1.0 About AECF

The AECF is a leading development finance organization that supports businesses to innovate, create jobs and leverage investments to build resilience and sustainable incomes for rural and marginalized communities in Africa. AECF’ s goal is to bridge the investment gap between early-stage enterprises and business maturity for entrepreneurs serving the poorest communities.

The AECF provides patient capital to new and innovative business models in the agribusiness and renewable energy sectors across Sub-Saharan Africa through various financing instruments, which include grants, zero-interest loans, guarantees, and working capital facilities. AECF’ s financing products are supplemented by three additional growth support services to improve the viability and sustainability of our investees, namely, (i) Advisory Services to improve investee internal capabilities (ii) Investment Support in raising commercial capital in significant volumes and (iii) Knowledge and Insights for learning and evidence gathering for policy influencing and advocacy.

AECF has successfully implemented programmes across 26 countries in Sub-Saharan Africa (SSA), supporting over 343 enterprises, raising US$ 392 million in funding for programmes, leveraging $750 million in additional capital and impacting 28 million lives. We are looking for an entrepreneurial and experienced Innovations Incubation Specialist.

2.0 Background

The AECF 2021-2025 new strategy objective is to build resilience and sustainable incomes for rural and marginalized communities in Africa. Through catalytic funding, the AECF surfaces and supports commercialization of new ideas, business models, companies and technologies designed to increase agricultural productivity, expand energy access, and alleviate poverty while also addressing the crosscutting themes of women and youth.


The Renewable Energy and Adaptation to Climate Technologies (REACT) window is demonstrating how renewable energy technologies and businesses have the potential to reach Africa’s rural communities. Limited access to sources of energy, (especially in rural areas) continues to undermine the productivity of households and businesses, limit growth, experience high emissions and deteriorating living standards REACT has shown that private sector innovation has the potential to reach people in ways that large-scale government investment in grid extension and climate adaptation infrastructure struggle to deliver.

In six years, REACT is worth US $161 million of investors commitment and invested in 77 companies implementing innovative business models that provide increased access to clean energy, financial services, and climate smart solutions for the rural poor across Sub–Saharan Africa.

REACT has two programmes providing investing in companies in Ethiopia as outlined below:


REACT SSA is a SIDA funded programme with a total value of US $ 61 Million supporting the private sector in Sub-Saharan Africa to meet the energy needs of rural communities. The target countries include Burkina Faso, Ethiopia, Kenya, Liberia, Mali, Mozambique, Somalia, Sudan, and Zimbabwe.

About 510 million people in sub-Saharan Africa (SSA) currently have no access to electricity and will not get grid access, resulting in a steady increase in the number of people without electricity until at least 2025. The slow progress and prohibitive cost of conventional solutions to the household energy crisis means that cheaper and more accessible new clean technologies offer a better chance of improved access to energy for rural households. Over the last decade, clean energy technologies have become more economical than conventional generation for many applications, and although the regulatory environment to facilitate their application has improved, there is need for strong renewable energy private sector voices to influence decision-making around policies, laws, and regulations that impact the industry.

The AECF’s engagement in the energy sector under REACT SSA is designed to catalyze the private sector to increase the supply of cleaner fuels, raise awareness of the dangers from indoor air pollution, demonstrate how new knowledge in renewable energy technologies can be put into practice in ways that benefit the poor especially women, and provide evidence on challenges in policy formulation and implementation.

3.0 Problem statement

In Ethiopia, REACT SSA is supporting local companies/investees to enable rural customers access transformative solar home systems. The REACT SSA programme has 10 investees in Ethiopia, all who receive grant funding and technical support from the programme.

REACT SSA issues grants in U.S. dollars and has currently committed US$ 5 million to the investees in Ethiopia. However, REACT SSA grantees are required to raise matching funds against their grants which they often raise through loans from local or foreign banks. REACT SSA grantees are experiencing challenges to raise matching funds as there are directives provided for accessing loans, and from using their collateral as a guarantee.

