Pakistan Parametric Flood Instrument Trigger Design and Structuring Tender, Pakistan - 105646190

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.: 105646190

Document Ref. No. : 0002010593

Competition : ICB

Financier : World Bank (WB)

Purchaser Ownership : Public

Tender Value : Refer Document

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Tender Details

Underthe Resilience and Accessible Microfinance (RAM) project, the World Bank aimsto support Pakistan to enhance access to microcredit and support resilience ofthe microfinance sector and its borrowers. The project is scheduled forapproval within fiscal year 2025. In the initial phase of the proposed project, a Climate Risk Fund (CRF) will be established, capitalized and operationalizedto address climate risk and its associated impacts on the microfinance sector.The CRF will be established as anindependent and sustainable state-owned liquidity facility for the microfinancesector, where the type and level of liquidity released will be determined bypredefined and clear decision criteria which will be informed by objective andverifiable data (including parametric triggers that will be designed for aninsurance backstop for the CRF). The CRF has been designed to meet multifoldobjectives: 1) Reverse the disintermediationaway from locations and sectors which are prone to climate shocks (but wherethe risk is still manageable) by providing liquidity buffers in theevent of a climate shock to help mitigate the risks; 2) Serve as an avenue to transfer some of the risks ofclimate-related disasters through international reinsurance; 3) Promote climateadaptation in agriculture through a pilot leveraging technology and liquidity;4) Enhance the quality and availability of climate risk data for themicrofinance sector, providing a valuable public good. The CRF will provide two distinct products: a Contingent LiquidityInstrument (CLI; the focus of this consultancy) and an Immediate AgriculturalLiquidity Instrument.The CLI will extend contingentcredit to the sector (to be passed onto borrowers in impacted geographies)following qualifying climatic shocks. The amount of liquidity available for on-lendingby the CLI will depend on its initial capitalization, earnings from interest, investments, and annual microfinance provider (MFP) contributions, as well asfrom parametric insurance payouts. ...

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