Feasibility Study and Market Placement of a Risk Transfer Solution for the National... Tender

Procurement Summary

Country : DR Congo

Summary : Feasibility Study and Market Placement of a Risk Transfer Solution for the National Agriculture Development Program

Deadline : 03 Mar 2021

Other Information

Notice Type : Tender

TOT Ref.No.: 50355194

Document Ref. No. : 1273019

Competition : ICB

Financier : World Bank (WB)

Purchaser Ownership : -

Tender Value : Refer Document

Purchaser's Detail

Purchaser : THE WORLD BANK GROUP
49, Boulevard Colonel Tshatshi Kinshasa/Gombe Tel: +243 999 94 9015 /+243 817 00 5215
DR Congo
Email :drcalert@worldbank.org / drcinfo@worldbank.org
URL :https://www.worldbank.org/en/

Tender Details

Expression of Interest are invited for Feasibility Study and Market Placement of a Risk Transfer Solution for the National Agriculture Development Program in DRC.


REQUEST FOR EXPRESSION OF INTEREST FOR SELECTION # 1273019

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Selection Information

Assignment Title

Feasibility study and market placement of a Risk Transfer solution for the National Agriculture Development Program in DRC

Publication Date

17-Feb-2021

Expression of Interest Deadline

03-Mar-2021 at 11:59:59 PM (Eastern Time - Washington D.C.)

Language of Notice

English

Selection Notice

Assignment Country

· ZR - Congo, Democratic Republic of

Funding Sources

The World Bank Group intends to finance the assignment/services under:

· BB - BANK BUDGET

· TF0B4448 - Risk-Transfer Solutions for Enhanced Contingency Financing for Agriculture and Food Security in the Democratic Republic of Congo

Individual/Firm

The consultant will be a firm.

Assignment Description

The World Bank is searching for a consulting firm that can support with a feasibility study for a risk transfer solution covering the NADPs beneficiaries against the risks of droughts and extreme precipitation. The objective of the task is to demonstrate the extent to which a risk transfer solution for weather risks (drought and excess rainfall) for the DRC National Agriculture Development Programs (NADP) contingency component provides value for money compared to alternatives. The intention of this work is to support robust and evidence-based decision making by evaluating the proposal of a drought and excess rainfall risk transfer solution for beneficiaries of the NADP through the lens of value for money. The objective of NADPs contingency component is to provide support to NADPs smallholder beneficiaries in case of a sector emergency.

Attachments

· Optional TOR File

Qualification Criteria

· 1. Provide information showing that they are qualified in the field of the assignment and experience in the Region. *

· 2. Provide information on the technical and managerial capabilities of the firm. *

