TA-6910 IND: Supporting Institutional Knowledge Development and Capacity Building for Planning of Innovative and Sustainable Projects and Programs - Utilizing PPP and Private Sector Investment to Support Climate-Smart Development of Agricultural Value Chains in India (55311-001)

TA-6910 IND: Supporting Institutional Knowledge Development and Capacity Building for Planning of Innovative and Sustainable Projects and Programs - Utilizing PPP and Private Sector Investment to Support Climate-Smart Development of Agricultural Value Chains in India (55311-001)

Date Published: 17-Oct-2024

Deadline of Submitting EOI: 07-Nov-2024 04:00 PM Manila local time

SELECTION PROFILE

Consultant Type: Firm

Selection Method: Simplified Consultants' Qualifications Selection (SCQS)

Selection Title: Supporting Institutional Knowledge Development and Capacity Building for Planning of Innovative and Sustainable Projects and Programs

Package Name: Utilizing PPP and Private Sector Investment to Support Climate-Smart Development of Agricultural Value Chains in India

Engagement Period: 6MONTH

Consulting Services Budget: USD 99,500

Source: National

Technical Proposal: Single-Stage Proposal (SSP)

Approval Number: 6910

Approval Date: 22-Mar-2022

ADDITIONAL INFORMATION

Country of assignment: India

Country of eligibility for national consultants: Same as country of assignment

TERMS OF REFERENCE

Primary Expertise: Agriculture Value Chains and Private Sector Financing

TOR Keywords: Agriculture, Private Sector Finance, Decarbonization, PPP

Objective and Purpose of the Assignment

I. Background

Under the India Country Partnership Strategy (CPS) , ADB is committed to helping deliver increased agricultural productivity and improving rural livelihoods and food security. About 40% of the labor force remained employed in agriculture, where productivity and wages are well below the national average. To address these development needs, ADB will support India to introduce better technology and more modern farm inputs focusing on increasing adoption of climate resilient and modern inputs such as drip and micro irrigation, better quality and speciality seeds and fertilizers, clean planting materials, and enable development of market linkages for various agricultural value chains. Agricultural wastes and residues are also of concern under the CPS. ADB will support the Government of India’s intentions to adopt circular economy principles to extract value from these waste products and byproducts.PPP and private sector investment have significant potential to fill some of these gaps and help meet these objectives. A full understanding of relevant agricultural value chains and the different stages and stakeholders in these value chains is required in order to best identify how PPP and private sector solutions can be utilized. Further, an understanding of how these potential solution support India’s larger climate initiatives is critical to identifying optimal approaches to addressing these development needs. Where possible, these solutions should support both decarbonization and improving the climate resilience of farmers and food security in India.The agriculture sector accounts for 14% of India’s total GHG emissions, trailing only the energy sector (including transport) at 75% and followed by 8% from Industry Process and Product Use (IPPU) and 3% from waste. GHG emissions from cultivation have increased 161% from 1960 to 2010, with the primary contributors to this increase being chemical nitrogen fertilizers and the shift from animal and human energy sources to diesel and electricity-dependent machines. In addition to decarbonization, building climate resilience in agricultural value chains is critical to support India’s policy objectives in climate change, pollution reduction and food security. The climate-related hazards for India that are most relevant to agricultural production are droughts, the effects of extreme rainfall (flooding, erosion, landslides), high maximum temperatures, and changing pest conditions. , , , , Fertilizer use and soil quality management through appropriate input use are critical factors both in decarbonizing agriculture and in improving climate resilience. Fertilizer application is the main driver in GHG emissions during production of most crops, with use of pesticides and herbicides also contributing. Government subsidies and regulations have led to an overreliance on bulk fertilizers such as urea, di-ammonium phosphate (DAP) and NPK, leading many farmers to overuse these primary nutrient fertilizers. Source: Sah 2018This overuse of primary nutrient fertilizers has resulted in widespread soil deficiencies of zinc, sulfur, iron, copper, manganese, and boron across India. The Indian Government’s Union Budget 2022 has advocated for the use of natural farming practices to boost sustainable agriculture and reduced fertilizer subsidies on bulk fertilizers urea, NPK and DAP. , However, a hybrid model or transitionary model that includes natural farming practices supplemented by smart fertilizer use might better support government objectives in climate change, pollution reduction and food security while simultaneously improving farmer productivity and incomes. Livestock production is also a key sector for both decarbonization and building climate resilience. While poultry meat, eggs and milk are amongst the lowest GHG emitters amongst livestock, there is considerable room for decarbonization especially through feeding and waste management practices.10 II. ObjectiveThis study aims to identify policy and regulatory impediments to private participation that could be addressed by ADB’s public sector operations to support the development of agricultural value chains in India in accordance with government initiatives and the India Country Partnership Strategy (CPS) . The study will focus on the three agricultural value chains: (i) agricultural inputs, including fertilizers and agrochemicals, seeds, feed, and equipment; (ii) dairy and poultry; and (iii) horticulture, with a focus on fresh fruit and vegetables. The value chains included in this study have been selected based on (i) alignment with the India CPS, and (ii) their importance to India’s food security objectives and thus their need to improve climate resilience.The report will identify at each stage of the relevant value chains, the scope for: (i) opportunities that may benefit from PPP technical advisory, prioritizing those opportunities that could also support decarbonization or improving climate resilience of stakeholders; (ii) opportunities that would benefit from private sector financing and risk-appetite mapping of such opportunities to determine the best kind of private sector financing applicable