Call for Proposal for the establishment of the Capital Advisory Initiative (CAI)

Purpose of CAI: The UN-Habitat Capital Advisory Initiative will effectively identify capital needs and mobilize diverse private financing capital to complement public and aid resources for Sustainable City Infrastructure Development enabling the Multi-Partner Implementation Facility for Sustainable Urban Development’s (IFSUD) partnership to reach development targets as per its mission and as highlighted under the SDGs.  

Submission Start Date: 7th November 2018

Submission Deadline Date and time: 21st November 2018, 17:00 hrs. CET               

Project Key Information

  • UN-Habitat Project title: Capital Advisory Initiative
  • Locations
  • Town/City: Nairobi
  • Country: Kenya
  • Anticipated start date: 5th December 2018
  • Estimated duration of project in calendar months: 36 months  
  • Lead Organization Unit: External Relations Division

A. Brief Background of the Project 

UN-Habitat is at an important juncture following the adoption of the New Urban Agenda and SDGs and must be well positioned to play a coordinating role to support the urban dimensions of this important agenda effectively. Accordingly, the organization launched a change process to make UN-Habitat fit-for-purpose, maximizing its added value to UN system-wide efforts and effectively supporting Member States as they tackle the challenges of sustainable urbanization through implementation of the New Urban Agenda to achieve the urban dimensions of the Sustainable Development Goals.

The change process is based on initial engagement with Member States and other stakeholders during the World Urban Forum; intensive consultations with staff at all levels across the Agency, through surveys, townhalls and focus group discussions; and work sessions with senior management. It will be used as a tool for further consultations and most importantly to guide the formulation of the Strategic Plan 2020-2025, which will set UN-Habitat’s programmatic priorities for that period and provide an adequate organizational structure.

The change process will improve internal governance and effectiveness and transform UN-Habitat into a mature organization, capable of meeting the expectations of Member States. It comes at an opportune time when UN-Habitat can be fully aligned to the wider UN reforms being led by the Secretary-General. The result of all these important changes is a more focused organization that is relevant, transparent, accountable, trusted and efficient, and whose services are valued and in demand. The change process has already received support from the Swedish Government through the Swedish International Development Cooperation Agency (SIDA) to focus on its seven key priorities among which include funding with the aim of regaining trust and confidence of funders to deliver our mandate.

Globally, some 60% of the area expected to be urban by 2030 remains to be built. The urban infrastructure financing gap is in excess of $ 4.5 trillion per annum, much of this is in the developing world. Today, 1 billion city dwellers live in slums, often with lack of access to basic services and sanitation. By 2035 an estimated 440 million households, or 1.6 billion people will be living in unsafe, inadequate or financially stretched housing. The housing affordability gap is estimated at US$650 billion per year. It is therefore imperative UN-Habitat is empowered to assist member states to finance bankable projects that will address these issues, ensure inclusion and the prosperity of cities.

Adoption of the Sustainable Development Goals (SDGs) and the global endorsement of the New Urban Agenda (NUA) following Habitat III have set ambitious targets on urban development by the global community and U.N. member states and provides fresh impetus to strengthen the role of cities in driving poverty reduction, stability, and sustainable development.

The 2030 Agenda for Sustainable Development, which aims to “leave no one behind” recognizes the importance of leveraging good urbanization as a solution to the global challenges of poverty, exclusion, peace and security. The NUA, adopted by Member States in October 2016, provides a direct link between urbanization and sustainable development by offering a practical framework for its implementation at the local level. The know-how for assisting countries and cities to achieve inclusive, safe, resilient and sustainable cities is in place; pilot projects have been tested.

To support countries and cities in developing countries to implement urban transformation measures, following the NUA’s call for a “coordinated, coherent response to rapid urbanization, through inclusive partnerships, integrated approaches, and the translation of global and national development goals to the local level”, the World Bank Group (WBG) and UN-Habitat are jointly proposing the establishment of IFSUD.

IFSUD aims at catalyzing a more effective, coordinated and accelerated action for integrated solutions to sustainable urban development, by creating a public/private partnership platform to facilitate collaborative partnerships, coordinate activities and deliver on financing requirements resulting in urban areas and human settlements that are safer, healthier, more inclusive, resilient, livable and prosperous.

The fund targets three keys gaps: 

  1. Leveraging public and private finance for sustainable urban development.
  2. Stronger coordination mechanism for the international community to support country- and city-led urban development programs.
  3. Systematic monitoring of progress.

