REQUEST FOR PROPOSAL-TERMS OF REFERENCE-CONSULTANCY FOR GENERAL BUSINESS STRATEGIST TO SUPPORT PORTFOLIO INVESTEES IN SOMALIA AND SOMALILAND MAY 2024

TERMS OF REFERENCE CONSULTANCY FOR GENERAL BUSINESS STRATEGIST TO SUPPORT PORTFOLIO INVESTEES IN SOMALIA AND SOMALILAND

1. The African Enterprise Challenge Fund (AECF)

The Africa Enterprise Challenge Fund (AECF) transforms lives by providing investment funding and technical assistance to commercially viable businesses that improve the lives of rural communities. It mobilizes donor funding to support early and growth-stage businesses in agriculture and renewable and clean energy sectors, with a focus on improving incomes and employment for rural and marginalized groups. It is a non-profit organization, with its headquarters in Nairobi and operational centres in Somalia, Ethiopia, Dar-es-Salaam, Mozambique, Nigeria, South Sudan, and Côte d’Ivoire.

We surface and commercialize new ideas, business models and technologies designed to increase agricultural productivity, improve farmer incomes, expand clean energy access, reduce greenhouse gas emissions and improve resilience to the effects of climate change while also addressing the crosscutting themes of women, youth, and fragility. AECF is committed to working in frontier markets, fragile contexts, and high-risk economies where few mainstream financing institutions dare to go.

Since our launch in 2008 at the World Economic Forum, AECF has built the resilience of rural and marginalized communities by catalysing innovative private sector business models with patient capital and growth support services across Sub-Saharan Africa.

1. REACT Sub Saharan Africa

REACT Sub-Saharan Africa (REACT SSA) is a Swedish International Development Authority (Sida) funded programme that provides financing and technical assistance to innovative renewable energy businesses/ business ideas across Sub-Saharan Africa (SSA). The programme commenced in November 2017 and will run for five years in Burkina Faso, Ethiopia, Kenya, Liberia, Mali, Mozambique, Zimbabwe and Somalia together with a regional component to support technical assistance, advocacy and learning activities.

REACT SSA is expected to catalyse the private sector by supporting transformative business models to accelerate access to low cost, clean energy i.e. cleaner fuels, cookstoves, alternatives to grid power including stand-alone solar home-systems, solar lanterns for lighting and charging mobile phones and decentralized mini and microgrids.

The programme supports activities that demonstrate how new knowledge in renewable energy technologies can be put into practice in ways that benefit the poor, especially women. It will also provide an evidence base to address challenges in policy concerning the uptake of renewable energy in participating countries. These include inadequate legal, regulatory and institutional frameworks; lack of funds to expand rural electrification programmes; pricing distortions that are disadvantageous to renewables; high upfront capital costs and financial institution reticence to clean energy lending and limited relevant skills and expertise.

1. REACT SSA Somalia and Somaliland

The REACT SSA Somalia and Somaliland programme, a component of REACT SSA, is a fund that seeks to reduce poverty through a transformational increase in the use of renewable energy by off-grid households in the Federal Government of Somalia (FGS) and Somaliland. This programme aims to promote private sector investment and innovation in low-cost clean energy and climate change catalyzed at scale.

The specific objectives of the fund are:

1. Support transformational business models adapted to the target markets in order to accelerate access to low cost, clean energy i.e. cleaner fuels, cook stoves, alternatives to grid power.
2. Support commercially viable companies and markets in target countries, out of which 25 percent will be women owned and/or managed.
3. Support innovative ideas that stimulate next-generation approaches in the renewable energy sector in Sub-Saharan Africa.
4. Capture and disseminate lessons on how increased access to clean energy can deliver positive impact on the rural poor, especially women and youth, through: i) business models, ii) improved business environment, through policy influencing and advocacy, and iii) improved business environment through crowding in, replication and copying best practice.
5. Stimulate stakeholder engagements for an improved policy, legal and regulatory environment for renewable energy businesses within the target countries.
6. REACT SSA Somalia is a component of the AECF’s Renewable Energy and Adaptation to Climate Technologies Sub-Saharan Africa Programme (REACT SSA) a project funded by Sida.
7. Objective of the Assignment

The AECF is seeking the services of a consultant(s) to support up to thirteen (13) AECF’s investees in Somalia and Somaliland to;

• Strengthen the operational functions of the investees.
• Foster business development and marketing strategies for the investees.
• Enhance organizational management and governance for the investees.
• Ensure robust financial and credit management and oversight for the investees.

