Terms of Reference for the Recruitment of a consultant firm to develop Guidelines for Digital Infrastructure Financing models in Africa.

Case Studies: Digital Infrastructure Financing Strategy for Nigeria and Rwanda 

1. INTRODUCTION AND GENERAL BACKGROUND

1.1 ORGANISATION BACKGROUND

Smart Africa is a bold and innovative commitment from African Heads of State and Government to accelerate sustainable socio-economic development on the continent, ushering Africa into a knowledge economy through affordable access to Broadband and usage of Information and Communications Technologies.

The Transform Africa Summit held in Kigali, Rwanda on 28th-31st October 2013 culminated in the adoption of the Smart Africa Manifesto document by seven (7) African Heads of States (Rwanda, Kenya, Uganda, South Sudan, Mali, Gabon, Burkina Faso) in which they committed to providing leadership in accelerating socio-economic development through ICT’s.

On 30th -31st January 2014, The Smart Africa Manifesto was endorsed by all Heads of State and Government of the African Union at the 22nd Ordinary Session of the Assembly of the African Union in Addis Ababa. This development places the Manifesto at the heart of the ICT agenda in Africa beyond just the 7 original signatories at the Summit to all the 54 African countries. The Smart Africa Alliance has since grown to include 39 African countries that represent 1.1 billion people and 50+ International partner organizations and private sector members.

The Smart Africa Manifesto aims to put ICT at the center of national socio-economic development agenda of member countries; improve access to ICT especially Broadband; to improve accountability, efficiency, and openness through ICT promoting the introduction of advanced technologies in telecommunication; to put Private Sector first, and to leverage ICT to promote sustainable development.

The Team Europe Action – Data Governance in Africa

The African Union Commission, the European Union Commission, Smart Africa Alliance (SAS) and the German Federal Ministry for Economic Cooperation and Development (BMZ) engaged in the creation of a political initiative entitled the EU-AU Data Flagship with the main objective of unlocking social and economic potential of data across the African continent and protecting citizens’ fundamental rights. The flagship was designed to work on five pillars of intervention: data policy frameworks, data innovation, data infrastructure, data against pandemics and data professionals.

As a result of the Flagship a Team Europe Action (TEA) Data Governance in Africa was formalized to support the African Union (AU) and its Member States to form development-oriented and human-centric data regulation, data use and digital infrastructure at continental, regional and Member State levels. The Data Governance in Africa Action is jointly implemented by Enabel, Digital Africa, GIZ, ESTDEV, Expertise France and HAUS. It is coordinated by the Digital for Development (D4D) Hub which aims to shape a sustainable digital future for all, bridging digital divides to place people at the heart of digital economies and societies globally.

As part of the TEA, GIZ will support the African Union Commission in implementing the African Continental Data Policy Framework and support SAS in developing and disseminating the Digital Infrastructure Financing Guideline along with the two case studies.

1.2 PROJECT BACKGROUND

Today, 2.6 billion individuals worldwide await connection to the internet and the digital realm. The distribution across regions, as per the ITU's 2022 Facts & Figures, reveals that the majority of the unconnected reside in Africa (60%), followed by the Asia-Pacific (36%), the Arab States (39%), the Americas (17%), CIS (16%), and Europe (11%).

Over the years, telecommunications companies and government bodies have worked tirelessly to bridge the coverage gap and reduce the digital divide. Significant progress has been made in extending coverage, yet the usage gap persists, particularly in remote areas, largely due to affordability issues. To address connectivity challenges, in 2019, Smart Africa, SAMENA, GSMA, several Member States, and other international organizations, under the UN Broadband Commission Working Group, formed a task force for sustainable development, and in 2021, they shared the "21st Century Financing Models report", presenting an innovative financing model aimed at bridging broadband connectivity gaps.

The 21st Century Financing Model report delves into how a diverse range of stakeholders within the digital space can come together to tackle the challenge of developing new broadband infrastructure, upgrading existing infrastructure, and creating relevant digital content and services for populations still unconnected. It also explores how these new models can help achieve the Commission’s 2025 Targets and the United Nations’ 2030 Sustainable Development Goals.

