Solicitation 95332424Q0014.pdf

SOLICITATION/CONTRACT/ORDER FOR COMMERCIAL ITEMS

OFFEROR TO COMPLETE BLOCKS 12, 17, 23, 24, & 30

1. REQUISITION NUMBER PAGE 1 OF

2. CONTRACT NO. 3. AWARD/EFFECTIVE

DATE

4. ORDER NUMBER 5. SOLICITATION NUMBER 6. SOLICITATION ISSUE

DATE

7. FOR SOLICITATION

INFORMATION CALL:

a. NAME b. TELEPHONE NUMBER (No collect calls)

8. OFFER DUE DATE/

LOCAL TIME

9. ISSUED BY

13b. RATING

14. METHOD OF SOLICITATION

CODE

15. DELIVER TO 16. ADMINISTERED BY CODE

18a. PAYMENT WILL BE MADE BY CODE 17a. CONTRACTOR/

OFFEROR

CODE

FACILITY

CODE

CODE

TELEPHONE NO.

17b. CHECK IF REMITTANCE IS DIFFERENT AND PUT SUCH ADDRESS IN

OFFER

18b. SUBMIT INVOICES TO ADDRESS SHOWN IN BLOCK 18a UNLESS BLOCK

BELOW IS CHECKED

RFQ IFB RFP

SEE ADDENDUM

19.

ITEM NO.

20.

SCHEDULE OF SUPPLIES/SERVICES

21.

QUANTITY

22.

UNIT

23.

UNIT PRICE

24.

AMOUNT

(Use Reverse and/or Attach Additional Sheets as Necessary)

25. ACCOUNTING AND APPROPRIATION DATA 26. TOTAL AWARD AMOUNT (For Govt. Use Only)

28. CONTRACTOR IS REQUIRED TO SIGN THIS DOCUMENT AND RETURN

DELIVER ALL ITEMS SET FORTH OR OTHERWISE IDENTIFIED ABOVE AND ON ANY

ADDITIONAL SHEETS SUBJECT TO THE TERMS AND CONDITIONS SPECIFIED

29. AWARD OF CONTRACT: REF.

DATED . YOUR OFFER ON SOLICITATION

(BLOCK 5), INCLUDING ANY ADDITIONS OR CHANGES WHICH ARE

SET FORTH HEREIN, IS ACCEPTED AS TO ITEMS:

30a. SIGNATURE OF OFFEROR/CONTRACTOR

30b. NAME AND TITLE OF SIGNER (Type or print) 30c. DATE SIGNED

31a. UNITED STATES OF AMERICA (SIGNATURE OF CONTRACTING OFFICER)

31b. NAME OF CONTRACTING OFFICER (Type or print)

COPIES TO ISSUING OFFICE. CONTRACTOR AGREES TO FURNISH AND

OFFER

13a. THIS CONTRACT IS A

RATED ORDER UNDER

DPAS (15 CFR 700)

SEE SCHEDULE

12. DISCOUNT TERMS

ARE ARE NOT ATTACHED

ARE ARE NOT ATTACHED

27a. SOLICITATION INCORPORATES BY REFERENCE FAR 52.212-1, 52.212-4. FAR 52.212-3 AND 52.212-5 ARE ATTACHED. ADDENDA

27b. CONTRACT/PURCHASE ORDER INCORPORATES BY REFERENCE FAR 52.212-4. FAR 52.212-5 IS ATTACHED. ADDENDA

11. DELIVERY FOR FOB DESTINA-

TION UNLESS BLOCK IS

MARKED

10. THIS ACQUISITION IS UNRESTRICTED OR SET ASIDE: % FOR:

SMALL BUSINESS

HUBZONE SMALL

BUSINESS

SERVICE-DISABLED

VETERAN-OWNED

SMALL BUSINESS

WOMEN-OWNED SMALL

BUSINESS (WOSB)

ECONOMICALLY

DISADVANTAGED

WOMEN-OWNED SMALL

BUSINESS (EDWOSB)

8 (A)

NAICS:

SIZE STANDARD:

95332424Q0014

03/01/24 02:00 PM

541990

See Schedule

See Schedule

953324

953324

See Schedule

MCC-HQ

Millennium Challenge Corporation, Contracts and Grants Management Division, 1099 Fourteenth St NW, Suite 700 Washington, DC, 20005-3550, US

IBC-FIN

Interior Business Center, M/S D-2773, 7301 West Mansfield Avenue Lakewood, CO, 80235-2230, US

STANDARD FORM 1449 (REV. 3/2005) BACK

19.

ITEM NO.

20.

SCHEDULE OF SUPPLIES/SERVICES

21.

QUANTITY

22.

UNIT

23.

UNIT PRICE

24.

AMOUNT

32a. QUANTITY IN COLUMN 21 HAS BEEN

RECEIVED INSPECTED ACCEPTED, AND CONFORMS TO THE CONTRACT, EXCEPT AS NOTED:

41a. I CERTIFY THIS ACCOUNT IS CORRECT AND PROPER FOR PAYMENT

32b. SIGNATURE OF AUTHORIZED GOVERNMENT

REPRESENTATIVE

32c. DATE

41b. SIGNATURE AND TITLE OF CERTIFYING OFFICER 41c. DATE

42a. RECEIVED BY (Print)

42b. RECEIVED AT (Location)

