INDIVIDUAL CONSULTANT PROCUREMENT NOTICE. For Climate Change Public Financial Management Expert

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1 INDIVIDUAL CONSULTANT PROCUREMENT NOTICE For Climate Change Public Financial Management Expert Date: 14 September 2015 Ref. No. UNDP/PN/31/2015 Country: Nepal Description of the assignment: This assignment includes the Technical assistance to the Ministry of Finance and the National Planning Commission of Nepal: a) Work with the key personnel of the MOF and NPC in implementation of the recommendations on Integrating CCFF into budgeting processes of Nepal developed during the Design Phase of the UNDP Project on Effective Governance in Climate Change Finance. b) Ensure that the findings from the national and district CPEIR (which is the other key component of the umbrella project) feed into the design and implementation of an effective Climate Change Financing Framework, in consultation with key stakeholders such as the Ministry of Finance, Ministry of Federal Affairs and Local Development, National Planning Commission, and Ministry of Science, Technology and Environment. c) Work with UNDP country office and regional teams in tailoring the recommendations to the needs of the beneficiaries within the framework of the TA assignment. This will require close discussion and agreements with national implementing partners, UNDP Nepal team (including the Project Coordinator), UNDP relevant Bangkok Regional Hub team, as well as relevant UNDP Headquarter team. d) Provide necessary inputs to annual progress reports, mid-term reports, and others as required. e) Provide necessary inputs to national and sub-national workshops, meetings, and conferences, as and when required. Project name: Governance of Climate Change Finance to Benefit the Poor and Vulnerable Period of assignment/services (if applicable): The assignment will take place from September 30, 2015 to April 30, Duty Station: Kathmandu, Nepal Proposal should be submitted at the following address: Procurement Unit, UNDP (Ref.: UNDP/PN/31/2015 Individual Consultancy Services on Climate Change Public Financial Management in Nepal), UN House, Pulchowk, PO Box 107, Kathmandu, Nepal or by to no later than 25 September 2015.

2 Any request for clarification must be sent in writing, or by standard electronic communication to the address or indicated above. The procurement unit will respond in writing or by standard electronic mail and will send written copies of the response, including an explanation of the query without identifying the source of inquiry, to all consultants. 1. SCOPE OF WORK, RESPONSIBILITIES AND DESCRIPTION OF THE PROPOSED WORK As per the attched Terms of Reference (ToR) Annex I. Please submit your application at the address: 2. REQUIREMENTS FOR EXPERIENCE AND QUALIFICATIONS I. Education & Experience: Advanced degree in public administration, public finance, public policy, or related areas. At least 10 years of professional experience. Proven experience in policy analysis and public financial management, and advisory role to senior government stakeholders. Experience in Ministries of Finance and Planning is an advantage. Experience in medium-term and annual budget formulation practices and budget cycle analysis is an advantage. II. Other competencies: Excellent English communication skills, both written and oral Experience working in UN organizations is an advantage

3 3. DOCUMENTS TO BE INCLUDED WHEN SUBMITTING THE PROPOSAL Interested individual consultants must submit the following documents/information to demonstrate their qualifications: Offeror s Letter to UNDP Confirming Interest and Availability for the Individual Contractor (IC) Assignment along with the completed financial proposal and PII template annexed to this letter. Note: Duly completed P11 template as per Annex 3; Technical proposal with methodologies and an initial proposed work plan; Financial proposals: Lump sum offer with an indication of the working days covered by the financial proposal for which the consultant will be available. a. Applicants of 62 years or more require full medical examination and statement of fitness to work to engage in the consultancy b. The candidate has to be an independent consultant (If the candidate is engaged with any organization, the organization employing the candidate will be issued with a Reimbursable Loan Agreement (RLA) to release the employee for the consultancy with UNDP). c. Due to sheer number of applicants, the procurement unit will contact only competitively selected consultant.

