Financial Modeler and Policy Analyst-National Individual Consultant

Project/Consultancy Title: Financial Modeler and Policy Analyst

Project Location(s): Somali Region, Adadle Woreda, Ethiopia

Finance Department Code:  23738

Background:

Mercy Corps is a leading global organization powered by the belief that a better world is possible. In disaster, in hardship, in more than 40 countries around the world, we partner to put bold solutions into action — helping people triumph over adversity and build stronger communities from within.

Consultant Objectives:

Mercy Corps seeks a Financial Modeler and Policy Analyst to support the development of a business case—inclusive of a comprehensive economic analysis—for an anticipated Adadle water treatment plant and system in the Somali Region of Ethiopia. The plant and system includes the following project elements:

o   An intake on the Shebelle River near Gode, approximately 15 km north of Adadle

o   Water Treatment Plant (WTP)

o   Water Transmission Pipelines

o   Booster Pump Station

o   Storage Tanks

o   Water Distribution Systems (piping and distribution points).

The analysis aims to evaluate the viability, potential benefits, costs, risks, and overall value proposition of the project. The analysis will encompass financial, economic, and strategic aspects to support decision-making regarding the implementation of the Adadle water treatment plant and system.

The primary objectives of the business case and economic analysis are as follows:

• Assess the market demand for water in Adadle town based on water demand, population growth trends, and customer preferences.
• Evaluate the costs associated with the establishment and operation of the Adadle water system, including capital investment, operating costs, revenue generation potential, and long-term maintenance and lifecycle costs.
• Develop financial model to determine full cost recovery tariff and estimate, if applicable, the viability gap funding
• Analyze the long-term sustainability of the Adadle water system, considering water resource management, environmental impact, and adaptability to future challenges.
• Perform a risk and regulatory assessment to identify potential challenges, risks, necessary approvals, licenses, and compliance measures.
• Identify the financial and regulatory risks associated with building the new water system and evaluate risk mitigation strategies.

A separate but related work effort is being undertaken to study the engineering feasibility of the Adadle water system.  It is anticipated that the following information will be coordinated between the economic and financial analysis and the Feasibility Design Report:

·        Population projections

·        Engineer’s estimate of probable construction cost and design life for each project element

·        Operation and Maintenance (O&M) costs for each project element

 The Engineering Feasibility Design will be summarized in a Feasibility Design Report, which is outlined in the attached RFP for that work effort.

Consultant Activities:

Working in close coordination with the Mercy Corps RIPA Crisis Modifier 3 team, the Financial Modeler and Policy Analyst will support the Lead Economic and Financial Analyst in conducting the following tasks:

Task 1 – Forecast Market Demand (4 days of LOE)

• In coordination with the Lead Economic and Financial Analyst, provide in-country technical guidance to the Gode-based Mercy Corps Water Security team to collect additional data needed to evaluate water demand from residential customers as well as commercial customers and water truckers.
• Provide technical inputs on the methodology and questionnaire for the affordability and willingness-to-pay survey developed by the Lead Economic and Financial Analyst. 
• Provide an overview and training to the Mercy Corps team on the survey and data collection, management, and processing best practices. The methodology and questionnaires will be developed by the Lead Economic and Financial Analyst.

Task 2 – Evaluate cost considerations (5 days of LOE)

This task includes preliminary activities related to feasibility verification and identification and definition of additional alternatives and includes:

• Review anticipated operating and maintenance costs, including energy consumption, maintenance, labor, and chemical usage based on inputs from an engineering feasibility study. Attend meeting with Feasibility Design Report consultant during which cost information is to be acquired and reviewed.
• Lead the preparation of the financial model to determine the full cost recovery tariff and estimate viability gap funding required if cost recovery tariff is greater than the tariff determined through the affordability and WTP study.
• Provide written input on the cost considerations evaluation report as requested by the Lead Economic and Financial Analyst

Task 3 – Perform Risk and Regulatory Assessment (5 days of LOE)

• Gather information on risks through desk review and interviews with key informants under the direction of the Lead Economic and Financial Analyst.
• Review regulations on water sector and PPPs to determine compliance process.
• Provide written input to the Risk and Regulatory Assessment as requested by the Lead Economic and Financial Analyst

Task 4 – Economic Analysis and Recommendations (6 days)

• Prepare cost-benefit analysis under the supervision of the Lead Economic and Financial Analyst. The analysis will include:
• Estimated economic costs and benefits associated with the plant and all system elements to calculate the economic EIRR.
• Financial projections for the Adadle water system, including income statement, balance sheet, and statement of cash flows for 10 years.
• Financial metrics such as net present value (NPV), internal rate of return (IRR), and profitability ratios. Consider strategic factors, program objectives, stakeholder interests, and long-term strategic planning.
• Gather any additional data needed to validate assumptions

Task 5 – Illustrative Activities (up to 15 additional days of LOE*)

This task covers but is not limited to the following illustrative activities:

·       Recalibrate and rerun the financial model should the need arise to revisit water system designs due to cost considerations;

·       Support discussions with the Regional Water Bureau and other local authorities about any financial viability gap and potential options;

·       Other tasks as agreed with the CM3 team.

 *The consultant must have written approval to proceed with this work. Activation of this contingency LOE will require a mutually agreed upon schedule and outlined deliverables in advance of any work initiated.

