USAID Africa Trade and Investment Partnerships Opportunity:
USAID Continental Services – Large Scale Transactions APS Addendum
Issuance date: October 18, 2023
Closing date for submission of concept papers: July 31, 2024 5:00PM EDT
Overview of ATI:
USAID established the Africa Trade and Investment (ATI) Program to mobilize enterprise-driven solutions that increase trade and investment and contribute to job creation in Africa. The USAID Africa Bureau (AFR) and Prosper Africa Secretariat are currently inviting concepts from private sector partners who can facilitate and close transactions of $150 million or more in a 12–25-month time frame to financial closure across the African continent.
Overarching Priorities for the Large-Scale Transactions Facility:
Investor appetite for returns and diversification in developing world assets is strong, however, investors require technical and financial support to mitigate risks and close deals. The ATI program is designed to provide this catalytic support through interventions such as US investor relationship deepening with African asset managers and local asset owners; diligence, structure and close transactions; and strengthen local capacity and ecosystems. ATI also looks for opportunities to partner with USG interagencies, such as the US Development Finance Corporation, to leverage USG efforts.
Under this APS Addendum, ATI is seeking private sector partners who can facilitate and close transactions of $150 million or more in a 12–25-month time frame to financial closure. “Transactions” will be strictly defined as single facilities, funds or deals and should not include a portfolio of disparate transactions with their own separate timelines to closure. In all cases, offerors should already have secured a written mandate to execute the transaction and provide evidence of that or be the sponsor or fund manager of record. In all cases, sponsors or fund managers should be matching or exceeding the resources they request through their own equity capital or that of other private investors, local governments, or sponsors.
There is a strong preference for transactions linked to climate and resilient infrastructure, including critical minerals, adaptive transportation, natural capital, renewable energy and clean tech energy. Transactions must have a significant US Nexus (e.g., US company is the transaction or financial sponsor, significant provider of services, or the project will result in an increase in supply of trade or investment between the US and Africa in the near term, or the capital raise will target a significant percentage of US investors/financiers).
Success will be measured by the partner’s ability to facilitate and mobilize capital from local and U.S.-based asset owners or managers into African projects. Compelling proposals will include the offeror’s previous experience, institutional capacity, and team to advance strategic high-value opportunities and close deals. The partner should indicate what milestones within the capital raise process/cycle they can realistically achieve within the activity timeframe and very clearly lay out an achievable progression towards financial close, noting sources and uses of funds from both ATI and their own sources along the way. Identified approach(es) and structure(s) should be in line with industry best practices and demonstrate suitability and realistic assumptions in line with raising capital in the current investment environment.
Illustrative Interventions for the Activity under ATI:
- First-loss or junior equity to de-risk a single facility or fund encompassing a portfolio of at least $150 million worth transactions or a single large-scale transaction of at least $150 million.
- Technical assistance alongside sponsor capital to de-risk a single facility or fund encompassing a portfolio of at least $150 million worth transactions or a single large-scale transaction of at least $150 million. Technical assistance can be transaction advisory services to bring large-scale transaction(s) to close, e.g., advise on structure and approach, conduct due diligence and risk assessment exercises, develop pitch decks and financial projections, map and engage targeted investors and financiers, support negotiations on terms and conditions of financing.
In all cases, transaction dependencies on the deployment of other forms of de-risking tools from other public or private entities should be clearly laid out with appropriate timelines to secure them.
Illustrative Milestones for the Facility under ATI:
- Letter of Engagement: For transaction facilitators, the partner should have already secured a specific letter of engagement with the selected transaction sponsor to demonstrate their commitment. It could include, among others, the Scope of Work with the proposed institutions, key performance metrics and targets, and requisite NDA (if applicable), M&E, communications, and other requirements. A copy of the fully executed letter of engagement signed by all parties will be requested as evidence that services are formally initiated to support the institution(s) in achieving the proposed interventions, and the partner would develop individual workplans reflective of the proposed SOW and associated performance metrics.
- Engagement Deliverable Documents: The partner may submit periodic progress reports and deliverables to demonstrate progress toward activity objectives. Deliverables may include commitment letters, technical assistance and transaction advisory services outputs such as pitch decks, financial projections, and investor engagements, among others.
- Transaction Close Report: At transaction close, the partner will prepare a transaction closeout report and secure letters of confirmation and commitment from the investors and financiers, with supporting documentation such as term sheets, shareholders agreements, Investment Committee resolutions or other supporting documents.
In addition to milestones agreed upon, the partner will provide updates on routine check-in calls and via email as required by ATI and USAID. The meeting cadence will be established during activity kickoff.
Eligible Applicants:
To be eligible under this facility, potential partners must meet the following qualifications:
- Strong and relevant networks and connections with international investors of varying types, e.g. institutional investors globally, in the United States and Africa.
- Demonstrated and robust access to transactions and other relevant opportunities with potential impact in sub-Saharan Africa
- Expertise in climate and resilient infrastructure sectors
- Identification of relevant, viable institutional investor commitments and/or transactions that meet the criteria of U.S. and global institutional investors and advance development goals of interest to USAID
- As relevant, ability to leverage the financial expertise and depth of the US and global capital markets and financial sectors in emerging markets
- As relevant, demonstrated capacity for advising on and structuring complex medium and large- scale investments in Africa
- As relevant, ability to form partnerships with and leverage the risk mitigation tools of other development finance institutions
- Knowledge of the landscape of U.S. government priorities, tools, and relevant actors
- Staff with deep local knowledge and experience in sub-Saharan Africa
Within their concept paper, applicants must clearly indicate the concept & the objectives it will cover, additionality & the value of the partnership, the ability to leverage private sector resources, assets, capabilities and expertise and public sector resources, both local and global, and their corporate capability, including prior history of successful operations/financing.
Eligible Activities:
“Transactions” will be strictly defined as single facilities, funds or deals and should not include a portfolio of disparate transactions with their own separate timelines to closure. In all cases, offerors should already have secured a written mandate to execute the transaction and provide evidence of that or be the sponsor or fund manager of record.
Offerors should propose a timeline they believe is feasible to complete the advisory services as requested above, not to exceed 25 months.
Current Funding:
It is anticipated most support under this activity will be in the range of $500,000-$5,000,000 although other size awards will be considered. As of the date of this release (above), the current ceiling for awards is not fixed.
Information on Applying:
To apply for funding interested applicants must submit a concept note via the ATI intake site. This concept note will include the technical details of the proposed project, an estimated cost of the activity, and details on the applicant’s company and experience. Applications will be accepted on a rolling basis. For more information and relevant deadlines, we encourage all interested applicants to visit the entire ATI Annual Program Statement (APS) here. All applicants are asked to take specific note of the long-term reporting requirement which requires all award recipients to provide impact data through the end of 2026. Issuance of funding is conditional on this requirement.