Funding Opportunities

Request for Proposals: Unlocking LPG Finance for Clean Cooking

Request for Proposals (RFP): Unlocking LPG Finance for Clean Cooking

Summary

The United Nations Foundation’s (UNF) Clean Cooking Alliance (CCA) is accepting proposals for a study to identify Liquefied Petroleum Gas (LPG) market barriers and recommend specific interventions to overcome these barriers in two countries in Africa. The study will identify the specific barriers along the LPG value chain that are limiting the financing of LPG for clean cooking in high potential markets, recommend specific interventions to overcome these barriers, and suggest policy, infrastructural, and/or market-based solutions to accelerate access to LPG for low-income customers. This study is co-sponsored by UNF/CCA and the Shell Foundation and project managed by African Refiners and Distributors Association (ARDA).

CCA is releasing this RFP to solicit proposals to (1) assess which countries are well-suited for the barrier analysis by drawing on existing evidence on LPG environments across potential countries, (2) apply existing evidence and stakeholder surveys and interviews to identify and map key barriers to LPG scale-up in the chosen countries, and (3) draw on existing research and stakeholder consultations to develop and recommend feasible finance interventions to surmount these barriers and move the needle toward a national-scale LPG transition.

Proposals should clearly define what existing resources, such as LPG feasibility assessments, will be used to gather evidence on barriers to LPG scale-up in each country and inform finance interventions. In addition, proposals should identify potential on-the-ground stakeholders to consult for insight on barriers and potential finance interventions. Barriers to be assessed should include: supply and demand side factors; financing and investment; policies and regulations; public and private sectors; and consumer awareness. Proposals should clearly articulate a detailed approach and methodology for implementation and management of a pilot project to be conducted post-study to demonstrate the efficacy of the study recommendations. In addition, innovative approaches for barrier analysis and finance intervention development are welcome to achieve the project objectives.

Background of Organization

CCA works with a global network of partners to build an inclusive industry that makes clean cooking accessible to the three billion people who live each day without it. Established in 2010, CCA is driving consumer demand, mobilizing investment to build a pipeline of scalable businesses, and fostering an enabling environment that allows the sector to thrive. Clean cooking transforms lives by improving health, protecting the climate and the environment, empowering women, and helping families save time and money.

Objective

This study seeks to define a framework for identifying and overcoming LPG market barriers with the aim of unlocking the growth potential for LPG cooking solutions in markets where LPG could play a significant role in achieving universal access to clean cooking.

This study will apply the framework to two African countries (to be determined following scoping exercise), analyze the market barriers and opportunities, assess the existing finance ecosystem, and identify the interventions required to rapidly scale access and improve the affordability of LPG for low-income customers.

The findings and recommendations of this study could be used by CCA, Shell Foundation and other partners to develop and implement the appropriate in-country interventions. These interventions could range from working with a financial institution to enhance lending risk-management through levers such as blended finance, pairing software-as-a-service (SaaS) providers with finance institutions to provide better risk analytics and credit scoring for retail lending, partnering with existing initiatives to expand scope, or reaching lower income segments of the market.

Scope of Work and Deliverables

LPG offers an unparalleled opportunity to serve low-income customers with modern cooking energy. Even with all of the advantages known to LPG, there are barriers that make it challenging for traditional LPG suppliers to serve low-income consumers, such as (1) availability of LPG only in bulk quantities makes it unaffordable (e.g., full cylinders are six kilograms); (2) inefficient supply chains and customer service/delivery management drives up operational expenses; (3) limited and expensive working capital requirements of distributors restricts overall supply volume and ability to provide consumer credit generally and cost effectively; (4) difficult regulatory/policy contexts make for a challenging enabling environment to scale market solutions; and (5) unfavorable customer perceptions of LPG due to unreliable market supply as well as safety issues.

To scale accessible LPG cooking solutions for low-income customers, several levers require attention. First, to unlock greater procurement volumes of LPG downstream, distributors need access to larger amounts of working capital or credit lines, and at cheaper cost. Second, marketers need access to cheaper financing to offer affordable consumer credit—or a financial partner to extend consumer credit for LPG retail procurement. Third, traders need access to commoditized technology and models to better package fuel and track and trace cylinders to optimize sales to low-income customers, while ensuring safety and regulatory standards are met. While the market is seeing progress related to this last lever—as a result of technological innovations such as pay-as-you-go (PAYG) cylinder smart meters and incremental refilling of cylinders—the first two levers remain constrained at varying degrees of gridlock across priority country markets, preventing low-income access at the necessary scale.

LPG stakeholders, such as the Global LPG Partnership (GLPGP), have already conducted assessments to identify country-specific barriers to scaling up LPG as a primary cooking fuel and evaluate the requirements of national-scale LPG transitions. For example, GLPGP has conducted feasibility and investment assessments in three African countries to date: Ghana, Cameroon, and Kenya. These assessments examine the feasibility and potential role of LPG as a major clean cooking solution, assess the potential impacts from a large-scale LPG transition, and discuss the investment requirements for scaling up LPG from a finance provider and implementer perspective. These assessments describe key factors that need to be addressed to achieve LPG scale-up, such as improved affordability and consumer education. However, these assessments do not outline how those key factors could be addressed by deploying context-specific interventions. Therefore, CCA is commissioning this research to build upon work completed by GLPGP and others with the aim of identifying specific interventions to overcome the contextual barriers associated with LPG scale-up. In addition, the research aims to expand previous feasibility assessment efforts to new geographies.