42c. DATE REC'D (YY/MM/DD) 42d. TOTAL CONTAINERS

40. PAID BY

32d. PRINTED NAME AND TITLE OF AUTHORIZED GOVERNMENT

REPRESENTATIVE

32e. MAILING ADDRESS OF AUTHORIZED GOVERNMENT REPRESENTATIVE 32f. TELPHONE NUMBER OF AUTHORZED GOVERNMENT REPRESENTATIVE

32g. E-MAIL OF AUTHORIZED GOVERNMENT REPRESENTATIVE

33. SHIP NUMBER 34. VOUCHER NUMBER 35. AMOUNT VERIFIED

CORRECT FOR

PARTIAL FINAL

37. CHECK NUMBER

38. S/R ACCOUNT NO. 39. S/R VOUCHER NUMBER

36. PAYMENT

COMPLETE PARTIAL FINAL

See Schedule

95332424Q0014

TABLE OF CONTENTS:

Listing of Incorporated Purchase Requisitions Section B - Supplies or Services and Prices/Costs Section C - Description/Specifications/Work Statement Section D - Packaging and Marking Section E - Inspection and Acceptance Terms Section F - Delivery or Performance Section G - Contract Administration Data Section H - Special Contract Requirements Section I - Contract Clauses Section J - List of Documents, Exhibits, and other Attachments Section K - Representations, Certifications, and Other Statements of Offerors Section L - Instructions, Conditions and Notices to Offerors Section M - Evaluation Factors for Award

Listing of Incorporated Purchase Requisitions

Incorporated Purchase Requisition Numbers:

Section B - Supplies or Services and Prices/Costs

Item Number Base Item Number

Supplies/Services Quantity Unit

0001 Base 1 LT Contract Type:Time and Materials

Unit Price Other Direct Costs

Extended Price

Description:

BASE PERIOD

LABOR AND OTHER DIRECT COSTS

Purchase Requisitions

IDC Type: Not Applicable FSC Codes: R499 SUPPORT- PROFESSIONAL: OTHER NAICS Code: 541990 All Other Professional, Scientific, and Technical S...

Supplies/Services Quantity Unit

1001 Option Period 1 1 LT Contract Type:Time and Materials

Unit Price Other Direct Costs

Extended Price

Description:

OPTION PERIOD ONE

LABOR AND OTHER DIRECT COSTS

Purchase Requisitions

Option: 1 Option Time Date: 4/29/25 Option Time Duration: 364 Option Time Units: Days IDC Type: Not Applicable

Supplies/Services Quantity Unit

2001 Option Period 2 1 LT Contract Type:Time and Materials

Unit Price Other Direct Costs

Extended Price

Description:

OPTION PERIOD TWO

LABOR AND OTHER DIRECT COSTS

Purchase Requisitions

Option: 2 Option Time Date: 4/29/26 Option Time Duration: 364 Option Time Units: Days IDC Type: Not Applicable

Supplies/Services Quantity Unit

3001 Option Period 3 1 LT Contract Type:Time and Materials

Unit Price Other Direct Costs

Extended Price

Description:

OPTION PERIOD THREE

LABOR AND OTHER DIRECT COSTS

Purchase Requisitions

Option: 3 Option Time Date: 4/29/27 Option Time Duration: 365 Option Time Units: Days IDC Type: Not Applicable

Supplies/Services Quantity Unit

4001 Option Period 4 1 LT Contract Type:Time and Materials

Unit Price Other Direct Costs

Extended Price

Description:

OPTION PERIOD FOUR

LABOR AND OTHER DIRECT COSTS

Purchase Requisitions

Option: 4 Option Time Date: 4/29/28 Option Time Duration: 364 Option Time Units: Days IDC Type: Not Applicable

Clauses incorporated by reference

None

Clauses incorporated by full text

SECTION B

B.1 SERVICES TO BE PROVDED

The Millennium Challenge Corporation seeks to procure the services of a qualified, Indonesia-based firm to support its Environmental and Social Performance Practice Group with due diligence activities related to the Indonesia II Compact.

The Contractor shall provide all personnel, equipment, tools, materials, supervision, and other items and non-personal services necessary to perform the tasks as defined in Section C of the Statement of Work.

B.2 CONTRACT TYPE

MCC anticipates awarding a time and material type contract.

B.3 LABOR CATEGORIES, RATES, ESTIMATED LEVEL OF EFFORT AND OTHER DIRECT COSTS

LABOR CATEGORY HOURLY

LABOR

RATE

BASE

PERIOD

HOURLY

LABOR

RATE

OPTION

PERIOD ONE

HOURLY

LABOR

RATE

OPTION

PERIOD

TWO

HOURLY

LABOR

RATE

OPTION

PERIOD

THREE

HOURLY

LABOR

RATE

OPTION

PERIOD

FOUR

Team Leader

Field Specialist

Stakeholder Engagement

Specialist

ESMS/Regulatory Specialist

Infrastructure Specialist

Administrative Support

ESTIMATED TOTAL HOURS BY PERIOD

MCC anticipates the level of effort for each period below.

Labor Category Estimated Hours

Estimated Hours

Estimated Hours

Estimated Hours

Estimated Hours

Base Period Option Period One

Option Period Two

Option Period Three

Option Period Four

TOTAL

Total Estimated Level of Effort in Hours

4,800 4,800 4,800 4,800 4,800

24,000

ESTIMATED OTHER DIRECT COSTS - TRAVEL BY PERIOD

(This not to exceed amount includes airfare, per diem, lodging, report printing, enroute expenses)

TOTAL LABOR AND OTHER DIRECT COSTS

Total Labor Other Direct Costs - Travel

Additional Other Direct Costs (non-travel)

Total by Period

BASE PERIOD $76,830

PERIOD ONE $76,830

PERIOD TWO $76,830

PERIOD THREE $76,830

PERIOD FOUR $76,830

GRAND TOTAL $76,830

Section C - Description/Specifications/Work Statement

SECTION C

DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

Due Diligence Services – Environmental and Social Performance – Indonesia II Compact

1. INTRODUCTION

The Millennium Challenge Corporation (MCC) seeks to procure the services of a qualified, Indonesia-based firm to support its Environmental and Social Performance Practice Group with due diligence activities related to the Indonesia II Compact.

