Expertise: Insurance, Project finance, Infrastructure finance, PPPs, Risk management, Infrastructure development, Wastewater Treatment Plants
Expertise Group: Finance and Investment
Consultant Source: International
TOR Keywords: Insurance advisory
Objective and Purpose of the Assignment
ADB partners with the Government of Azerbaijan (GOA) for promoting a public-private partnership (PPP)
for water supply and sanitation infrastructure with private sector participation. The Office of Markets
Development and Public-Private Partnership (OMDP) of ADB works for the GOA in the preparation and
tendering of a wastewater treatment plant for its rehabilitation through a PPP modality (the Project).
The Insurance Advisor will support ADB in developing insurance provisions under a PPP Agreement for the
Project. The objective of this assignment is to establish insurance provisions, coverage limits and
insurer eligibility requirements that are bankable, consistent with international project-finance
practice, and capable of being placed in the market on commercially viable terms, while promoting
alignment with the requirements of prospective international lenders to the Project. When requested by
ADB, the Insurance Advisor will assist ADB responding to bidders’ clarification requests and proposals
from an insurance perspective during the tender and documentation process for the Project.
Scope of Work
The scope of work include, but not limited to, (i) Assessment of the availability and capacity of local
and international insurance and reinsurance markets to support the Project; (ii) Provide recommendations
on commercially viable insurance requirements under a PPP Agreement for the Project; and (iii) when
requested by ADB, Assist responding to bidders’ clarification requests and proposals from an insurance
perspective during the tender and documentation process for the Project.
The Insurance Advisor shall perform the Services in a timely manner and in cooperation with all other
advisors and consultants to ADB when needed. The Insurance Advisor shall perform the Services with the
diligence, care and skill that a prudent independent consultant would ordinarily exercise in
transactions as assigned using practices consistent with customary industry standards.
The Insurance Advisor will be retained by and will be responsible to ADB as an independent consultant in
all respects and shall perform the Services solely for the benefit of ADB. The Insurance Advisor will
follow all instructions of ADB consistent with the scope of work. The Insurance Advisor will respond to
all enquiries made by ADB and will submit its work product to ADB.
Detailed Tasks and/or Expected Output
(A) Final Report shall include (i) Insurance Market Assessment Memorandum; and (ii) Recommended
Insurance Provisions including Minimum Insurance Requirements for inclusion in a draft Project
documentation (PPP Agreement), which will be developed through:
Review of project risks and documentation:
- Review relevant project documentation made available by ADB, including:
-draft Request for Proposals (RFP);
-draft PPP Agreement;
-legal and technical studies and reports;
-draft risk allocation matrix; and
-other project documentation as reasonably required. - Review the project’s construction, rehabilitation and operational risks and identify key insurance
considerations relevant to the Project. (Note: It is anticipated that phased rehabilitation and
construction works will be undertaken within or adjacent to an operating wastewater treatment facility) - Identify any material insurable risks that should be addressed through the Project documentation.
Development of insurance provisions under a draft project documentation:
- Review and advise on the insurance provisions of the draft PPP Agreement, including preparation of
the Minimum Insurance Requirements Appendix for inclusion in the draft PPP Agreement. - Benchmark the proposed insurance requirements against international market practice for wastewater
treatment, water sector PPP and project-finance transactions and review the proposed insurance program
against the requirements typically imposed by international project-finance lenders and development
finance institutions and identify any material gaps and recommend mitigation measures where appropriate. - Assess the availability of insurance and reinsurance capacity for the Project in local and
international markets, including the ability of insurers and reinsurers to support major wastewater
treatment plant rehabilitation and expansion projects. - Consult with insurers, brokers, reinsurers and other market participants, as appropriate, to confirm
the commercial availability of required coverages. - Advise on:
-required insurance policies during construction and operations;
-appropriate coverage requirements;
-policy limits, sub-limits and deductibles;
-insured parties;
-waiver of subrogation provisions;
-loss payee arrangements;
-local law and placement considerations; and
-insurer eligibility requirements. - Recommend appropriate minimum insured values, sub-limits, deductibles and liability limits for each
insurance policy, taking into account:
-project size and replacement value;
-wastewater treatment sector practice;
-international PPP and project-finance market standards; and
-insurance market capacity. - Identify any insurance requirements that may be difficult to procure, may be unavailable on
commercially reasonable terms, or may create unnecessary barriers to competition, and propose suitable
alternatives where appropriate.
(B) Supplemental Advisory Note/s will be developed, upon ADB’s request, in response to bidders’
clarification requests and proposals from an insurance perspective. Such notes will be developed through:
Support during Procurement Process
- Review bidders’ questions relating to insurance matters and provide recommendations for responses.
- Support ADB in assessing the adequacy, responsiveness and bankability of insurance arrangements
proposed by bidders, including any assumptions regarding insurance availability, coverage limits,
deductibles, and insurer eligibility. - Review any bidder departures and proposed amendments relating to insurance provisions.
- Provide insurance-related inputs to bid clarification processes and evaluation when requested by ADB.
- Participate in bidder clarification discussions (virtually as required).
Final Advisory Note
Prepare a brief final note summarizing:
- Key issues identified during procurement process;
- Assessment of bidder insurance proposals;
- Final insurance provisions to be incorporated into the PPP Agreement; and
- Any residual insurance-related risks requiring further consideration.
Minimum Qualification Requirements
The Insurance Advisor shall have at least 8 years of professional experience in insurance advisory for
PPP and project-financed infrastructure projects, including water, wastewater, utilities, and other
infrastructure sectors. The advisor should have experience in assessing insurance market capacity,
developing insurance programs for major infrastructure projects, and advising on lender-aligned
insurance requirements. Geographic experience in the Caucasus region and other countries of the former
Soviet Union would be an advantage.
Minimum General Experience: 8 Years
Minimum Specific Experience (relevant to assignment): 8 Years