 Consultant Deliverables:

The Consultant will deliver on the following:

Task 1 Deliverables: 

·        Meeting summary of meeting with Feasibility Design Report consultant to coordinate population projections and demands (Task 2 of the Feasibility Design Report Scope of work)

·        Presentation and training on the affordability and willingness-to-pay survey methodology, questionnaire, and guidance note. The consultant is expected to collaborate with the CM3 MEL team in developing the training. See Section D for further details.

·        Support the development of the market demand forecast report, including water demand, population growth trends, and customer preferences in Adadle town.

·        Communication with Mercy Corps and the Lead Economic and Financial Analyst via periodic telephone calls and meetings 

·        Contribute to monthly and quarterly reports. 

Task 2a Deliverables:

§  Meeting summary of meeting with Feasibility Design Report consultant to coordinate Engineer’s estimate of probable construction cost, design life and O&M costs for each project element (Task 4 of the Feasibility Design Report Scope of work)

• Financial model
• Support and provide input on the cost considerations evaluation report

 Task 3 Deliverables:

• Support and provide input on the risk and regulatory assessment report, identifying risks, necessary approvals, licenses, compliance measures, and risk mitigation strategies.

Task 4 Deliverables:

• Economic analysis report, including financial projections, comparative analysis using financial metrics, and consideration of strategic factors and stakeholder interests.
• Support development of a two-to-three-page brief summarizing the project, learning, and findings

·       Section B. Level of Effort

·        The total level of effort for Tasks 1-4 is 20 days. 

·       Section C. Travel

·        This assignment may require in-country trip(s) to Somali Region. Travel and per diem costs will be the responsibility of Mercy Corps and any required travel will be arranged by the Mercy Corps team. The consultant must acquire prior approval before incurring any travel-associated costs.

·       Section D. Schedule

·        Much of the work, Deliverables 2,4 and 5, are dependent upon information to be developed as part of the Feasibility Design Report, which is set to begin in the coming weeks.  Once the schedule for that has been completed, notice to proceed will be issued for this scope of work. The consultant shall complete this scope of work within 60 working days of notice to proceed. Working days is defined by the working week – Monday through Friday.       

Timeframe / Schedule: 

Section E. Qualifications

Educational Background:

·        A minimum of a Bachelor's degree in economics, finance, public policy, or a related field. A Master's degree is preferred.

Demonstrated Experience:

·        At least 5 years of relevant professional experience in financial modeling, economic analysis, and policy assessment.

·        Proven expertise in conducting market demand forecasting, cost-benefit analysis, and economic assessments.

Survey Implementation and Data Collection:

·        Experience in providing technical guidance for data collection and management, including knowledge of best practices in survey research.

Financial Modeling and Analysis:

·        Strong financial modeling skills, including the ability to prepare comprehensive financial models for cost recovery and viability gap funding estimation.

·        Proficiency in financial analysis, including NPV, IRR, and other relevant financial metrics.

Policy Analysis and Risk Assessment:

·        Experience in conducting risk assessments and regulatory analysis.

·        Familiarity with water sector regulations and public-private partnerships (PPPs) compliance processes.

Communication and Presentation Skills:

·        Excellent written and oral communication skills, including the ability to present complex data and analysis in a clear and concise manner.

·        Experience in conducting training sessions, workshops, or presentations.

Software Proficiency:

·        Proficiency in relevant software and tools for financial modeling, data analysis, and reporting.

·        Knowledge of data management and analysis software.

Collaboration and Teamwork:

·        Ability to work collaboratively within a multidisciplinary team, including coordination with the Mercy Corps RIPA Crisis Modifier 3 team, Lead Economic and Financial Analyst, and other stakeholders.

·        Strong interpersonal skills and cultural sensitivity when working in diverse environments.

Project Management:

·        Demonstrated ability to manage tasks, meet deadlines, and adapt to changing project needs.

·        Effective project management skills, including attention to detail.

 The Consultant will report to:Kefyalew Abera Fite, RIPA CM3 Team Lead and Kate Edelen, Global Water Security Director

 The Consultant will work closely with:

Water Security Team Lead, Global Water Security Director, the Water Supply Services Specialist, Monitoring, Evaluation, HQ Infrastructure Team and Learning (MEL) Team, and Communications unit. 

Required Experience & Skills:

Required Experience & Skills:

The preferred consultant should have a team of experts with the following experiences 

Diversity, Equity & Inclusion
Achieving our mission begins with how we build our team and work together. Through our commitment to enriching our organization with people of different origins, beliefs, backgrounds, and ways of thinking, we are better able to leverage the collective power of our teams and solve the world’s most complex challenges. We strive for a culture of trust and respect, where everyone contributes their perspectives and authentic selves, reaches their potential as individuals and teams, and collaborates to do the best work of their lives. 

We recognize that diversity and inclusion is a journey, and we are committed to learning, listening and evolving to become more diverse, equitable and inclusive than we are today.

Equal Employment Opportunity
We are committed to providing an environment of respect and psychological safety where equal employment opportunities are available to all. We do not engage in or tolerate discrimination on the basis of race, color, gender identity, gender expression, religion, age, sexual orientation, national or ethnic origin, disability (including HIV/AIDS status), marital status, military veteran status or any other protected group in the locations where we work.

Safeguarding & Ethics

Mercy Corps team members are expected to support all efforts toward accountability, specifically to our stakeholders and to international standards guiding international relief and development work, while actively engaging communities as equal partners in the design, monitoring and evaluation of our field projects. Team members are expected to conduct themselves in a professional manner and respect local laws, customs and MC's policies, procedures, and values at all times and in all in-country venues.