72048623RFI00001 Partnerships for Green Investment.pdf

REQUEST FOR INFORMATION

Request for Information No.: 72048623RFI00001

Released Date: June 23, 2023

Response Due Date: July 7, 2023, 10.00 a.m. Bangkok time

The United States Agency for International Development, Regional Development Mission for Asia (USAID/RDMA) is in the process of gathering information to support activity design for a program entitled "USAID/RDMA Partnerships for Green Investment".

In particular, this Request for Information (RFI) intends to:

1. Offer the opportunity for interested individuals and organizations to provide feedback on the Attachment A: Draft Statement of Objectives (SOO) and respond to questions in Attachment B: USAID Directed Questions, and

2. Determine the capabilities and interest of qualified organizations. While USAID/RDMA has not determined the most appropriate contract vehicle, USAID is interested to know whether your organization intends to submit a proposal as a prime offeror in response to the future USAID/RDMA Partnerships for Green Investment solicitation to be issued at a later date.

Please note that USAID is seeking feedback to the SOO and capabilities of qualified organizations only and is not seeking technical or cost proposals at this time. Responses to this RFI are voluntary and USAID will not pay respondents for any information provided in response to this RFI. All comments and questions regarding this RFI must be submitted in writing via e-mail to Ms. Nalinee Wichetthumsak, A&A Specialist at nwichetthumsak@usaid.gov no later than the closing date and time stated above.

Response Submission Guideline

1. Feedback on Attachment A: SOO and responses to USAID directed questions in Attachment B should not exceed five (5) pages.

2. Organizations interested in being considered should submit information supporting their experience, expertise, and capabilities in undertaking similar work as follows:

I. Organization Information: Name, email address, address, small or disadvantaged business status (if applicable).

II. Maximum three-page capability statement describing your organization’s capacity to execute the “SOO” detailed in Attachment A.

mailto:nwichetthumsak@usaid.gov

RFI No. 72048623RFI00001 USAID/RDMA Partnerships for Green Investment

III. One-page table that contains a list of up to five past or current projects/activities that details your organization’s experience of performing efforts of similar size, scope, and complexity as the requirements detailed in the SOO.

Responses to this RFI will not be returned and respondents will not be notified of the result of the review. All comments and recommendations must be submitted electronically with the title “72048623RFI00001 USAID/RDMA Partnerships for Green Investment” to Ms. Nalinee Wichetthumsak, Acquisition and Assistance Specialist, at nwichetthumsak@usaid.gov. Responses to this RFI will be accepted through the date and time indicated above.

You will receive an electronic confirmation acknowledging receipt of your response, but will not receive individualized feedback on any suggestions you or your organization make. No basis for claims against the U.S. Government shall arise as a result of a response to this request for information or from the Government’s use of such information. Specific questions about this RFI should be directed only to the email addresses identified above.

Please note that issuance of this RFI does not constitute an award commitment on the part of the U.S. Government, nor does it commit the Government to pay for any costs incurred in the preparation of comments.

Thank you for your assistance and interest in USAID’s programs.

Sincerely, /s/

Craig Smith Regional Contracting Officer USAID/RDMA, Bangkok, Thailand mailto:nwichetthumsak@usaid.gov

ATTACHMENT A: DRAFT STATEMENT OF OBJECTIVES

TITLE OF ACTIVITY - USAID/RDMA Partnerships for Green Investment

PURPOSE

The purpose of the USAID/RDMA Partnerships for Green Investment (PGI) activity, hereafter referred to as the “Activity” is to accelerate the transition in the land use sector across Southeast Asia to greater emissions reductions, climate resilience, biodiversity protection, inclusiveness, and benefit sharing. The Activity will advance systemic change in agricultural, forestry and other land use (AFOLU) systems in the region to reduce carbon emissions at meaningful scale in inclusive and sustainable approaches, enabling the regional transition to net zero1 climate resilient economies.

BACKGROUND

USAID/RDMA cultivates regional collective action to overcome transnational development challenges, among which climate change and biodiversity loss are critical. The regional mission works across Southeast Asian countries (Cambodia, Laos, Indonesia, Myanmar, Philippines, Thailand, and Vietnam) to accelerate systems change through private financing and fostering of sustainable supply chains to address climate mitigation, with a focus on the energy and AFOLU sectors. The region is well positioned to capture the opportunities that come from managing climate risk effectively due to growing economic activities and populations, and their reliance on the agricultural sector. The mission’s system change goal is to influence investors, business partners, and suppliers along selected supply chains to support nature-positive, net-zero economies. The mission has partnered with key regional partners and the private sector to find new solutions and/or scale proven, market-oriented solutions that include applying and promoting internationally accepted environmental and social safeguard standards to reduce greenhouse gas emissions.

