Objective and Purpose of the Assignment
1. The Asian Development Bank (ADB) is seeking to review and expand its financing program in the water sector. This includes review of the projects and programs in sovereign lending (ADBs five Regional Departments – RDs – in Central West, East, South, and Southeast Asia and the Pacific) to improve the performance of existing clients and increase their financial flows and credit worthiness as well as to look at alternative means of financing to crowd in commercial, blende and other financing. To accomplish this will require (i) assessment of the current financing, transactions and modalities currently supporting the water sector in ADB member countries; (ii) evaluation and recommendations for reforms to the enabling environment (including regulatory frameworks and capital markets) that can support financing; and (iii) alternative financial structures within ADB’s sovereign operations. ADB also has a Private Sector Operational Department (PSOD) and Office of Public Private Partnership (OPPP), both of which offer opportunities for expanded finance in the water sector as well as greater interaction with sovereign operations in the RDs.
2. The interest to expand the financial options to support to ADB’s Developing Member Countries to represents a long-term initiative to enhance the client services and development impact of ADB’s water sector program in line with ADB’s Strategy 2030 and the Sustainable Development Goals. An important milestone to forward ADB’s program on enhanced water financing includes ADB’s hosting of the Roundtable on Financing Water on 26-27 November 2019, which will be a catalytic event to elevate interest and action among ADB RDs, OPPP and PSOD staff.
3. The Roundtable on Financing Water is a joint initiative established by the OECD, the World Water Council and the Netherlands. The Roundtable provides a global public-private platform to promote action to scale up financing for water security and sustainable growth among governments, financial institutions, international organisations, philanthropies, academia and civil society organisations. As noted, the Asia Regional Financing will be held at ADB Headquarters, Manila, Philippines, 26-28 November 2019. ADB has overall responsibility for organizing in cooperation with OECD, the World Water Council and the Government of the Netherlands.
4. ADB is hosting the Asia-Pacific regional meeting of the Roundtable to provide an opportunity to (i) characterise water financing challenges and opportunities in the context of the Asia-Pacific Region; (ii) showcase innovative approaches in increase financial flows to the water sector and explore how they can be scaled-up; (iii) facilitate constructive engagement between governments and public and private finance institutions in the region; and (iv) help ADB take a leadership role in advancing these issues with its clients and on the international agenda. The regional meeting will also provide the platform for presenting the chapter on “Water Financing” of the Asian Water Development Outlook 2020 edition.
5 The target audience includes representatives from (i) ADB’s DMCs, (ii) public and private financial institutions (national or regional development banks, commercial banks, institutional investors, asset managers, venture capital firms, impact investors, philanthropies and foundations), and (iii) staff from ADB HQ Operational Departments and Resident Missions will participate. Previous regional meetings of the Roundtable have engaged between 70 and 100 participants, and it is anticipated that the Asia-Pacific Meeting will be similar.
Scope of Work
6. This assignment is aimed has two primary tasks (i) reviewing the financing options available to ADB clients and making recommends for more innovative financing and transactions across the spectrum of ADB’s financing options including (a) sovereign lending; (b) OPPP, and (c) PSOD, and (ii) providing support to prepare and coordinate the Roundtable on Financing Water including the drafting of relevant background paper(s) and organization/coordination of the Roundtable sessions/program.
Detailed Tasks and/or Expected Output
Specifically, the Water Financing Specialist will carry out the following detailed tasks:
a. Review and analyze available financial data on the amount and sources of funds going into the water sector in Asia and the Pacific and for ADB DMCs in particular. Provide a summary of the activity and any changes or trends.
b. Synthesize the investments to date on water supply and sanitation in the region and present an analysis of investment requirements over the medium-term (5-10 years) and long-term (15-20 years).
c. Assess the development and options for local capital markets to provide financing (bonds, equity, debt etc.) in the water sector in selected ADB DMCs. This would include countries where this is already taking place in the water sector or other infrastructures. Assess barriers to accessing financing.
d. Assess the development of the enabling environment and the regulatory frameworks in particular to support commercial and other types of finance transactions that may combine different sources of finance, such as sovereign lending/development finance and commercial finance, for the water sector in selected ADB DMCs.
e. Based on analysis and literature views, provide a background document on the necessary enabling environment and the regulatory frameworks to enable commercial finance and other more sophisticate financial transactions to take place in selected ADB DMCs. Make recommendations for needed policy reforms in selected ADB DMCs.
f. Review ADB sovereign lending to the water sector and look for opportunities that in the short- or medium-term where commercial finance or a mix of sovereign and nonsovereign funds (either ADB or local capital markets) could be applied in selected ADB DMCs.
g. Help to develop Terms of Reference and workplan for a small unit to support ADB sovereign operations diversify and strengthen the financing options that they can provide for ADB in selected DMCs
Develop Sessions/Program in for ADB-hosted Asian Roundtable on Water Financing
h. Provide inputs to the development of the Program including defining themes and content of each session in cooperation with ADB and OECD.
i. Help identify resources speakers and panelists to contribute to the various sessions in addition to ADB staff and DMC participants.
j. Assist in identifying cases and best practices for presentation at the Roundtable.
k. Assist in preparing session guides and discussion points as needed.
l. Provide support in preparing presentations for ADB staff and DMC counterparts as well as reviewing presentations and or any other materials related to the Roundtable for quality control.
m. Provide inputs to briefing notes for ADB Staff and Management as required.
n. Provide analysis and summary of the presentations and discussions during the Roundtable. Support ADB staff to develop follow-up actions and way forward (roadmap) for enhanced financing in the water sector.
Preparation of Indicative Discussion Papers and Summary Paper for the Roundtable (indicative in content and number of outputs.)
o. Provide a short background paper (2000-3000 words) on ADB’s private sector experience in the Peoples Republic of China (PRC) based on material provided by ADB staff and PRC project participants.
p. Provide a short background (2000-3000 words) on ADB’s current experience in Southeast Asia and elsewhere with clients who are transitioning from government funded provision of water services to more corporatized or privatized orientations with focus on sustainable financing. Paper based on material
provided by ADB staff and Roundtable participants.
q. Provide a short background paper (2000-3000 words) on ADB’s experiences in improving the performance of water service providers (mainly water supply and sanitation providers).
r. Provide a short background paper (2000-3000 words) on disaster risk and flood risk management financing in Asia. Paper based on material provided by ADB staff and Roundtable participants.
s. Provide a background paper and associated materials on the research regarding financial flows and trends in Asia.
Outputs and Deliverables
8. The Specialist will produce the following deliverables:
- Draft research findings and initial discussion on water financing in Asia 30 September 2019 and final draft by 31 December 2019
- Short background paper for the Roundtable on 10 October 2019 and final drafts by 23 October.
- Initial inputs to program/sessions by 30 September 2019
- Highlights of Discussion within two weeks after the event.
- Draft Roundtable Summary Paper incorporating meetings highlights and action plan by 15 December 2019. Final draft by 31 December 2019.
Minimum Qualification Requirements
The consultant should have:
(i) A Bachelor’s Degree in Finance, Economics or equivalent, Master’s degree preferable.
(ii) At least 10 years of general experience and 5 years of specific experience in the field of water financing, public and private finance.
(iii) Assignments with multilateral development institutions and public-private financial institutions.
(iv) Country experience working in ADB DMCs.