Contract

Project

Indonesia: Stakeholder engagement on design/preparation of green bond design in forest and land use sector

Expertise

Category

Advisory Report: Level F

Location

Duty Station

Indonesia

Contract Length

Start Date

 June 2018

End Date

 Dec 2018

Part-time/Full-time

Contract Value

Daily Rate

 Deliverable based

Days Estimated

 80 days

Total Fees

Up to USD 32,000 (dependent on qualification)

Specifics of Recruitment

Background

GGGI is working closely with the Ministry of Environment and Forestry and the national Peatland Restoration Agency (BRG) to help create a suitable enabling environment and bring investment into targeted demonstration projects for peatland restoration and development. GGGI is supporting the design and preparation of a project to restore the Utar-Serapat peatland landscape in South and Central Kalimantan.  The work so far has included the development of a landscape approach for peatland restoration and development focusing on a number of commodities with potential for investment and for sustainable livelihoods in local communities that are compatible with hydrological restoration of the peatlands.

BRG initial assessments indicate that ‘Utar Serapat’ has ~40,000 hectares of deep peat that needs restoration work. This work would require mobilization of ~USD 14 million for rewetting, reforestation, and revitalization of the local economy (GGGI internal estimates). GGGI Indonesia aims to pilot the landscape approach for peatland restoration and development at the ‘Utar Serapat’ site and aims to unlock restoration investment for at least 3 such peatlands sites, thereby representing a potential project size of approx.. USD 50 million.

GGGI is developing the concept of “peat-bonds”, along the lines of green bonds’ framework(s). Successful implementation of the peat-bonds mechanism could become one of the primary mechanisms for the national and local governments to sustainably finance restoration activities in peatlands across Indonesia (and potentially in other parts of the world). For the long-term investors, this could represent an opportunity to increase the share of green assets in their portfolios. The restoration work also has potential to spark development of multiple new business models for commodities derived from in and around peatlands like Gelam, Jelutong, Tengkawang, Rattan, peat-based aquaculture etc. (currently not within the scope of this project).

Currently, GGGI has collaboration with a few other organizations to develop the peat-bonds concept further. GGGI is also in the process of conducting a pre-feasibility assessment for this project. As a part of this assessment, GGGI team intends to carry out structured discussions with relevant Government of Indonesia (GoI) staff members and existing project owners to receive feedback and recommendations on structuring of the instrument. With Indonesia issuing green sukuk earlier this year, the timing is relevant to explore the possibility of using bond financing for peatlands restoration.

Objectives/Purpose of the Assignment:

The objective is to develop and formalize an implementable peatlands focused bond design, by engaging /working closely with the stakeholders from the relevant government counterparts and potential beneficiaries. The objective also is to set the roles and responsibilities of the stakeholders involved and generate consensus for the same.

The purpose is to get formal approvals from the relevant Government stakeholders for the GGGI designed peat bond, taking all the way to the launch and successful deployment of the bond. The output for this project would clearly define the relevant stakeholders (including national and local government decision makers, beneficiaries, communities, etc.) and enable GGGI to take up the operationalizing of this financial mechanism along with other partners.

Scope of Work:

The consultant is expected to;

1. Facilitate and secure engagement with key GoI staff members (Echelon 1/2/3) across the relevant ministries – Ministry of Environment and Forestry (KLHK), BAPPENAS, Ministry of Finance, Ministry of Agriculture etc. We expect a complex stakeholder engagement for the program, with multiple players from different GoI departments; and thus, the consultant shall be expected to be skillful in managing such engagement.
2. Document and fully understand the administrative framework needed for all the Government stakeholders (from the perspective of implementing a peat-bonds concept) – BAPPENAS, Ministry of Finance, Ministry of Environment and Forestry (KLHK), Ministry of Agriculture, etc. Additional national/sub-national/international stakeholders could be added to the list, depending upon the consultations, financial instrument design and operational mechanisms.
3. Collate GGGI design options, review and analyze the necessary design elements of the bond structure to and conduct brainstorm/feedback consultations (or workshops, if required) with GoI to fully substantiate the design and all subsequent stages of deployment (issuance of bond).
4. Review and analyze the international and national level engagement for the key stakeholders from the perspective of issuing a green bond. Identify and define the roles and responsibilities to form/strengthen linkages between agencies (internal and cross-order).
5. Key consideration must be given to link the roles and responsibilities to currently active stakeholder programs and gain consensus/acceptance from the GoI executives on the participation in this program. This confirmation could be in a written formal engagement letter/MoU etc.
6. While structuring of the peat-bond will be led by GGGI, the consultant will play a key role in reviewing the documents and providing guidance to shape the design effort by identifying and engaging relevant GoI stakeholders.
7. To also engage project owners/ investors/ managers for peatlands restoration and conservation projects like Sabangau, Katingan, Rimba Raya etc. to understand their project operations, financing requirement, key challenges, etc.
8. Assess the existing projects as potential beneficiaries from the bond issuance by considering their financial requirements and revenue generating potential. 
9. Conduct workshops (inception and engagement stages) with potential beneficiaries to present the financial mechanism for their feedback, review and consensus.

