Terms of Reference (ToR) to “Consulting service to Facilitate and develop local government policy on disaster Risk financing.”

Ujyalo Multipurpose Cooperative Ltd. Tikapur -6, Satti Kailali

Terms of Reference (ToR)

to

“Consulting service to Facilitate and develop local government policy on disaster Risk financing.”

October 2023

A. Ujyalo Multipurpose Cooperative Ltd, of Tikapur Municipality ward 7; Sattibazar Kailali district; registered in 2063 to work in various financial and livelihood sectors at the local level. The Cooperative is taking forward the Index Based Flood Insurance (IBFI)initiative in Kailali and Bardiya districts in partnership with Practical Action. Index Based Flood Insurance (IBFI) initiative is co-funded by the InsuResilience Solutions Fund (ISF) and Z Zurich Foundation.

B. Practical Action: Practical Action is a change-making organization that works in unconventional ways. We put ingenious ideas to work so people in poverty can change their world. Practical action does things differently, so answers that start small can grow big - bringing people together in bold collaborations, using innovation and knowledge to build futures free from poverty, and helping shape a world that works better for everyone.

C. Index-based flood insurance: Ujyalo Multipurpose Cooperatives is implementing Index-based flood insurance- IBFI one of the unique disaster risk transfer instruments to provide compensation for flood damage in paddy crops. The project is being implemented in 5 rural/ municipalities Lower Karnali river basin of Kailali and Bardiya district with technical support from Practical Action, and its consortium partners Shikhar Insurance (the insurer), The Stonestep (Insurtech) as well Global Parametric the flood modeling partner. The working modality of Index-based flood insurance projects is to settle the agreed percentage of money of the sum insured. against paddy damage caused by Riverine flood damage, based on a pre-defined flood index triggered. Payments are based on the intensity of an event rather than actual loss, and when compared to traditional indemnity insurance, parametric insurance products offer a scientific and more transparent determination of payments. Cooperatives work as aggregators between vulnerable farmers and insurance companies handle all administration of insurance and link it with the insurance company as a group policyholder. The overall objective of the project is to develop a risk transfer mechanism for climate-vulnerable smallholder farmers and marginalized people in western Nepal in partnership with private sector actors, local government, and local institutions. The expected outputs are (1) establishing institutional setup for the pilot program and capacity building for insurance administration (2) Establishing the enabling external environment for the index-based insurance product to sale and (3) developing and piloting IBFI in communities.

The index-based flood insurance product was successfully tested in 2022 when it was first piloted and now it is unconditionally approved by the Nepal Insurance Authority, the insurance regulatory body of the Nepal government. After successfully piloting the index-based flood insurance product, Practical Action/Ujyalo multipurpose cooperative is focusing its efforts on creating the enabling environment for government ownership and self-continuity of the index-based flood insurance product in the lower Karnali basin without any external support from the project.  The project expects its sustainability with local initiation and ownership at the local level. To contribute to its sustainability, this assignment will facilitate and technically support local/ province government authorities on Disaster Risk Financing Policy development and endorsement.

OBJECTIVES

The main objective of this assignment is to support/facilitate government authorities in the step-by-step process of disaster risk financing policy formulation. The project expects that the disaster risk financing policy will guide government authorities to the continuation of the IBFI in their ownership and provision budget – for example contributing to subsidy in insurance premiums that supports farmers. The Disaster Risk financing policy will also highlight the role of key stakeholders that are to be involved in the process and clarify the protocol for systematizing and implementing disaster risk finance. This assignment is to facilitate province/ local governments to develop disaster risk financing policies in their respective governments.

Specifically, this assignment aims to achieve.

• Provide technical support to governments in assessing the essential requirements of the Disaster risk financing policy.
• Support government authorities in identifying concerned stakeholders and their roles and responsibilities for disaster risk financing policy implementation.
• Support and guide about, how can these policies and tools be adapted to roll out Disaster Risk Financing policy effectively, addressing institutional gaps and challenges.
• Disaster risk financing policy is in place enhancing contribution in Parametric insurance solution premiums.

SCOPE OF STUDY

• Asses the existing policy on disaster risk financing, index-based weather insurance, and relevant indemnity insurance policies that target disasters.
• Identify policy window to formulate disaster risk financing policy of sub-national governments ( Palika and Province).
• Formulate DRF policy of sub-national governments (Palikas) that creates an enabling environment for local government to contribute to premiums of Climate and disaster risk insurance solutions. 
• support and work jointly with government authorities to facilitate the whole process of the policy formulation and documentation of the policy.

ELIGIBILITY AND TEAM COMPOSITION

The consultant team should comprise.

• law expert with knowledge about index-based flood insurance products.
• Disaster Risk Reduction and management expert with Knowledge of how Climate and disaster risk insurance functions.

RESULTS, DELIVERABLES, and DUE DATES

The expected deliverables of the assignment are:

• Inception Report entailing the framework or methodology for the assignment. Mid-term report incorporating inputs from the Ujyalo Multipurpose cooperative/ Practical Action and its partners.
• DRF policy of five local governments in Lower Karnali.
• Final report of the assignment with DRF of five local governments – (with all the recordings, meeting details, and analyzed data in the original file.) Final presentation in presentation format.

DURATION

The duration of this assignment will be approximately three months. The consultant is expected to start work from October–December 2023 and complete the assignment by endorsement of policy through the Province/Rural/Municipal winter session.

BUDGET

The total maximum budget available for this assignment is NRs. 550,000 (In words: Five lakh fifty thousand rupees only) inclusive of all applicable taxes. This includes the consultant’s fee, lodging/accommodation, travel, stationaries, workshop/meeting cost, and any relevant expenses involved in this assignment. The budget is not subject to negotiation.

All applicable taxes will be deducted at source. The release of funds will be made in three installments: 30 percent upon completion of the inception phase, 30 percent upon submission of the mid-term report, and the remaining 40 percent after submission of final reports.

ROLES AND RESPONSIBILITY

CONSULTANT

The main roles of the consultant shall be:

• Lead the overall process of data collection, stakeholder analysis, policy process, and report writing.
• Support concerned government units to Organize all the workshops, discussions, and key informant interviews as and where needed.
• Identify, contact stakeholders, and collate information.
• Collect data, process, Analyze, and Finalize Disaster Risk Finance policy at project working local government level and province government level.

PRACTICAL ACTION/ Ujyalo Multipurpose cooperative

The main responsibility of the Ujyalo multipurpose cooperative and Practical Action Nepal Office is to:

• Orient consultant on the concept and objectives of the assignment.
• Provide timely feedback and inputs.
• Support to organize meetings and workshops related to policy formulation.
• Release the budget as per the agreement.

EVALUATION OF PROPOSAL

All received proposals shall be reviewed following criteria based on sound understanding of the assignment, competent methodology, consistency, coherence and compliance, experience of the consultant, and proposed budget. All rights of approval of the proposal remain with Ujyalo Multipurpose and its decision will be considered final.

INVITATION OF PROPOSAL

Ujyalo multipurpose cooperative requests interested firms/companies/agencies (registered in VAT) to submit (i) a letter of interest (1 page), (ii) a brief technical proposal and CVs of professionals to be involved in the assignment, and (iii) a financial proposal with detail budget breakdown to conduct the proposed work to the following address on or before 6th November 2023 within 17:00 hrs in a separate envelope properly marked with the proposal type sealed.

Ujyalo Multipurpose Cooperatives Ltd.

Tikapur Municipality-7 Satti, Kailali

PHONE: +9779868473379, 9863784086

E-mail: ujyalo.ibfiproject@gmail.com / ujyalomulti2063@gmail.com