AFD | Capacity Building Program to support Rural Electrification Enterprises and Small Water Enterprises in developing bankable projects
Context justifying the implementation of the project:
Cambodia's 2012 HDI of 0.543 is below the average of 0.64 for countries in the medium human development group and below the average of 0.683 for countries in East Asia and the Pacific (ranked 138th out of 187 countries in 2012). In this context around 46 % of the population lives in multidimensional poverty and most of them suffer deprivations in living conditions. Limited access to water and electricity in rural areas plays a major role in these poor rankings.
Despite Cambodia's significant progress in enhancing access to water and promoting private investment in the water supply sector, the access to water in rural and agglomerated areas remains low, from 30 % to 60 % according to the figures of different studies undertaken.
Rural electrification remains quite low but electrification is increasing fast. It is generally estimated that only about 15% of rural households are electrified and 2 3% of villages.
As public investment remains low in small towns and rural areas, numerous Small Enterprises (SE) have invested in the water (Small Water Enterprise, SWE) and electricity (Rural Electricity Enterprise, REE) supply sector in those areas.
In the water sector, some of them have developed piped water networks supplying from 500 to 1 200 households with technical and business schemes similar to the ones used by larger scale water utilities. The number of piped network private operators is estimated at 300 of which 130 operate under a licence provided by the Ministry of Industry, Mines and Energy (MIME).
In the energy sector, REEs are in charge of the distribution of electricity, either by connecting to the grid when existing locally, or by producing their own electricity – mostly with diesel generators.
The case of Cambodia is quite unique considering the various typologies of SE, the level of financial investments, their demonstrated initiatives and the financial risks taken. The regulatory framework ensures sufficient flexibility in setting-up the tariffs in order to allow for a quick expansion of water and energy access through SE.
The potential of expansion of water and electricity access in small towns and rural Cambodia is still large; however it is today constrained by several factors.
Small Enterprises (SE) are constrained by the investment required: i) in infrastructure with good design and construction capable of producing safe drinking water with a large service coverage, and ii) in medium voltage distribution lines to link up to neighbouring villages, and in low voltage distribution to increase coverage rates for the more scattered households for electricity. The main difficulties lie in:
funding further investment mostly due to the lack of access to loans from commercial banks that analyse the water and electricity supply sector as a “risky business” and practice high collateral requirements (around 166 %) and small credits (lower than 50 000 USD).
the absence of professional technical assistance in order to: i) design and supervise the works, monitor and train SE, and ii) support SE in the drafting of a sound financial request to be submitted to commercial banks.
Project objective:
In this context, AFD implements a comprehensive program to support the strategy of Cambodia for Rural Electrification and the development of piped water networks in small towns and rural areas in Cambodia and which promote the financing of these SEs by dealing with all identified barriers for a sustainable access to commercial loans by REEs and SWEs.
The program includes several components:
a. A credit facility to a local bank (“the Bank”) and a risk-sharing mechanism called ARIZ dedicated to finance REEs and SWEs in small towns and rural areas in Cambodia;
b. A Technical Assistance (TA) program for the Bank dedicated to improve the technical skills of the bank to appraise and finance such projects;
c. A Capacity Building program (“the CB Program”) to support REEs and SWEs in developing bankable projects.
d. An Investment Grant program (“the IG Program”) to SWEs to improve the financial profitability of their business operation and increase household's access to clean water.
The CB Programme:
The purpose of this consultation is to recruit a consulting firm in charge of the implementation of the CB program to support selected REEs and SWEs in developing bankable projects.
The major part of the assignment relates to the SWEs capacity building.
The CB program comprises 4 components:
Component 1: Support to selected SEs in developing loan applications for the local bank.
The consultant will i) support SEs for preparation and review of loan applications both on financial and technical aspects and ii) carry out feasibility studies for SWEs.
Component 2: Support REEs and selected SWEs in improving their management and business operations.
The consulting firm will provide trainings:
— related to the electricity sector: on billing/accounting tools and practices, on GIS software and on Health, Safety and Environment (HSE) practices;
— related to the water sector: on technical and financial issues.
The consulting firm will also provide coaching and will monitor selected SWEs during two years.
Component 3: Manage incentive investment grant for SWEs.
The consulting firm will allocate incentive investment grants to SWEs based on defined selection criteria and will report and monitor and control the use of the investment grants.
Component 4: Monitoring, reporting, impact assessment.
The consulting firm will monitor, report and assess the impacts of the investments made possible by the AFD program. A dissemination of the project results will be ensured, particularly from the perspective of Policy Dialogue with the authorities through local partners.
Organisational Set-Up:
The CB program headquarter will be based in Cambodia.
The CB program will be tentatively structured as follow:
— A project manager, in charge of the coordination of the project and of the relationships with AFD. He will have strong expertise in project and team management, ability to work in multicultural environment and with large number of institutions, knowledge of international donors practices and requirements (all activities) – international consultant;
— A training specialist in the water sector, placed under the responsibility of the project manager, who will be in direct contact with SEs. He will have expertise in developing training modules and coaching adapted to small water enterprises both on business, technical and financial aspects – Cambodian national is required, with support from international consultant;
— A training specialist in the electricity sector, placed under the responsibility of the project manager, who will be in direct contact with SEs. He will have expertise in developing training adapted to small business in rural area both on business, technical and financial aspects – Cambodian national is required, with support from international consultant;
— Loan application review specialist(s) in the water sector, placed under the responsibility of the project manager, who will have expertise in business plan development, financing, small piped water systems – Cambodian national is necessary, with support from international consultant;
— Loan application review specialist(s) in the energy sector, placed under the responsibility of the project manager, who will have expertise in business plan development, financing, electricity distribution in rural areas – Cambodian national is necessary, with support from international consultant;
All equipment necessary for the implementation of the CB program will be provided by the tenderer. AFD will not provide logistical support to the CB program structure.
The total duration of the CB program is scheduled for 60 months.
The total duration of the CB program is scheduled for 60 months.
Justification for a duration exceeding 3 years: Support to REEs and SWEs in developing loan applications for the local bank will be provided over a period of maximum 3 years. Support and monitor of SWEs having obtained debt financing from the local bank will be provided over a period of maximum 2 years. Therefore maximum duration of the consultant services will be 5 years.
NB: This information do not replace the terms of reference that will be sent to selected applicants.
Date limite
Le délai de réception des offres était de 2014-05-12.
L'appel d'offres a été publié le 2014-04-15.
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Historique des marchés publics
| Date |
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| 2014-04-15
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Avis de marché
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