 As a continuation of the 21^st century report and the Digital Infrastructure Investment Initiative whitepaper, SAS in collaboration with GIZ for this consultancy seek to engage an experienced consulting firm to provide a specific guideline tailored to the financing demands and needs in Africa the aim of the engagement is to address the challenges and opportunities associated with financing for digital infrastructure. The firm will assess the current landscape of existing programs and funding gaps in digital infrastructure financing and develop guidelines for Digital Infrastructure Financing for SSA, with a deep dive in two case studies - Nigeria and Rwanda Digital Infrastructure Financing Strategy. The analysis, performed through the case studies, should encompass assessment of current governmental incentivization for financing for digital infrastructure, such as tax incentives and special economic zones, but also revenue generation levers to enhance the base for public households and also provide recommendations for future financial incentivization towards digital infrastructure policies.

2. OBJECTIVES AND SCOPE FOR THE CONSULTANCY  

2.1 THE SCOPE AND OBJECTIVES OF THE CONSULTANCY

The scope and objectives of the consultancy is to develop a comprehensive Guideline for digital infrastructure financing models in Africa and national policy for the selected Member States (Nigeria and Rwanda) basing on the 21st Century Financing Models report for financing contributions and disbursement for digital financing for each of the two selected member states (Nigeria and Rwanda) that will cover detailed technical, economic, financial, legal, regulatory and implementation plan.

2.1 THE MAIN OUTCOMES AND DELIVERABLES FOR THE CONSULTANCY

The main outcomes and deliverables for the Consultancy are as follows:

Inception Report:The inception report that will provide a comprehensive overview of the digital financing model project, outlining its objectives, scope, and methodology. It will include a research methodology for the regional guideline along with an analysis of the current state of digital infrastructure and financing mechanisms, identifying key challenges and opportunities for Nigeria and for Rwanda. Additionally, the report will outline the stakeholders involved and propose a roadmap for further research and development, laying the foundation for subsequent deliverables.

Regional guideline

Financial guidelines and Instruments for Digital Infrastructure:

• Comprehensive Analysis of Financial Instruments for Digital Infrastructure in Africa

A thorough evaluation of the financial instruments currently available for digital infrastructure projects in Africa (SSA), assessing their suitability and effectiveness in addressing region-specific risks and sectoral challenges. This analysis aims to identify key gaps in financing for underserved regions and propose tailored financial solutions, including traditional and innovative instruments, to enhance the bankability and financial viability of digital infrastructure projects.

• International Financing Approaches for Digital Infrastructure in SSA

A detailed exploration of international financing models and best practices, with a focus on blended finance, and international financing mechanisms. This outcome aims to provide insights into how these approaches can be adapted and implemented in SSA, offering viable funding solutions for digital infrastructure projects and fostering global collaboration.

Barriers and Recommendations for Scaling Digital Infrastructure:

• Identification and Evaluation of Barriers to Project Bankability in SSA

An in-depth assessment of the key barriers to the bankability of digital infrastructure projects across Africa, focusing on regional bottlenecks, regulatory hurdles, and access to financing. This outcome aims to provide actionable strategies for overcoming these barriers, including developing tailored financing models and solutions that improve access to capital for infrastructure projects at various stages.

• Analysis of Policies of SSA Digital Infrastructure Development

A comprehensive evaluation of key policies and frameworks influencing digital infrastructure development in SSA. This analysis focuses on identifying and recommending effective financial instruments, tax incentives to stimulate investment, increase government revenue, and drive regional cooperation for cross-border infrastructure challenges. The recommendations will help create an enabling environment for scaling digital infrastructure in SSA.