The assignment will be tailored for each investee based on their individual assessed needs. The companies are located in Mogadishu, Jubba land (Bardhere), Galmudug (Abduwaaq), Puntland (Garawe and Badhan), Somailand (Hargeysa).

1. Scope of Work

The consultant will work with The AECF and the investees’ leadership team to deliver interventions across the functions below:

1. Operational Functions Support:

• The consultant will conduct an assessment of supply and distribution channels (upstream/downstream), including related logistics, identify key bottlenecks and recommend strategic improvements, including cost reduction and efficiency.
• The consultant will review, assess (design where not available) and implement inventory and procurement management policies and procedures for the investees.
• The consultant will assess the operational capacity of the investees, including planning, execution and reporting of different initiatives in the company (including the AECF-funded project), identify any barriers and recommend appropriate solutions.
• The consultant will assess data management systems and processes for the investees, including data privacy and security and recommend appropriate solutions.
• The consultant will design and deliver a management training program focused on enhancing the operational efficiency of the investees.
  1. Business Model Review, Sales and Marketing:
• The consultant will develop and refine (review and improve where available) business models for the investees. The business models will take into account options for revenue diversification strategies and develop a viable value proposition for each investee to create a competitive advantage in their operating market segments.
• The consultant will guide the review, development and implementation of a Go-to-Market (GTM) strategy for the investees.
• The consultant will develop 3 to 5-year business plans, including improving or developing company profiles for the investees.
• The consultant will develop and implement effective sales and marketing strategies in line with the investees’ market segments and provide related coaching and mentorship to the investees. The strategies will include the key marketing principles such as products, pricing, process and marketing budgets.
• The consultant will develop and implement Customer Management Strategies and after-sales support for the investees in line with best practices.
  1. Organizational Management and Governance:
• The consultant will assess the organizational and governance structure of the investees which shall include documentation and procedures, ensuring alignment with best practices. The consultant will then identify, review, and recommend changes to existing key company policies for improved organizational management for the investees. Additionally, the consultant will develop a succession planning framework for organizational sustainability.
• The consultant will assess, review, develop and implement gender inclusion strategies to incorporate more women into leadership positions at the investees’ businesses.
• The consultant will assess the institutional human resource capacity and develop (or improve) a human resource management plan for each investee, including implementing the relevant capacity-building measures.
• The consultant will provide training to the investees on effective organizational management and governance.
  1. Financial and Credit Management:
• The consultant will assess the financial and credit management capacity of each investee and identify key gaps.
• The consultant will propose, develop and implement appropriate financial and credit management strategies and policies.
• The consultant will provide recommendations on appropriate systems for credit and financial management that the investees can adopt. The recommended systems and policies are expected to support the investees in implementing financial controls for better oversight of the investee resources.
• The consultant will conduct financial and credit management training programs for key personnel and ensure that each investee builds capacity in financial and credit management through targeted initiatives, addressing specific financial and credit management gaps for each investee.

1. Deliverables
   1. Key Deliverables

The consultant will conduct the following activities:

1. Review the preliminary needs assessment conducted by AECF
2. Clarify and align with the investees on the needs and gaps
3. Preparation of an Inception Report and Detailed Workplan
4. Execution of the Assignment and Reporting

The anticipated specific deliverables for the consultant will include the following but will be validated during the preparation of the inception report:

1. Operational Functions Support

• A comprehensive assessment report of the investees detailing the existing supply and distribution channels. The report will also include gaps identified, opportunities, recommended strategies and an implementation plan for the recommendations. This will be followed by an implementation report on the executed recommendations.
• An assessment report on the inventory and procurement management policies, detailing gaps and recommendations. This report will be followed by an implementation plan and a final report on the implemented policies.
• A comprehensive report on the operational capacity of the investees and the implemented recommendations.
• A management training program for enhanced operational efficiency, training materials, modules, and curriculum.
• Evaluation and feedback report on the training program’s effectiveness.

