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TERMS OF REFERENCE FOR ENGAGING A SERVICE PROVIDER IN BUSINESS PLAN DEVELOPMENT AND IMPLEMENTATION FOR KIIWP-2 COOPERATIVES

Introduction

Reference to the Terms of Reference (ToR) issued for the fiscal year 2023-2024 titled “Consultancy Service for Providing Business Development Services for KIIWP-2 Cooperatives.” Due todelays in receiving funding for this activity within the same fiscal year, Cordaid is unable to proceed with the implementation as originally planned.

In alignment with the new annual work plan and budget, which now includes three distinct categories of business plans for grant applications (each with specific requirements and conditions for its implementation) Cordaid is required to update the terms of Reference to reflect these current conditions to achieve the KIIWP-2 project's objectives.

In this updated scope of work, we will focus on implementing business plans development services as planned under Category 2, specifically for the matching grant aimed at cooperatives’ micro-projects in post-harvest management.

We request that you adjust your technical and financial proposal to align with the updated Scope of work for the relevant category, as outlined below:

Background

 The Government of Rwanda is working on reforms to shift from subsistence to market-oriented agriculture. Over the past 29 years, agriculture has grown to contribute 25% of GDP, with an annual growth rate of 5% and a significant rise in GDP per capita from $441 in 2007 to $1,004 in 2022. Despite this progress, challenges remain, including constraints in agricultural value chains, weak research-extension linkages, limited input supply systems, and low access to finance. Issues such as small land sizes, reliance on rain-fed farming due to limited access to irrigation and mechanization system. Poor storage techniques affect post-harvest handling, insufficient and inadequate storage and drying infrastructure heightens food safety risks and negatively impacts the quality of agricultural produce. There is still limited processing activity, and markets are predominantly informal and unorganized., inadequate storage, and minimal processing and formal market activities continue to hinder further development.

Value addition and agri-processing in Rwanda are limited, and private investment is scarce. This is largely due to the finance sector’s reluctance to lend to agribusinesses and the challenges of aggregating numerous small farmers to boost competitiveness. Evidence from other countries shows that enhancing farmers' and agribusinesses' skills in developing credible business plans and managing debt and cash flow can help overcome these challenges, leading to increased productivity and improved welfare for beneficiaries.

In Category 2 of the KIIWP-2 project, the focus is on helping 50 agricultural cooperatives develop bankable business plans. This initiative is designed to enable these cooperatives to access matching grants and other loan services for acquiring small to medium-sized post-harvest management facilities. These facilities are crucial for cooperatives engaged in KIIWP-2 target value chains, especially in light of the increased production resulting from irrigation development and catchment rehabilitation. Additionally, it provides coaching to cooperatives receiving matching grants throughout the implementation of their business plans.

The Kayonza Irrigation and Integrated Watershed Management Project, Phase 2 (KIIWP-2), led by Rwanda’s Ministry of Agriculture and Animal Resources and executed through the Rwanda Agriculture and Animal Resources Development Board (RAB), seeks to improve the livelihoods of 40,000 rural households in the Kayonza district. The project focuses on enhancing food security, increasing income, and building climate resilience across nine targeted sectors: Gahini, Murundi, Mwiri, Ruramira, Murama, Kabare, Ndego, Kabarondo, and Rwinkwavu.

About Cordaid's Role in the KIIWP2

CORDAID’s strategy to enhance food security and strengthen agricultural livelihoods encompasses three main tracks: increasing the technical and business capacities of smallholder farmers for self-sufficiency and income generation, supporting access to finance and markets to boost farmer incomes, and promoting sustainable agricultural practices. Specific interventions include Farming-as-a-Business training for 8,000 smallholders, delivering business development training and coaching to 500 individual farmers and 50 cooperatives, and aiding in the development of bankable business plans. CORDAID also facilitates market linkages through agribusiness connections and cultivates partnerships between public, private, and producer entities. Moreover, efforts to enhance financial services include promoting financial literacy, supporting the digitalization of financial services for smallholders and cooperatives, and encouraging the adoption of farm mechanization, post-harvest technologies, and climate-smart practices.

Objectives of the assignment

Primary Objective

The primary goal of this assignment is to develop comprehensive and successfully bankable business plans for 50 agricultural cooperatives’ business ideas of the project partner cooperatives in Kayonza district. A business plan will be considered successful when it is bankable, and the business promoter managed to raise up all supporting documents for the business plan to pass through the matching grants approval process.

Specific objectives

• Market Study and Cooperatives needs alignment: For ideas deemed potential by the KIIWP designated panel, the service provider will conduct quick market studies prior to developing business plans in the Rural Invest platform and will consult the cooperatives to align with their needs and long-Terms goals.
• Development of Business Plans for the 50 Cooperatives: At this stage, the service provider will develop business plans that adhere to international standards. The Rural Invest toolkit will be used as the primary tool for business plan development. For financial institutions that are not familiar with the Rural Invest software, the business plans will be created using excel. The plans will be prepared in Kinyarwanda or English, depending on the cooperative's preference. 
• Presentation and discussion with the cooperative members representatives on the drafted business plans and collection of all required documents to meet the loan/grant requirements: The developed business plan should be owned by the cooperative management team and the entire members, during this presentation, as well as emphasize the importance of cooperative ownership of the business plan, ensuring that it is embraced by both the management team and all members. Encourage members to ask questions to fully understand and approve the business plan at the cooperative level. Additionally, collect all required supporting documents needed to meet the matching grant requirements, ensuring they are submitted along with the finalized business plan.
• Provide hands-on coaching and guidance to cooperatives receiving matching grants in the implementation of their business plans after securing financing: Once the business plans have secured funding and implementation begins, a monitoring contract between the service provider and each cooperative will be established as a control tool. Additionally, a loan disbursement monitoring tool for funds from financial institutions will be set up, reviewed monthly, and reported to relevant stakeholders, including Cordaid, BDF, and RAB/SPIU. The service provider will coach the grant recipient/cooperative throughout the contractual year, conducting one coaching session per quarter. These coaching sessions will commence following the start of implementation activities for each cooperative's business plan and are designed to ensure effective utilization of the matching grants and adherence to project goals. The cost of these coaching sessions will be included in the implementation package of the business plan. This ongoing support and monitoring process aims to maximize the success of the funded projects and ensure transparency in fund utilization.