USAID/RDMA through Green Invest Asia (2017-2023), has mobilized $446 million in climate finance, resulting in emission reductions of 156 million tons of carbon dioxide equivalent2 from

1.7 million hectares of land under improved low-emission management, and livelihood and resilience benefits accruing to millions of smallholder farmers from the implementation of improved land management and conservation practices. The activity demonstrated partnership and investment models in mitigating greenhouse gas emissions from the AFOLU sector, which have both collaborated with and complemented bilateral USAID programs in Cambodia, Laos, Indonesia, the Philippines, and Vietnam.

Collective regional efforts through ongoing international and regional platforms are important to managing climate actions in a collaborative manner that strengthens all countries and key

2 Including projected reductions to 2030 that result from ongoing implementation of low-emission land use practices.

1 Net zero is defined by the Intergovernmental Panel on Climate Change as: “when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period.”

actors involved as well as mitigates potential leakages. Promoting systemic change, application of consistent standards, and localization approaches aligned with nature-based solutions in ASEAN3 and ASEAN’s Taxonomy for Sustainable Finance4 will enhance a common understanding and meaningful implementation of sustainable finance especially in the land use sector. A sustainable land use system shift from destructive and deforestation-driven practices to climate-resilient and net-zero economies is essential to continuously attract and orient capital towards sustainable investments, promote locally-led development and ensure achievement of NDCs and SDGs by ASEAN member states.

USAID/RDMA has developed a new activity, Partnerships for Green Investment, to address the President’s Plan to Conserve Global Forests5, the Indo-Pacific Strategy of the United States, and the USAID Climate Strategy. As a regional Mission, USAID/RDMA, in close collaboration with USAID/ASEAN and USAID bilateral missions in Southeast Asia, focuses on climate finance activities that include not only shifting finance flows but also transforming key systems toward sustainability through meaningful public-private partnerships, innovative finance tools and services, accountability of sustainability standards and equitable benefit sharing among key actors, including indigenous peoples and local communities (IPLCs).

DEVELOPMENT CHALLENGE

While USAID/RDMA and its partners have a strong history of reducing terrestrial emissions in the region, a number of additional actions are needed to build on these successes, respond to emerging challenges, and further strengthen the partnerships and regional ownership needed to most effectively respond to this issue. First, there is a growing consensus among private sector companies engaged in the production, processing, and trade of agricultural and forest-based commodities in Southeast Asia that the AFOLU sector is undergoing profound changes as export markets increasingly use regulatory market-access measures to reduce or eliminate agricultural commodity-driven deforestation. Southeast Asian forests are one of the critical ecosystems of global importance prioritized under the President’s Plan to Conserve Global Forests. However, that realization of associated emissions from deforestation and forest degradation in the global supply chains has not yet evolved to represent a critical mass of producers able to achieve sustainable transition to low-emission practices in a way that transforms the sector at the scale needed to achieve international climate goals.

Second, investors and financial institutions active in the region are beginning to recognize the opportunities presented by these market shifts, and are deepening their understanding of the unique characteristics of investments in the AFOLU sector and how they differ from more traditional investment in short-rotation monocrop commodities such as rice, cassava, sugarcane, or maize. The scale of investments in low-emission commodity production in the

5 Plan to Conserve Global Forests: Critical Carbon Sinks, 2021

4 ASEAN Taxonomy for Sustainable Finance, 2021

3 Study on Nature-based Solutions (NbS) in ASEAN, 2023 https://asean-crn.org/study-on-nature-based-solutions-nbs-in-asean/ https://asean-crn.org/study-on-nature-based-solutions-nbs-in-asean/ https://asean.org/wp-content/uploads/2021/11/ASEAN-Taxonomy.pdf https://asean.org/wp-content/uploads/2021/11/ASEAN-Taxonomy.pdf https://www.whitehouse.gov/wp-content/uploads/2021/11/Plan_to_Conserve_Global_Forests_final.pdf https://asean.org/wp-content/uploads/2021/11/ASEAN-Taxonomy.pdf https://asean-crn.org/study-on-nature-based-solutions-nbs-in-asean/ industries most directly driving forest conversion,6 however, is not yet sufficient to meet the increasing demand for these types of investments. The financing gap for these investments has been estimated at $220 billion.7

