International Consultant, Capital Market Investment and Bond Appetites for Lao PDR



Advertised on behalf of :

Location : Home-based, with travel to Vientiane, Lao PDR and Bangkok, Thailand
Application Deadline :22-May-20 (Midnight New York, USA)
Type of Contract :Individual Contract
Post Level :International Consultant
Languages Required :
English  
Starting Date :
(date when the selected candidate is expected to start)
01-Jun-2020
Duration of Initial Contract :1 June - 31 December 2020
Expected Duration of Assignment :Up to 25 working days

Background

The United Nations Capital Development Fund (UNCDF) makes public and private finance work for the poor in the world’s 47 least developed countries. With its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development.

UNCDF’s financing models work through three channels: inclusive digital economies, connecting individuals, households, and small businesses with financial eco-systems that catalyze participation in the local economy, and provide tools to climb out of poverty and manage financial lives; local development finance, that capacitates localities through fiscal decentralization, innovative municipal finance, and structured project finance to drive local economic expansion and sustainable development; and investment finance, that provides catalytic financial structuring, de-risking, and capital deployment to drive SDG impact and domestic resource mobilization. By strengthening how finance works for poor people at the household, small enterprise, and local infrastructure levels, UNCDF contributes to Sustainable Development Goal-SDG 1 on eradicating poverty and SDG 17 on the means of implementation. By identifying those market segments where innovative financing models can have transformational impact in helping to reach the last mile and address exclusion and inequalities of access, UNCDF contributes to a broad diversity of SDGs.

UNCDF are currently implementing a project that is developing financing solutions for supply side capital to enable the Government of Laos to efficiently deliver on their social protection commitments as outlined within the National Social Protection Policy.  This project is funded by the UN Secretary General Sustainable Development Goals Fund (UN-SDGF) providing focus for social protection through SDG acceleration and attainment of SDG targets.

Lao PDR is currently implementing an austerity regime in terms of public sector finance. The government is embarked on a broad consolidation of the public budget that is minimising expenditure, optimising revenues whilst at the same time still delivering and maintaining public services. The consolidation is following a strict monetary and fiscal policy that is aimed at reducing budget defects to less that 4% that will enable the government to maintain macro-economic stability and meet existing debt service obligations.     

The consultancy opportunity is funded through the above mention project and aims at assessing the current appetites held in the regions capital markets to providing debt to enable capitalization of the National Social Protection Fund (NSPF) as outlined in the governments National Social Protection Strategy (NSPS). The consultancy will be implemented through a mix of activities to be carried out in Thailand and Lao PDR and out-reach research into neighboring capital markets (China and Singapore).

The UNCDF portfolio in ASEAN

Historically UNCDF have designed and implemented local development initiatives in a majority of the ASEAN member states both at national and sub-national levels. In particular, in alignment to its mandate, UNCDF has mainly operated in the Least Developed Countries, of the ASEAN region including (1) Cambodia, (2) Lao PDR, and (3) Myanmar.

In Lao PDR, UNCDF has been engaged extensively in the government’s decentralization process through the National Governance and Public Administration Reform Programme (NGPAR). The NGPAR process has supported the enhancement of inclusive service delivery and local development via the strengthening public administrations, fostering of inclusive dialogue, and facilitating dialogue between citizens and state for more effective, transparent, accountable and responsive service delivery.

UNCDF is working directly with the Ministry of Finance (MoF) within the sphere of the Public Finance Management Reform initiative that is following on from the 2019 National Public Expenditure and Financial Accountability (PEFA) assessment. UNCDF is working in partnership with the World Bank, the European Union and other Development Partners with the introduction of an IPSAS compliant CoA and a robust IFMIS that is under procurement.

Leveraging this positing and work, UNCDF, in partnership with ILO and UNICEF, is supporting the SDG Fund project “Leaving no one behind: Establishing the basis for social protection floors in Lao PDR” that is working with the Ministry of Labor and Social Welfare (MoLSW) that aims at supporting the government to implement the social protection strategy. This strategy envisions the development of an inclusive social protection system that includes a continually capitalized fund to ensure timely payments are made to all groups covered by the strategy. UNCDF is assisting MoLSW and MoF to establish and capitalize the fund through various technical inputs.