4 4. EVALUATION Individual consultants will be evaluated based on the following methodologies: Cumulative analysis When using this weighted scoring method, the award of the contract should be made to the individual consultant whose offer has been evaluated and determined as: a) responsive/compliant/acceptable, and b) Having received the highest score out of a pre-determined set of weighted technical and financial criteria specific to the solicitation. * Technical Criteria weight; 70% * Financial Criteria weight; 30% Only candidates obtaining a minimum of 49 points in the technical evaluation would be considered for the Financial Evaluation. Criteria Weight Max. Point Technical Criterion A: Advanced degree in public administration, public finance, public policy, or related areas. Criterion B: At least 10 years of professional experience. Proven experience in policy analysis and public financial management, and advisory role to senior government stakeholders. Experience in medium-term and annual budget formulation practices and budget cycle analysis is an advantage. Criterion C: Experience in Ministries of Finance and Planning is an advantage. Excellent English communication skills, both written and oral 10% 10 30% 30 20% 20 Criterion D: Experience working in UN organization. Financial 10% 10 Lowest financial proposal 30% 30 Contract will be awarded to the technically qualified consultant who obtains the highest combined score (financial and technical). The points for the Financial Proposal will be allocated as per the Lowest Bid Offered following formula: X 30 Bid of the Consultant * Lowest Bid Offered refers to the lowest price offered by Offerors scoring at least 70% points in technical evaluation. * The method of evaluation is a desk review of P11. Please highlight in the P11 form major report you have prepared (but don t attach them at this time).

5 ANNEX ANNEX 1 TERMS OF REFERENCES (TOR) ANNEX 2 GENERAL CONDITIONS OF CONTRACT FOR THE SERVICES OF INDIVIDUAL CONSULTANT ANNEX 3 P11 FORM ANNEX 4 Offeror s Letter to UNDP

6 ANNEX - 1 ToR Individual Consultancy Services on Climate Change Public Financial Management in Nepal 1. Background UNDP Nepal is currently engaged in strengthening its strategic interventions and support to the Government of Nepal in accessing, managing, and disbursing current and future climate change finance in the country. This is being implemented through the programme Strengthening the Governance of Climate Finance to Benefit the Poor and Vulnerable in Nepal. As an extremely climate vulnerable country, Nepal has been channelling its own resources, as well as international climate finance to respond to the challenges. According to the MoF, approximately 10.73% of the national budget is climate relevant, or 23.09% of the development budget for the fiscal year 2014/15. A combination of domestic resources, and dedicated climate international funds have been flowing into the country, through bilateral arrangements, as well as vertical funds such as the GEF, the LDCF, the Adaptation Fund and others. With the establishment of the GCF, and the recent financial pledges that have been made by various countries, Nepal will, in the near future, be the recipient of additional international funds, as well as continue its engagement with other vertical funds. Globally, the pledges and commitments being made by the international community should lead to an increase of climate change finance into developing countries. In light of this, Nepal s capacity and systems to access, absorb and effectively manage these additional funds on top of its own domestic investments on climate change activities should be robust. Furthermore, while the delivery of climate change finance from the international to the national, and the national to the sub-national needs to happen, the equitable delivery of those resources to those who are most vulnerable to climate change impacts must also be ensured. UNDP, through its technical support will assist to strengthen the Government of Nepal s capacity and systems to access, absorb and effectively manage existing and projected climate funds, as well as its own domestic investments to address climate change. As part of the overall efforts to strengthen the integration of climate finance in the development planning and budgeting processes under the umbrella project Strengthening the Governance of Climate Finance to Benefit the Poor and Vulnerable, an individual consultant (the Consultant) will be engaged in assisting GoN in implementing reforms and strengthening its capacity in Climate Change financial and institutional frameworks. The Consultant will be responsible to effectively collaborate with relevant government counterparts in performing the services.