A third challenge is the varying credibility of companies and their level of progress toward net-zero commitments. Self-declaration potentially “misleads consumers, investors, and regulators”8 and may be viewed by the public as insincere or even false; voluntary standards proliferate, diluting their effect in motivating industry-wide adherence to common metrics;9 media reports of greenwashing reach wider audiences than rigorous research analyses showing generally positive outcomes from verification schemes; and systems operated by civil society organizations attempting to establish common bases for target setting and reporting have so far attracted far too few companies to have meaningful impact.10 Rigorous standards agreed by the world’s national standards bodies with both the authority and responsibility to independently set, monitor, accredit, and audit conformance with global standards are much less widely known or applied in part due to the cost of regular certification audits by accredited third parties. Market prices for AFOLU sector commodities do not yet reflect the additional costs of certification.

Finally, the climate and conservation benefits of low-emission agricultural and forest commodity production are generally not distributed equitably in monetary terms within and across countries. IPLCs manage tenure rights over over a quarter of the world’s land, and intersects about 40% of ecologically intact landscapes11. Recognizing their rights to land and enhancing benefit sharing are critical to address climate mitigation and strengthen their ability to adapt to climate change.

THEORY OF CHANGE

If sustainable and scalable investments from public-private partnerships are increased to support climate-resilient, biodiversity conservation, and low emission land use;

11 Garnett ST et al., 2018. A spatial overview of the global importance of Indigenous lands for conservation, July 2018; Nature Sustainability 1(7)

10 For example, the Science Based Targets initiative (SBTi) has only eight companies participating from the Food - Agricultural Production sector and 11 from the Forest and Paper Products sector, all but one from OECD countries.

9 An exception to this trend is the work of the Global Coffee Platform’s ongoing adoption of common metrics and methodologies, developed with technical support from the USAID-funded Green Invest Asia Activity, against which each company in the industry can measure its progress toward climate-related and other commitments transparently and credibly.

8 https://www.un.org/en/climatechange/high-level-expert-group

7 https://www.dbs.com/sustainability/insights-and-research/green-finance-opportunities-in-asean

6 Analyses commissioned by USAID to identify the specific commodities most directly driving deforestation have determined that in addition to oil palm in Indonesia and Malaysia, rubber, coffee, cacao, cashew, and other fruit and nut crops are most severely impacting forest conversion in the region, with different commodities having greater significance in different parts of the region. Illicit removal of timber often precedes this land use conversion.

https://www.nature.com/articles/s41893-018-0100-6 https://www.un.org/en/climatechange/high-level-expert-group https://www.dbs.com/sustainability/insights-and-research/green-finance-opportunities-in-asean

If credible ESG standards are adopted and/or implemented for biodiversity conservation and low emission investments;

If inclusive and equitable benefit sharing to local communities and smallholders are enhanced; and

If regional platforms and/or markets are created and/or strengthened to support low emission, inclusive and sustainable investments;

Then the AFOLU sector in Southeast Asia will be more inclusive, climate resilient, protective of biodiversity, and capable of reducing emissions at scale.

PLACE OF PERFORMANCE

The Activity’s geographic scope may include all ASEAN member states. Maintaining the activity’s regional mandate as outlined in USAID/RDMA’s Regional Development Cooperation Strategy, actions undertaken in any country are subject to the concurrence of the USAID bilateral Mission Director in USAID presence countries. In nonpresence countries, the concurrence of the USAID Bureau for Asia’s Assistant Administrator will be required.

DESCRIPTION OF OBJECTIVES

The Activity will achieve three objectives as illustrated in a simplified logic model, as shown below, and in the following narrative:

1) Increase sustainable12 and scalable investments in biodiversity conservation, climate resilience, low emission land use and AFOLU supply chains. The Activity will mobilize new investments from public, private, and/or philanthropic sources to catalyze large-scale transformations and commercially viable nature based solutions in AFOLU systems. Targeted commodity chains for investment intervention(s) must be among the most significant drivers of terrestrial emissions in the region. Expected results under this objective include:

a) At least three commodity chains at an industry level (network of companies) driving deforestation or other emissions sources in Southeast Asia are substantially advanced toward deforestation-free and the net-zero transition through investments in low-emission and nature-positive practices.13

b) At least $150 million in new finance from public, private, or blended finance sources will be mobilized to support mitigation, biodiversity conservation, and climate resilience in the land use sector in Southeast Asia.

c) Strategic partnerships between USAID and regional organizations14 will be established or strengthened as necessary to drive systemic change toward net-zero, nature-positive and climate resilient operations within the region.