Attaining this however is not as straightforward as there are several challenges:

  1. The capital requirements are too broad, 
  2. There is lack of mapping of development needs to match with the most appropriate type of financing structure and capital (e.g. real estate finance for private equity or mobility opportunities for impact investors,
  3. Limited segmentation of different kinds of capital types and asset classes for investment

(municipal bonds, pay for results, project finance)

  1. Lack of understanding/risk/return expectations by asset and investor
  2. Requirements from the United Nations and World Bank to develop bankable projects at greater quantum and scale.
  3. Need for greater access to mainstream investors/asset allocators.

The Capital Advisory Initiative is therefore established to meet these challenges, effectively identify capital needs and mobilize diverse private financing capital (and blended products) to complement public and aid resources for IFSUD’s partnership to reach development targets as per its mission as highlighted under the SDGs. The vision for the Initiative is to have mobilized $ 1 Trillion by 2023 from the private sector and blended products for the IFSUD partnership to attain SDGs and sustainable city development, The Initiative, by leveraging the private sector, will assist in developing on-going capability in UN Habitat to structure partnerships and bring in capital; not one offs/projects. By the end of the project the Initiative should ideally have increased UN-Habitat’s capacity to finance its own projects and assisted cities and countries attain its development targets.

The UN-Habitat Capital Advisory Financing Initiative would seek to: 

  1. Project capital needs mapping: For each project, develop holistic view of capital gap, identify project financing needs, risk/ return potential across the spectrum, duration/tenor, equity/debt / mezzanine/ project finance, municipal bonds, pay for results bonds, corporate private investments, public capital and development assistance, global investment funds, opportunity for blending and risk mitigation.
  2. Mainstream investor segmentation and relationships: Develop robust and “living” sources of capital database; build out relationships with mainstream investors from SME financing LPs, public market investors.
  3. Develop sector perspectives: Transport infrastructure, water/sanitation, electricity and green public spaces and social infrastructure, real estate and housing financing.
  4. Impact / Monitoring and Evaluation: Leverage WB, UN agency and other players to develop Impact/nonfinancial risk evaluation and measurement.
  5. Develop bankable products/opportunities: Leverage IFSUD partnerships, variety of capital providers to develop products and capital structures, consider emerging vehicles and blended finance structures, innovative financing platforms, etc., to develop pitch decks and bankable products.

Expected Outcomes for the full scope of work may include:

  1. Increased capacity within UN-Habitat and IFSUD to identify, develop and provide transactional support on sustainable infrastructure projects on an ongoing basis.
  2. A strong pipeline of viable funding opportunities with a broad and differentiated range of donors ready to contribute towards the operationalization of the UN-Habitat Capital Advisory Initiative
  3. Additional capital flow to sustainable infrastructure projects in selected cities as a direct result of the collaboration between UN-Habitat and the implementing partner.
  4. Increased financial capacity within UN-Habitat to bank new and existing projects.

B. Main activities and outputs

The Implementing Partner will be undertaking main activities as follows (but not limited to):

  1. Manage co-design of the UN-Habitat Capital Advisory Initiative concept note in close coordination with UN-Habitat.
  2. Co-design the development of a basic strategic plan and preliminary budget and team.
  3. Co-develop fundraising strategy.
  4. Co-develop a list of potential contributors.
  5. Manage database of potential contributors.
  6. Schedule and conduct interviews with potential contributors.
  7. Update and develop a refined concept note.

Eligibility Criteria

 

 

 

Criteria

 

 

Submission Details/ Documents Required

 

 

Legal Status

  • Certificate of registration/incorporation i.e.,
  • Proof of registration in Country of Origin.
  • Proof of registration of Country of operation
  • Proof of country operational presence

Organization profile and details

  • Clear organization profile and structure of the organization indicating:
    • Organization’s vision, mission and objectives
    • Management structure
    • Members of the Governing Board and their Designations duly certified by the Corporate Secretary, or its equivalent document
    • Proof of membership to professional associations if any.

Financial Capacity

  • Audited company financial statements (balance sheet and income statement) and auditors report for the last two years

Exclusive bank account

  • Is the organization willing and able to have a separate bank account for the funds provided by UN-Habitat?

 

 

 

Integrity and Governance

  • The organization should complete and submit a signed Partner Declaration Form.

Click here to access the Partner Declaration Form

  •  Provide the profiles of the Chairperson of the Board of Directors, Head of the Organization and Chief of Finance

Selection Criteria

 

 

 

Criteria

 

Submission Details/ Documents Required

 

Weighting

1.   Technical capacity

 

25%

1.1 Does the organization have the relevant experience and proven track record in implementing activities in the areas of the project?