7 2. Objectives of the Assignment The overall objective of the assignment is to provide technical assistance to the Government of Nepal in implementing reforms on integration of climate change finance in the PFM systems of the country. The specific objective of the assignment is to provide technical assistance to the Ministry of Finance of Nepal, National Planning Commission and other relevant institutions in introducing the Climate Change Financial Framework, improving the budget guidelines, reporting on Climate Change Finance and other elements of the budget cycle in integrating climate change finance in the budgeting system of the country. 3. Scope of Work The scope of work for this assignment includes the Technical assistance to the Ministry of Finance and the National Planning Commission of Nepal: f) Work with the key personnel of the MOF and NPC in implementation of the recommendations on Integrating CCFF into budgeting processes of Nepal developed during the Design Phase of the UNDP Project on Effective Governance in Climate Change Finance. g) Ensure that the findings from the national and district CPEIR (which is the other key component of the umbrella project) feed into the design and implementation of an effective Climate Change Financing Framework, in consultation with key stakeholders such as the Ministry of Finance, Ministry of Federal Affairs and Local Development, National Planning Commission, and Ministry of Science, Technology and Environment. h) Work with UNDP country office and regional teams in tailoring the recommendations to the needs of the beneficiaries within the framework of the TA assignment. This will require close discussion and agreements with national implementing partners, UNDP Nepal team (including the Project Coordinator), UNDP relevant Bangkok Regional Hub team, as well as relevant UNDP Headquarter team. i) Provide necessary inputs to annual progress reports, mid-term reports, and others as required. j) Provide necessary inputs to national and sub-national workshops, meetings, and conferences, as and when required. 4. Duration of Assignment, Duty Station and Expected Places of Travel 5. The assignment will take place from September 30, 2015 to April 30, 2016.

8 6. Deliverables S. No. Deliverables Tentative Timeline 1. A detailed work plan on delivery of the TA to the MOF with recommendations on the implementation approach, timelines and expected outputs by each recommendation (as per the attachment A of this TOR). 05 Oct Interim Progress Report 30 Nov Provision of outputs as per the work plan and within the framework of the recommendations on Integrating CCFF into budgeting processes of Nepal (as per the attachment A of this TOR). 31 Mar Provision of Monitoring and Progress Controls The Consultant will work under the guidance of the UNDP Nepal Environment and Climate Change Unit. Advice and support will be provided by the BRH team in Bangkok, as well as the CC Team in Headquarter. 8. Requirements on the Consultant Prior experience in conducting consultancy in Public Financial Management (e.g. budgeting, strategic planning, expenditure assessment, budget monitoring and evaluation) with at least 5 years of experience in Nepal is a requirement that would need to be met. The Consultant is expected to show familiarity with MTEF and budgeting processes in Nepal, expenditure analysis (preferably public expenditure reviews), national legislation on PFM and capacity building activities. Experience in conducting expenditure monitoring and analysis at the subnational level is an advantage. The required qualifications for the Consultant are: Advanced degree in public administration, public finance, public policy, or related areas. At least 10 years of professional experience. Proven experience in policy analysis and public financial management, and advisory role to senior government stakeholders. Excellent English communication skills, both written and oral Experience in Ministries of Finance and Planning is an advantage. Experience in medium-term and annual budget formulation practices and budget cycle analysis is an advantage.

