Consultancy to Support Sustainable Finance Mechanisms for the Kenya Project Finance for Permanence(PFP) Initiative at Nature Conservancy

Scope of work
The aim of this consultancy is to design sustainable finance mechanisms touching on tax, levies, royalties, and other government related sustainable revenues collected in favor of conservation of the country:

• Review efforts to date on various sustainable finance mechanisms (SFMs) for conservation available to the state conservation areas including taxes, licenses and other government fee/ subscription related sustainable conservation revenues through desktop research, interviews with TNC staff, government officials and relevant partners and organizations, summarizing this into a baseline report

The assessments are expected to include the following at minimum:

• Review of existing project materials relevant to the assignment including prior works from Conservation capital and IRPA to be provided
• An indication of current annual revenues captured through each SFM, including identification of payors
• A summary/ illustration of flow of funds from source to conservation area/landscape for each SFM
• Investigate feasible revenue potential of the identified government sustainable revenues available to conservation that are currently in effect in Kenya along with additional and relevant sustainable finance mechanisms from comparable countries and other PFPs including:
• National carbon tax
• A general environmental royalty system
• Environmental licenses including a percentage water resource levy for sector players with high water consumption
• Electricity sector transfers, for environment component of electricity fees
• Fuel levy transfers, and the environment component of electricity fees
• Biodiversity offsets and feasible multiplicative factors.
• License & permit fees for infrastructure development as a percentage of setup costs
• Feasibility analysis of a tax rebate/incentive to companies funding nature
• Pollution related fees
• Other tax/ fee-based avenues for revenue generation not here mentioned.
• The assessments are expected to include the following at minimum, summarized in a feasibility report:
• Production of a benchmark of relevant tax-based finance mechanisms for conservation that have worked in similar jurisdictions
• A detailed analysis and summary showing the potential for each of the above SFM quantifying the potential contribution of each SFM to conservation in Kenya after optimization.
• An assessment of feasibility & potential revenues to be ring-fenced for financing of conservation activities including what is available as a total and the percentage flow to conservation.
• An estimate of the potential scale of revenue over time under different scenarios
• Recommendations with reasons on whether to pursue each of the identified SFM
• A summary/ illustration of flow of funds from source to conservation area/landscape for each of the additional SFMs
• Develop a roadmap outlining next steps to advance selected SFMs - including needed policy and legislative actions/reforms;
• Define the gap and needs to improve or develop these SFMs including identification of risks and risk mitigation steps associated with each SFM.
• Define conditions needed for the successful implementation of identified SFMs highlighting the policy reforms to support SFMs
• Identify all stakeholders to be involved in the process, map synergies and possible collaboration with other related initiatives & actors in the country
• Draft an action plan to implement each of the recommended SFMs in a SFM development strategy document

Geographical scope

• The geographical scope of work includes resources that can be sourced in Kenya and applied to terrestrial protected and conserved areas across Kenya. A comprehensive list will be supplied by The Nature Conservancy. An analysis of the SFMs revenue performance and potential per key ecosystems in the country would be useful.

Duration of assignment

• The assignment will be carried out within a period of forty (40) working days from the date of signing the Contract.

Deliverables
Deliverables Installment

Baseline report
30%

• Feasibility report

40%

• SFM development strategy

30%

• Reporting arrangement
• The Consultant will be accountable to The Nature Conservancy’s Director, Durable Finance Africa Region. It will also be invited to participate in internal or, as the case may be, external, meetings to discuss findings.

Qualifications
The consultant will have the following skills and experience:

• Extensive knowledge of and experience with SFMs and knowledge of how they have performed in different countries and regions of the world
• Extensive tax background in Kenya
• Extensive knowledge and expertise conducting financial analysis
• Solid knowledge of protected areas issues, particularly in developing countries
• Strong communications skills, including ability to convey SFM concepts effectively to senior government officials and other relevant stakeholders and rights holders
• Knowledge of Kenya context and institutional structures.
• Conservation & policy background/ previous works in Kenya preferred
• A professional network of contacts in the tax, government license & conservation fees and conservation industries in Kenya
• Demonstrated experience conducting similar research in the past