Selection of A Consultant Firm to Recommend A Framework for

Management, Utilization and Accounting Of Financial Resources

Terms of Reference (TOR)

Introduction

The Infrastructure Development Company Limited (IDCOL), a non-bank financial institution, was
incorporated in Bangladesh on May 14, 1997 as a government owned public limited company
under the Companies Act 1994. The Company was licensed by Bangladesh Bank as a non-bank
financial institution (NBFI) on January 5, 1998. The registered office of the Company is located
at UTC Building, Level-16, 8 Panthapath, Kawranbazar, Dhaka-1215.

Since inception, IDCOL is playing a major role in bridging the financing gap for developing
medium and large-scale infrastructure and renewable energy projects in Bangladesh. After a
decade, the company now stands as the market leader in private sector energy and
infrastructure financing in Bangladesh. The primary objective of the company is to promote
significant participation of the private sector in investment and operation, ownership and
maintenance of new infrastructure facilities.

Background

Private Sector Infrastructure Development Project (PSIDP):

IDCOL was created by the Government of Bangladesh (GOB) with assistance from International
Development Agency (IDA), a member of the World Bank Group, through its PSIDP under IDA
Credit No. 2995-BD pursuant to the following agreements:

 Development Credit Agreement (DCA) executed between GOB and IDA on November 17,
1997;
 Project Agreement (PA) executed between IDA and IDCOL on the same date; and
 An Agency and Administration Agreement (AAA) executed between the GOB and IDCOL on
January 25, 1998.

Under the PSIDP project, GOB made available to IDCOL an amount of USD225 million funds
sourced from the IDA for investing in infrastructure projects owned and maintained by the
private sector. Out of the allocation, IDCOL as a fund manager of the GOB, extended debt
financing of USD80 million to Meghnaghat Power Ltd., a 450 MW power plant project under the
PSIDP project. The terms of the financing are as follows:
 Particulars Senior Loan Subordinated Loan
Loan amount USD20 million USD60 million
Tenor 16 years 23 years
Grace period 2 years 8 years
Interest rate 8.80% p.a. 9.025% p.a.
Repayment 6-monthly 6-monthly
Financial closing 11 April 2001 11 April 2001

As required under the relevant agreements, IDCOL has been maintaining 2(two) Repayment
Accounts, (i) Repayment account in US Dollar, and (ii) Repayment account in Bangladesh Taka,
with Bangladesh Bank to receive reflows (both interest and principal) from the noted
investment.

Rural Electrification and Renewable Energy Development Project (REREDP):

The GOB sourced fund for IDCOL from IDA, through its REREDP under IDA Credit No. 3679-BD
pursuant to the following agreements:

 Development Credit Agreement (DCA) executed between GOB and IDA on July 16, 2002;
 Project Agreement (PA) executed between IDA and IDCOL on the same date; and
 An Agency and Administration Agreement (AAA) executed between the GOB and IDCOL on
October 2, 2002.

Under the RERED project, GOB made available to IDCOL an amount of USD54 million funds
sourced from the IDA for extending refinancing in the renewable energy projects. IDCOL, as the
implementing agency of the GOB, extended refinancing of equivalent BDT of USD54 million to
Participating Organizations (POs) for installation and maintenance of Solar Home Systems
(SHSs) in off-grid areas under the project. The terms of the refinancing are as follows:

Particulars Terms Remarks

Loan amount BDT 3,720 million USD54 million equivalent
Tenor 10 years From the date of disbursement
Grace period 2 years From the date of disbursement
Interest rate 6% p.a. On reducing disbursed and outstanding balance
Repayment 6-monthly On level principal method

As required under the relevant agreements, IDCOL has been maintaining a Repayment Account
in Bangladesh Taka, with Bangladesh Bank to receive reflows (both interest and principal) from
the noted investment. According to the DCA and AAA under the REREDP, proceed in BDT (97%
of interest and 100% of principal) are to be deposited in the Taka denominated Repayment
Account (while 3% of interest is IDCOL fees).
The “Repayment Account”, under both the projects, is an account established by, and operated
as per terms and conditions to be stipulated, including those defined in the AAA for this
purpose. The account is designated to receive all principal repayments and interest proceeds
from loans made by IDCOL under the PSIDP and REREDP. Although the funds in the account
belong to the GOB, these funds can only be used for the following three purposes:

 To meet IDA’s debt service obligations.