Scope of Work

The service provider is expected to develop 50 bankable business plans that will enable cooperatives in the project area to access matching grants or other financial support. This involves conducting market scans to assess cooperative needs and creating detailed business plans using the Rural Invest toolkit. Each plan should adhere to standards, ensuring they meet both grant eligibility criteria and the requirements of financial institutions and BDF. These activities are essential to empower the cooperatives to obtain the necessary financial support to implement their business plans successfully.

In addition to business plan development, the service provider will offer ongoing coaching and guidance to the cooperatives after financing is secured. This includes setting up monitoring mechanisms for both the implementation of the plans and the disbursement of funds. Coaching sessions, scheduled on a quarterly basis, will ensure cooperatives utilize the matching grants effectively, adhering to the objectives of the KIIWP-2 project. The scope of work also includes preparing and submitting detailed progress reports on the development and implementation of the business plans, ensuring transparency, accountability, and the successful completion of the project's objectives.

Specific tasks/activities, deliverables and outputs

The Service Provider is responsible for undertaking the key activities and specific tasks and for achieving the key outputs as summarized in this table below:

The recruited service provider will be requested to produce a road map/ Inception report indicating how to reach the tasks assigned to him by Cordaid under KIIWP-2. Produce an action plan of the contracted period and a monthly work plan extracted from the original action plan and monthly report indicating progress of work, challenges and suggestions on how to overcome the met challenges.

Performance evaluation

Performance will be evaluated quarterly, with Cordaid reserving the right to terminate the contract if performance is deemed unsatisfactory.

Pricing Strategy

The pricing strategy should clearly define costs according to the three categories proposed: (a)1 RWF to 10,000,000 RWF, (b) 10,000,001 RWF to 50,000,000 RWF, and (c) business plans valued above 50,000,000 RWF. The service provider must propose a tiered pricing structure that aligns with the complexity and scale of each business plan, ensuring that the costs reflect the level of effort, resources, and expertise required for each category.

The pricing must be established with a clear benchmark, defined by either current market standards or relevant literature.

Payment Modalities

All payments will adhere to the rules and regulations set forth by the Rwanda Revenue Authority. The budget amounts are inclusive of VAT. Payments will be made based on the number of business plans successfully validated, as well as the coaching sessions conducted within the quarter.

Reporting

• All monthly and quarterly reports must be submitted within 5 days following the end of the reporting period (month/quarter).
• The market scan and cooperative consultations should be conducted well in advance to prevent delays in submitting business plans to BDF. It is recommended to initiate these activities prior to the start of the quarter and complete them early in the first month. A brief report on these activities should be submitted to Cordaid within the first 5 days of the first month of the quarter.
• Both parties will mutually agree on a practical timeline for preparing and submitting business plans to BDF, ensuring that all requirements are met to achieve the quarterly targets.

Duration of Consultancy

The service provider is expected to work for a period of 10 months (September 2024 – June 2025) with the possibility of extension based on performance. Cordaid reserves the right to terminate the contract after quarterly evaluations if delivery is unsatisfactory.

Qualifications and Experience

To be considered for this assignment, an individual consultant or company should meet the following requirements:

• Holding an advanced degree in areas such as Business administration, Project management, Agribusiness, Agricultural economics, Environmental economics, Rural Development, Cooperatives management and related fields.
• Proven experience in developing successful business plans for agricultural projects targeting cooperatives, SMEs, and medium to large enterprises.
• Expertise in providing business development services and coaching to rural communities.
• The service provider must have a strong team competence and high level of professional initiative as indicated by CVs of the related staff.
• Familiarity with Rwanda's agricultural landscape and climate resilience strategies.
• Proficiency in using tools such as Rural Invest, and other business proposals development tools.
• Demonstrated positive and constructive approaches to work, excellent written and verbal communication skills, ability to meet deadlines, and capacity to work effectively under pressure.
• Excellent proficiency in English and Kinyarwanda languages, strong computer skills, and the ability to effectively communicate with stakeholders.

Application Process

Companies should submit their updated technical and financial proposals, and examples of previous relevant work to apollinaire.nshimiyimana@cordaid.org by 08 October 2024. The subject line should be “Interest in BDS for KIIWP project 2024 - 2025”.

Evaluation Criteria

Proposals will be evaluated based on experience, understanding of the project context, proposed methodology and budgetary forecast (value for money).

Implementation Arrangement

The consultant will be recruited under the Cordaid Terms and conditions and undertake the assigned tasks and responsibilities under the direct supervision of Cordaid and its lead agency.

Confidentiality and Proprietary interest

The consultant shall not, either during the Terms or after Termination of the assignment, disclose any proprietary or confidential information related to the service without prior written consent. Proprietary interests in all materials and documents prepared by the consultant under the assignment shall become and remain properties of Cordaid and its lead partner.