AECF seeks to get a deeper understanding of the monetary policy in Ethiopia specifically, the implications of the directives outlined below on foreign investment, specifically:

  1. External Loan and Supplier’s credit Directive No. REL/05/2002 directives which provides for the following articles:

· 3.1: External loan guaranteed by Federal Government shall be registered by the National Bank of Ethiopia by presenting the agreement and guarantee issued there to.

· 3.0 – An eligible borrower except stated under article 3.1 shall first get approval from the National Bank of Ethiopia before entering to external loan and supplier’s credit agreement with the lender/supplier.

· 3.3- An eligible borrower shall register the foreign loan registered in cash or in kind by producing necessary documents.

· 3.4 – No repayment in convertible foreign currency may be allowed for the purpose of payment of external loan or supplier’s credit unless registered by the NBE

  1. In March 2021, the National Bank of Ethiopia published the ‘Retention and Utilization of Export Earnings and Inward Remittances Directives’ No. FXD/70/2021. This directive stipulates new rules for the opening and utilization of Foreign Exchange Retention Accounts. Article 4 of the Directive, on Retention Rights, clause 1, stipulates that:

“Exporters of goods and services as well as recipients of inward remittances shall have the right to retain only forty five percent (45%) of their export earnings and remittances in foreign currency indeterminately in a retention account after deduction of 30% surrender requirement from the total earnings.”

  1. The new temporary directive on suspension of loans using asset-based collateral where the NBE has frozen lending using houses, buildings, and other assets at collateral1.

AECF seeks clarity on: qualifications for the guarantee by the National Bank of Ethiopia; additional directives/policy instruments which may impact on foreign investments; and which type of external investments are accepted for local companies.

4.0 The assignment

AECF seeks to recruit a consultant to provide clarity on the monetary policy in Ethiopia and specifically on the directives, and outline the following:

  1. What is the policy imperative for this loan directive No. REL/05/2002 and how does it link with Ethiopia’s financial sector policies including the forex directive no. FX/70/2021 and the collateral directive?
  2. What are the implications of these directives on external lending to Ethiopian companies and what options are provided in policy and in practice?
  3. What mechanisms exist under the two directives to allow local companies to obtain forex for importation of renewable energy products?
  4. Payment mechanisms: AECF’s grants are issued in US dollars, and thus require repayment in the same currency; what mechanisms exist to comply with article 3.4 and meet obligations to the lenders.
  5. What options are available for AECF programming and its current and future portfolio of companies?

5.0 Scope of work

The consultant will be required to:

  1. Conduct a desk review of Ethiopia’s fiscal policy and regulatory environment including foreign lending practices and specifically review the two directives i.e.: Directive No. REL/05/2002 and Directives’ No. FXD/70/2021, collateral directive and any other related policy instruments.
  2. Engage with key stakeholders including:

a. Engage with government officials at the National Bank of Ethiopia and the Ministry of Finance, Ministry of Water, Irrigation and Energy (MoWIE) and other key policy makers.

b. Local and international investors who have received foreign loans in the past and successfully repaid.

c. Key banks who are well versed with the financial services sector, and especially foreign lending.

  1. Consolidate the desk review and stakeholder engagements to present a concise position of the implication of the directives mainly foreign loan approvals, registration, and repayment in foreign currency.
  2. Provide evidence-based advice and recommendations to AECF on implementation of repayable grants in Ethiopia.

[1]Ethiopia suspends loans using asset-based collateral, citing ‘economic sabotage’ Accessed from on 20/9/2021

6.0 Deliverables and timing

This assignment is expected to be concluded in a short duration not exceeding 20 working days. It is expected that the service will be concluded by 30th October 2021. The key deliverables are:

· A brief inception report which provides guiding questions and a list of key stakeholders and clear timelines to deliver the assignment.

· A draft report for review and further deliberation on the findings of the assignment.

· A final report incorporating feedback provided by AECF.

Phase **

Assignment Deliverables **

Est. Assignment duration **

1 **

Contract signing and inception report

0 months

2 **

· Inception report

3 working days

3 **

· Literature review and stakeholder engagement

2 weeks

4 **

· Draft report

5 working days

5 **

· Final report

3 working days

7.0 Payment structure

The payment breakdown below will be milestone based, against the Assignment deliverables, and will be made upon satisfactory signoff by AECF.



