Antecedentes

UNCDF, the UN capital investment agency for the 48 least developed countries, provides seed capital and technical assistance to test new modalities of public and private financing for local development. These investments are designed to leverage innovative financial flows from the private sector, national governments and development partners, for maximum impact towards inducing sustainable growth and transformative impact via the localization of the SDGs. UNCDF discreetly operates two inter-connecting practice areas of; (1) inclusive finance, and (2) local development finance. The goals of UNCDFs local development finance practice is to assist municipal authorities develop productive infrastructures and provide quality services that contribute towards transforming the economic structures of local economies and improving the quality of life of citizens.  This concept extends beyond local governance and the decentralized provision of services to the spatial, institutional and economic linkages required for comprehensive development. It additionally addresses the spectrum of climate change adaptation, food security, education and health, infrastructure, resilient environments, citizen empowerment and representation, and fulfilling and rewarding inclusive economic activity.

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) Laos PDR, and (3) Myanmar.

In the area of local development finance in ASEAN, UNCDF is present in Cambodia and Laos PDR, and through the introduction of new projects and the associated programme to this mission will engage in Myanmar.  The LDFP is additionally using a global program: Local Climate Adaptive Living Facility (LoCAL) and specific country programs to promote sustainable and inclusive local development.

In Cambodia

The LDDHS program was launched in 2013 with the objective of promoting decentralization and de-concentration reform in Cambodia to reduce poverty. The program focuses in particular on the health sector. The two main outcomes of this project are:

• Mechanisms for local discretion in health budget planning and for local accountability for health service delivery are designed and tested;
• Effectiveness of the new mechanisms is demonstrated through improved efficiency of budget execution and measurable improvement in delivery of selected services.

LoCAL aims at improving local climate resilience by channelling climate finance to the local level using a performance-based grant system. Key elements of the program include:

• Increased awareness of climate change and potential adaptation and resilience building responses, amongst sub-national governments and local communities;
• Integration of cross-sectoral, analysis-based strategies for building climate change resilience in sub-national plans and investment programs;
• Systems and procedures for mainstreaming climate change resilience within sub-national government public expenditure management systems in a fiscally sustainable manner are proven and available for scaling up;
• National guidelines for sub-national public expenditure management facilitate mainstreaming of climate change resilience, particularly through cooperative action between district/municipal and commune/sangkat councils and administrations.

In Laos PDR

The Strengthening Capacity and Service Delivery of Local Administrations (SCSD) programme was initiated in 2012. The programme is a joint cooperation with UNDP. UNCDF within the framework of SCSD supports the development and enhancement of Inter-Governmental Fiscal Transfers (IGFT) and overall fiscal decentralization. UNCDF applies a specific mechanism of “performance based grants” to assist local institutions of government to invest into local development projects.

LoCAL has since complimented the SCSD providing additional funding to promote and introduce climate resilience in the context of local infrastructure development.

The challenge of cross-border development

The least developed countries (LDCs) in ASEAN represent some of the fastest growing economies in the world. Estimates suggest that growth in Asia and the Pacific is expected to remain steady at 5.5% in 2016 (IMF Regional Economic Outlook, April 2015 issue).
Growth within the region will be driven by domestic demand and through global exports even though the economic recovery of the wider global economy will be moderate to weak and remain uneven. The region accounts for approximately 40% of the global output but contributes to nearly two thirds of global growth.

The inward expansion of the global value chains (GVCs) in Asia has been noticeable and has witnessed the engagement of the CLMV cluster of countries to engage in lower value activities, whilst the more advanced economies have moved into higher positions on the GVC (upstream) and are capturing a growing share of the GVC-related value added.

Although inter-regional trade has increased the level of financial integration across the ASEAN economies remain weak. Only between 20% to 30% of the cross-border investment and banking portfolio is inter-regional.  This indicates that ASEAN member states have a tendency to invest more into their “home” country as opposed to neighbours. However, it is witnessed that financial integration increases with trade integration and the size and sophistication of financial systems. Given that Thailand has re-oriented its export policy towards ASEAN and the Asia region in general opportunities arise that support investments through inter-regional financing that specifically boost regional trade.  The geographical focal point for such investments will be the cross border economic areas that combine service provision with competitive labour costs.

The CLM group of countries all are experiencing different patterns of socio-economic growth that are illustrated in the balance of their economies. Growth in most cases is not balanced be it across or within the broad sectors of the economy, geographically, and even amongst different societal groups. Such structural issues present substantial challenges for sustainable and equitable development in Southeast Asia.

Research and investments have been targeting the development of inter-regional economic corridors (Greater Mekong Subregion-GMS) that has resulted in the establishment of a comprehensive overland transport mechanism to aid the development and installation of regional production networks (RPNs). In the context of the GMS, cross-border transactions have in general been limited to ease of customs flows, safe storage and distribution, and in some cases the early establishment of special economic zones. Trade exchanges (informal and formal) additionally form and integral part of the cross-border eco-systems.

In Southeast Asia, the cross-border areas represent a huge potential for development based upon the features of complementary factor endowment that take advantage of low cost labour and the provision of high quality reliable services that are available or either side of the border area.  However, limited activity in terms of productive municipal infrastructure investments is taking place to harness these endowments especially within the CLM country group due to their proximities to Thailand and Viet Nam.

