Transactions Advisors (TAs) & Business Services Advisors (BSAs)

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To:                    Transactions Advisors (TAs) & Business Services Advisors (BSAs)

Date:                  May 31, 2019           

From:                Technical and Procurement Teams USAID Nguriza Nshore Activity (Implemented by DAI Global LLC)

Subject:             Expression of Interest: NgurizaNshore-C1-C2-01: Expression of Interest

Due:                   1:00 PM Central Africa Time (CAT) on June 21, 2019

Dear Offerors:

It is our pleasure to release an Expression of Interest (EOI) to support the implementation of DAI’s Nguriza Nshore Activity (NNA) funded by the United States Agency for International Development (USAID). DAI invites qualified Transaction Advisors (TAs) and Business Service Advisors (BSAs), hereafter referred to as “Offerors,” to submit an EOI for vetting and pre-qualification in support of Nguriza Nshore’s overarching objectives – facilitating commercial debt and private capital for off-farm, privately-owned and operated, Small and Medium Enterprises (SMEs).

NNA seeks to partner with qualified Offerors and intends to underwrite discrete, punctual and deliverable-based costs, either in full or on a percentage basis, leading to financial close with commercial lenders and/or SMEs. NNA will not underwrite success fees.

Background

NNA is a five-year activity funded by the United States Agency for International Development (April 2018-March 2023). NNA’s primary Transaction Advisor—BiD Network—has built a healthy pipeline of SME transactions and closed several small investments for Rwandan SMEs with more companies in the process of identification and investment readiness preparation. However, NNA has been approached by other TAs and BSAs, inside and outside Rwanda, with investment pipelines separate from BiD Network’s current portfolio of opportunities. NNA seeks to evaluate and pre-qualify additional Rwandan SMEs proposed by Offerors to compliment the work developed by BiD Network. In addition, NNA has been approached by commercial lenders looking for access to capital for intermediation and on-lending to SMEs.

Definitions

  • Transaction Advisors/Business Service Advisors. Generally, within Rwanda, there is a dearth of experienced Transaction Advisors and Business Service Advisors specialized in identifying investible, privately-owned and operated SMEs with the proven experience and ability to assist them to become investment ready and to secure private capital for their growth and profitability. In addition to SME identification and financial close, TAs/BSAs typically provide management/strategic consulting, business planning, financial modeling, investment memorandum/pitch deck preparation, etc. Typically, TAs/BSAs also have expansive and diverse private capital networks that include angel investors, venture capitalists, private equity funds, high-net-worth individuals, family foundations, social impact investors and development finance institutions. The diversity of private capital options is further enhanced when TAs/BSAs have networks of domestic, regional and international investors. NNA seeks offers from experienced and qualified TAs/BSAs with proven track records in these critical business functions and with the recognized ability to provide end-to-end services leading to financial close.
  • Commercial Banks and Other Financial Service Providers (FSPs). Commercial banks and other FSPs (MFIs, SACCOs, niche operators) have expressed a generic need to access subsidized or commercial capital for potential intermediation into existing or new products, in addition to loan guarantees and, in some instances, Tier II Capital. Similar to the SME support outlined above, NNA seeks end-to-end services leading to financial close.
  • SMEs. NNA supports privately-owned and operated off-farm SMEs. Rwandan SMEs tend to have less exposure to investors for a variety of reasons and, in most cases, require additional upfront assistance. In addition, their capital finance/investment needs are generally smaller in nature which makes the due diligence and investment readiness processes more expensive, time-consuming and less attractive for investors (i.e. similar end-to-end fixed costs spread across smaller businesses versus larger companies). For the purposes of this EOI, NNA has bifurcated SMEs into two groups.
  • Small private capital. These opportunities typically fall within the range from $100,000 - $1,500,000. They usually involve angel investors, venture capitalists or social impact investors and the investments are, in most instances, pre-Series A. End to end support can be time-consuming and labor-intensive.
  • Medium private capital. These opportunities generally are above $1,500,000 and less than $10,000,000. Transactions with this range can also be time consuming and labor intensive for reasons similar to small private capital.

NNA seeks to support transactions from both categories—commercial banks and other financial service providers and SMEs—from qualified and experienced Offerors.

EOI Process and deadlines.

  1. Submission of Questions. Questions must be submitted no later than 1:00 pm CAT on June 7, 2019, via email to NgurizaNshore_Procurement@dai.com
  2. EOI Submissions. Submission must be emailed no later than 1:00 pm CAT on June 21, 2019, via email to NgurizaNshore_Procurement@dai.com, copying Nadine_Manzi@dai.com and Michael_Baingana@dai.com. The subject line of the email must include your organization or consultant name, followed by “Submission under EOI NgurizaNshore-C1-C2-01: Expression of Interest.” In your email submission, certify a validity period of 60 days and include your organization’s DUNS number. Limit file submissions to 10 megabytes or less.