9 ATTACHMENT A. Indicative list of recommendations as part of the PFM TA to Nepal MOF in integrating climate change financing in the PFM system INTRODUCING CLIMATE CHANGE FINANCING FRAMEWORK A Climate Change Financing Framework is a tool to address the complex nature of integration of CC strategies into budgeting systems. This proposal is an advancement from the regional experience of using CCFFs and envisages direct integration of the CCFF itself in the Nepal s existing PFM system. In doing so the CCFF will be treated not only as a document but rather a process that is part of the existing MTEF/Budget process in Nepal. Introduction of the CCFF will require adjustments to the existing functions, information types and flows, CC coding and analytical systems, and capacities of the key players in the budget cycle that have CC relevance. The critical aspects in effective integration of the CCFF into the PFM cycle are: 1. Integration of the CCFF requirements in the Budget Guidelines and the Budget Calendar 2. Use of existing information requirements to the extent possible (e.g. the Results Framework) in formulating the CCFF. 3. Exercising high-level of coordination of the cross-sector nature of CC expenditures amongst the key CC-relevant ministries. This will require a change in the existing functions and information requirements. It is important to mention that new functions do not necessarily lead to concentrating of all CC expenditures or policies with a single ministry. Rather the opposite the new function is only to coordinate CC financing information and consolidate it for the benefits of effective budget decisionmaking. 4. Basically, the CCFF will require two main stages of formulation: a. To feed (inform) the MTEF decision makers on the proposed financing policies and initiatives (strategies, programmes, activities, priorities and required resources). b. To drive the annual budget formulation process (and other segments of the budget cycle) with formulated MTEF decisions (approved priorities, programmes, budget ceilings, targets). There must be a solid process of decision-making taking place in between the two stages above, i.e. a well-structured and coordinated system (e.g. provisions in the budget calendar) where the individual bottom-up initiatives on CC financing will be discussed in the light of top-down policy decisions. FUNCTIONAL/INSTITUTIONAL ASPECTS (CC BUDGETING COORDINATION) The process of Climate Change budget allocations in Nepal s PFM system is fragmented. CC relevant expenditures reach the addressee in various ways and overlaps as well as gaps may occur as the Budget Guidelines do not specify the lead ministry being responsible for CC financing related activities. There is

10 no coordination function (or institution) to collect, monitor, analyse all CC relevant data and advocate on CC financing policies prior to the budget decision making and expenditure priority setting. The nature of CC interventions is crosscutting by its nature, so consolidation of the information becomes an important task as CC sector policy and budget decisions must rely on a solid and systemic set of information. Recommendation: There can be two main options to address this issue. 1. A lead CC financing coordination responsibility (unit) created at the central level (OPMC, MOF or NPC) for harmonization of CC financing related policies with budget decisions; or 2. A ministry (supposedly, MOSTE) is held responsible for combination of bottom-up information flows for CC funding requests and promoting those at the higher level sector prioritization processes. REFLECTION OF CC POLICIES IN THE GUIDELINES The current Budget Guidelines have only generic requirement to follow the periodic plans, sector policies, etc. Budget circulars reflect on specific priorities after the proposals from ministries are collected. Even though CC is considered as one of the strategies in 13 th Periodic Plan, CC change is not dealt as the crosscutting issue and one of the priority areas. In any case, given the fact that the periodic plans are sometimes not specific enough to guide the budget planning process then there seems to be a room for improvement in top-down and bottom-up information flows and ensuring synergies between those. Recommendation: A recommendation to address the above issue is to revitalize the MTEF process with following adjustments: Specific information requirements in the MTEF formulation process (with or without CCFF) to be employed in requesting CC policy related information from the CC relevant ministries. More structured system of information flows and institutional arrangements to process that information to merge the top-down decisions over the climate change sector (e.g. the 80% target 1 ) with bottom-up processes of new initiatives/projects. This recommendation on information flows must be synchronized with the recommendation on the functional/institutional adjustments presented above. Employing new systems of policy formulation and analysis including cooperation with CSOs in tracking and analysing the effectiveness of CC budgets to feed the MTEF process. PRIORITY SETTING PROCESS One of the existing criteria in programme/project prioritization process in Nepal is on climate change with 2% weighting. The system or prioritization of programmes/projects is in place and is functional. However, although priority setting at individual projects seems to be effectively operational, the sector level or thematic prioritization is not part of the Budget Guidelines requirements. 1 Currently, the MTEF system does not provide a systemic solution to bridge such high-level policy decision over the CC financing with fragmented bottom-up funding requests over individual programmes/projects