The following activities are expected to achieve the scope of work:

Country Selection: The study partners and contracted research firm will conduct a brief scoping exercise to determine the two focus countries to be studied. The scoping exercise will utilize existing knowledge of LPG enabling environments across a set of countries where positive market conditions exist—as well as the readiness of the ecosystem to deploy novel access to finance instruments—to determine the most appropriate countries for this study.

Research: The study will involve a mix of desk and field research and will seek to draw from and build on the range of existing research and knowledge of the LPG ecosystem in the focus countries—such as recent work by GLPGP, World LPG Association (WLPGA), and Sustainable Energy for All (SEforAll)—and other relevant sources. The research component will involve mapping the LPG value chains and stakeholder landscape and interviewing key stakeholders across the ecosystem, including oil marketing companies (OMCs), finance institutions and lenders, last mile distributors, and consumers.

Analysis: The study will identify the existence and assess the effectiveness of existing financial mechanisms, identify gaps and the underlying barriers where financial mechanisms do not exist, and recommend opportunities for stakeholders along the value chain to help unlock financing solutions. This may include: identifying what financial institutions require from distributors to enable lending (e.g., credit history, financial ratio/KPIs, diversification, etc.), what criteria are required, what is the relationship to criteria, and cost/terms of lending.

Deliverables: The final deliverable of the study will be a comprehensive, yet concise report that provides key insights into the LPG market barriers and opportunities in the focus countries, analysis of the finance ecosystems, and recommendations for designing finance interventions that could rapidly scale access to LPG and improve affordability for low-income customers. In addition to the final report, the following deliverables are expected throughout and at the end of the project:

• Kick-off workshop
• First milestone: detailed workplan and timeline of activities
• Second milestone: interim presentation with preliminary results
• Final presentation showcasing key findings of the study and implications
• Design for pilot intervention including stakeholder engagement

Project Period of Performance

The study will take place from October 2021 to February 2022, with final deliverables completed by March 09, 2022.

Technical Requirements

The applying team must showcase relevant expertise, experience, and capacity to accomplish the defined research objective(s) in a timely manner. Applying teams should include researchers in countries that are most affected by access to clean cooking (or the lack thereof).

Timeline

Budget

A total budget of up to $150,000 is available for this project. A detailed budget in US Dollars must be submitted with the proposal. Budget should include both pre-tax and net of tax values. The budget should include direct costs (Personnel, Fringe Benefits, Travel, Sub-Agreements, Equipment, Supplies, etc.), as well as indirect costs (overhead). Overhead costs must be reasonable and appropriate. For indirect costs, please indicate a list of expenses covered by the indirect rate. For all direct cost, please include assumptions that were made to arrive at line-item costs (e.g., 2 trips @ $1,500/trip = $3,000 or 20 staff hours @ $40/hour = $800).

If a bid has a mathematical discrepancy, CCA may correct the discrepancy and notify the Consultant of the adjustment. In such circumstances, the Consultant may choose to withdraw their bid.

Evaluation process

The Clean Cooking Alliance will review all written proposals and may request a phone or in-person interview and/or updated submission to address questions or provide clarification. CCA will use the following criteria in our evaluation.

Intent and disclaimer

This RFP is made with the intent to identify a Consultant to deliver results as described in this RFP.  UNF/the Clean Cooking Alliance will rely on the Consultant’s representations to be truthful and as described. The Clean Cooking Alliance assumes it can be confident in the Consultant’s ability to deliver the product(s) and/or service(s) proposed in response to this RFP.

If the Clean Cooking Alliance amends the RFP, copies of any such amendments will be sent to all respondents to the proposal.

Proposal Guidelines and Requirements

• The proposal should be no longer than 8 pages in length (excluding Sections F-H) and include the following sections:
  • Section A. Background and Objectives (1 page)
  • Section B. Significance of Research (1 page)
  • Section C. Description of Investigative Team (1 page); Include Organizational Qualifications as Relevant
  • Section D. Related Previous Studies (1 page)
  • Section E. Research Plan and Methods (not to exceed 4 pages)
  • Section F. Literature Cited
  • Section G. Detailed Budget (PDF and Excel Format)
  • Section H. Detailed Gantt Chart
• This RFP is open to multiple partners and is a competitive process.
• Proposals received after 10/6/2021 at 11:59 PM EDT will not be considered.
• The price provided should be in US dollars and should contain both pre-tax and net of tax values. If the process excludes certain fees or charges, the applicant must provide a detailed list of excluded fees with a complete explanation of the nature of those fees.
• CCA prefers a single point of contact who manages deliverables. If the execution of work to be performed by the Consultant requires the hiring of sub-contractors, the Consultant must clearly state this in the proposal. Sub-contractors must be identified and the work they will perform must be defined. Subcontractors are subject to vetting and approval of UNF/CCA.
• CCA will not refuse a proposal based upon the use of subcontractors; however, we retain the right to refuse the sub-contractors you have selected.
• Provisions of this RFP and the contents of the successful responses are considered available for inclusion in final contractual obligations.

