and subsectors; (v) an evaluation and design of financial instruments; and (vi) dissemination of results. Tender Link : https://wbgeprocure-rfxnow.worldbank.org/rfxnow/public/advertisement/4988/view.html