to them; and (iv) key policies and regulatory changes which could be supported through sovereign operations/Technical Assistance/policy dialogue of ADB and which in turn increase private sector investment potential. III. Scope of WorkThe study will focus on four key agricultural value chains and will assess barriers and opportunities to support development in accordance with the India CPS at all stages of these value chains. The study will prioritize development opportunities that include decarbonization features and improved climate resilience. The scope of work would cover following sectors and analyses, drawing international experiences and bringing India specific context as per finalized Interim Report (Section IV).Three key study areas have been selected due to (i) alignment with India CPS and government ministry objectives and (ii) decarbonization potential and impact on climate-resilience of agricultural production in India:• Sector 1: Agricultural Inputs With respect to agricultural inputs, the study is expected to be comprehensive but must include, at a maximum: fertilizers, agricultural chemicals, seeds. These subsectors are considered critical for improved agricultural production efficiency and for supporting transition towards natural farming practices. Additionally, these sectors offer significant potential for climate adaptation. • Sector 2: Dairy and poultry Poultry is an important source of protein with a relatively low carbon footprint, and production in India is largely on small farms, with some contract farming operations working with farmers with as little as 0.04 ha. There is significant room for improving climate resilience, which impacts not only food security but also small holder farmers. There is considerable room for decarbonization in the dairy industry, including on-farm and in energy efficient storage and logistics. • Sector 3: Horticulture The horticulture study will focus on fruit and vegetable value chains and will align with ministry objectives to develop this sector. There are also potentials for investment in climate resilience through the integration of fruit trees in farms and the use of greenhouses, amongst others.For each of the areas, the study will meet the following objectives:1. Map the value chain 2. Identify gaps that may benefit from transaction advisory services for ADB’s Office of Market Development and PPP in the midstream segment. 3. Identify gaps that can be resolved by interventions of sovereign operations/Technical Assistance/policy dialogue which will enable and increase private sector investment 4. Identify opportunities for private sector financing to support the sector development which aligns with the India CPS, while prioritizing opportunities that also support decarbonization and climate resilience at each stage of the value chain; identify the best types of applicable private sector financing based on size, scope and risk landscape of the opportunities.IV. Timelines and deliverablesThe overall assignment is proposed for a duration of six months. Outcomes from the final deliverables would be able to inform policy and financing decisions which would build climate resilience in and decarbonize agricultural value chains in India.The contract type is lump sum inclusive of reimbursable expenditure.Key deliverables based on Terms of Reference are:a) Inception report (within 3 weeks after signing the contract) As a starting point for the project, a kick-off meeting is proposed to ensure smooth exchange of expectations. At the same time, it would also serve as a platform for agreement on the nuanced work schedule and experts to be mobilized. This activity would further help in better ascertaining the scope of activities and actions to be undertaken as part of the project. Inception report will be revised based on feedback received from the review panel (consisting of multi sectoral team members of ADB)b) Interim Report and stakeholder feedback (~2 months) An interim report covering overall the skeleton of activities under the scope will be prepared by the end of 2nd month. c) Draft Report and stakeholder consultations (~4 months) A detailed first draft of the report covering all the listed study sectors and objectives will be prepared by the end of 4th month after having extensive stakeholder consultations.d) Final report and analytics (6 months) Draft report will be reviewed, edited and supplemented with additional information based on feedback received from review panel, government and industry stakeholders. Supporting analytics will be provided along with a copy of the final draft report.V. Required Consulting ServicesA consulting firm will be recruited to provide the consulting services required to implement the above activities, as outlined under the scope of work. The consulting firm is expected to deliver the overall outputs stipulated above. The consultant may be required to propose additional consultancy efforts inputs, if required by ADB. Deliverables: The implementation period of the study will be for 06 months from May 2024 to October 2024. The activities under the scope of work described above are expected to be completed within the timelines. The consulting organization will be required to prepare and deliver periodic and specific task reports, as required by ADB.Firm Experience: The consulting firm is expected to: a. Be an independent private legal entity/ Partnership Firm/ Private Limited Company/ Limited Liability Partnership firm registered in India, and operational for at least 15 years, as on the date of submission of the response. b. Have experience of providing project/ program management services for at-least 3 large-scale strategic programs with central government/State government/ central or State government agencies & departments financed by Central/State Government or by Multilateral/Bilateral Institutions in mission mode in last 5 years (completed or ongoing projects) i. The services provided by the consulting firm under aforementioned programs should have a minimum contract value of INR 1 Crore ii. The programs must include at-least 1 program related to decarbonization / climate resilience / climate change. iii. The programs must include at-least 1 program related to agriculture sector. c. Experience of working on pan-India programs is preferred. d. Expertise in climate change or agriculture is preferred. d. Experience of undertaking at least 5 advisory / consultancy engagements (ongoing or completed) in last 10 years related to PPP in form of Transaction Advisory/Bid Advisory//Implementation/Project Structuring/Financial Feasibility across India. e. Engagements should have contract value of more than INR 50 Lakhs.Please refer to attachment for more details.