NICARAGUA: NATIONAL GSS BOND ROADMAP AND NATIONAL DEBT FOR CLIMATE SWAP ROADMAP

INTRODUCTION TO GGGI

The Global Green Growth Institute (GGGI) is a treaty-based international, inter-governmental organization dedicated to supporting and promoting strong, inclusive and sustainable economic growth in developing countries and emerging economies. To learn more please visit about GGGI web page. 

• Project : NI01-E1 (100%)
• Duty Station: Managua, Nicaragua, with a flexible arrangement (working from home + attending in person to the office when required)
• Contract Duration: 5 months (May – September 2024)
• Number of Workdays Estimated (internal purpose only): 110
• Consultant Level: Level 4
• Total Fees: up to USD35,000

Nicaragua's National Determined Contribution (NDC) was originally submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in 2018 and updated in 2020. The development of the country's NDC followed a highly participatory and consultative process with vulnerable groups, including native, Afro-descendant, and Indigenous communities, women and youth. The resulting NDC is a very ambitious plan that includes climate change mitigation and adaptation measures.

The Green Climate Fund (GCF) is the financial mechanism created within the framework of this Convention (UNFCCC) and seeks to support countries in complying with their National Contributions (NDC) and, in this way, contribute to the final objective of keeping the increase in global average temperature below 2°C above pre-industrial levels, recognizing that this would significantly reduce the risks and effects of climate change.

The Global Green Growth Institute (GGGI), in collaboration with the Secretariat of Climate Change, the Ministry of the Environment and Natural Resources and the Ministry of Finance and Public Credit, is implementing a 24-month technical assistance program for the Government of Nicaragua entitled "Mobilization of climate finance and private investments for low carbon development in Nicaragua". The program, funded by the Green Climate Fund (GCF) Preparatory and Readiness Support Program, aims to improve the institutional capacity, strategic frameworks, and project portfolio of the Government of Nicaragua to increase the mobilization of national and international climate finance and private investments for the implementation of national determined contribution (NDC) and low-carbon development.

[1] GSS Bond Roadmap

Provide technical assistance to support the development of a government Green Social and Sustainability (GSS) Bond Roadmap linked to the specific project portfolio.

This consultancy will have the following specific objectives:

• Assist the Government of Nicaragua in identifying, prioritizing, and selecting eligible categories of projects and expenditures to be included in the portfolio of green projects to be financed with bond proceeds, linked to National Determined Contributions (NDC).
• Develop the Nicaragua GSS Bond Roadmap, defining the environmental and social objectives of the issuance, the preliminary issuance strategy, the schedule, the steps prior to the issuance, the roles, and responsibilities of the key actors. This analysis should include opportunities to reduce the fiscal deficit and implementation mechanisms based on previous GGGI experiences or other references.
• Identify/map potential creditor counterparties, develop and implement an engagement strategy to gauge interest in a potential transaction in terms of GSS bond road map.

[2] Climate Change Debt Swap roadmap

Provide technical assistance for the design and implementation of the Nicaraguan government's Climate Change for Secretariat of Climate Change of the Presidency and MARENA and stakeholders in Debt Swap roadmap based on the portfolio of projects eligible for this type of transactions.

This consultancy will have the following specific objectives:

• Assist the Government of Nicaragua in identifying, prioritizing, and selecting eligible projects and expenditures to be included in the portfolio of green projects to be financed with debt-for-climate swaps, linked to National Determined Contributions (NDC).
• Develop the Nicaragua debt-swap for climate change Roadmap, defining the environmental and social objectives of the issuance, the preliminary issuance strategy, the schedule, the steps prior to the issuance, the roles, and responsibilities of the key actors. This analysis should include opportunities to reduce the fiscal deficit and implementation mechanisms based on previous GGGI experiences or other references.
• Identify/map potential creditor counterparties, develop and implement an engagement strategy to gauge interest in a potential transaction in terms of debt-swap road maps.

