COLOMBIA: CLIMATE FINANCE EXPERT CONSULTANT Job in Bogotá Recruiting by Global Green Growth Institute

COLOMBIA: CLIMATE FINANCE EXPERT CONSULTANT

INTRODUCTION TO GGGI

The Global Green Growth Institute (GGGI) is a treaty-based international, inter-governmental organization dedicated to supporting and promoting strong, inclusive and sustainable economic growth in developing countries and emerging economies. To learn more please visit about GGGI web page. 

Through strategic partnerships, GGGI has collaborated with the Government of Colombia to promote green growth and investment policies. These alliances include collaborations with the Ministry of Environment and Sustainable Development, the Ministry of Agriculture and Rural Development, the Ministry of Finance and Public Credit, and the National Planning Department (DNP). Since 2014, GGGI has supported the DNP in advancing a green growth vision and transition plan for Colombia to support climate goals and the achievement of the SDGs. GGGI supported the development of the Green Growth Working Group led by the DNP (2016–2018), which produced valuable information for the design of the Green Growth Policy – ​​GGP (adopted through CONPES 3934 of 2018).

Additionally, Colombia has made significant progress in designing and implementing standardized methodologies, such as Environmental, Social, and Governance (ESG) and the Colombian Green Taxonomy, to ensure the sustainability of national investments. However, economic and financial investments are essential to mobilizing resources for the socioeconomic and cultural transformations necessary in the country to advance the climate transition. Although the Government of Colombia has made significant progress in developing a robust policy framework and updating the country's National Climate Finance Strategy to promote sustainable climate finance and resource mobilization to meet mitigation and adaptation objectives, it is necessary to increase climate investments in strategic sectors for a just transition towards low-carbon and climate-resilient economic development.

On the other hand, the Colombian government has adopted policies to promote sustainable, low-carbon, and climate-resilient development. Mitigation and adaptation to climate change are national priorities. Colombia's 2021-2023 GCF Country Program is expected to mobilize GCF resources to support the objectives of Colombia's updated NDC, National Climate Change Policy, National Long-Term Climate Strategy 2050, and sectoral plans and territorial issues on climate change. On the other hand, the National Development Plan (PND) 2022-2026, adopted through Law 2294 of 2023, establishes climate action, the control of deforestation, and the construction of climate resilience as national priorities.

Priorities for GCF financing in Colombia are established through the Collegiate Body, which meets periodically to discuss the country's project financing needs through the GCF and to review and support GCF financing proposals. The Collegiate Body is made up of the PND, the MADS, the MHCP, the Ministry of Foreign Affairs, and the Presidential Agency for International Cooperation (APC).

In Colombia, three accredited Direct Access Entities (Fondo Acción, Findeter, and Bancoldex) and one nominated entity are in the accreditation process (Finagro). Finagro is Colombia's largest financing provider for the AFOLU sector. FINAGRO operates as a second-tier bank, that is, it delivers resources under favorable conditions to financial institutions so that they grant credits to productive projects. To achieve its objective, Finagro is funded through Agricultural Development Titles (TDA), whose conditions are defined by the Board of Directors of the Banco de la República and makes its placement following what is established by the National Agricultural Credit Commission (CNCA). Thanks to this scheme, agricultural producers can access financing in the lowest market conditions, given that the CNCA establishes ceiling rates at which agricultural development credit can be registered with Finagro. In 2023, Finagro's loan portfolio was valued at USD 10,549 million and included 1,319,000 individual credit operations, of which small agricultural producers represented 82%.

Finagro submitted its accreditation documentation through the GCF Online Accreditation System in December 2021. This application was the subject of preliminary observations that were adjusted on two occasions; The last preliminary observation was received in January 2023. The application requires updating.

Additionally, Finagro needs to implement the SGAS and the Gender and SSE policies efficiently. To do so, it depends on financial intermediaries to develop analysis and collect information from the beneficiaries. Therefore, it is necessary for Finagro intermediaries to adopt compatible policies and ESMS. Bancamía, a microfinance institution that manages the majority of Finagro's microcredit operations, is developing its own ESMS and requires support to implement it, including training its staff.