2. BACKGROUND

MCC is a U.S. Government agency established in 2004. Its mission is to provide assistance that will support economic growth and poverty reduction in carefully selected developing countries that demonstrate a commitment to just and democratic governance, economic freedom, and an investment in their citizenry.

In December 2018, MCC's Board of Directors selected Indonesia as eligible to develop a second compact. The selection reflected MCC and Indonesia's strong partnership during the first compact. The growth diagnostic methodology conducted jointly by MCC and the Government of Indonesia (GOI) has identified the problem of the high cost of financing, resulting from weak financial intermediation, as a binding constraint for Indonesia's economic growth. After several development processes, The GOI proposed two core problems caused by weak financial intermediation that will be addressed in the Indonesia Compact-2:

i. Infrastructure Finance

The low supply of finance available to support investments in transport and logistics infrastructure, as well as the infrastructure sector's lack of ability to absorb the financing that is available, and

ii. MSME Finance

The low supply of finance available to support the growth of micro-, small, and medium-sized enterprises (MSMEs), as well as the challenges that MSME borrowers face in accessing financial products.

Infrastructure Finance faces two binding constraints to economic growth, on both the supply and demand sides. On the supply side, financial intermediation is shallow, segmented, inefficient and costly with 75% of infrastructure financing funded from banks, while capital market access is still minimal at 25% (OJK, 2021). The inefficiency in financial intermediation is reflected in the large spread between savings and lending interest rates (BI, Q1 2021). On the demand side, borrowers face difficulties meeting lenders' requirements due to the low quality of project preparation and their frequent inability to fulfil investment readiness criteria.

The MSME sector represents one of the largest economic generators in Indonesia with over 65 million MSMEs (1 MSME per 5 Indonesians) and contributes about 60% of the country's GDP. The MSME sector also absorbs as much as 97% of the workforce, but the businesses are growth-restricted due to the low supply of finance available to them (Supply Side Problem) and their inability to access formal sources of finance (Demand Side Problem). In general, financial service providers (FSPs) consider MSMEs risky and find the process to lend to them too cumbersome, a situation that has historically led them to serve other sectors instead. The inability of MSME borrowers to access formal sources of finance (Demand Side Problem) can be ascribed both to procedural requirements, comprising lack of creditworthiness, unsuitable collateral, and lack of qualifying documents; and to a lack of awareness and tentative attitude among borrowers, who are often constrained by low financial and digital literacy and geographic exclusion.

Approximately 53.76% of MSMEs are managed by women, with the highest female ownership being in microenterprises.

Yet, many MSMEs still have limited access to formal sources of finance due to their lack of elements including formal business registration, collateral, business plans, financial statements, and credit history. Women-owned MSMEs (WMSMEs) have even less access to finance as a result of a variety of underlying gender issues. For example, only 17% of WMSMEs have access to KUR (People's Business Credit) program.

Geographical Focus: The GOI conducted a data-driven process—using metrics, such as a propensity for reform and impact on growth and poverty reduction—to evaluate and rank Indonesia's provinces and select potential target provinces for the proposed program. Initially, MCC and the GOI identified three (3) target provinces: North Sulawesi, South Sumatra, and Riau.

Later, the GOI added two (2) more provinces: Bali and Riau Islands, to the list of target provinces for economic recovery due to the Covid-19 pandemic.

In August 2022, the GOI established an independent implementing agency, Millennium Challenge Account – Indonesia II (MCA Indonesia II or "MCA") through Bappenas Ministerial Decree Number 5/2022, to act as the accountable entity in supervising and managing the implementation of the five-year MCC Compact Program in Indonesia.

The Compact was signed on April 13, 2023, and now the Government is preparing for the implementation stage that will be effective after the entry into force ("EIF") date, currently estimated during the first quarter of 2024.

PROGRAM INTRODUCTION

To address the binding constraint of costly and underdeveloped financial intermediation, MCC and GOI agreed to a holistic approach for the Compact's Infrastructure Finance intervention, starting from the demand/upstream process (identification/planning process) to the supply/downstream (financing instruments/de-risking, schemes, sources). The objective from the demand side is to create bankable infrastructure pipelines in the 5 target provinces. This objective entails a focus on improving planning and preparation process for transportation projects. On the supply side, the objective is to offer a range of financing instruments for infrastructure to make them more accessible to various stakeholders and more attractive to potential investors. Accordingly, the Compact aims to reach financial close on transactions using structured finance, (including deals with institutional investors and a focus on local currency transactions.

Under the Infrastructure Finance workstream, the Compact will have two projects focusing on (i) the Demand Side: The Advancing Transport and Logistics Accessibility Services (ATLAS) Project, and (ii) the Supply Side: The Financial Markets Development Project (FMDP). While there are two projects under the Infrastructure Finance workstream, these projects are heavily related and interconnected, forming an integral part of the mainstream process for public investment.