Objective of the assignment

The main objective of the assignment is to support MoLSW and MoF to examine the potential to secure funding through various transnational financial products to capitalize the proposed NSPF. The consultancy will explore regional capital markets; namely Thailand, China, Hong Kong and Singapore in the context of bonds and other debt financing instruments that can be accessed by the Government of Laos. This assignment will also complete a stocktake of existing general obligation and revenue bonds issued by the Government Lao PDR or any government entities and provide a succinct trend analysis of associated credit ratings


Duties and Responsibilities

The consultant will specifically work with the MoF’s Budget Department in coordination with the Department of Fiscal Policy and Law, and MoLSW to provide the following TA support:

  1. Generate and implement a dedicated work plan inclusive of milestone deliverables required dialogues based on Laos and Thailand inputs;
  2. Organise and implement a stocktaking exercise of current Lao issued bonds (general obligation and revenue) that includes, volume of each individual listing, place of issue, credit rating, tenure, coupon repayments and underwriters. This work includes dialogues and exchange of data with Lao MoF, Lao Securities Exchange, Thai Securities Exchange and the Ministry of Finance, Thailand;
  3. Complete a trend analysis of Lao issued bonds in terms of yields and appetite in the markets where the bonds are issued;
  4. Ascertain appetite for additional Lao debt especially in the Thai, China and Hing Kong capital markets through dialogise with key market advisors and the associated credit rating agencies;
  5. Assist the government (MoF and MoLSW) to generate a draft policy paper that provides clear directions for the government to debt finance the capitalization NSPF over a short and medium term;
  6. Organise a de-briefing event in Lao PDR or Bangkok being dependent on the lessons learned from the mission.

Deliverables

The consultant will deliver the following within the framework of the mission:

  1. Submission or work plan indicating timebound milestone deliverables and list of required meetings and consultation to enable the work to be completed;
  2. Stocktaking report of current Government of Lao PDR issued bonds (general obligation and revenue) that includes, volume of each individual listing, place of issue, credit rating, tenure, coupon repayments and underwriter (maximum 10-page report);
  3. Trend analysis of Lao issued bonds in terms of yields and appetite in the markets where the bonds (maximum 10-page report);
  4. An overview of capital market exposure held by the Lao Government (maximum 6-page report).
  5. A draft policy advisory to capitalize the NSPF (to be develop with MoF and MoLSW);
  6. A report on base debt structure for capitalization of the NSDF that anticipates public sector budget allocations and a start capital requirement (to be fulfilled by blending debt financing, ODA and public budget, base data of fund delivery will be provided by ILO).

Provision of Monitoring and Progress Control

The consultant will work under the supervision of the UNCDF National Programme Specialist and will work closely with the MoF‘s Budget Department and in close consultation with Regional Technical Advisor for the Lao component of the mission.

For all Bangkok and neighbouring country related work the consultant will work under the direct supervision of the Regional Technical Advisor who will provide overall direction and guidance of the consultancy and approve key outputs and deliverablesIn addition, the consultant will also coordinate and collaborate with UNCDF National Programme Specialist in Lao Country Office for all necessary programming, operations and logistics.

Consultancy fees will be paid upon: (i) submission of Certificate of Payment form (ii) review, approval, acceptance of output for each deliverable by the UNCDF National Programme Specialist (iii) authorization of payment disbursement from Regional Technical Advisor based in Bangkok.

Terms of Payment

The following terms of payment based upon the above-mentioned deliverables will be applicable for this Terms of Reference and associated mission. Payments will be based upon a percentile of the contracted lump sum for each area as tabulated. The payment will only be made up on satisfactory completion and submission of the assignment and deliverables.

Deliverable 1, Mission Planning:  (i) Work plan for  mission and setting of agreed delivery milestones; (ii) Organization of a Lao PDR based kick-off meeting for the mission for key leading counterparts and selected relevant stakeholders (30%);

Deliverable, 2, Technical reviews of Government debt-financing: (i) Stocktaking: Stocktaking report of current Government of Lao PDR issued bonds (general obligation and revenue) that includes, volume of each individual listing, place of issue, credit rating, tenure, coupon repayments and underwriter (maximum 10-page report) (15%); (ii) Trend Analysis: Trend analysis of Lao issued bonds in terms of yields and appetite in the markets where the bonds are issued. The report needs to provide yield curves and yields over a suitable time series (maximum 10-page report)(15%); (iii) Capital Markets exposure and risk: Overview of capital market exposure and short risk analysis of the debt held by the Lao Government (maximum 6-page report). The generation of this report need include government, market and credit rating perspectives (20%);

Deliverable 3, Policy Advisory for NSPF Capitalization and Fund Structure: (i) Draft Policy – A draft policy advisory to capitalize the NSPF (3 pages max) (10%); (ii) NSPF Capitalization Structure - Report on base debt structure for capitalization of the NSDF that anticipates public sector budget allocations and a start capital requirement (to be fulfilled by blending debt financing, ODA and public budget, base data of fund delivery will be provided by ILO (6 pages max) (10%)


