Local Currency and Capital Markets Initiative Technical Cooperation Framework Tender

Procurement Summary

Country : United Kingdom

Summary : Local Currency and Capital Markets Initiative Technical Cooperation Framework

Deadline : 16 May 2019

Other Information

Notice Type : Tender

TOT Ref.No.: 32415432

Document Ref. No. : 78175

Competition : ICB

Financier : European Bank for Reconstruction and Development (EBRD)

Purchaser Ownership : -

Tender Value : Refer Document

Purchaser's Detail

Purchaser : EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT
Bank Contact Person: Larissa Gosling European Bank for Reconstruction and Development One Exchange Square London EC2A 2JN
United Kingdom
Email :goslingl@ebrd.com

Tender Details

Expression of Interest are invited for Local Currency and Capital Markets Initiative Technical Cooperation Framework

The Cross-Sectoral Coordination Centre of Latvia (“CSCC” or the “Client”) has requested the European Bank for Reconstruction and Development (EBRD) to provide technical assistance in developing the methodology to identify the optimal capital and governance structures for state owned enterprises (“SOEs”) (the “Project”).

The project will be carried out with funding by the European Union via the Structural Reform Support Programme and in cooperation with the European Commission's Structural Reform Support Service (“SRSS”). This TC will be implemented in cooperation with the Governance & Political Affairs (“GPA”), Local Currency & Capital Market Development (“LC2”), and Legal Transition (“LTT”) teams of the EBRD.

The Latvian SOEs exhibit today room for improvement in terms of using the available funding resources more efficiently while achieving the optimal capital structures. Certain drivers led to this development such as the lack of clarity on SOEs- commercial and strategic objectives together with the absence of related financial targets. It has also emerged that key stakeholders were not fully aware of all options available for diversifying the financing tools for SOEs by for instance tapping the debt or equity capital markets.

Furthermore, the local capital markets exhibit a rather fragmented structure characterized by limited turnover and low market capitalisation. This has wide ramifications ranging from capital markets that do not match the economic development of the country to failing to match investors- appetite - due to the lack of index coverage such as MSCI for benchmarking purposes. These issues are being addressed by cross-sectoral Government backed strategies and were reinforced during the SRSS funded project on Frontier Market Status for the Ministry of Finance of Latvia that was completed in early 2019.

In parallel with identifying the appropriate capital structure, there is also a need for Latvian SOEs to have robust corporate governance structures and practices, in order to achieve objectives set out by corporate strategies and ensure adequate internal controls and fair treatment of potential new shareholders (in case of SOEs which are tapping the equity markets) and other investors.

Assignment Description:

The overall objective of the project is to assist the Latvian CSCC in facilitating an improvement of its decision-making process with respect to the most suitable structure of SOE(s) by selecting the most appropriate funding option.

The specific objective of the project is to prepare a Final Report highlighting an overarching methodology for identifying the optimal capital and governance structures for relevant commercially driven SOEs.

The Bank now intends to engage a consulting company (the “Consultant”) to assist and support the CSCC with the implementation of the following activities:

1. Review of capital structures and governance framework analysis: provide an assessment and gap analysis of the current capital structures of SOEs - and highlight global best practices and OECD relevant member state experience on the matter;

2. Feasibility study and development of methodology: draft the methodology to identify the optimal capital and governance structures for SOEs. This proposal shall be made by assessing the advantages and disadvantages, costs and benefits, market sounding with potential institutional investors, and potential risks of the methodology to be implemented;

3. Recommendations: prepare a roadmap that covers measures, timeline and clear responsibilities per stakeholder in order to implement successfully the designed methodology - including testing its merits on 10-15 SOEs.

Full Terms of Reference (TOR) of the Assignment can be found here http://www.ebrd.com/documents/procurement/78175-tors.docx .

Consultant Selection Procedure: Single stage open competitive selection. Interested firms or groups of firms are invited to submit a Technical and Financial Proposal.

Assignment Start Date and Duration: The Assignment is expected to start in June 2019 and has an estimated overall duration of 12 months.

Cost Estimate for the Assignment: EUR 279, 500 (exclusive of VAT).

Funding Source: This assignment is expected to be funded by the European Commission via the Structural Reform Support Service. Please note selection and contracting will be subject to the availability of funding.

Eligibility: There are no eligibility restrictions based on the consultant's country of origin.

Consultant Profile: Corporate services are required. The Consultant will be required to demonstrate:

• A proven track record of working on similar projects and ideally experience in framing reforms on opening of capital structures of SOEs in other OECD countries - that exhibit clear policy for corporate governance of SOEs; and

• In-depth knowledge of the Latvian regulatory framework and local capital markets related instruments is an advantage, and understanding of new legal and regulatory developments are required.

The Consultant's expert team is expected to include the following key experts (the 'Key Experts'):

Key Expert 1: Team Leader: Senior Strategy / Business Planning Expert

• 10+ years of professional experience in advising SOEs with focus on financing via capital markets instruments;
• knowledge and experience of the privatization process and equity capital markets in OECD member states;
• good knowledge of the Latvian legal / regulatory environment;
• corporate governance knowledge and prior state aid experience is preferable;
• proficiency in written and spoken English language.

Key Expert 2: Senior Corporate Governance Expert with relevant project experience in:

• corporate governance of SOEs, including local / regional practices and standards as well as international best practices;
• internal control and risk management as well as compliance and internal audit functions for SOEs;
• advising state authorities on regulatory and governance issues; availability for frequent missions in Latvia;
• designing and conducting knowledge-sharing activities on corporate governance in the form of workshops, seminars and trainings; and
• preferably fluent in English.

Key Expert 3: Business Analyst(s)

• 2+ years of consultancy experience;
• knowledge of opening of capital for SOEs in OECD member states incl. relevant corporate governance aspects;
• experience with data gathering and analysis;
• excellent communication, analytical, report writing and presentation skills;
• proficiency in written and spoken English language;
• financial and commercial track record is advisable.

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