In summary, the Compact will support three projects to address the binding constraint of costly and underdeveloped financial intermediation. The objective of each of the respective Projects is as follows:

• Advancing Transportation and Logistics Accessibility Services (ATLAS) Project's objective is to improve transport planning and preparation in the 5 target provinces;

• Financial Market Development Project's (FMDP) objective is to reach financial close on transactions using structured finance, including deals with institutional investors and with a focus on local currency transactions; and

• Access to Finance for Women-owned / Micro-, Small and Medium Enterprises (MSME) Project's objective is to increase lending by formal financial service providers ("FSPs") to micro-, small and medium enterprises owned by women or men in the 5 target provinces.

The three projects in this Compact are divided into eleven activities and described below in detail.

I. Advancing Transportation and Logistics Accessibility Services (ATLAS) Project

i. Transport Planning Reform Activity

ii. Good Practice Infrastructure Projects Activity

iii. Public Investment Management Guidelines (PIMG) Activity

iv. Project Preparation and Delivery Facility (PPDF) Activity

II. Financial Market Development Project (FMDP)

i. Capacity Building / Technical Assistance Activity

ii. Transaction Advisory Services Activity iii.Blended Finance Delivery Mechanism (BFDM) Activity

III.Access to Finance for Women-owned / Micro-, Small and Medium Enterprises Project

i. Gender Inclusive Value Chain Finance Activity

ii. Digital and Financial Literacy Enhancement Activity iii.MSME Capacity Enhancement Activity iv.Augmenting Government Data on MSMEs Activity

The Financial Market Development Project will focus on the national level while the other two programs will be implemented at the sub-national level in the 5 target provinces of North Sulawesi, Riau, Riau Islands, Bali and South Sumatra.

ATLAS Project Summary

The objective of the Advancing Transport and Logistics Accessibility Services Project (the "ATLAS Project") is to improve transport planning and preparation in the Target Provinces, responding to the root cause of inadequate infrastructure project preparation. Poor project preparation leads to worthwhile projects failing to attract the appropriate financing, resulting in costly and underdeveloped financial intermediation. Improved planning and preparation will make transport projects better positioned to attract appropriate sources of finance, including blended and green finance, thus maximizing infrastructure investment across Indonesia. Improved infrastructure planning and preparation encompasses improving approaches to planning, procurement, implementation, operation and maintenance to further improve value for money throughout the infrastructure project lifecycle. Achieving these goals requires transformational reform, including legal and regulatory adjustments, institutional restructuring and strengthening of capacities and business processes across various government organizations and the private sector, including the ongoing alignment of subnational reforms and corresponding national level reforms and policy directions. The Project includes four Activities focused on the 5 target provinces, but all activities will be designed for national adoption or replication after the Compact Term:

Transport Planning Reform Activity: This Activity will establish an urban transport organization ("UTO") for an urban area located within the 5 target provinces and develop a multi-modal urban transport plan to support the UTO. In addition, a regional transport plan will be developed for the wider region. With the development of these two, proof-of-concept multi-modal transport planning projects to influence the Government at both the national and the subnational levels to embrace the necessary institutional, legal and regulatory reforms required to mandate and mainstream a multi-modal transport planning approach.

Good Practice Infrastructure Projects Activity: This Activity intends to support at most six infrastructure projects (the " Proper") whose aim is to demonstrate innovative and strengthened approaches to project preparation, structuring and financing, and procurement and implementation, so that lessons learned during these projects can inform the emerging designs for both the PIMG and PPDF (each defined below). The Proper will also be used as a vehicle for significantly strengthening subnational infrastructure capacity, in the public sector, but also in supporting private sector consultants and contractors. From the list below, the Parties will agree upon the Proper that will be supported by MCC Funding. MCC Funding will support, for each of the Proper that is selected, as required: project management services, design services, services related to the assessment and/or mitigation of environmental, gender and social impacts, benefits and/or opportunities, contract packaging and structuring, procurement/transaction support, construction oversight/supervision/audit and a financial contribution to support a portion of the cost of the transport services or construction contracts, while utilizing the World Bank's "Cascade" approach for blended finance. The potential Proper that may be supported by this Activity are:

Table 1

Province Potential Proper

South Sumatra Ampera LRT Station – Accessibility, Connectivity and Public Realm Upgrade

North Sulawesi Bersehati Market Elements

Bali Electric Vehicle (EV) Support Element I – EV Public Transport

Electric Vehicle Support Element II – EV Charging Points

Riau Islands Development of Kuala Riau Port (Pelantar I and II), Tanjung Pinang

Riau Upgrading of two (2) RORO Terminals and supporting facilities on both Sumatra side and Rupat side

In addition to environmentally and socially responsive and climate friendly design, the Good Practice Infrastructure Projects Activity will strive to demonstrate best practices in gender equality, social inclusion and women's economic empowerment by developing supportive and child-friendly components in the rehabilitated spaces within these projects. The Parties will assess the development and provision of these components, such as shared workspaces with one-stop service (including mobile one-stop services) and childcare for W/MSMEs (as defined below). This linkage with the MSME Finance Project will help W/MSMEs save time, access safe and affordable services, and spend more time on paid economic activities. This will also support the implementation of the MoWECP Regulation No. 5 of 2015 on Provision of Gender-Responsive and Child-Friendly Work Facilities and Childcare in the Workplace, which regulates the obligations of Government and private institutions to provide equal opportunities to every woman and man to carry out their duties, functions, rights, and responsibilities in the workplace.

