Pakistan Parametric Flood Instrument Trigger Design and Structuring Tender, Pakistan - 105433886

Procurement Summary

Country : Pakistan

Summary : Pakistan Parametric Flood Instrument Trigger Design and Structuring

Deadline : 21 Aug 2024

Other Information

Notice Type : Tender

TOT Ref.No.: 105433886

Document Ref. No. : 0002010593

Competition : ICB

Financier : World Bank (WB)

Purchaser Ownership : Public

Tender Value : Refer Document

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Tender Details

Expression of Interest are invited for Pakistan Parametric Flood Instrument Trigger Design and Structuring

Description: Under
the Resilience and Accessible Microfinance (RAM) project, the World Bank aims
to support Pakistan to enhance access to microcredit and support resilience of
the microfinance sector and its borrowers. The project is scheduled for
approval within fiscal year 2025. In the initial phase of the proposed project,
a Climate Risk Fund (CRF) will be established, capitalized and operationalized
to address climate risk and its associated impacts on the microfinance sector.The CRF will be established as an
independent and sustainable state-owned liquidity facility for the microfinance
sector, where the type and level of liquidity released will be determined by
predefined and clear decision criteria which will be informed by objective and
verifiable data (including parametric triggers that will be designed for an
insurance backstop for the CRF). The CRF has been designed to meet multifold
objectives: 1) Reverse the disintermediation
away from locations and sectors which are prone to climate shocks (but where
the risk is still manageable) by providing liquidity buffers in the
event of a climate shock to help mitigate the risks; 2) Serve as an avenue to transfer some of the risks of
climate-related disasters through international reinsurance; 3) Promote climate
adaptation in agriculture through a pilot leveraging technology and liquidity;
4) Enhance the quality and availability of climate risk data for the
microfinance sector, providing a valuable public good. The CRF will provide two distinct products: a Contingent Liquidity
Instrument (CLI; the focus of this consultancy) and an Immediate Agricultural
Liquidity Instrument.

The CLI will extend contingent
credit to the sector (to be passed onto borrowers in impacted geographies)
following qualifying climatic shocks. The amount of liquidity available for on-lending
by the CLI will depend on its initial capitalization, earnings from interest,
investments, and annual microfinance provider (MFP) contributions, as well as
from parametric insurance payouts. The terms and conditions of the credit to be
extended by the CLI to MFPs will be layered and will vary depending on the
severity of the climate-related disaster. It is expected that the available
amount will depend on the MFP's portfolio size, their exposures in the
flood-impacted areas, and the severity of estimated impacts of the
climate-related disaster in those areas. Initially
the CRF will focus on flood risk.The
purpose of this assignment is to facilitate the design and structure of the
CLI-s parametric flood triggers and parametric flood insurance backstop. The
assignment is intended to build on existing preliminary flood risk analysis for
Pakistan-s microfinance sector.

Documents

 Tender Notice