11 Recommendation: There are two areas for improving the prioritization process: 1. The weighting for CC related projects can be increased from its current level of 2%. 2. Revitalization of the MTEF process (and possible introduction of CCFF as part of the MTEF process) may drive a more solid priority setting process (by sectors rather than only by projects). Before the transition to CCFF system takes place, the MOF authorities may consider an option to have a designated chapter on sector priorities and cross-cutting issues (such as the climate change expenditures) in the MTEF paper. USE OF CEILINGS UNDP project has analysed the variances of planned annual budgets and actual budget expenditures with the ceilings set for all ministries and also for ten main CC related ministries. The analysis indicates that the ceilings are not effectively utilized in the country and specifically in the CC sector. This is a major concern and budget guidelines need to reflect on this aspect with an aim to improve this state of affairs. Recommendation: MOF reviews the process of ceilings setting and analyses the actual variances (poor planning vs. poor absorption capacity of CC ministries or other reasons). Final recommendations can be developed based on the outcomes of the above analysis. UNDP may assist in analysing the reasons of variations. APPLICATION OF PERFORMANCE INFORMATION IN BUDGETING The guidelines require ministries to present their budget programmes to NPC using the Results Framework during the MTEF process but outcomes are not well integrated in budget process (information on outcomes is not effectively processed by MOF). Information on outcomes, however, is imperative and central in case of climate change expenditures. Concentration on purely outputs during budget negotiations put the CC initiatives in a very unfavourable and non-competitive environment compared to many other competitive bids from other sectors. Impact and outcome indicators are the ones that have a voice and value in budget negotiations as most of the CC expenditures have an extended impact on societal benefits. Further, climate change programmes and budget is not yet been linked with FMIS. Thus, information on the actual expenditure of CC budget cannot be traced through the existing system. Recommendation: Result Framework with information on outcomes, outputs and resources must become an effective part of the MTEF and budget decisions. Such graduation must be accompanied with MOF starting to build a series of data sets on outcomes, outputs and resources (historic data). This is useful for MOF to track and verify result frameworks submitted by the line ministries by using various effectiveness and efficiency indicators. Besides, sector-wise, ministry-wise and program/project-wise CC budget and expenditure should be linked with FMIS to track the expenditure of CC through National Financial System. However, creation of reliable information systems on collecting CC related information (especially on results) requires

12 significant financial, technology and human resources. A solution to this is cooperation with CSOs in tracking the CC expenditures (using tools such as the Public Expenditure Tracking Surveys (Public Expenditure and Service Tracking Survey (PESTS)) and Benefit Incidence Analysis. CPEIR is also a useful analytical framework if raw data is available). This is the area where Nepal needs to improve its capacity to monitor and analyse the climate change related expenditure trends. CLIMATE CHANGE CODE Introduction of the CC code is a significant step forward in monitoring the allocations in this sector (as the standard budget classifications do not have a category for CC). The Budget Guidelines require the ministries to use the CC and the outcome of it is the Budget Speech with a designated annex on CC expenditures. However, presentation of this information in the Budget Speech does not yet guarantee its effective utilization at prior stages of the budgeting process, neither does it at the actual expenditure reporting stage. Despite the fact of this information being presented by functions, there is a need for regular monitoring of its application during the budget and ceilings decision-making. Extension of the application of the Climate Budget Code to the budget reporting stage is an important step forward for integration climate change finance into the PFM system of Nepal. Options on broadened application of the CC budget code must be developed and smooth application of the recommended approach must be ensured. Recommendation: A synergy with high level sector prioritization process is required to fully operationalize the CC code. The guidelines must envisage proper synchronization of top-down decision with current bottom-up information flows (e.g. via MTEF or other processes) using CC codes. This is especially important in the current institutional fragmentation of the CC sector within the very competitive environment on government s priorities. A designated chapter (or annex) on CC prioritization and CC expenditure plans linking those with GoN goals in MTEF and budget documentation can help in this regard. Such requirement will provide pressure over the MTEF and budget proposal developers in defining CC expenditures and presenting those in a sector policy framework. The full report on Integrating CCFF into budgeting processes of Nepal will be available to the Consultant at the inception phase.

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