1.       Scope of Work

IFC seeks a firm to conduct a detailed market assessment on the green financing market in Bangladesh, including a deep dive into three or four high-potential sectors, to identify areas of challenge and opportunity for green investments in the country and provide recommendations to unlock financing in these areas. The proposed assessment will cover, but not be limited to, the following aspects of the green finance market and will build upon existing research and studies already available for this market segment. Different methodologies may need to be applied to different components of the study.

A.      Market Assessment

a.       Using an approach that is a combination of primary and secondary research and intensive stakeholder consultations, understand the overall market potential and readiness for green financing by financial institutions in the current macroeconomic environment, including a review of priority sectors and projects guided by the updated Nationally Determined Contributions, the Sustainable Finance Policy for Banks and Financial Institutions, and other green/climate-related policies issued by the Government of Bangladesh.

b.       Review current green finance targets set by the Bangladesh Bank, degree of compliance and target achievement, barriers and concerns of FIs in meeting the targets and/or success areas, sectors where FIs have had success and difficulty with green finance etc.

c.       Conduct a desk review of green sectors that help FIs achieve their 5% green finance target (e.g., large solar) and use existing assessments on such sectors that have already been conducted to identify market opportunity, success/failure causes, innovative green financing instruments that have been successfully deployed so far etc.

d.       Discuss current understanding and progress made by financial institutions in green financing and challenges faced, e.g., capacity constraints withing financial institutions, lack of bankable projects, low demands of green products from the clientele, perceived risks and high costs

e.       Summarize key issues and challenges that hinder green investments, including regulatory gaps, policy fragmentation, existing refinancing process, insufficient data availability, etc.

f.        Identify (and confirm with IFC) 3-4 priority sectors through the above analysis with high investment potential and impact to assess prevailing market gaps and opportunities. Estimate the broad financing potential under each sector/subsector (some potential areas of focus are listed in Section B below).

g.       Identify key financing instruments in each sector/subsector

h.       Identify key stakeholders, both private and public, where IFC can collaborate for market creation, investments, and sectoral interventions.         

i.         Identify technical assistance and capacity building needs of stakeholders – especially FIs.

j.         Conduct a detailed deep dive into each of the identified 3-4 priority sectors as outlined below.

B.       Deep Dives (indicative areas)

(i)      Energy efficiency (EE) for SME sector, except readymade garments (RMG)

§  EE potential and market sizing of priority areas for investment

§  Policy and regulatory landscape including barriers and incentives

§  Current and potential innovative financing instruments to help scale deployment

§  EE technologies mapping and energy saving potential.

§  ESCO landscape and services in EE, if any

§  EE for export-oriented SMEs other than RMG:

·       Identify energy intensive SME clusters and estimate energy-saving potential of relevant EE technologies and the corresponding financing potential.

·       Of these, identify the export-oriented SMEs clusters

·       For the identified clusters, analyze technology needs (cluster- and industry wise), technology providers (vendors) along with their market share, and identify financing requirements; map the financing mechanisms/instruments available/needed for EE.

·        The criteria for identification of the clusters and technology could include cost, applicability, quality product availability, potential savings, payback etc. and will need to be finalized in discussion with IFC

·       SME side data and insights on (i) overall financing need (ii) current and potential future financing availability for EE (iii) preferred financing partners (top 5-10 Banks/NBFCs with the largest portfolio exposure to MSMEs by volume) and (iv) top challenges in modernizing to EE

·       FI side data and insights (i) estimated credit exposure to SMEs (ii) exposure to EE financing (in general and specifically for MSMEs) (iii) key financing instruments utilized to finance EE (iv) key risks and challenges in financing EE generally and MSME specifically.

·       Investor side data and insights (i) List key domestic investors in EE (ii) List key international investors in EE

(ii)     Rooftop solar (RTS)

§  Conduct a demand analysis for RTS systems and review deployment by segment across residential and non-residential.

§  Define suitable RTS implementation models for the Bangladesh market

§  Identify current and potential innovative financing instruments to help scale deployment

§  Review market trends, including drivers and constraints.

§  Track current levels of financing of RTS by FIs, identify existing RTS financial products in the market, and assess FIs’ RTS portfolio performance in the sector versus other product portfolios

§  Assess current financing need and market size including high-potential areas for investment.

§  Identify challenges and risks in financing RTS

§  Review current policies that support, or hinder, the use and financing of rooftop solar.

§  Provide case studies and best practices from other markets that are replicable and scalable in Bangladesh.

§  Develop recommendations for how FIs in Bangladesh can scale up financing of RTS solutions

(iii)   Climate-smart agriculture (CSA)

§  Analyze current FI portfolio exposure to agriculture, agribusiness, and agro-processing in Bangladesh

§  Assess demand potential and financing needs for agrivoltaics, diversified crop production, and commercial resilience-building practices and/or technologies with adaptation/mitigation co-benefits

§  Identify key areas with high potential for CSA investments in line with IFC definitions of CSA, such as resilient crop production, agroforestry, water management, integrated pest management, soil health management, etc.