Public Investment Management Guidelines (PIMG) Activity: This Activity (the "PIMG Activity") will create a public, online suite of Public Investment Management Guidelines ("PIMG") for infrastructure, designed to improve the effectiveness and efficiency of public investment. The PIMG will describe, in one place, the requirements to achieving well prepared inclusive and sustainable projects. This will focus on the full lifecycle, including planning, preparation, structuring, procuring, implementing, operating and, long-term maintenance. Its inclusive approach will identify and promote the needs of all Indonesians, paying particular attention to marginalized and vulnerable groups, especially the poor, women and people with disabilities. This approach will seek to include such groups as change agents in each step of the PIMG processes so that services are user friendly, safe, affordable and promote such group's value in society.

The long-term goal is for the Government to create and implement a similar set of guidelines covering all Indonesian infrastructure. However, the complexity and scope of that challenge is too great for the five-year compact period, and therefore the PIMG implementation scope hereunder will be limited to subnational transport and logistics infrastructure and services as follows:

• Development of a unified set of guiding principles to underpin the budget requests associated with the implementation of PIMG processes;

• Regional multi-modal transport infrastructure and services during the planning phase up to the definition of transport and logistics project pipelines;

• Regional multi-modal transport infrastructure and services through the project preparation stage, including feasibility studies, business cases and project delivery strategies; and

• Subnational roads, only from procurement onwards through the detailed design, delivery and maintenance phases.

Once this 'limited scope' PIMG has been developed and implemented successfully under the Compact and appropriately socialized at the national policy level, it may then be used by the Government as a template for the gradual expansion of the PIMG to cover all infrastructure sectors.

The PIMG is a living system that will include the development and implementation of a public online technology platform that will be regularly updated and maintained. The experience from the Good Practice Infrastructure Project Activity will inform the iteration and improvement of the PIMG.

MCC Funding will support: the creation of the sustainable online PIMG through development of strengthened infrastructure processes; upstreaming of environmental and gender significant stakeholder engagement; the identification of an entity of the Government to own the PIMG; the design, launch and testing of the online PIMG platform; and the provision of a user support service.

In addition, MCC Funding will also support the drafting and agreement of the necessary legal and regulatory changes needed to mandate and formalize the PIMG, supporting the Government with technical assistance through the policy making process through to enactment and implementation. Finally, MCC Funding will support a capacity development strategy to be implemented during the remaining years of the Compact.

Project Preparation and Delivery Facility (PPDF) Activity: This Activity (the "PPDF Activity") will provide project preparation, structuring, procurement and project delivery support to subnational governments, focused on the governments of the Target Provinces during the Compact Term. This Activity will establish a facility, the Project Preparation and Delivery Facility ("PPDF"), that subnational governments can call upon to provide preparation, procurement and delivery support services for eligible infrastructure projects. The PPDF will be designed as a sustainably financed facility which will continue to operate after the end of the Compact. The appropriate institutional home and organizational structure for PPDF to ensure a sustainable facility is to be determined prior to entry into force during the design period.

The Activity is heavily connected to the PIMG Activity because the PPDF will follow the processes defined in the PIMG from completion of planning (and resulting definition of project pipelines) through to completion of construction, after which infrastructure will be handed over to subnational governments for continued operation and maintenance. Therefore, the design of the reformed processes for the PIMG and the design of the PPDF must be undertaken as an integrated effort.

Infrastructure projects will be subject to eligibility criteria for entry to the PPDF. Precise eligibility criteria will be developed during design, such criteria will include standards for environmental and social performance, inclusion and gender-responsiveness, as well as minimum project sizes for different types of delivery modality. In line with the transport and logistics focus of the Compact, the PPDF will initially be restricted to supporting transport and logistics projects only. This is necessary to limit the range of specialist technical advisory services that would be initially required and to keep the number of technical stakeholders manageable. However, the PPDF will be designed so that it can continue to expand its services to support other types of infrastructure after the end of the Compact.

FMDP Project Summary

The objective of the Financial Markets Development Project (the "FMD Project") is to reach financial close on transactions using structured finance, including deals with institutional investors and with a focus on local currency transactions, responding to the root causes of underdeveloped project financing market and capital markets. This Project will promote globally recognized, alternative forms of infrastructure finance within the financial market ecosystem to bring infrastructure projects to financial close. The transactions will demonstrate less risky financing structures and innovative financing techniques for Indonesia that can then be replicated by the market, thus helping to create infrastructure as an asset class and demonstrating blended finance at scale. The Project includes three Activities:

Capacity Building/Technical Assistance Activity: This Activity aims to build capacity for lenders, especially Indonesian institutional investors, and project owners/sponsors to invest in infrastructure through structured finance, including mechanisms to further develop Indonesia's growing green finance initiatives. This Activity will also aim to build the capacity of the Government (and potentially Otoritas Jasa Keuangan, Bank Indonesia, and subnational governments) to develop and oversee financial markets to support infrastructure finance.

Transaction Advisory Services Activity: This Activity will provide transaction advisory services to relevant Government agencies and project owners to originate a number of proof-of-concept demonstration transactions for infrastructure projects from a pre-identified list. It will be necessary to support more projects than the number of projects required to close as projects inevitably experience delays or failure for a variety of reasons, which is why this Activity will support approximately 15 proof-of-concept demonstration transactions. This Activity aims to address the limited capacity of institutions to structure and execute structured finance transactions.

Blended Finance Delivery Mechanism Activity: This Blended Finance Delivery Mechanism Activity (the "BFDM Activity") aims to mobilize commercial financing for sub-projects by providing blended finance grants. For the sake of clarity, the Parties agree that these blended finance grants will be governed by MCC's Program Grant Guidelines. MCC Funding will support an implementor, referred to as the Blended Finance Host ("Blended Finance Host"), in establishing and operating a facility for loans and grants to accomplish the purpose of this Activity.