Under the direct supervision of the Project Manager and in coordination with GGGI’s Nicaragua team, the Consultant will present the following deliverables:

Deliverable 1: Detailed Workplan

Upon taking on the assignment, the consultant is expected to arrange and complete consultations with relevant project stakeholders to develop a detailed workplan outlining the timeline of main activities, methodology, milestones, validation meetings, draft and final deliverables.

Deliverable 2: Debt for Climate Swaps Baseline Report

The Consultant shall produce a diagnostic study of Nicaragua’s fiscal situation, readiness, and capacity to implement a Debt for Climate Swap Transaction. The tentative structure of the baseline report is as follows:

• Assessment of Nicaragua´s outstanding debt and current debt service capacity;
• Assessment of Nicaragua´s public debt management plan;
• Characterization of the main holders of Nicaragua´s external debt;
• Identification and review of principal debt management polices and climate finance strategies and plans;
• Preliminary screening of credits to identify possible counterparts for the swap transaction;
• Mapping of stakeholders involved in a possible swap transaction;
• Review of international best practices and case studies applicable to Nicaragua´s context;
• Annex: Table of Contents of Nicaragua´s Debt for Climate Swap Roadmap.
• Annex: minutes from bi-weekly validation meetings, including participants list, feedback and next steps.

The consultant will deliver the baseline report in a Word document accompanied by a brief PowerPoint presentation (10-15 slides). 

The deliverable must be approved by the GGGI’s Project Manager and Nicaragua Nationally Designated Authority.

Deliverable 3:   Nicaragua’s Debt for Climate Swap Roadmap

The consultant shall engage with relevant government counterparts, conduct desk research, and analysis to produce a Debt for Climate Swap Roadmap outlining the step-by-step process to implement the proposed transaction.  The tentative structure of the base line report is as follow:

• Climate and fiscal rationale for the Debt for Climate Swap transaction
• Government stakeholders involved in the transaction and their respective roles and responsibilities
• List and description of eligible creditor counterparts, including names, amount of external debt currently held, main ODA and climate change priorities and targets, contact information
• Portion(s) of external debt that may be subject to a Swap, amount, rationale and justification
• Step-by-step process, including pre- and post- transaction requirements
• Creditor engagement strategy
• List of required documentation
• Expected cost of the transaction
• Annex: minutes from bi-weekly validation meetings, including participants list, feedback and next steps

The consultant will deliver the Debt for Climate Swap Roadmap in a Word document accompanied by a brief PowerPoint presentation (10-20 slides). 

The deliverable must be approved by the Project Steering Committee and GGGI’s Project Manager.

Deliverable 4: Debt for Climate Swap Project Pipeline and Documentation

The consultant will identify, screen, evaluate and recommend eligible projects and initiatives to be financed with proceeds from the swap transaction. The consultant is expected to conduct the following tasks:

a)       Define a list of Environmental, Social and Financial Indicators to be utilized for the evaluation and selection of eligible projects;

b)       Development of an Excel-based Evaluation Matrix enabling the transparent evaluation and selection of projects on the basis of environmental and social impact indicators;

c)       Engage with relevant government departments and agencies to collect a longlist of climate change projects and initiatives;

d)       Facilitate the evaluation of identified projects by representatives of the Department of Finance, Department of Economic Development and Department of Sustainable Development;

e)     The deliverable must be approved by the GGGI Project Manager and Nicaragua Nationally Designated Authority.

Deliverable 5: Government of Nicaragua GSS Bond Roadmap

The consultant shall develop a report outlining the Government of Nicaragua GSS Bond Roadmap, outlining:

a)       The environmental and social objectives of the issuance;

b)       Rationale for a GSS Bond issuance by the Government of Nicaragua;

c)       Relevant policies and plans to guide the issuance strategy;

d)       The recommended issuance strategy;

e)       The pre-issuance steps, processes, requirements, roles and responsibilities of the key actors involved.

f)        Mapping of stakeholders/investor involved in a possible GSS Bond transaction.