Format for Proposals

Proposals must include applicant signature as well as a signed declaration form. Proposals must include the full legal name of applicant, as well as legal formation and ownership structure (e.g., incorporation certification, tax status and ID, etc.).

Contracting and Compliance

CCA will negotiate contract terms upon selection. A copy of the contract terms and conditions will be provided upon selection. All contracts are subject to review by UNF’s Business Services and Budget Reporting team. The project will start upon the complete execution of the contract. The contract will outline terms and conditions, scope, budget, and applicable flow down terms. Selected recipient(s) must comply with CCA, United Nations Foundation, and funder compliance requirements. The selected recipient(s) must also undergo detailed legal, financial, and commercial due diligence. The selected recipient shall simultaneously enter an agreement with African Refiners & Distributors Association (ARDA) for the portion of this project they are funding.

Release

The Consultant understands that the Clean Cooking Alliance has chosen to solicit an RFP for consulting services, and that the Consultant’s response does not guarantee that the Clean Cooking Alliance will enter into a new contract with the Consultant or continue any current contract(s) with the Consultant.

The Consultant agrees that Clean Cooking Alliance may, at its sole discretion:

• Amend or cancel the RFP, in whole or in part, at any time
• Extend the deadline for submitting responses
• Determine whether a response does or does not substantially comply with the requirements of the RFP
• Waive any minor irregularity, informality or nonconformance with the provisions or procedures of the RFP
• Negotiate with all Consultants UNF deems acceptable
• Issue multiple awards
• Photocopy the responses for evaluation/review

This RFP is not an offer to contract. The Clean Cooking Alliance assumes no responsibility for the Consultant’s cost to respond to this RFP. All responses become the property of the Clean Cooking Alliance.

The Consultant, by submitting a response to this RFP, waives all right to protest or seek any legal remedies whatsoever regarding any aspect of this RFP.

The Consultant affirms that it has responded to the RFP with complete honesty and accuracy. If facts provided in the Consultant’s response change, the Consultant agrees to supplement its response in writing with any deletions, additions, or changes within ten (10) days of the changes. The Consultant will do this, as necessary, throughout the selection process.

The Consultant understands it may receive proprietary and confidential information from the Clean Cooking Alliance during the RFP process (“Confidential Information”). The Consultant and CCA agree to not use Confidential Information for any purpose other than the Consultant’s participation in the RFP process, and to not reveal Confidential Information directly or indirectly to any other person, entity, or organization without the prior written consent of the other party. The Consultant and CCA further agree to exercise all reasonable precautions to maintain the proprietary and confidential nature of Confidential Information where it can best demonstrate its value and capacity to delivery ecosystem-wide, meaningful value.

Grounds for Exclusion

Material misrepresentations, including omissions, may disqualify the Consultant from a contract award.

Submissions will be rejected in the Clean Cooking Alliance’s sole discretion if it finds that the Consultant has engaged in any illegal or corrupt practices in connection with the award.

The Consultant will be excluded from participation for the reasons below. By submitting a proposal in response to the RFP, the Consultant confirms that none of the below circumstances apply:

• The Consultant is bankrupt or being wound up, is having their affairs administered by the courts, has entered into an arrangement with creditors, has suspended business activities, is subject of proceedings concerning those matters, or is in any analogous situation arising from a similar procedure provided for in national legislation or regulations.
• The Consultant or persons having powers of representation, decision-making or control over them have been convicted of an offence concerning their professional conduct by a final judgment.
• The Consultant has been found guilty of grave professional misconduct; proven by any means which CCA can justify.
• The Consultant has not fulfilled obligations relating to the payment of social security contributions or taxes in accordance with the legal provisions of the country in which they are established, or within the United States of America, or those of the country where the contract is to be performed.
• The Consultant or persons having powers of representation, decision-making or control over them have been convicted for fraud, corruption, involvement in a criminal organization or money laundering by a final judgment.
• The Consultant makes use of child labor or forced labor and/or practice discrimination, and/or do not respect the right to freedom of association and the right to organize and engage in collective bargaining pursuant to the core conventions of the International Labour Organization (ILO).

Principal Point of Contact

Questions should be sent by email to info@cleancookingalliance.org and frobinette@cleancookingalliance.org no later than 9/27/2021 at 11:59 PM EDT. Responses will be posted to https://cleancooking.org/funding-opportunities no later than 9/29/2021 at 11:59 PM EDT.

Submission details

Proposals should be submitted by email to info@cleancookingalliance.org and frobinette@cleancookingalliance.org with the subject line ‘Unlocking LPG Finance for Clean Cooking Study Proposal – [Recipient  name]’ no later than 10/6/2021 at 11:59 PM EDT. Proposals should be submitted in PDF format, with the budget also attached in an Excel file.

Q&A

Please find questions and answers regarding this RFP here.