The Parties intend for this facility to catalyze the market for limited-recourse project finance and structured finance capital market solutions. The Blended Finance Host will recommend that the Government grant MCC Funding to the Blended Finance Host for the Blended Finance Host in turn to lend or grant to lenders and investors to mitigate specific risks to debt holders and encourage them to invest in infrastructure as an attractive asset class with appropriate returns for the risk taken.

These successful demonstration transactions, in turn, can then be replicated by others in the market.

Projects and blended finance participations in financing structures will be recommended by the Blended Finance Host to the Government in line with guidelines and parameters agreed between the Parties. Such guidelines will include assessment of the subsidy amounts of blended finance grants needed to achieve financial closing; additionality of blended finance; and requirements that the returns to project participants be on appropriate terms relative to the risks being taken. The facility will fund one or more transactions from the Pre-Identified Projects.

Recommendations on the suitability of any particular project for grants under this Activity will be provided to the Government by the Blended Finance Host after each project submits a formal application to the Blended Finance Host. The Blended Finance Host will be responsible for conducting due diligence to assess potential applicants; proposing financing structures and blended finance solutions; ensuring project environmental, social and governance compliance; and ensuring suitability in relation to the Program Guidelines, in compliance with a set of operational guidelines set forth in an operations manual for the BFDM Activity, to be approved by the Parties. The Parties will agree on whether or not MCC Funding may be used to support any particular project from the Pre-Identified Projects and any particular blended finance structure.

The Government will grant MCC Funding to the Blended Finance Host to be immediately granted or lent out to enable the full range of blended finance instruments to help projects or transactions reach financial close using appropriate concessionality and maximizing project impact, including:

• Viability gap funding to de-risk lenders in their financing of a project e.g., to pay for risk hedges, guarantees, and interest rate support;

• Interest rate buydowns;

• Partial credit guarantees and guarantee fee buydowns;

• First-loss participations in project financing structures, financial asset recycling, and in securitizations;

• Foreign exchange/interest rate hedging cost buydowns;

• Results-based incentives;

• Mitigation of performance risks of different types of contractual obligations in projects;

• Mezzanine participations in financial structures to improve debt-equity ratios;

• Tenor extension guarantees, investment in longer end tranches of bond issues;

• Contingency reserve accounts to support project cash flow shortfalls or delays (these would not be used to fund project expenses);

• Credit enhancements to support debt service reserve accounts and sinking funds for bond instruments;

• Underwriting fees, credit ratings, and other expenses associated with capital markets transactions/sukuks; and

• Technical assistance and studies, as may be necessary.

In addition to financial instrument support at the transactional level, the Blended Finance Host may, in compliance with the operational guidelines referenced above, use MCC Funding to support technical assistance to project sponsors, legal fees, and other upfront costs which need to be met with grant support to make the transaction selected from the Pre-Identified Projects economically feasible. Such forms of blended finance support will also be evaluated and recommended by the Blended Finance Host, and decided upon by the Government, using the processes to be set out in the operational guidelines referenced above.

MSME Finance Project Summary

The objective of the Access to Finance for Women-owned / Micro-, Small and Medium Enterprises Project (the "MSME Finance Project") is to increase lending by formal financial service providers to 28,000 Micro-, Small and Medium Enterprises owned by women or men in the Target Provinces to support their businesses, responding to the root causes of information asymmetry and borrowers' constraints. This Project will facilitate more inclusive lending practices by FSPs and improving W/MSMEs' ability to borrow and make use of this finance, taking a "financing ecosystem" approach to growing W/MSMEs in the Target Provinces that addresses barriers that small firms face at each stage of their journey, first towards business formalization, then towards formal finance and the business expansion that can be unlocked with access to capital for fixed asset purchases. The MSME Finance Project will focus on a specific population of W/MSMEs in the Target Provinces with a view towards catalysing growth. The firms targeted will be growth oriented rather than subsistence focused and will initially be drawn from sectors with high growth potential, such as food and beverage, fishery, textile and apparel, and manufacture of botanical products, and from growth-oriented producer groups in selected agriculture and agroindustry sectors that have been prioritized by provincial stakeholders for compact assistance. Although eligible W/MSMEs will include MSMEs owned by either women or men, priority will be given to women-owned MSMEs. The Project includes four Activities:

Gender-inclusive Value Chain Finance Activity: MCC Funding will be used to create and fund a revolving fund to be administered by a public institution (the "OLW Administrator") for providing interest-free loans to selected Financial Service Providers (the "Partner FSPs") as well as technical assistance for managing on-lending to eligible MSME borrowers within the Target Provinces and within the target sectors. This Activity is linked to efforts in Activities 2 and 3 below, which is designed to enhance capacities of W/MSMEs to meet the lending requirements of formal FSPs. Partner FSP needs to provide 50% of funding of the loan made to W/MSMEs under this Activity. The OLW Administrator will conduct auctions to determine the allocation of the OLW funds to each Partner FPSs. Loans to Partner FSPs from this revolving fund will be repayable to the revolving fund. The OLW Administrator will then continue to use the repayments from the Partner FSPs to the revolving fund to make similar loans until the Compact ends. Technical assistance, training and other demand-driven business development support to Partner FSPs can be given depending on the individual Partner FSP's willingness to engage in any change towards more inclusive lending practices. In addition, MCC funding will support Ministry of Cooperative and SME to develop a digital portal for MSMEs to apply loans where Partner FSPs can review and choose to move forward with such applications.