• Actionable Roadmap for Scaling Digital Infrastructure:

• Actionable Recommendations for Overcoming Challenges to Scaling Digital Infrastructure

A comprehensive set of actionable recommendations aimed at overcoming the key challenges faced by digital infrastructure projects in SSA. This includes innovative funding strategies, public-private partnership models, and regulatory reforms designed to create a sustainable, long-term investment environment for digital infrastructure in the region.

National Digital Infrastructure Financing Strategy for Nigeria and for Rwanda

Policy and Regulatory Framework for Digital Financing: the policy and regulatory framework that will guide selected member states for their digital financing initiatives. It will encompass an analysis of existing regulations and identify areas for improvement to facilitate investment in digital infrastructure. The framework will address issues such as licensing requirements, UAF management and investment incentives, ensuring alignment with national development goals and international best practices.

A Framework on the institutionalization of contributions to digital infrastructure costs from a broader stakeholder basis. This includes a definition of all relevant stakeholders, of different mechanisms of how these stakeholders contribute to digital infrastructure costs (mandatory, voluntary contributions to demand and supply-side initiatives), the governance / institutional set up for the different mechanisms. This framework includes the USF as one mechanism that will be opened to a broader contributing basis.

Guidelines for Utilization of EarmarkedFunds: These guidelines will establish clear criteria and procedures for the allocation and utilization of earmarked funds dedicated to digital infrastructure development. They will outline eligibility requirements for projects, application processes, and evaluation criteria for funds allocation. Additionally, the guidelines will include mechanisms for monitoring and evaluation to ensure transparency and accountability in the use of funds, maximizing their impact on digital infrastructure access and adoption.

Comprehensive Framework Document Outlining Strategies and Mechanisms for digital infrastructure New Financing Model:that will serve as guide, consolidating the findings and recommendations from the inception report, policy and regulatory framework, and guidelines for earmarked funds. It will provide a strategic roadmap for digital financing, outlining various funding sources, investment mechanisms, and partnership models. The framework document will aim to address the diverse needs and challenges of digital infrastructure development, ensuring equitable access to high-quality digital services.

3. METHODOLOGY AND APPROACH

The mission will be executed in alignment with the terms outlined in this reference document and within a contractual framework to be established between the Smart Africa Secretariat and the consulting firm.

The Smart Africa Secretariat will support the consulting firm, to the extent feasible, in facilitating contacts and obtaining necessary authorizations pertinent to the scope outlined in this document. However, the consulting firm is expected to submit a proposal which includes but not limited a detailed project plan and inception report.

The mission shall be carried out by the Consulting firm with support from the Project Working Group which is comprises of selected stakeholders from each of the two Smart Africa Member states, Nigeria and Rwanda and Smart Africa Project team and key stakeholders.

The consultant's methodological approach must include the following principles and any other principle where appropriate:

• Integrate existing international guidelines and recommendations.
• Meet with key contacts in government and other institutions, with Smart Africa Alliance members and the Project Working Group.
• Organize and participate in consultation and feedback workshops during the duration of the study.
• With Smart Africa project team carry-out 4 in-person workshop for each of the two selected member states, for the presentation of the guideline and national policy on digital infrastructure financing.
• Develop a Policy and Regulatory Framework, Guidelines for Utilization of Earmarked Fundsand Comprehensive Framework for digital infrastructure New Financing Model for each planned report or blueprint and provide a presentation at workshops in both French and English languages.
• Collect comments on each draft guideline and draft national policies and make consequential revisions in the final version.
• Develop an implementation plan with detailed timelines, responsibilities, and performance indicators for executing the digital financing strategies outlined in the framework.

4. DURATION OF THE ASSIGNMENT:

The selected consulting firm must carry out the project within Six (6) Months from the date of signing the contract. The indicative timetable is as follows:

5. FIRM PROFILE AND EXPERIENCE /PROFILE OF THE FIRM

Applicants must be a consulting firm fully registered with a formal intention to conclude an agreement on its own or having concluded a joint venture agreement. In the event of a joint venture bidding, all the member parties are jointly and severally liable for the contractual clauses. Applicants may where necessary, collaborate with other consulting firms to bid for the assignment.   