 Support IDCOL’s operating expense, if necessary.
 Make loans to project companies in the future.
The DCA and the AAA under these projects provide that after meeting the Government’s debt
service obligations, the balance in the repayment accounts shall be used by IDCOL to meet its
operating expenses and future lending operations, subject to approval of the Government. The
AAA also states that funds credited to the repayment accounts will be exclusively managed by
IDCOL and shall not form part of the Government’s normal budgetary resources. The Finance
Division of the Ministry of Finance also issued an operational guideline in this regard.

Presently, on obtaining authorization from the Ministry of Finance, IDCOL has been on-lending
the surplus fund from the reflows deposited into the repayment accounts after servicing debt
to IDA. Fund drawn in this way and on-lent to projects is being accounted for in the books of
IDCOL as borrowing from the GOB.

As instructed by the GOB, represented by Economic Relations Division of Ministry of Finance,

IDCOL intends to engage a consultant firm to recommend a framework for management,
utilization and accounting of reflows deposited into the repayment accounts under the World
Bank funded projects, i.e. PSIDP and REREDP.

Objective of this Assignment

The provision for on-lending of funds deposited in the Repayment Accounts from the reflows of
the loans extended under PSIDP and REREDP was incorporated to meet IDCOL’s funding
requirement and thus, assist in fulfilling its core objective of bridging the financing gap for
developing medium and large-scale infrastructure and renewable energy projects in
Bangladesh. The objectives of this assignment are to:

 review the provisions under all relevant agreements, constitutional documents of IDCOL
and present practice in using the funds from the repayment accounts as well as legal
provisions and practices under GOB regulations; and
 recommend a framework for management, utilization and accounting of the reflows
deposited into the repayment accounts under the PSIDP and REREDP.
Scope of Work

The consultant firm will specifically examine, but not limited to, the following areas in light of
the genesis for creating IDCOL by the GOB:

 The role of repayment accounts in bridging the financing gaps of IDCOL;

 Accounting treatment of the transactions under the repayment accounts;
 Provisions under DCA, PA and AAA of the projects;
 Operational guideline of the repayment accounts;
 The terms and conditions of the fund sourced by IDCOL from the reflows deposited in
the repayment accounts;
 Constitutional documents of IDCOL; and
 Meetings and interviews with relevant officials at Ministry of Finance (ERD & Finance
Division), the Word Bank and IDCOL.

Deliverables and timeline for reporting

The principal deliverables and timeline for reporting are as follows:

 A draft report containing recommended framework for management, utilization and

accounting of the reflows deposited into the repayment accounts under the PSIDP and
REREDP should be furnished by the consultant firm within 20 (twenty) working days
from their appointment;
 After review and comments, if any, from Ministry of Finance and IDCOL, the consultant
firm will furnish the final report.

Terms and conditions

 The executing agency and the Client for the purpose of this assignment is IDCOL;
 The report should be acceptable to Ministry of Finance and IDCOL;
 In addition to fees, an estimate for out of Pocket Expenses to be quoted, this will be
reimbursed at actual but not exceeding the estimated amount.

Area of Activity

i) IDCOL Head Office, UTC Building, Level-16, 8 Panthapath, Kawran Bazar, Dhaka-1215;
ii) Economic Relations Division, Ministry of Finance, Sher-e-Bangla Nagar, Dhaka;
iii) Finance Division, Ministry of Finance, Bangladesh Secretariat, Dhaka;
iv) The World Bank, Dhaka Office, Sher-e-Bangla Nagar, Dhaka
Required key staff

The minimum required experience of the key professional staff for the proposed assignment is:

Team Leader: Professional degree in finance/accounting, e.g. CA, CPA, CFA, CMA, ACCA, etc.,
with minimum 10 (ten) years of professional experience including financial advisory.

Specialists (2 Nos.): Professional degree in finance/accounting, e.g. MBA, CA, CPA, CFA, CMA,
ACCA, etc., with minimum 5(five) years of professional experience including financial advisory,
rating services, auditing, etc.

Besides the above key staff, whose CVs will only be evaluated, the consultant will require
additional inputs from other staff (legal opinion, data collection, analyses of data, drafting,
etc.). Accordingly the consultant firm is expected to mobilize number of teams to complete the
task within the assigned period.

Payments

Payments would be made in phases on submission of the reports, as required under this TOR
and acceptance thereof by IDCOL.