Digital and Financial Literacy Enhancement Activity: This Activity will enhance the viability of W/MSMEs by providing technical assistance, digital and financial literacy training, and other demand driven business development support to growth-oriented W/MSMEs in the Target Provinces. The training and assistance will cover several relevant topics including the following:

• Financial Literacy: the topics will include basics of finance, defining financial concepts, financial behavior, personal financial management, and the separation of business and personal finance. This will enable participants to make informed decisions and judgments concerning the use and management of their money.

• Financial Management of the Enterprise: the topics will include financial management of the enterprise, defining the role of internal and external sources of finance, investments, operational costs, revenues, profits, retained earnings, trade finance, debt management, business planning and forecasting.

• Digital Literacy: the topics will include basic knowledge of digitalization and access to the internet, mobile phones, and fintech space. The training will also cover issues of data privacy, cyber security and safekeeping of devices, and internet activity.

• Digital Financial Literacy: the topics will include concepts around financial capability and control, preparing participants to understand digital financial services and further extend their ability to manage business affairs through digital means.

• Mitigate social risks: the topics will include TIP, gender-based violence, child labor, as well as gender actions learning system for creating a conducive environment for women's empowerment.

• Assist W/MSMEs to apply for loans, especially from Partner FSPs using either the direct application or the digital portal established under the Technical Assistance to FSPs Sub-activity.

MSME Capacity Enhancement Activity: This Activity will support eligible, growth-oriented W/MSMEs in the Targeted Provinces that are in an earlier stage of their journey towards formalization and eventually towards formal finance by providing capacity enhancement training to develop business skills, access markets and increase sales. This Activity includes:

Formalization, Permitting, and Certification of W/MSMEs. This Sub-activity aims to enable eligible W/MSMEs to become legal entities to comply with regulatory requirements that represent structural barriers in accessing formal loans/finance and increase women's control over their business decisions, finance, and profit. Compact funding will provide technical assistance to W/MSMEs which are not registered and which lack licenses, to assist them with the acquisition of tax identification and business identification numbers (NIBs), the first two essential steps for business formalization. With these two forms of identification in place, business actors can apply for business permits and commercial or operational permits in accordance with their sectoral requirements. Compact Funding will also provide technical assistance to these MSMEs to facilitate additional certifications, such as intellectual property rights, food safety climate-smart certifications and other required regulatory compliance.

Market Access Support for MSME. Enhancing W/MSME business capacity through business development services (BDS) is critical to bolster their market access, profitability and competitiveness, by skill development for entering high-growth value chains, training, coaching, mentoring, and networking with national and international buyers. This Sub-activity will provide training to eligible W/MSMEs in the Target Provinces to promote skills in high-growth value chains, better business practices (marketing, record keeping, drafting of bankable business plans, identification of financial gaps/financial needs, financial planning, bidding proposals), which can promote accessing finance, enhancing production and faster sales growth and survival rates of small businesses. This Sub-activity may be implemented using both contracts and partnerships with BDS providers, business associations, sector associations, incubators, start-ups, and accelerators. The orientation of these trainings will be towards entry and linking W/MSMEs within specific value chains with suppliers, incubators, and associations, with the understanding that these actors are more likely to sustain relationships with growing W/MSMEs.

Linking Good Practice Infrastructure and MSME Finance Project for One-Stop and Childcare Services. The Compact's GPIP will, where feasible, construct "shared workspaces" for W/MSMEs that will include "one-stop" service and childcare centers in the facilities upgraded or constructed by the infrastructure projects being supported under the GPIP (projects known as the "Proper"). The MSME Finance Project will provide designated services in these facilities upgraded or constructed under the GPIP Activity in the target provinces of the ATLAS Project. The MSME Finance Project will contract consultant firm(s) to manage "one-stop" facilities (facilitate W/MSMEs obtaining tax ID numbers and NIB, registration/ formalization of businesses, permits and certifications, cashless solutions, FSP outreach, financial kiosks, non-financial services, and others) and childcare centers.

Augmenting Government Data on MSMEs Activity: This Activity will support the Government in monitoring and evaluating the MSMEs development target by gathering, integrating, synchronizing, and analyzing W/MSME financial and technical performance and W/MSME sex-disaggregated data. This Activity includes:

(A) Technical assistance and capacity-building to help standardize efforts by enumerators engaged by the public sector to collect information on W/MSMEs' access to finance and performance

(B) Capacity-building for Government of Indonesia staff to help them better capture and understand data on financial and technical performance of W/MSMEs. MCC Funding will be used to support an economic analyst at BAPPENAS and Ministry of Cooperative and SME (MoCSME) to analyze the database information. The economic analyst will provide training on economic analysis to BAPPENAS and MoCSME staff, support the maintenance of the database and help improve the MSME database information system at the MoCSME as well as producing policy analysis as needed at BAPPENAS. MCC funding will also be used to train BAPPENAS and MoCSME staff to continue to expand the abovementioned data analysis and maintenance, including by bringing in data sets from other government units in central and local level that would allow the Government to measure the relative risk of W/MSMEs by a range of characteristics such as industry, business size, location, and gender. MCC and the Government may consider adding a component to this Activity specifically focused on sharing data with W/MSMEs for the purpose of advising W/MSMEs on improving their creditworthiness in line with some of BAPPENAS and MoCSME's other programming for W/MSMEs.

PROGRAM IMPLEMENTATION STRUCTURE

Country ownership of compacts is a core part of MCC's model and influences a great deal of MCC's work. To facilitate this, MCC collaborates with country partners to establish a local team of professionals to deliver each compact, often referred to as an "Accountable Entity" or "MCA Indonesia II." This team is responsible for executing the compact's initiatives and is locally overseen by a Board of Trustees.