·       Conduct market sizing of the above and prioritize areas of potential investment

§  Review current agricultural sector characteristics and identify market segments for financial institutions to target CSA products

§  Key challenges in financing CSA

§  Current policies that support, or hinder, CSA

§  Provide case studies and best practices from other markets that are replicable and scalable in Bangladesh

§  Financing needs; market size including high-potential areas for investment.

§  Identify key financing instruments used to finance CSA and potential innovative financial instruments that can help scale CSA financing

§  Identify development partners to promote innovative CSA financing

§  Develop recommendations for how FIs in Bangladesh can scale up financing of such solutions

§   

(iv)   Blue finance

§  Review current market understanding of blue finance, including any existing initiatives or financing products of FIs used in blue sectors

§  Conduct a market assessment to identify sectors and sub-sectors where significant financing opportunities exist for FIs in line with the IFC Blue Finance Guidelines (e.g., water supply, waste management, sanitation, fisheries, aquaculture, seafood value chain, sustainable shipping, and port logistics sectors, etc.).

§  Perform sector/sub-sector level assessment (through desk-top and secondary market research) in terms of key blue opportunities for FIs, focusing on: (a) the size of the opportunity, (b) market potential, (c) market barriers, (d) regulatory and policy environment, (e) key market gaps and challenges, (f) environmental and social concerns, (g) role of the private sector, (h) current and potential innovative financing instruments (i) FI credit exposure (j) potential domestic and international investors (k) an outlook for each sector/sub-sector in Bangladesh.

§  Develop recommendations for how FIs in Bangladesh can scale up financing of such solutions. Provide case studies and best practices from other markets that are replicable and scalable in Bangladesh.

§  Identify 10-20 potential FIs (banks and NBFCs) with exposure to, interest in, and/or capacity for blue finance product development, investments etc.

§  Based on these findings, develop an indicative pipeline or taxonomy of potential blue projects for FIs to finance alongside potential clients and financing value

SELECTION OF CONSULTING FIRMS BY THE WORLD BANK GROUP

REQUEST FOR EXPRESSION OF INTEREST (EOI)

Electronic Submissions through WBGeProcure RFx Now

ASSIGNMENT OVERVIEW

Assignment Title: Green Finance Market Assessment in Bangladesh

Assignment Countries:

• Bangladesh

ASSIGNMENT DESCRIPTION

1. Scopeof Work

IFC seeks a firm to conduct adetailed market assessment on the green financing market in Bangladesh,including a deep dive into three or four high-potential sectors, to identify areasof challenge and opportunity for green investments in the country and provide recommendations to unlockfinancing in these areas. The proposed assessment will cover, but not belimited to, the following aspects of the green finance market and will buildupon existing research and studies already available for this market segment.Different methodologies may need to be applied to different components of thestudy.

A. MarketAssessment

a.Using an approach that is a combinationof primary and secondary research and intensive stakeholder consultations, understandthe overall market potential and readiness for green financing by financialinstitutions in the current macroeconomic environment, including a review of prioritysectors and projects guided by the updated Nationally Determined Contributions,the Sustainable Finance Policy for Banks and Financial Institutions, and othergreen/climate-related policies issued by the Government of Bangladesh.

b.Review current green finance targets set by the BangladeshBank, degree of compliance and target achievement, barriers and concerns of FIsin meeting the targets and/or success areas, sectors where FIs have had successand difficulty with green finance etc.

c.Conduct a desk review of green sectors that help FIs achievetheir 5% green finance target (e.g., large solar) and use existing assessmentson such sectors that have already been conducted to identify marketopportunity, success/failure causes, innovative green financing instrumentsthat have been successfully deployed so far etc.

d.Discuss current understanding and progress made by financialinstitutions in green financing and challenges faced, e.g., capacityconstraints withing financial institutions, lack of bankable projects, lowdemands of green products from the clientele, perceived risks and high costs

e.Summarize key issues and challenges that hinder greeninvestments, including regulatory gaps, policy fragmentation, existingrefinancing process, insufficient data availability, etc.

f.Identify (and confirm with IFC) 3-4 priority sectors throughthe above analysis with high investment potential and impact to assessprevailing market gaps and opportunities. Estimate the broad financing potentialunder each sector/subsector (some potential areas of focus are listed inSection B below).

g.Identify key financing instruments in each sector/subsector

h.Identify key stakeholders, both private and public, where IFCcan collaborate for market creation, investments, and sectoralinterventions.

i.Identify technicalassistance and capacity building needs of stakeholders – especially FIs.

j.Conduct a detaileddeep dive into each of the identified 3-4 priority sectors as outlined below.

B. Deep Dives (indicative areas)

(i)Energy efficiency (EE) for SME sector, except readymadegarments (RMG)

§EE potential and market sizing of priority areasfor investment

§Policy and regulatory landscape includingbarriers and incentives

§Current and potential innovative financinginstruments to help scale deployment

§EE technologies mapping and energy savingpotential.

§ESCO landscape and services in EE, if any

§EE for export-oriented SMEs other than RMG:

·Identify energy intensive SME clusters andestimate energy-saving potential of relevant EE technologies and thecorresponding financing potential.