Has it managed in the past projects of similar technical complexities and financial size?

Is the project linked with the core business of the IP?

  • List of projects executed in the last 2 years (value, location, donors, nature of projects, execution stage – completed or ongoing).
  • Demonstrate how the experiences in past projects are relevant in the execution of the current proposal
  • References from past donors

 

1.2 Does the organization have qualified technical staff with the experience and the technical skills required by the project?

What is the staff size, type, qualification and education background?

  • CVs of key management staff, technical and non-technical staff that will be involved on the project
  • How many technical staff do you have in the concerned Country for implementing the project? Is there reasonable assurance that such technical staff required by the project will continue to be available as needed in the Project?

 

1.3 Does the organization have a clear and strong link with an identifiable constituency relevant to the targeted population of the project?

Does it have the ability to impact on the targeted population and on the issues?

Does it have strong presence in the field and for how long?

Does it have adequate capacity to work in key areas/regions where the proposed field activities will be implemented?

  • Demonstrate, describe and provide proof of local operational presence, including link and ability to impact the targeted population.

 

1.4 Does the organization possess adequate physical facilities, office equipment, transport, etc. to implement the activities?

  • Provide location and list of office facilities, vehicles and office equipment locally available to implement the project.

 

1.5 Does the organization have formal procedures to monitor project execution (e.g. milestones, outputs, expenditures…)

  • Provide formal project monitoring policies and procedures

 

 

2.   Financial and administrative capacity

 

15%

2.1 Has the organization been in operation over a period of at least 2 years to demonstrate its financial sustainability and relevance?

  • State the years of operation
  • Financial statements for the last 2 years

 

2.2 Does the organization have qualified staff in Finance? Is the current accounting system computerized and does have the capacity to collect and provide separate financial reports on the activities executed under the Agreement of Cooperation?

Does it have systems and practices to monitor and report whether the project deliverables and expenditures are within agreed time and budget?

Does it have minimum segregation of duties in place (separation between project management, finance/accounting and executive office)

 

  • CVs of key finance and accounting staff
  • Description and key features and controls of the accounting system used
  • Organization structure/ Organogram

 

2.3 Does the organization have the capacity to procure goods and services on a transparent and competitive basis? (if applicable) check for procurement unit with experienced staff

  • Copies of procurement policies and procedures. The procedures should show how you procure locally and internationally.

 

2.4 Does the organization have formal procedures and controls to mitigate fraud such as multiple signature signatories on bank accounts, reporting and prosecution of incidences of fraud?

  • Describe anti-fraud controls and provide formal procedures

 

2.5 Does the organization have capacity to provide in-kind, financial, personnel contribution as UN-Habitat Implementing Partner in this present project? Please give details of contribution nature and size.

  • Describe nature and value of contribution (in-kind or cash)

 

 

3.   Financial Proposal

 

 

30%

3.1 Is the budget for each component of the activity to be performed by the Implementing Partner

(i) cost-effective (i.e. the cost should be economical and prudently estimated to avoid any under/over estimation)

(ii) justifiable/well supported and

(iii) accurate and complete

 

Budget Proposal

Click here to access the Budget Proposal

 

  • Other supporting documents

 

 

4.   Technical Proposal

 

 

30%

4.1 The technical proposal is sound and responds adequately to the specifications and requirements?

Technical Proposal document

Click here to access the Technical Proposal

 

 

Cumulative score for ratios

 

100%

Notes:

  1. Interested Organizations must provide information indicating that they are qualified to perform the services (brochure, description of similar assignments, experience in similar conditions, availability of appropriate skills among staff, etc.).
  2. The CFP and accompanying documents must be received in accordance with instructions provided. The CFP should be submitted to claudia.scheufler@un.org. CFPs submitted to a different email address other than the specified one will not be considered.
  3. CFP from applicants failing to provide the complete information to fulfill the basic eligibility criteria will be considered non-responsive.
  4. CFP received after the above deadline will not be considered
  5. Organizations will be selected in accordance with the procedure set out in the UN-Habitat IP Management policy and Standard Operating Procedures.
  6. CFP from applicants failing to provide the requested information will be disregarded.
  7. This CFP does not entail any commitment on the part of UN-Habitat, either financial or otherwise. UN-Habitat reserves the right to accept or reject any or all Proposals without incurring any obligation to inform the affected applicant(s) of the grounds.
  8. All prices must be in USD

 

Deadline/closing date: 
Wednesday, November 21, 2018