Competencies

  • Possesses a comprehensive knowledge of the regional bond markets with especial focus on the Thai Bond, Thailand Capital Markets, China Dim Sum and Panda Bonds and Singapore Capital markets from the perspective of government and or corporate debt financing;
  • Has the ability to develop and formulate financial analysis of bond issues predicting forward risk, generation of yield curves and examining and detailing coupon repayments in terms of attractiveness of the bond issue;
  • Has detailed knowledge of current credit ratings systems for Lao issued GO and Revenue bonds;
  • Able to provide in-depth peer reviews of existing debt financing positions for Lao Government and associated State Enterprises in terms of exposure (current US$, or LC);
  • Able to prepare a fund structure that possibly blends the following; public sector budget, GO bond issue, ODA, and an investor grade tranche;
  • Able to developed standardised policy papers (short version) for government consumption in the area of GO or revenue bond issuance


Required Skills and Experience

Education: Minimum Master’s Degree in Finance related area/ MBA;

Skills and Experirence: 

  • Minimum 10 years of professional experience with at least 5 years working within international finance institutions or international commercial banks in Asia, mandatory;
  • Proven professional track record related to bond markets (primary and secondary), required
  • Proven track record working with general obligation bond and or revenue bond design and issuances, required
  • Proven track record working with national government sector is required;
  • Specific knowledge of capital markets consisting of; (i) Thailand, (ii) Chain / Hong Kong, (iii) Singapore is an advantage;
  • Good communication skills; sensitivity and willingness/flexibility to respond to client’s needs is an asset

Application Process

Interested individual consultants must submit the following documents/information to demonstrate their qualifications. Proposers who shall not submit below mentioned documents or information will not be considered for further evaluation.

Please include all documents into one file while submitting your application

Evaluation method

Applications will be rated on both technical and financial submissions.  The following selection method will be used:  Highest rated proposal using the combined scoring method, which assigns the weight distribution between the technical and financial proposals.  The weight distribution shall be 70% technical and 30% financial. 

Step I: Longlisting/Shortlisting

Applications will be screened and only applicants meeting the following minimum criteria will be shortlisted:

  • Minimum Master’s Degree in Finance related area/MBA;
  • Minimum 10 years of professional experience with at least 5 years working within international finance institutions or international commercial banks in Asia;

Step II: Technical Review of CVs by Desk Review

UNCDF will conduct a desk review to produce a shortlist of candidates by evaluating the following criteria with the corresponding points (100 points)

  • Minimum 10 years of professional experience with at least 5 years working within international finance institutions or international commercial banks in Asia (30 points);
  • Proven professional track record related to capital market and bond markets (primary and secondary)  (30 points)
  • Proven track record working with general obligation bond and or revenue bond design and issuances (30 points);
  • Proven track record working with the national govenrment sector (10 points)

Only the applicants achieving 70% of the points will be considered as technically qualified and will be reviewed further for financial evaluation.

Step III: Financial Evaluation

The following formula will be used to evaluate financial proposal: Lowest priced proposal/price of the proposal being evaluated x 30%.

Step IV: Award Criteria:

The contact shall be awarded to the applicant whose offer have been evaluated and determined as:

  • Responsive/compliant/acceptable vis-à-vis the requirements of the TOR and the project operating environment; and
  • Having received the highest score out of a pre-determined set of weighted technical (70%) and financial (30%) criteria.

Individual consultants and individuals employed by a company or institution are welcome to apply. 

Any individual employed by a company or institution who would like to submit an offer in response to a Procurement Notice for IC must do so in their individual capacity (providing a CV so that their qualifications may be judged accordingly).  If the company or institution that employs them will charge a management fee, the said amount must be incorporated in the financial proposal that the individual will submit.  No further changes to reflect additional costs shall be accommodated by UNCDF at the point of awarding the contract.

Women candidates or women-owned businesses are strongly encouraged to apply.

UNCDF is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply. All applications will be treated with the strictest confidence.

Copyright

All products and reports related to the mission will be provided to UNCDF and be subject to associated copyrights. The contractor will not use, without prior permission of UNCDF, any the materials or data produced during the mission for any other purpose than furnishing UNCDF with a project delivery. Any use or reference to the information contained within the presented mission documents must be prior clarified and approved by UNCDF and clearly reference UNCDF as the source.

Additional institutional arrangements

  • Any travel required under the assignment needs to be agreed and pre-approved by UNCDF regional technical advisor. All the travel cost will be reimbursed by UNCDF according to UNCDF rules and regulations.
  • The consultant is expected to own and use his/her own computer equipment during the assignment.


UNDP is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply. All applications will be treated with the strictest confidence.

UNDP does not tolerate sexual exploitation and abuse, any kind of harassment, including sexual harassment, and discrimination. All selected candidates will, therefore, undergo rigorous reference and background checks.


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