The roadmap will be developed in close consultation with the SCCP, MHCP, MARENA and BCN.

The deliverable must be approved by the GGGI Project Manager and Nicaragua Nationally Designated Authority.

Deliverable 6: Recommended GSS Use of Proceeds

The consultant shall develop a report outlining the proposed GSS Bond’s use of proceeds section, in line with the International Capital Market Associate (ICMA), including:

a)       Eligible categories of projects and expenditure;

b)       Eligibility criteria in line with international standards;

c)       Expected environmental and social benefits;

d)       Alignment with the country´s NDC targets;

e)     The deliverable must be approved by the GGGI Project Manager and Nicaragua Nationally Designated Authority.

PAYMENT AND DELIVERY SCHEDCHUELD

Payment

Deliverables

Objectives

Target Completion

Amount (% over total fee)

1

Detailed Workplan

GSS Bond Roadmap and Climate Change Debt Swap roadmap

10-May

10%

2

Debt for Climate Swaps Baseline Report

Climate Change Debt Swap roadmap

24-May

15%

3

Nicaragua’s Debt for Climate Swap Roadmap

Climate Change Debt Swap roadmap

8-Jun

15%

4

Debt for Climate Swap Project Pipeline and Documentation

Climate Change Debt Swap roadmap

03-Jul

20%

5

Government of Nicaragua GSS Bond Roadmap

GSS Bond Roadmap

23-Jul

20%

6

Recommended GSS Use of Proceeds

GSS Bond Roadmap

17-Aug

20%

Reporting Arrangements

The Consultant will be supervised by the Nicaragua’s GGGI Project Manager who will be assisted by GGGI’s technical staff. The consultant's work progress will be monitored primarily through periodic review meetings.  These review meetings will tackle subjects such as the overview of the contractual objectives, the development of activities, detailed information milestones, actual achievements made against the timeline initially set, and any other relevant progress details.

Deliverable 1 – 5 must be written in English and Spanish, in accordance with GGGI's formatting requirements, and submitted with proof of editable file back-up (e.g., .docx, .pptx) in the GGGI SharePoint system. Where relevant, the Consultant shall also provide sets of raw data, research materials, and meeting notes related to the contractual objectives.

The total fees specified in these TOR include other related expenses e.g. travel, accommodation, food, among others.

The product referred as to Final Report (Deliverable 5) is a document that will summarize the main deliverables of the assignment, the activities carried out, conclusions, and recommendations about the consultancy, and must be submitted in English and Spanish (maximum 30 pages).

The Global Green Growth Institute (“GGGI”) is committed to transparency, accountability, and openness in the organization. In case of any doubt, please refer to our Whistleblower policy in the link:

http://gggi.org/site/assets/uploads/2017/11/Whistleblower-Policy_02072015.pdf

The consultant should demonstrate the credentials described below.

Required:

• Must be a Nicaraguan citizen or foreigner who can reside and work with a valid Visa/Permit in Nicaragua.
• Master's degree in financial or similar, economics, banking and finance, specialization studies in climate finance, sustainability applied to business, companies, banks, national financial institutions, development banking. Experience in capital markets, financial models and fiscal policies.
• Relevant and demonstrable general work experience of 8 years, in the financial sector or development banking, desirable experience in formulation, design and implementation of projects in the public and private financial sector, financial innovation projects, climate finance.
• Experience in public financial institutions, multilateral banks, fiscal policy management, public spending, capital markets, Design of innovative financial products, Climate finance, Financial Models, Investment Prospecting
• Preferably, at least two years of consulting experience in international financial organizations, multilateral banking.
• Experience in climate finance, two to three years, preferably with GCF funds or similar organizations.
• Experience in Climate Change and sustainable development issues.
• Preferably, proven track record of involvement in the development, issuance, or management of green, social, and sustainability (GSS) bonds, or similar financial instruments, structuring or advising on debt-for-climate swap arrangements, including negotiation with creditors and stakeholders.
• Language required, Spanish and English, excellent writing skills and clear transmission of ideas.