Foreign economic-aid-related services

Tender description

This is a prior information notice (pin) only: publication and call for competition will be conducted once scope of work is fully defined and approved. Mozambique Agricultural Financing Vehicle Prior Information Notice (PIN) Building on its experience DFID Mozambique (DFIDM) believes there is a role to play in telling a positive story about private investment in agriculture. DFIDM believes commercial agricultural enterprises can play a crucial economic role on poverty reduction if we target for the ‘missing middle of SME's on agribusinesses. Consolidating those business can sustain the dual benefit of i) long-term social and economic transformation to the rural economy and ii) genuinely crowd-in the private investment agricultural space — being through enterprises and/or agricultural services. DFIDM is keen to open frontiers on the Mozambican equity/debt market, in a joint venture with GAPI and genuinely supported by the current government of Mozambique. DFIDM has plans to create a new local Mozambican Agriculture Impact Fund (MAF) for Equity investments. DFIDM will ensure conditions exist to operate and invest social venture and patient capital for equity transactions that shall be balanced in terms of risk and development gains with adequate Technical Assistance/BDS — That means finding a suitable company manager to partner with, able and motivated to pioneer the first compliant Impact Equity Mozambican Fund dedicated to agriculture with a focus on SMEs development. Description of MAF Programme Objective The objective of MAF is to create a sustainable and compliant Mozambican equity company that will be a pioneer in creating sustainable development of new and existing commercially viable businesses along agricultural value chains and services across Mozambique, in order to improve the competitiveness of the agricultural sector and the living conditions of smallholders and low-income households and to increase food security in the country. Important: The contract holder will build a sustainable local equity company and will have to sign a non-competitive clause in Mozambique. The assets will be in the new company's books. Investment Objective MAF is to provide equity and quasi-equity financing as well as managerial support and technical assistance to Mozambican businesses that are active across the agricultural value chains. Target investees are mainly SMEs that are inhibited in their growth potential due to lack of access to capital as well as to business development support services. MAF may also invest in larger businesses that have a demonstrable and positive social impact for smallholders or low-income households in Mozambique. By acting as a pilot investment vehicle in Mozambique that seeks to narrow a funding gap in the market, MAF aims to pioneer and demonstrate the attractiveness of Mozambican agricultural value chain investments for commercial capital while improving livelihoods of smallholders or low-income households that are active across the agricultural value chains in Mozambique. Investment Instruments Funding of DFID, assuming conditions are satisfied, is intended to provide USD 20 000 000 equivalent in capital to the Company for investments. Additional funding is intended to be made available to partly cover operational costs and for a TA Facility. Eligible Instruments The Company will pursue its investment objective by deploying the following instruments:— Equity investments (in MZN only) through ordinary and/or [preferred shares],— shareholder loans [(in USD or MZN)],— [other equity and quasi-equity instruments].Through its equity instruments, the Company will aim to obtain a stakes in its Investees and will assist the owners and the managers of the Investees to develop their businesses. The Company will aim to exit equity investments up to 12 years. Early Market Engagement (EME) Objective This is a Prior Information Notice (PIN) only: publication and call for competition will be conducted once scope of work is fully defined and approved. DFID is in the process of establishing the conditions for a joint local equity operations and designing and developing the structure and route to market and therefore no tender documentation will be available at this time or stage in the process. DFID is exploring a range of potential design of MAF and would like feedback/testing from the market actors on opportunities, challenges and risk of launching such an initiative in Mozambique. As part of this exercise, DFID is hosting an early market engagement event to collect market inputs for completing its business case. Format There will be a presentation of MAF, a session of market question and answers, some breakout session if necessary, short session to introduce the principles of the OJEU (Official Journal of European Union) tender process and the next steps and timing once the EME is completed. Potential Questions during the EME to be discussed 1) How do we create MAF to comply with the Mozambican Financial, fiscal and regulatory Framework?2) How do we setup the governance structure of MAF with a Company Manager that is able to build capacity and to ensure it functions effectively and maximises its impact? What type of conditions or incentives MAF would need to guarantee before it is launched ?3) How do we set-up the structure of MAF to enable it to evolve from a donor funded finance vehicle to a revolving capital investment organisation? 4) What are the risks (market, governance, fiscal, legal, etc) associated with MAF and how to ring fence them? How to Participate Please register your interest in this PIN via the DFID Portal in due course. (https://supplierportal.dfid.gov.uk/selfservice/) Please register with the DFID supplier Portal for all communications on this programme. Registration for the EME will be through the Portal and Suppliers must be registered prior to the 15.3.2016.The EME is being held at the British High Commission in Pretoria on 22.3.2016, starting at 13:00 SA time and potentially running until 17:00 Pretoria time. Participants can also dial in via phone (+44 1355 598360, then VMR 402031626# then Access Code 1296#). Participants will hear the opening presentation and questions and answers session but might not be able to listen to any break-out session discussions. DFID will hence make a summary of the day's discussions available to all attendees including phone attendees after the event.