· 3. Provide information on their core business and years in business. *

· 4. Provide information on the qualifications of key staff. *






Terms of Reference
Feasibility study and market placement of a Risk Transfer solution for the National Agriculture Development Program in DRC
1. Background
The Democratic Republic of Congo (DRC) is a resource-rich country with considerable potential for development. With a land surface area of 2.3 million km2, it is the largest country in Sub-Saharan Africa (SSA). The country-s endowment of natural resources includes the world-s largest diamond reserves, major reserves of other minerals, more than 80 million ha of fertile and arable land, and 52 percent of all freshwater resources in SSA. Despite its rich endowments, the DRC is one of the world-s poorest countries and had a 2017 per capita gross domestic product (in PPP 2011) of US$432. The country is emerging from a long period of conflict, which has had devastating impacts on the economy and the population. If the existing agricultural potential were effectively used, the DRC could feed up to one billion people, which is 10 times its own population.
Agriculture currently accounts for about 20 percent of GDP; employs some 70-75 percent of the economically active population; and plays a key role in reducing food insecurity, malnutrition, and rural poverty. Related agro-industries employ another 10 percent of the population. Jobs in agriculture tend to be informal, with low value-added per worker (US$227/year), an amount that often provides only for subsistence. Out of a total population of 81.3 million, the DRC has approximately 13 million farmers in rural areas, with an average landholding of 1.6 ha. Diverse agro-ecological zones enable the production of a variety of staple and cash crops, as well as dairy, livestock, and fisheries. Rural households derive more than 80 percent of their income from agriculture, making the growth of agriculture productivity a necessary condition to reduce rural poverty and food insecurity in the DRC. If crop yields matched the maximum yield in the central Africa region countries, the size of the agricultural sector would more than double, and the DRC-s overall economy would grow by 23 percent.
The agriculture sector of the DRC is particularly exposed to climate change and other external shocks because droughts, floods, and other extreme weather events are expected to increase in frequency and severity. Although the Congo basin seems to be relatively less exposed to climate change than dryer parts of Africa, DRC-s farmers are particularly poor and isolated. Therefore, they are vulnerable to climate impacts and other external shocks such as the recent infestation of fall armyworm and the locust invasion, which have produced large economic losses.
Drought has historically been infrequent in many areas of the country. Nonetheless, climate change and increasing temperatures are leading to higher frequency of weather shocks in many important agriculture production areas. Production shocks in one region or another increase in importance for the DRC because poor internal transportation hampers development of an integrated, national food system.
The National Agriculture Development Program (NADP) is a US$1.5 billion series of projects (SOP) program covering 16 provinces in the DRC over 15 years. It intends in its first phase to reach 1.8 million smallholder framers. The proposed NADP will seek to (a) enable smallholder farmers to transition from mainly subsistence farming to small holder commercial farming and (b) promote private investment in commercial agriculture for domestic and regional markets. To get direct support from the NADP for the adoption of CSA technologies, smallholder farmers must contribute their own counterpart resources for the overall on-farm investment. CSA technologies do improve resilience of famers to weather shocks, but they do so in the medium to long term. While they are adopting the CSA technology (often between 6 to 18 months depending on the technological package chosen), if an extreme weather event strikes, their agriculture production could be lost and, with it, their own investment. Therefore, the contingency finance mechanism aims to protect the livelihoods of the participating smallholder farmers. It will ensure that they have timely resources to restart production in case of extreme weather events.
The initial weather shocks to be covered by the risk-transfer solution will be drought-like events (generated by low precipitation or by high temperatures). As the NADP evolves and depending on the government-s demand, the team will explore covering more types of risks such as excess rainfall, animal or plant health, etc.
A pre-feasibility study/risk assessment impact was conducted and finalized in Sept 2020. The report identifies the most important correlated risks that can have a high negative impact for the agriculture sector in DRC and that could be transferred into global reinsurance markets: drought and excess precipitation. It is the opinion of the consortium that redacted the report that a risk transfer product that is based on a standardized, transparent index focused on modeled crop yield (i.e. crop yield index) would meet the requirements of potential risk takers, provided that the hazard data used comes from public, independent sources (ECMWF-ERA5). The entire report will be shared to the consultant selected for the feasibility study.
The overall characteristics of the risk-transfer solution are these:
• Expected coverage of the risk-transfer solution—four provinces (which are the same as those targeted by the IPF: Kasai, Kasai Central, Kwilu, and North Kivu)
• Expected type of product—parametric
• Expected perils to be insured—drought, excess precipitation
• Expected policyholder: Aggregator of farmers at provincial/district level, or the Project Implementation Unit of the WB operation
The World Bank is searching for a consulting firm that can support with a Feasibility study for a risk transfer solution covering the NADP-s beneficiaries against the risks of droughts and extreme precipitation.
Objective:
To demonstrate the extent to which a risk transfer solution for weather risks (drought and excess rainfall) for the DRC National Agriculture Development Program-s (NADP) contingency component provides value for money compared to alternatives. The intention of this work is to support robust and evidence-based decision making by evaluating the proposal of a drought and excess rainfall risk transfer solution for beneficiaries of the NADP through the lens of value for money. The objective of NADP-s contingency component is to provide support to NADP-s smallholder beneficiaries in case of a sector emergency.
This NADP component requires the Consultant to research the market for benchmark solutions for risk transfer in agriculture, in particular excess rainfall and drought risks, and to quantify the costs and benefits of various solutions that could be used by the NADP to protect smallholder farmers beneficiaries of NADP in the aftermath of a disaster, using the pre-feasibility/risk assessment study in DRC as a basis.
Key Actions:
These will include, but should not be limited to:
• A cost benefit analysis (CBA) framework to compare the opportunity cost of the proposed solution (detailed in the pre-feasibility study) with that of alternative designs (for example, different financial layering, with different balances of different financial instruments, including risk transfer) and counterfactual situations to ensure an appropriate a

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