·Of these, identify the export-oriented SMEsclusters

·For the identified clusters, analyze technologyneeds (cluster- and industry wise), technology providers (vendors) along withtheir market share, and identify financing requirements; map the financingmechanisms/instruments available/needed for EE.

·The criteriafor identification of the clusters and technology could include cost,applicability, quality product availability, potential savings, payback etc.and will need to be finalized in discussion with IFC

·SME side data and insights on (i) overallfinancing need (ii) current and potential future financing availability for EE(iii) preferred financing partners (top 5-10 Banks/NBFCs with the largest portfolioexposure to MSMEs by volume) and (iv) top challenges in modernizing to EE

·FI side data and insights (i) estimated credit exposureto SMEs (ii) exposure to EE financing (in general and specifically for MSMEs)(iii) key financing instruments utilized to finance EE (iv) key risks andchallenges in financing EE generally and MSME specifically.

·Investor side data and insights (i) List keydomestic investors in EE (ii) List key international investors in EE

(ii)Rooftop solar (RTS)

§Conduct a demand analysis for RTS systems andreview deployment by segment across residential and non-residential.

§Define suitable RTS implementation models forthe Bangladesh market

§Identify current and potential innovativefinancing instruments to help scale deployment

§Review market trends, including drivers andconstraints.

§Track current levels of financing of RTS by FIs,identify existing RTS financial products in the market, and assess FIs’ RTSportfolio performance in the sector versus other product portfolios

§Assess current financing need and market sizeincluding high-potential areas for investment.

§Identify challenges and risks in financing RTS

§Review current policies that support, or hinder,the use and financing of rooftop solar.

§Provide case studies and best practices fromother markets that are replicable and scalable in Bangladesh.

§Develop recommendations for how FIs inBangladesh can scale up financing of RTS solutions

(iii)Climate-smart agriculture (CSA)

§Analyze current FI portfolio exposure toagriculture, agribusiness, and agro-processing in Bangladesh

§Assess demand potential and financing needs foragrivoltaics, diversified crop production, and commercial resilience-buildingpractices and/or technologies with adaptation/mitigation co-benefits

§Identify key areas with high potential for CSAinvestments in line with IFC definitions of CSA, such as resilient cropproduction, agroforestry, water management, integrated pest management, soilhealth management, etc.

·Conduct market sizing of the above andprioritize areas of potential investment

§Review current agricultural sectorcharacteristics and identify market segments for financial institutions totarget CSA products

§Key challenges in financing CSA

§Current policies that support, or hinder, CSA

§Provide case studies and best practices fromother markets that are replicable and scalable in Bangladesh

§Financing needs; market size including high-potentialareas for investment.

§Identify key financing instruments used tofinance CSA and potential innovative financial instruments that can help scaleCSA financing

§Identify development partners to promoteinnovative CSA financing

§Develop recommendations for how FIs inBangladesh can scale up financing of such solutions

§

(iv)Blue finance

§Review current market understanding of bluefinance, including any existing initiatives or financing products of FIs usedin blue sectors

§Conduct a market assessment to identify sectors andsub-sectors where significant financing opportunities exist for FIs in linewith the IFC Blue FinanceGuidelines (e.g., water supply, waste management, sanitation, fisheries,aquaculture, seafood value chain, sustainable shipping, and port logisticssectors, etc.).

§Perform sector/sub-sector level assessment(through desk-top and secondary market research) in terms of key blueopportunities for FIs, focusing on: (a) the size of the opportunity, (b) marketpotential, (c) market barriers, (d) regulatory and policy environment, (e) keymarket gaps and challenges, (f) environmental and social concerns, (g) role ofthe private sector, (h) current and potential innovative financing instruments (i)FI credit exposure (j) potential domestic and international investors (k) anoutlook for each sector/sub-sector in Bangladesh.

§Develop recommendations for how FIs inBangladesh can scale up financing of such solutions. Provide case studies andbest practices from other markets that are replicable and scalable inBangladesh.

§Identify 10-20 potential FIs (banks and NBFCs)with exposure to, interest in, and/or capacity for blue finance productdevelopment, investments etc.

§Based on these findings, develop an indicativepipeline or taxonomy of potential blue projects for FIs to finance alongside potential clients and financing value

SUBMISSION REQUIREMENTS

The World Bank Group invites eligible firms to indicate their interest in providing the services. Interested firms must provide information indicating that they are qualified to perform the services (brochures, description of similar assignments, experience in similar conditions, availability of appropriate skills among staff, etc. for firms; CV and cover letter for individuals). Please note that the total size of all attachments should be less than 5MB. Firms may associate to enhance their qualifications unless otherwise stated in the solicitation documents. Where a group of firms associate to submit an EOI, they must indicate which is the lead firm. If shortlisted, the firm identified in the EOI as the lead firm will be invited to the request for proposal (RFP) phase.

Expressions of Interest should be submitted, in English, electronically through WBGeProcure RFx Now

NOTES

Following this invitation for EOI, a shortlist of qualified firms will be formally invited to submit proposals. Shortlisting and selection will be subject to the availability of funding.

Only those firms which have been shortlisted will be invited to participate in the RFP phase. No notification or debrief will be provided to firms which have not been shortlisted.

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