Execution of the contract (Commencement of Assignment)


Inception report


Satisfactory completion of phase 4


Satisfactory completion of phase 5

8.0 Proposal submission

To submit a proposal to conduct this assignment, the following is required:

a. Qualifications of the consultant demonstrating that they:

a. Have at least 10 years work experience as a monetary policy expert in Ethiopia

b. Have a minimum of bachelor’s degree in finance, Banking, Economics, Accounting, and related degrees.

c. Demonstrated knowledge of the Ethiopian financial sector, and particularly knowledge of the fiscal policy framework.

b. A technical proposal on how to carry out the assignment and proposed timelines to deliver the assignment. (Not exceeding 5 pages)

c. A financial proposal to deliver this assignment in USD

d. Technical and financial proposal must be submitted as separate documents

9.0 Pricing

AECF is obliged by the Kenyan tax authorities to withhold taxes on service contract fees as well as ensure VAT, at 16%, is charged where applicable. Applicants are advised to ensure that they have a clear understanding of their tax position with regards to provisions of Kenya tax legislation when developing their proposals.

10.0 Evaluation Criteria

An evaluation committee will be formed by the AECF and shall include employees. All members will be bound by the same standards of confidentiality. The consultant should ensure that they fully respond to all criteria to be comprehensively evaluated.

The AECF may request and receive clarification from any consultant when evaluating a proposal. The evaluation committee may invite some or all of the consultants to appear before the committee to clarify their proposals. In such event, the evaluation committee may consider such clarifications in evaluating proposals.

In deciding the final selection of qualified bidder, the technical quality of the proposal will be given a weighting of 70% based on the evaluation criteria. Only the financial proposal of those bidders who qualify technically will be opened. The financial proposal will be allocated a weighting of 30% and the proposals will be ranked in terms of total points scored.

The mandatory and desirable criteria against which proposals will be evaluated are identified in the table below.



Weighted Award



  1. An understanding of the terms of reference

Demonstrate understanding of the assignment and expected outcomes.


  1. Demonstrate an in-depth understanding of Integrity Due Diligence, Bribery and Anti-corruption laws, Money laundering regulations and IFC’s Sanctionable Practices.


  1. Methodology and work-plan that will deliver the best value on the assignment

Demonstrate the capacity to deliver the task in a timely and efficient manner.

Demonstrate access to relevant sources on the ground (local/regional databases and human intelligence) that are credible, reliable and independent.

Demonstrate best and most practical approach to the assignment.

Provide a workplan on the key deliverables.


  1. Qualification and Experience

The Team – Demonstrate team capabilities and past relevant experience in tackling the assignment.


  1. Demonstrate relevant experience in conducting similar engagements. Provide evidence of similar previous experience including reference list indicating the scope and magnitude of similar assignments; specification of reporting capabilities; provide sample of the kind of reports they provide.


A. FINANCIAL PROPOSAL: Clarity, relevance, reality to market value/ value for money of cost for the assignment (inclusive of any applicable tax, reimbursables and travel).


Total Score


11.0 Disclaimer

AECF reserves the right to determine the structure of the process, number of short-listed participants, the right to withdraw from the proposal process, the right to change this timetable at any time without notice and reserves the right to withdraw this tender at any time, without prior notice and without liability to compensate and/or reimburse any party.

How to apply

12.0 Application

The AECF is an Equal Opportunity Employer. The AECF considers all interested candidates based on merit without regard to race, gender, colour, national origin, religion, age, marital status, disability or any other characteristic protected by applicable law.

AECF invites qualified consultants/firms to send a proposal to

, clearly marked “***Terms of Reference for a Monetary Policy Consultant In Ethiopia***” to be received no later than 30th September 2021 by 5.00 pm East Africa Time (GMT +3) addressed to: The AECF, Procurement Department. All clarifications and or questions should be sent to

For more information, please visit our website 

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