UNCDF has developed the Local Uplifting Transformative Solutions (LoTUS) programme in Southeast Asia, which aims at facilitating investments that take advantage of cross-border locations and factor endowments. Within the framework of this programme UNCDF seeks to create innovative sustainable financial mechanisms to support regional and domestic investments into cross-border areas. Specific emphasis is placed upon promoting cross-border local economic development through the definition of “bundles” of interconnected investments that have maximum impact upon local and regional development. LoTUS will support regional and national policy formulation and the testing of targeted investment mechanisms to support regional integration and development of the border areas.

Deberes y responsabilidades

Objective of the Assignment

Pre-feasibility analysis is one of the most critical steps in the initial decision-making process for project development. Before an investment decision is made and further more detailed studies are commissioned it is necessary to determine whether or not the planned investment idea is feasible. The pre-feasibility of an investment idea has to be considered with respect to several different aspects in order to determine whether the investment should be realized or not. Financial feasibility is often a predominant factor in such analysis, but also need to be complimented with base technical, environmental, and economic analysis.

As indicated within the findings of the UNCDF LoTUS scoping study private investors are generally cautious when it comes to large, complex, long-term and illiquid infrastructure investments, particularly in emerging economies. From both a public and private investor perspective it is essential to identify and evaluate the capability of the organization to come up with the funds needed to complete the project and the viability of such projects considering the cycle and complexity of financial structure likely to impact directly and indirectly on such projects over their economic life.

The objective of this consultancy is to support the Local Development Finance Practice to build Pre-Feasibility for one Investment Project, that will be identified through consultation with the consultant that allows UNCDF to investigate the possible positive and negative potentials of a proposed investment idea, providing a base document – “Consideration of funding proposals”. The format of the proposal (pre-feasibility) will include but not be limited to the following key sections.

• Project Summary (300 words)
• Detailed Project Description
• Capex / Cost Information
• Financial Projections & Capital Structuring
• Financing & fundraising Considerations
• Return On Investment Analysis
• Economic appraisal
• Expected Performance against UNCDF Local Development Investment Criteria
• Appraisal Summary
• Risk Assessment and Management

(total pages approx. 40)

The consultancy will support the formulation of inputs in respect to all financial related matters, Financial Analysis to be included in the Appraisal Summary and the development of a Financial Risk Management Table for two identified projects.

Effective frameworks and instruments for Financial Mechanisms and Investment Frameworks to support infrastructure investment decisions in the CLM-T countries and beyond play an important role in future UNCDF innovations. The consultancy will assist to developed such frameworks using worked examples, that will provide a “knowledge product” to facilitate infrastructure investment decisions in emerging economies, thereby serving the needs of the LoTUS project whilst complimenting other key areas of UNCDF global work and corporate development.

Working under the direct supervision of the LDFP Regional Technical Advisor for Asia based in Bangkok, the consultant will be responsible for providing high quality pre- financing assessment analytical tool and capital investment analysis to evaluate the economic and financial viability of an investment of two identified projects in the LoTUS pipeline for further development of a suitable financial model for the investment purposes. The initial assignment will be for 2 potential projects in the cross-border area between Myanmar - Thailand and Cambodia – Thailand to be agreed with the consultant and relevant actors.

Indicative Locations for Study

Myawaddy, Myanmar and Mae Sot, Thailand – Priority Area;

Poipet, Cambodia and Aranyapathet, Thailand -  Secondary Area;

Koh Kong, Cambodia and Trat / Koh Chang, Thailand – Priority Area;

The broad strategy for developing such frameworks and instruments will be approached in 3 stages through demonstration as described. The finalised content and sub content (features of the analysis) will be agreed during the 1st week of the mission through consolation between the consultant and UNCDF:

Research and collect the data for the analysis, meet and interview relevant sources;

Conduct Financial Feasibility Study and Financial Model for 2 related business for the potential investments including:

• Lean financial feasibility study that includes start-up capital requirements;
• Project Capex and Cost Estimation;
• Methodology for revenue build-up, a framework for generating revenues, identifies which revenue source to pursue, what value to offer, how to price the value, and who pays for the value;
• Building of financial projections including all standard financial statements: Income Statement (P&L), Balance Sheet and Cash Flow Statement;
• Capital structure analysis and calibration (Optimal Capital Structure);
• Financial structuring: Financing, sources of finance and financing packages;
• Cost of Debt (debt pricing), Cost of Equity  and Weighted Average Cost of Capital;
• Profitability, Operating & Financial metrics and ratios;
• Analyse Investors’ Returns and Disbursements: Return on investment (ROI), Net Present Value (NPV), Internal Rate of Return (IRR) and Payback Period;
• Economic appraisal: Value for Money (VfM) and Cost Benefit Analysis (CBA);
• List general practices for how investments return will be distributed, assuming different business scenarios.

Report and presentation

• Prepare Investors presentations (also called an Information Memorandum) and make the presentation related to financial aspects;
• Identify/quantify the economic values gained from the associated value chain;
• Support the investment analysis aspect for the proposal to be submitted to the Development Finance Institutions.