Based on Presidential Regulation Number 80 of 2011 concerning Trust Funds and as part of its commitment to implement Program Compact II, the GOI has taken a significant step by forming the Trustee Agency (Lembaga Wali Amanat/LWA) for Millenium Challenge Account Indonesia II through the Bappenas Ministerial Decree Number 5/2022. The LWA is tasked with managing grant funds from the MCC to finance activities in accordance with the Compact Agreement, which includes preparation and development, implementation, and completion of Compact Program II. The LWA consists of three main components:

a. The Board of Trustees, also known as "Majelis Wali Amanat" (MWA);

b. The Fund Manager, also known as "Pengelola Dana Amanat" (PDA); and

c. The Implementation Team, which consist of:

i. Program Implementation Unit, also known as MCA Indonesia II ii.Support Unit for Budget User, also known as "Satuan Kerja Majelis Wali Amanat Millennium Challenge Account Indonesia II" (Satker MWA MCA Indonesia II).

Each of these components plays a crucial role in carrying out the functions and responsibilities of the LWA to ensure the successful execution of its programs and activities.

3. SCOPE

MCC seeks an Indonesia-based consultant to provide ESP due diligence services (Consultant) advising the MCC team on ESP impacts, risks and opportunities associated with activities described above that are under development and/or in implementation in Indonesia. The Consultant will serve as a local resource to assist MCC's efforts to integrate recommendations optimizing environmental and social performance into the design and implementation of MCC funded programs specifically through support of MCC's efforts to assure compliance with applicable Environmental and Social Management Systems (ESMS) and the integration of best management practices into research methods and analysis.

4. APPLICABLE DIRECTIVES

MCC Environmental Guidelines https://www.mcc.gov/resources/doc/environmental-guidelines/#:~:text=MCC's%20process%20of%20environmental%20and,capabilities%20of%20the%20entities%20implementi ng

IFC Performance Standards https://www.ifc.org/en/insights-reports/2012/ifc-performance-standards

5. PERFORMANCE REQUIREMENTS

Leveraging a required full-time presence in Indonesia, the Consultant will serve as a local resource to assist MCC's efforts to support MCA Indonesia II's compliance with MCC's Environmental Guidelines in the design and implementation of activities in various sectors, including (but not necessarily limited to):

• Logistics/Transportation

• Natural Resource Management

• Institutional Reform

• Climate Change Strengthening at the Subnational Level

• Climate/Green Finance

• MSME Finance and Potentially Related Value Chains

6. TASKS

More specifically, the Consultant shall on an as needed basis perform the following:

• Identify major environmental and social risks and opportunities associated with MCC investments and propose mitigation measures for any negative impacts identified and recommendations for site selection, enhancing project design and/or benefit streams from an environmental and social perspective;

• Assist in technical reviews of project-related documents including concept papers, feasibility studies, environmental and social impact assessments and management plans, consultant terms of reference, construction bidding documents, work plans, and performance monitoring plans to ensure compliance with any applicable ESMS and the International Finance Corporation's Performance Standards on Environmental and Social Sustainability;

• Assist MCC in the development and/or review of Terms of Reference for specific sector activities;

• Carry out desk reviews and field surveys as needed to provide assurance that projects are on track to meet agreed-upon objectives, standards, specifications, schedules, and budgets;

• Provide appropriate guidance, tools, and assistance to help strengthen institutional capacity and policies to integrate internationally accepted principles of environmental and social sustainability into the design and implementation of

MCC-funded projects among the range of MCA Indonesia II Compact beneficiaries and stakeholders; and

• Maintain a productive, collaborative working relationship with MCA Indonesia II, key sector actors, donors, donors' consultants, and MCC.

Other Technical Assistance

From time to time, and as required, the Consultant may be required by the MCC COR or PM to provide other advice and counsel. This may include but is not limited to:

• Review of proposal evaluation reports from technical panels and procurement agents;

• Review of proposed implementing entity agreements and cooperation agreements between MCA Indonesia II and government entities;

• Assist MCC in reviewing qualifications of key technical staff in Indonesia prior to their engagement;

• Assist MCC in reviewing the adequacy of all deliverables that are provided by country counterparts, contractor(s), Implementing and Accountable Entities, and in confirming that the reports fulfill the reporting requirement obligations of these entities under their specific program/mandate in order to assist MCC's authorization of disbursement requests; and

• Undertake mission-related travel within Indonesia, as required by MCC, and provide review of project risks and recommend corrective and/or mitigation measures to assure environmental and social performance that complies with applicable ESMS documents and MCC's Environmental Guidelines.

• The Consultant would be precluded from bidding on work and services (design, assessment, program implementation) to be procured by Indonesia's, or another MCC eligible country's Compact program management entity or using funds advanced under a Compact or Threshold Program in the country where services are being provided to MCC. The designated Consultant would be expected to coordinate with local authorities responsible for MCC Compact implementation as well as other donors, where relevant. However, the designated Consultant would report directly to the designated COR/PM.

7. DELIVERABLES AND SCHEDULE

Task Requirement Deliverable Due Date

Task 1 Inception Report Within 30 days of Contract award

Task 2 Quarterly Progress Reports Quarterly

Task 3 Yearly Report End of base/option year

Unless specifically instructed by MCC otherwise, all such reports are to be submitted in English, in three (3) hard copies, and an electronic copy using WINDOWS based MS-Office 2003 products including WORD for text, data tables in…