Output/Reporting Requirements/Deliverables:

1. While structuring of the peat bond will be led by GGGI, the consultant will play a key role in reviewing the documents (strategic, operational and technical design) and providing guidance to shape the design effort by identifying and engaging relevant GoI stakeholders.
2. Secure and engage key GoI staff members (Echelon 1/2/3) across the relevant ministries – Ministry of Environment and Forestry (KLHK), BAPPENAS, Ministry of Finance, Ministry of Agriculture etc. to conduct a complex stakeholder engagement for the program, with multiple players from different GoI departments; with an objective of reaching a consensus on an implementable “peat-bond” design.
3. Consensus building is key to getting approvals from the government stakeholders, the consultant will be needed to lead Government meetings as a part of GGGI team. (Note: All government stakeholder meetings pertaining to the project shall be done along with GGGI staff as a GGGI meeting). Independent meetings pertaining the project would be considered breach of contract unless otherwise allowed by GGGI in writing.
4. Identify key contact persons in each relevant ministry who could be a part of working group going forward in development and deployment of the bonds. Draft specific, detailed and practical steps (including specific Government operation model at national/provincial offices) for taking the project to successful deployment.  
5. Facilitate and conduct at least two working group consultations (this is different from day to day meetings) and present the draft peat bond design options to the key stakeholders including agencies/Government counterparties as mentioned above, the efforts are not limited to government stakeholders mentioned above, the list is indicative and will have more stakeholders added as we progress in the project.
6. Facilitate and conduct at least one workshop with potential beneficiaries of the financial mechanisms (Sabangau, Katingan, Rimba Raya etc.).
7. Produce a well-written and comprehensive project closure report with the processes followed to engage the government stakeholders highlighting: Current responses by key stakeholders in development of the peat bond – recommendations for strengthening responses.
8. Recommendations to strengthen linkages between organizations/ministries involved in the process.
9. Provide a detailed resource Directory of all the relevant Government Departments / Ministries / NGOs/private sector/SoEs with focal points.

Time Table and Reporting Arrangements

General Overview of the timeline of the deliverables, to be fixed upon signing of the contract, and aligned with the outputs mentioned above:

Qualifications/Experience/Expertise

1. Track record of deep rooted engagement with the Government stakeholders mentioned above (please provide evidence of project completed with the stakeholders mentioned above).
2. A demonstrated understanding of and experience with Indonesian government system and key stakeholders in the forestry and land use sub-sectors, and markets will be highly favorable.
3. At least 8 years Experience in stakeholder consensus building by navigating between multiple ministries in Indonesia will be an advantage.
4. At least 3 years of prior work experience in dealing with financial structures. Experience with Green bonds development/ structuring will be given a priority.
5. A Master Degree in Energy and Environment / Science and Engineering / Energy Finance, or other related degree from a reputable local or overseas universities/institutes will be favorable.
6. At least 8 relevant years of experience 
7. Demonstrated knowledge and experience in undertaking primary research especially in the area of peatlands will be favorable. This is an innovative product that GGGI wants to bring forth to the market.
8. Understanding of bond structures and design will be favorable. Previous/current active involvement in successful deployment of green bonds project is highly desirable.
9. Must be able to analyze/review professional documentation especially on Green bond structures.
10. Indonesia country experience and superior Bahasa skills are a must.