1. Business Model Review, Sales and Marketing

• An implementation plan for business model design and review for each investee.
• Improved or newly developed business models with a focus on revenue diversification strategies.
• Go-to-market strategy and implementation report
• Coaching plans and coaching materials for sales and marketing strategies.
• A comprehensive report detailing the sales techniques developed, reviewed or adopted for each investee, pricing strategies and marketing budgets.
• Customer Management Strategy and Implementation Report.

1. Organizational Management and Governance

• A comprehensive report on the state of each investee’s management and governance policies, recommendations, implementation schedules and investee feedback post-implementation.
• Succession Planning Framework and Implementation Report
• Gender Inclusion Strategy and Implementation Report.
• A Human Resource Management Plan and report.
• Training program, training materials and modules on management and governance

1. Financial and Credit Management

• A Credit Management Framework/Strategy for each investee and implementation report
• Financial Management Training/Implementation Strategy
• A report on the recommended systems for credit and financial management
• A training program, training modules and training report on financial and credit management.

1. Duration of Service

The assignment will be conducted over seven (7) months in Somalia and Somaliland. The assignment is expected to commence in June 2024.

1. 7.0 Reporting

The Consultant will report to the Manager, Advisory Services at the AECF.

1. Eligible Experience

The successful consultant should have;

• Demonstrated experience in strategic business planning focusing on business operations, business model designs, sales and marketing, specifically in Somali and Somaliland;
• Demonstrated experience in organizational management and governance, designing and implementing gender and governance strategies across Somali and Somaliland;
• Demonstrated experience in financial and credit management with a focus on renewable energy companies;
• A minimum of ten years in the provision of strategic advisory support to corporate or development institutions;
• Good understanding of the Renewable Energy Sector in Somalia and Somaliland.

1. Evaluation Criteria

An evaluation committee will be formed by the AECF. All members will be bound by the same standards of confidentiality. The consultant should ensure that they fully respond to all criteria to be comprehensively evaluated.

The AECF may request and receive clarification from any consultant when evaluating a proposal. The evaluation committee may invite some or all the consultants to appear before the committee to clarify their proposals. In such an event, the evaluation committee may consider such clarifications in evaluating the proposals.

In deciding the final selection of a qualified bidder, the technical proposal will be given a weighting of 70% based on the evaluation criteria. Only the financial proposal of those bidders who qualify technically will be opened. The financial proposal will be allocated a weighting of 30% and the proposals will be ranked according to the total points scored.

The mandatory and desirable criteria against which proposals will be evaluated are identified in the table below.

NO.

CRITERIA FOR ASSESSMENT

Weighted Award

1. TECHNICAL PROPOSAL

80

An understanding of the terms of reference

Demonstrate understanding of the assignment and expected outcomes.

10

Methodology and work plan that will deliver the best value on the assignment

Soundness and feasibility of the proposed technical approach and methodology that provide comprehensive assessments, reviews, recommendations and implementation findings and analysis to the investee needs in line with each item in the Scope of Work.

20

Realistic and well-structured timeline, clear identification of deliverables and milestones, and coherence with the intended Scope of Work.

10

Qualification and Experience

Qualification and experience of the consultant/team and evidence of relevant certification

10

Demonstrated experience and relevant services are undertaken by the applicant in past engagements with evidence links to previous work done / completion certificate. The experience should be linked to the Scope of Work and Target Regions (Somali and Somaliland). Provide skill sets and experience in aligning specifically to the Scope of Work. Please provide details of at least three (3) similar projects completed in the last( 5) years

20

All the required registration and certification document and at least 3 signed reference letters of similar work done.

10

1. FINANCIAL PROPOSAL: Detailed showing level of effort of the team, Clarity, relevance, and reality to market value/ value for money of cost for the assignment (inclusive of any applicable tax, reimbursable, and travel where applicable).

20

Total Score

100

1. Proposal submission

• Technical and Financial proposals should be submitted as separate documents.
• Financial proposal to be submitted in USD.
• As per requirements in the evaluation criteria

AECF is obliged by the Kenyan tax authorities to withhold taxes on service contract fees as well as ensure VAT, at 16%, is charged where applicable. Applicants are advised to ensure that they have a clear understanding of their tax position with regards to provisions of Kenya tax legislation when developing their proposals.