Applicants must provide any document that the Smart Africa Secretariat may reasonably request, establishing to the satisfaction of Smart Africa being the Contracting Authority that they continue to be eligible to compete.

The Firm must provide recommendation letters signed and stamped of at least four (4) similar assignments in the telecommunications sector (across different connectivity types). It shall clearly and precisely indicate the composition of the mission team only proven by duly signed and stamped recommendation letters.

The consulting firm(s) must meet the qualification requirements of at least 10 years of professional experience in one or all the following sectors: telecommunications sector, Policy and Regulatory, financial and economist analyst, Broadband connectivity industry planning, management. Experience in Africa or other developing countries will be an added advantage.

The key human resources for this project will be:

Lead Consultant, Economic/Financial and Commercial Expert:

• The Lead Consultant should be holding A Master's degree or higher in a relevant field such as MBA focusing on finance and digital infrastructure, engineering economics, finance, public policy, or telecommunications or relevant area from a recognized University and have a proven, extensive experience of at least 10 years on telecommunication/ICT with a focus on digital infrastructure development, financing, and policy.
• Years of experience to be proved by academic certificates, and signed detailed curriculum Vitae.
• The Consultants should have a solid background in advising on financing mechanisms for digital infrastructure projects in Africa, should have a deep understanding of Multi-lateral Development Banks and PPP models.
• Must have proven skills and experience in similar projects related to digital infrastructure financing or telecommunications policy.
• He/she should be familiar with both public and private sector financing mechanisms for infrastructure projects.
• He/she should have a demonstrable track record in project management and in coordinating large diverse teams/stakeholders, in complex working environment.
• He/ She should Proficiency in financial modeling and analysis to develop sustainable financing models for digital
• Knowledge of models and forecasting scenarios in the ICT sector, as well as in assessment of business environment and of technical and competitive commercial options, including analysis of cost estimations.
• Proven experience in preparing Multinational Development Banks (MDBs) works Programs and an extensive experience with MDBs financial and contracting guidelines and procedures.
• Excellent proficiency of English and report writing skills are required. Working Knowledge of French is required.
• Any other relevant qualification and experience will be an added advantage.

Legal and Regulatory Expert:

• Advanced university degree (master’s degree or equivalent) in economics, or related field. A first-level university degree in combination with qualifying experience may be accepted in lieu of the advanced university degree.
• A minimum of 10 years of progressively responsible experience in telecommunications projects, policy formulation, application of economic principles in development programs in the areas of economic and corporate governance, and private sector development or related areas, is required.
• Years of experience to be proved by academic certificates, and signed detailed curriculum Vitae.
• He/she should have experience in similar regulatory telecommunication projects.
• He/she should have a demonstrable track record in project management and in coordinating large diverse teams/stakeholders, in complex working environment.
• He/ She should have high level understanding of regulatory, policy issues and development issues pertaining to digital infrastructure and connectivity in Africa.
• This includes expertise in PPP models, and the regulatory requirements for financing infrastructure projects, with a focus on digital infrastructure.
• Knowledge of models and forecasting scenarios in the ICT sector, as well as in assessment of business environment and of technical and competitive commercial options, including analysis of cost estimations.
• Must be fluent in both written and spoken English Language. Knowledge of French will be an added advantage.

Project Management Support Expert:

• He/ She should be holding a degree in ICT field from a recognized University and have a proven experience of at least 5 years of providing project management support on telecommunication/ICT projects.
• Years of experience to be proved by academic certificates and signed detailed curriculum Vitae.
• Must have proven skills and experience in project management tools and be able to provide project management support to the project.
• Excellent command of English and report writing skills are required. Working Knowledge of French is required.
• Any other relevant qualification and experience will be an added advantage.

6. EVALUATION CRITERIA /EVALUATION OF THE PROPOSALS

The following model will be used to evaluate all respondents and proposals submitted.