2) Credible environmental, social and governance (ESG) standards adopted and/or implemented for biodiversity conservation and low emission investments. The new investment under Component 1 must be developed to meet high-quality standards and sustainability metrics that align with relevant regional and/or international platform(s) to streamline emission standards to mitigate greenwashing risks, and create additionality of emission reduction and co-benefits. The interventions will address fragmented markets for nature-based solutions due to low liquidity, lack of transparency, and variable standards versus various pricing initiatives. Expected results under this objective include:

a) Standards addressing nature-based solutions adopted, implemented and expanded regionally, on a pre-competitive collaboration basis among actors of a key commodity supply chain, or a common set of standards applied across different AFOLU-related commodities.

b) Regional organizations, partners, and/or platforms strengthened to improve the environmental sustainability, inclusiveness, cost effectiveness, and climate resilience of nature-based solutions and carbon markets in a manner that mitigates emissions and reduces greenwashing risks.

14 For the purpose of this Activity, “regional organizations” may include public, private, or civil society organizations engaged in one or more aspects of agricultural and forestry commodity production, processing, or trade.

13 Commodity-Driven Forest Loss: A Study of Southeast Asia

12 Sustainable investment, including socially-responsible, ethical, and Environmental, Social, and Governance investing. USAID Private Sector Engagement Policy https://servir.adpc.net/publications/commodity-driven-forest-loss-a-study-of-southeast-asia https://www.usaid.gov/sites/default/files/2022-05/usaid_psepolicy_final.pdf

3) Inclusive and equitable benefit sharing to local communities and smallholders enhanced. Climate and nature financing activities in the land use sector must be inclusive of Indigenous Peoples and Local Communities (IPLCs) and all members of communities, including women and youth to be effective and sustainable. Results expected to achieve this objective, through regional organizations, partners, and/or platforms, include:

a) Information, tools and knowledge sharing such as low emission, sustainable supply chains, regenerative agriculture best practices land use monitoring, and supply chain traceability across all community members engaged in supply chains, including women and youth and IPLCs.

b) Smallholders, including women, and women-led civil society organizations engaged in developing nature-based solutions.

c) Multi-stakeholder joint efforts through existing relevant platforms to improve smallholder farmers' livelihoods and incomes.

(END OF ATTACHMENT A)

ATTACHMENT B: USAID DIRECTED QUESTIONS

Stakeholders are free to submit answers to any or all of the following questions. Kindly limit your responses to no more than five (5) pages in total for your submission:

1. What do you consider the strengths and weaknesses of USAID’s proposed approach, and why?

2. Are there any aspects of the proposed objectives that USAID should add to, or amend? If so, which ones?

3. Are there any other regional approaches to achieving the goal not mentioned above that you would suggest for USAID’s consideration?

4. What critical assumptions does USAID need to consider for a regional program of this nature in Southeast Asia?

5. Do you foresee the drivers of emissions in the Agriculture, Forestry, and Other Land Use (AFOLU) sector shifting in the next 5-10 years? If so, why and how? If not, why not?

6. What long-term (10+ years) institutional capabilities are needed to support a sustainable transition to net-zero commodity production in this region?

7. The current state of carbon markets and carbon credits is very dynamic. What are some ways that this prospective program could be an active participant, shaping the agenda to ensure long-term development goals while mitigating risk?

8. What are the potential benefits to engaging women, youth, and indigenous peoples and local communities in nature-based solutions? What are some of the potential social or economic risks?

9. Scope 3 emissions and carbon footprint calculations are an ongoing challenge in developing net-zero supply chains. What are some approaches and risks to consider in order to address these challenges?

10. Has USAID appropriately identified the best strategies for mobilizing new finance from public, private, or philanthropic sources?

11. Do you think your organization will be interested in participating in the forthcoming solicitation?

If so, why?

(END OF ATTACHMENT B)

[END OF REQUEST FOR INFORMATION 72048623RFI00001]