Within the boundaries of this ToR the consultant will undertake to complete stages above formulation strategy with Financial Feasibility Study and Financial Model for 2 related business for potential investments.

The UNCDF Regional Technical Adviser (RTA) based in Bangkok, will be the contact point for the mission, providing necessary management support, guidance, and over-sight of the mission.  The RTA Unit will be responsible for reviewing intermediate and final products and providing approvals for payment based upon the deliverables under VI.

Deliverables

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

• Research and collect the data for the analysis, meet and interview relevant sources for a cross border portfolio of project in the area between Thailand and Myanmar. The pipeline consists of 2 business units that associate and create the economic value chain;
• Financial Feasibility Study and Financial Model for 2 related business for potential investments in alignment to section III;
• Financial risk assessment tables;
• Presentation/Information Memorandum.

Provision of Monitoring and Progress Control

The consultant will work in close consultation with Regional Technical Advisor. The Regional Technical Advisor will provide overall supervision of the consultancy and approve key outputs and deliverables.  

Payment Terms

Applicants are requested to indicate the expected lump sum fee to undertake this assignment.

Travel cost will be reimbursable based on actual cost upon presentation and submission of receipts

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.

The payment will be based on deliverables.

• Research 30% : Research and collect the data for the analysis, meet and interview relevant sources for a cross border portfolio of project in the area between Thailand and Myanmar;
• Analysis 50% : The pipeline consists of 2 business units that associate and create the economic value chain;
• Financial Feasibility Study and Financial Model for 2 related business for potential investments;
• Report and Presentation 20%:  Report and presentation.

Payment will be 2 weeks after the submission of the report with satisfactory rating.

Duration of Assignment, Duty Station and Expected Places of Travel.
Duration: cover the period of 3 months or until presentation to potential investors will be conducted.
Duty Station and expected places of travel: Homebased with possible travel to the cross-border areas between Thailand-Myanmar.
 

Competencias

• Owns a comprehensive knowledge of Corporate Finance, Project Finance, Financing, Fundraising, Capital Markets, Financial Structuring (Debt and Equity Structuring), Financial Advisory, Investment Banking and Investment Advisory;
• Able to provide complex/ in-depth financial modelling and Financial Analysis e.g. Financial Projections’ building, Capital Structure calibration and optimization, Financing Structure, company valuation, investment return analysis (ROI, IRR, NPV, payback period);
• Able to prepare and provide presentations/Information memorandums to potential investors in relation to reviewed opportunities;
• Knowledge of deal execution and negotiation of all related transaction documentation (term-sheet, LOI, MoU, SPA, shareholders’ agreement, loan agreement, articles of association, prospectus, offering memorandum and other transaction documentation);
• Able to effectively undertake desk based research and communicate with key experts within the field of the work to be undertaken.
   

Habilidades y experiencia requeridas

Education

• Master's Degree in Corporate Finance/Finance

Experience

• 10 years of professional experience with at least 5 years working within Corporate Finance, Project Finance, Investment Banking, Financial Advisory, Financing & Fundraising, Mergers & Acquisitions and Financial Structuring;
• Proven track record of providing financial advisory on infrastructure project finances and PPPs;
• Experienced in Corporate Finance in Thailand, Myanmar and other Emerging/South Economies.

Language

Fluent in English

Evaluation

Individual consultants will be evaluated based on the combined scoring method.

The formula for the rating of the Proposals will be as follows:

Rating the Technical Proposal (TP): 70%
TP Rating = (Total Score Obtained by the Offer / Max. Obtainable Score for TP) x 100

Rating the Financial Proposal (FP): 30%
FP Rating = (Lowest Priced Offer / Price of the Offer Being Reviewed) x 100

Total Combined Score:
(TP Rating) x (Weight of TP, e.g. 70%)+ (FP Rating) x (Weight of FP, e.g., 30%)

Total Combined and Final Rating of the Proposal

Technical Criteria weight 70% includes:

• 25% Professional experience;
• 25% Competencies, past work related to the assignment;
• 10% Academic qualification;
• 10% Geographical working experience (proven).

Total maximum obtainable score for Technical proposal = 100 points. Only candidates obtaining a minimum score of 70 points under Technical evaluation will be considered for the financial evaluation

Application Guidelines

• Interested candidate should submit the following information as part of the application package:
• When applying for this consultancy position, please apply with your official name as shown in the government issued identification document (e.g. passport and/or driver license). Contract award is subject to this verification;
• Detailed updated CV including past experience in similar projects or P11 link: http://sas.undp.org/documents/P11_Personal_history_form.doc;
• One page of cover letter describing why the candidate is the most suitable for the assignment;
• Confirmation of availability to take up assignments for the whole period;
• Name and contact details of 3 references.

Should the applicant is shortlisted, the Technical Proposal will be requested. The Technical proposal shall consist of the past work demonstrating comprehensive knowledge as listed under competencies.

Other

Travel cost will be reimbursable based on actual cost upon presentation and submission of receipts.

The consultant is expected to own and use his/her own equipment during and after the assignment.