6.1 Technical Criteria

6.2 Financial Criteria:

Once the technical criteria have been evaluated, the costs of all bids will be listed from low to high. Computing the cost criteria score will be accomplished by use of the following formula:

= Sf

The Applicant getting maximum marks on 70-30 weightage (70% for technical and 30% for financial) will be selected as Consultants for the Client. The weights given to the Technical (T) and Financial Proposals (F) are: T = 0.70 and F = 0.30

The Final Score (S) is calculated as follows: S = St*T + Sf*F

7. INFORMATION AND SUBMISSION REQUIREMENTS:

7.1. Submission Requirements:

A specific outline must be followed to facilitate the Smart Africa Secretariat’s review and evaluation of the responses received.

A response to this RFP must include the following sections in the order listed:

• A cover letter confirming the firm’s interest to provide the services required.
• Mandatory documents (Company registration certificates, Social Security Contributions certificate and tax clearance) or any appropriate documentation to demonstrate that the firm is registered legal entity. Other relevant documentation should be included if there may be any joint venture bidding or collaboration between or among applicants to bid for this assignment. Failure to submit them will lead to automatic disqualifications.

A technical proposal containing the following content:

• Executive summary
• Business experience/Profiles
• Approach and Methodology
• Work Plan / Schedule
• Mission team experience/profiles
• Updated Curriculum Vitae for the experts and academic certificates requested.
• Recommendation letters signed with the logo of recommending entity .

Financial Proposal containing the following tables.

• Summarized Total Cost VAT Inclusive (Value of tax indicated on final cost)
• Breakdown of a remuneration package.
• Breakdown of reimbursable expenses (Will not be considered during financial evaluation since these will be invoiced upon approval by the SAS based on the need; for example, in case the service provider is requested to travel for a physical workshop).

Notes:

• All Financial Proposals/offers should be password protected, and Smart Africa will request for it for bidders who have been qualified in the technical evaluation phase.
• Only consulting companies are eligible to apply to this assignment, no individuals will be accepted.
• Indicate your preferred payment terms under financial proposal.
• A withholding tax of 15% will be deducted from payments for firms not VAT-registered with Rwanda Tax Administration (RRA) and 18% VAT will be applicable for registered firms in (WHT must be embedded in remuneration cost and not as an addition)
• All Financial Offers should be quoted and submitted in USD Currency.

7.2. Submission Process and deadline:

Soft copies of both Technical and Financial Offers must be sent to: procurement@smartafrica.org   showing each the nature of the offer concerned (technical or financial offer) as : 124/S.A/GIZ-Data Flagship/RFP/01/2025, “Recruitment of a Consulting Firm to Develop A guideline for Sub-Saharan region and national policies for Digital Financing model for Two (2) Smart Africa Member States” not later than 18^th  February 2025 at 5:00 PM local time (Kigali).

8. VALIDITY:

Proposals and quotes must remain valid for 180 days after the date of closing noted above. After, the closing date and time, all proposals received by the Smart Africa Secretariat become its property.

9. ANTI-CORRUPTION:

Smart Africa is committed to preventing and not tolerating any act of corruption and other malpractices and expects that all bidders will adhere to the same ethical principles.

10. ENQUIRES:

Any inquiries will only be received at least 5 working days before the bid submission deadline. Prospective respondents who may have questions regarding this RFP may submit their inquiries to tenderenquiries@smartafrica.org.

 11. RIGHTS RESERVED:

• This RFP does not obligate the Smart Africa Secretariat (SAS) to complete the RFP process.
• SAS reserves the right to amend any segment of the RFP prior to the announcement of a selected firm.
• SAS also reserves the right to remove one or more of the services from consideration for this contract should the evaluation show that it is in SAS’s best interest to do so.
• SAS also may, at its discretion, issue a separate contract for any service or groups of services included in this RFP.
• SAS may negotiate a compensation package and additional provisions to the contract awarded under this RFP. 
• The Smart Africa reserves the right to debrief the applicants after the completion of the process due to expected high volume of applications and avoiding the compromise of the process.