Qualification and Short-listing:

The firms that meet the following criteria are encouraged to participate:
 Companies and firms registered with appropriate authorities
 Have minimum 10 (Ten) years of general experience
 Have completed minimum 03 (Three) similar assignments in last 03 (Three) years
 Have yearly minimum turnover about BDT 5,000,000.00 (Fifty Lac Taka Only)
The short-listing criteria are:
a) Experience of the firm
b) Experience of similar tasks/assignments
c) Financial Capacity of the firm
d) Availability of appropriate experience and professional qualifications among Applicant’s
staff

Consultants may associate with other firms in the form of a joint venture or a sub consultancy
to enhance their qualifications. To associate, every partner of the association individually
requires meeting the following criteria:
 Have legal capacity to form association
 Have minimum 05 (Five) years of general experience
 Have completed minimum 02 (Two) similar assignments in last two years
 Have yearly minimum turnover about BDT 5,000,000.00 (Fifty Lac Taka Only)
 At least one key expert from any partner
 Infrastructure Development Company Limited (IDCOL)
Level-16, UTC Building, 8 Panthapath, Kawran Bazaar, Dhaka
Telephone No.: 9102171-8, Fax No.: +880-2-8116663
REQUEST FOR EXPRESSIONS OF INTEREST
(CONSULTING SERVICES– FIRMS SELECTION)

Assignment Title: Selection of firm to recommend a framework for management, utilization and accounting of
financial resources
Reference No. IDCOL/Company/01/2014, Date: 08/06/2014

As instructed by the GOB, represented by Economic Relations Division of Ministry of Finance, IDCOL intends to
engage a consultant firm to recommend a framework for management, utilization and accounting of reflows deposited
into the repayment accounts under the World Bank funded projects, i.e. Private Sector Infrastructure Development
Project (PSIDP) and Rural Electrification and Renewable Energy Development Project (REREDP).

The consulting services (“the Services”):

The consultant firm will specifically examine, but not limited to, the following areas in light of the genesis for creating
IDCOL by the GOB:

 The role of repayment accounts in bridging the financing gaps of IDCOL;

 Accounting treatment of the transactions under the repayment accounts;
 Provisions under DCA, PA and AAA of the projects;
 Operational guideline of the repayment accounts;
 The terms and conditions of the fund sourced by IDCOL from the reflows deposited in the repayment
accounts;
 Constitutional documents of IDCOL; and
 Meetings and interviews with relevant officials at Ministry of Finance (ERD & Finance Division), the Word
Bank and IDCOL.
IDCOL now invites eligible consulting firms (“Consultants”) to express their interest in providing the Services.
Interested Consultants should provide information demonstrating that they have the required qualifications and relevant
experience to perform the Services. The firms that meet the following criteria are encouraged to participate:

 Companies and firms registered with appropriate authorities

 Have minimum 10 (Ten) years of general experience
 Have completed minimum 03 (Three) similar assignments in last 03 (Three) years
 Have yearly minimum turnover about BDT 5,000,000.00 (Fifty Lac Taka Only)

The short-listing criteria are:

a) Experience of the firm

b) Experience of similar task/assignment
c) Financial Capacity of the firm
d) Availability of appropriate experience and professional qualifications among Applicant’s staff
The attention of interested Consultants is drawn to paragraph 1.9 of the World Bank’s Guidelines: Selection and
Employment of Consultants (“Consultant Guidelines”), setting forth the World Bank’s policy on conflict of interest.

Consultants may associate with other firms in the form of a joint venture or a sub consultancy to enhance their
qualifications. To associate, every partner of the association individually requires meeting the following criteria:

 Have legal capacity to form association

 Have minimum 05 (Five) years of general experience
 Have completed minimum 02 (Two) similar assignments in last two years
 Have yearly minimum turnover about BDT 5,000,000.00 (Fifty Lac Taka Only)
 At least one key expert from any partner

Consultant will be selected in accordance with the Fixed Budget Selection (FBS) method set out in the Consultant
Guidelines and contract will be lump-sum based.

Further information can be obtained at the address below during office hours- 10:00 AM to 06:00 PM (BST) and the
interested firm may visit www.idcol.org for detail ToR of this assignment.

Expressions of interest (one hard & one Soft) copy must be delivered in a written form to the address below (in person,
or by mail, or by e-mail) by 30 June 2014 at 06:00PM (BST).

Md. Maidul Islam

Officer, Procurement
Infrastructure Development Company Limited
Level-16, UTC Building, 8 Panthapath,
Kawran Bazar, Dhaka-1215