II. EOI Composition: EOIs must include the following submission documents.

  1. Technical Component.  The Technical Component requires the following documentation: two tables with the first listing the Offeror’s current/potential opportunities and the second listing historical information on closed transactions; and, two-page CVs for personnel involved in each aspect of the Offeror’s end-to-end services. Specific details required are detailed below under “Part 1: Technical Component.” All documentation must be submitted in PDF and Times New Roman 12-point font with a 20-page limitation.
  2. Cost Component. Cost submissions are not required now. Should the Offeror's Technical Component secure endorsement from the evaluation committee, NNA will enter into discussions and negotiations with Offerors on specific transactions pertinent to NNA’s mandate and objectives. Later, NNA and the Offeror will review opportunities with strict consideration for cost realism, price reasonableness, and allowability consistent with US government cost principles. Furthermore, as part of NNA’s price reasonable test, we will compare proposed costs against other similar USAID-funded projects DAI manages that finance similar services, including: INVEST, East Africa Trade and Investment Hub, Southern Africa Trade and Investment Hub, etc.

Part 1: Technical Component.

Technical proposals must be no more than twenty (20) pages in PDF Times New Roman font. The technical proposal must include the following three (3) sections: 

1. Table 1: Commercial Bank and Other FSPs; and, SME Transactions/Opportunities. This table must include a list of opportunities the Offeror wishes to present to NNA that require financial support. Do not include names of specific Commercial Banks and FSPs.

Current Opportunity Examples

Transaction Table—Commercial Banks and Other FSPs

Commercial Bank/other FSP

Finance/Investment or Guarantee Need

Bank 1

$10,000,000

Bank 2

$15,000,000

MFI

$5,000,000

SACCO

$1,500,000

*NNA will only support financial institutions having less than 50% government ownership.

Transaction Table—Private Capital

Company Sector

Investment Need

Agriculture

$500,000

Transport

$3,000,000

Fintech

$1,000,000

WASH

$500,000

*NNA will only support companies (SMEs) that are privately owned and operated.

Offerors can provide information for one or both tables and as many examples as deemed necessary (including only one). Add more rows if necessary.

Financial institutions and SMEs must be headquartered in Rwanda. There will be no exceptions. Rwandan SMEs with plans to geographically expand beyond the country’s borders can be included in the second table. Nguriza Nshore will not support the regional expansion of Rwandan financial institutions.

2. Table 2: Past Performance. Offerors must provide details about their experience identifying and closing transactions in similar African contexts. Do not include names of specific Commercial Banks and FSPs.

Past Performance Examples

Transaction Table—Commercial Banks and Other FSP: Deals Closed

Commercial Bank/Other FSP

Location

 Deals Closed (amount)

Transaction Type

Bank 1

Kenya

$10,000,000

Tier II capital

Bank 2

Rwanda

$15,000,000

DFI loan

MFI

Tanzania

$5,000,000

DFI guarantee

SACCO

Rwanda

$1,500,000

Bank loan guaranteed by USAID DCA

*DCA (Development Credit Authority)

Transaction Table—Private Capital: Deals Closed

Company Sector

Location

Investment Closed (amount)

Transaction Type

Agriculture

Rwanda

$500,000

Venture capital: revenue-based loan

Transport

Kenya

$5,000,000

Private equity

Fintech

Kenya

$1,000,000

Angel: equity stake

WASH

Uganda

$500,000

Angel: convertible note

 

Offerors can provide information for one or both tables. Add more rows if necessary.

3. CVs. Offerors must include details of individuals who will provide consulting and transaction advisory (end-to-end services and closing transactions) described in both tables if both tables are provided. Individuals must have proven and verifiable track records. Past performance can be with other firms or companies and not with the Offeror. However, those individuals must be currently part of the Offeror’s team/organization. CVs must be two pages maximum.

Part 2: Cost Proposal 

Not applicable (n/a).

EOI Evaluation. NNA will review EOI submissions from Offerors without a prescribed and subjective evaluation criterion. NNA will objectively review documentation submitted by Offerors based on the opportunities presented and past performance. Submissions must follow and adhere to the requirements outlined above; otherwise, they will not be reviewed. Submissions from Offerors that are evaluated will be contacted by NNA in writing by email. Our email response will either (1) ask for a follow-up meeting in Kigali to enter into discussions and possible negotiations on the EOI information provided or (2) indicate the reason or reasons for not entering into discussions.

Thank you,

DAI Nguriza Nshore Technical and Procurement Teams

NgurizaNshore_Procurement@dai.com