Despite steady progress, Finagro's accreditation requires further expert support to address three outstanding barriers: Finagro's limited capacity to implement ESMS and gender and EAS policies, the limited capacity of first-tier financial intermediaries to implement climate investments, and the lack of credit instruments aligned with the criteria of Colombia's Green Taxonomy.

Since 2019, GGGI has supported Finagro in its accreditation process through GCF Readiness. GGGI will implement the program: “Advance the mobilization of climate finance in Colombia's AFOLU sector through the support of the Direct Access Entity and the implementation of the country's green taxonomy for the agricultural and forestry sectors. This program will be implemented in close collaboration and consultation with the NDA, SFC, Finagro, and Bancamía to ensure alignment with Colombia's strategic and planning documents, NDC objectives, and the country's political context.

GGGI aims to utilize new and existing GGGI staff for positions that involve involvement in multiple outcomes and require ongoing involvement during program implementation. This consultancy will be part of the team required to successfully implement the program and must respond to the closure of barrier 3: overcoming Colombia's lack of financial instruments aligned with the green investment criteria (Colombia Green Taxonomy) in the AFOLU sector.

OBJECTIVE OF THE ASSIGNMENT  

The objective of the consultancy is to contribute to the advancement of the implementation of the Green Taxonomy for the AFOLU sector by evaluating the main existing barriers, analyzing the alignment of Finagro's current financial products with the green taxonomy, preparing a roadmap to overcome these barriers, make recommendations to the parties, including the Financial Superintendency to facilitate that the Taxonomy can be implemented by Finagro and the banks that register operations with the Entity, lead the development and/or adjustment of financial products that can apply the Green Taxonomy and the preparation and delivery of demand-based capacity building and awareness materials to all relevant units.

DELIVERABLES AND PAYMENTS  

Deliverable

Description

Recommendations

Payments

Date

It must include a detailed schedule and methodology for completing the consultancy.

10%

Two weeks after signing the contract.

A detailed report that reviews Finagro's existing credit destinations and financial instruments. It should include an analysis of its alignment with the green taxonomy standards and recommendations to the parties (Finagro, the Financial Superintendency of Colombia, and the National Green Taxonomy Table) for adjustments that facilitate the implementation of the taxonomy by the banks in the AFOLU sector, for which previous studies can be used if they exist.

Detailed document in digital format (Word).

15%

Eight weeks after signing the contract.

A report that identifies and analyzes the barriers faced by the AFOLU sector to adopting Green Taxonomy, highlighting key obstacles, and suggesting strategies to overcome them, including training needs to improve understanding and application of green taxonomy principles. This analysis should also include recommendations for the National Green Taxonomy Table.

20%

At week 14, from the signing of the contract

These workshops should be designed to strengthen financial intermediaries' capacities in implementing the green taxonomy. Awareness-raising and training material on the principles and practices of green taxonomy should be provided to improve understanding and promote its application in the financial decision-making process.

25%

At week 20, from the signing of the contract

The findings of the financial instrument review activity are based on the complete design and/or adjustment of at least two financial products offered by Finagro (credit destinations) that fit the criteria of the green taxonomy.

15%

At week 30, from the signing of the contract

This report details the validation process of the adjustments made to the financial products, including credit destinations, developed in response to the needs identified while reviewing lines of credit and financial instruments.

In addition, it presents the comments and final adjustments incorporated into the financial products, as well as proposals for operational adjustments in Finagro and the Monitoring, Support and Verification System. It also includes recommendations for the National Green Taxonomy Table

15%

At week 40, from the signing of the contract

SCOPE OF WORK

The assignment includes the following tasks but is not limited to:

REPORTING ARRANGEMENTS  

EXPERTISE REQUIRED  

1) Academic experience

2) Professional experience:

ADMINISTRATIVE INFORMATION