|Introduction : |
Although the sustainability-linked investment landscape in Malaysia is dynamic and promising, the mobilised financing is still insufficient to address the country’s urgent SDG needs. The SDG Financing gap is most evident when it comes to climate change. The recent research by IRENA identifies the climate financing gap in Malaysia, stating that the country needs to increase its investment to at least USD 375 billion from the current USD 159 billion. SDG-enabling investments could be instrumental in unlocking increased private capital flows into responding to these development needs in Malaysia.
Blended finance can be one way of de-risking and mitigating the challenges in SDG financing gap by inviting organisations with different objectives and roles to invest together while achieving their own objectives (financial return, social impact, or both). Blended finance refers to the use of catalytic capital from public or philanthropic sources to mobilise additional private sector investment in sustainable development.
In this context, UNDP Malaysia, Singapore and Brunei Darussalam (UNDP Malaysia) is seeking to procure the services of an organisation or consortium of agencies (Service Provider) to conduct the research, analysis, synthesis, and consultations with public and private stakeholders for the ex-ante assessment of “Climate Blended
Finance for Green MSMEs”. The ex-ante assessment of “Climate Blended Finance for Green MSMEs” aims to assess the market gaps or suboptimal investment situations and lay out possible blended finance strategies that can be standardised and replicable in the Malaysian context. The feasibility study is envisioned to serve as a part of the preparatory phase of introducing a viable blended financing model.
This Terms of Reference lays out the framework to carry out this assignment
SCOPE OF TENDER.
The task involves creating a preliminary evaluation to demonstrate the suitability of planned financial instruments (FIs) in addressing the financing gap for MSMEs engaged in climate actions. The Service Provider, overseen by UNDP Malaysia's SDG Impact Finance Specialist and Economist, is required to engage in comprehensive stakeholder consultations and desk research. The ex-ante assessment process is divided into three stages.
- Inception Stage: This phase focuses on defining the study's scope through consultations with key stakeholders, considering government policy priorities, and assessing concessional funding availability. Stakeholder mapping is crucial during this stage.
- Market Assessment: Following scope definition, a market assessment is conducted to validate the need for establishing an FI to address the identified financing gap.
- Delivery and Management: Subsequently, the investment strategy is refined based on the market assessment, with further input from stakeholders through focused group discussions or bilateral consultations. Evaluation of the anticipated outcomes of the proposed investment strategy is carried out. Importantly, the results of the ex-ante assessment are shared with relevant stakeholders to facilitate evidence-based discussions.
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UNDP OFFICE MALAYSIA