Terms of reference: Support to Oikocredit’s ongoing strategy refresh for its Agriculture portfolio

Introduction

Oikocredit is a global social impact investor focused on markets in Africa, Asia, Latin America & the Caribbean. Oikocredit calls for an (individual) consultant to support the on-going strategy refresh of its Agriculture investment portfolio. The consultant will be responsible for ongoing project management of the strategy refresh, lead the development of key analyses that inform the process (as set out below) and develop a document that captures strategic options and areas where Oikocredit can increase impact and grow portfolio, within the Oikocredit investment mandate and risk appetite.

Background

Oikocredit is an established Impact Investor in Agriculture with a current portfolio > EUR 200M. For more than 40 years we have directly invested into companies operating across value chains in developing markets, providing debt and equity financing as well as much needed capacity building services. Our focus is to sustainably support organisations that can achieve scalable and measurable impact to low-income farmers that support commodity and stable crops.

However, Agriculture investing and realising impact at smallholder famer level remains challenging. There is still a critical lack of access to finance in the sector, and as a result, stakeholders across value chains are often unable to show resilience in the face of negative externalities. With new technologies and platform businesses emerging, Oikocredit has a unique position within the market to catalyse these models. This strategy refresh process will focus on creating an investment approach that aligns to our core mission, whilst focusing our resources on sustainable investment and balanced risk.

This consultant will work closely with the Agriculture investment team. To successfully conclude this process an individual within the Oikocredit team will be allocated as the PoC for the consultant to support access to information and coordinate Oikocredit input. In addition, other investment teams, such as Renewable Energy and Financial Inclusion, may be informed/input into this process as aligned in the work plan to be developed with Oikocredit and the consultant.

Objective and scope of work

Objective: Support the development of arefreshed strategy for Oikocredit’s agriculture portfolio

Scope of Work:
The consultant will be responsible for the following tasks:

1. Establish and align with Oikocredit a project plan for the strategy refresh process. The consultant will be expected to lead the project management process for the strategy refresh, working closely with the Oikocredit team through regular weekly or bi-weekly calls to ensure timely access to information, review cycles and development of analyses and deliverables. This could include several visits to countries/regions where Oikocredit has a significant agri portfolio (incl. Latin America, West Africa, East Africa) to understand local opportunities, competences and limitations.

2. Conduct an analysis of existing internal data on the performance of the agriculture portfolio. The analysis may include a segmentation of debt (trade finance, long-term/CapEx debt) and equity products, as well as key value chains, and key geographies. This would also include an analysis of past deals to assess evolution of the agri investment approach, including successes and learnings.

3. Conduct high-level desk research from publicly available sources to identify trends from i) other investors in the market and ii) progress of different established and emerging business models. This may include existing reports, studies, and databases on agriculture impact investments across regions , including the competitiveness of Oikocredit in each region.

4. Conduct 5-7 internal consultations with relevant stakeholders to better understand Oikocredit and our Agriculture investment portfolio. This may include interviews and surveys with key stakeholders (including Regional Director, Sector Heads Agribusiness, Financial Sector, Renewable Energy).

5. As aligned with Oikocredit in the workplan, engage through consultation any external stakeholders that might inform this process (such as other Impact investors, Entrepreneurs, peer organizations).

6. Utilize qualitative and quantitative analysis techniques to substantiate and evaluate the market opportunities. This should include a portfolio construction exercise informed by high-level data and underlying assumptions to test different paths for Oikocredit.

7. Set out preliminary parameters related to the role of partnerships in the strategy refresh, such as for de-risking (guarantees), pipeline development and other, in alignment with Oikocredit’s key investment policies.

8. Organize 2 (interim and final) workshops with key internal stakeholders to gather i) input on lessons learned, market developments, and proposed new investment areas and ii) feedback on options/solutions and potential portfolio.

9. Identify critical risks to successful implementation of the refreshed strategy.

10. Deliver a final report summarizing the findings, recommendations, and proposed changes.

Final deliverable

A comprehensive report that identifies and summarises findings and recommendations. Including relevant data, analyses, case studies, and stakeholder mapping. This should be presented in a clear and concise format (word or PPT) suitable for an executive level audience. In addition, a supporting Excel document of analyses (such as for portfolio construction) should be provided.

1. Introduction
o Capture from existing materials the purpose and significance of the strategy refresh, as well as context on smallholder agriculture and its importance.
2. Background and rationale
o Capture from existing materials.
3. Objectives and goals
o Capture from existing materials.
4. Target beneficiaries
o Identify the specific smallholder communities, crops or countries targeted by the strategy.
o Describe how these beneficiaries will benefit from the investments.
5. Investment Areas and Focus
o Outline the key areas where impact investments will be made (e.g., crop diversification, technology adoption, infrastructure development).
o Discuss the rationale behind selecting these areas and alignment/ impact on existing portfolio; including any sensitivities or scenarios around the portfolio
6. Risk Assessment and Mitigation
o Evaluate potential risks associated with smallholder investments.
o Propose risk mitigation strategies to ensure successful implementation
7. Collaboration and Partnerships
o Collaboration with local governments, NGOs, and private sector entities.
o Discuss potential partnerships for effective implementation.
8. Portfolio composition
o Explain how financial resources will be allocated.
9. Case Studies and Best Practices
o Provide examples of successful impact investment projects in smallholder agriculture.
o Summarize lessons learned and best practices.
10. Conclusion
o Summarize the strategy’s key components.
o Preliminary P&L

Timelines

o Send out Terms of Reference: 20th of May 2024
o Submit proposals until: 1st of June 2024
o Feedback consultants: 7th of June 2024
o Engagement KO: 21st June 2024
o Interim Strategy report: 21st August 2024
o End date assignment: 12th September 2024

Confidentiality and ownership of deliverables:

• All information provided to the consultant during the course of this consultancy is considered confidential and should not be disclosed to third parties without prior authorization.
• All deliverables produced as part of this consultancy will be considered the property of Oikocredit and should not be reproduced or distributed without our permission.
• A confidentiality agreement should be signed prior to the initiation of the project.

Proposal

Interested consultants are invited to submit a proposal which includes at least the following:
• A detailed workplan including, milestones and deliverables
• Outline of the outputs
• Time frame
• The information expected as input, and suggested external parties to interview

Budget and Payment Terms

Consultants are requested to provide their quote and specify payment terms and conditions, including milestones for payment. Please specify consultancy fees, travel expenses, and other relevant costs in reaction to the Terms of Reference.

Consultancy Team (if not applying as an individual)
Consultants are requested to provide information about themselves, and if applying as a team, about the consultant's team members, their expertise, and relevant experience in agriculture and impact investing in Africa, Latin America, and Southeast Asia.

Highlight any past projects or publications or experiences related to impact investments in developing countries.

Note: These terms of reference serve as a general guideline and can be modified or expanded based on the specific requirements of the project.

Qualified consultants should respond to these Terms of Reference by June 1st 2024, 17h00 CET and send their proposals to the undersigned:

Vincent van Dugteren
Head, Innovation Hub
vvdugteren@oikocredit.org

Oikocredit is an equal opportunity employer. We value diversity and are committed to creating an inclusive work environment that embraces individuals from various backgrounds.

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