Finance for Peace initiative and FAO – Early-stage feasibility study on food storage bond in pilot countries

A. About Finance for Peace and Food and Agricultural Organization of the United Nations

Through leveraging and creating new partnerships of on the ground community engagement and political support, Finance for Peace aims to scale what we call “Peace Finance” – investment that has an intentional and positive impact on peace while promoting economic development, job creation and better livelihoods. Peace-positive investment generates mutual benefits of reduced risks for investors and communities and can achieve both bankable and peaceful outcomes.

Finance for Peace works with partners to catalyse a market for peace-positive investment. We work collectively to create standards, market intelligence and partnerships across sectors to build trust, share knowledge and establish networks.

Peace-positive investment encompasses different asset classes such as Peace Bonds or Peace Equity or similar structures, across a range of sectors. In order for Peace Bonds and Peace-Equity like structures to take flight, we need commonly agreed standards and guidance that the market can trust and use, as well as new partnerships and knowledge.

Finance for Peace brings together investors, private sector actors, development finance institutions and other development actors, governments, peacebuilders, civil society and communities, to identify innovative solutions that can bring true additionality to investors, as well as more inclusive development.

Finance for Peace is supported by the German Federal Foreign Office (GFFO) and builds on feasibility research supported by the UK Foreign and Commonwealth Development Office (FCDO) on a new sustainable investment category called Peace Bonds. Finance for Peace has been incubated by Interpeace, an international peacebuilding organisation that has worked on conflict resolution and peacebuilding throughout Africa, the Middle East, Asia, Europe and Latin America for 30 years.

The Food and Agriculture Organization (FAO) is a specialised agency of the United Nations that leads international efforts to defeat hunger.

The goal of the FAO is to achieve food security for all and make sure that people have regular access to enough high-quality food to lead active, healthy lives. With 195 members – 194 countries and the European Union – FAO works in over 130 countries worldwide.

For more information on Interpeace, the Finance for Peace initiative and the FAO, please see our websites:

https://financeforpeace.org/; https://www.interpeace.org/

About FAO | FAO | Food and Agriculture Organization of the United Nations

B. Conceptual background and description of the assignment

The work would seek to articulate a pre-feasibility study for a world-first food security Peace Bond. The study would build on significant scoping research that has been conducted by Interpeace’s Finance for Peace initiative. The scoping research that has been conducted to date was catalysed by discussions between Interpeace and FAO approximately 12 months ago. This outlined food storage needs in the horn of Africa related to FAO’s joint IGAD-WFP ‘One million grain stores in the IGAD region’ initiative.

The research conducted to date establishes basic business diligence and business model logistics of scaled up food storage approaches are possible and highly opportune. This work highlights the financial parameters of a potential food storage bond that could scale up investment in food storage in the IGAD or Horn of Africa.

This work now needs to be built on to establish geographic and market specificity as well further description of the peacebuilding and political work required to make scaled up food storage possible. The purpose of the pre-feasibility study would be to articulate the parameters of a detailed study that could then be taken to full feasibility via technical assistance to be provided by a third-party actor, ideally the African Development Bank (AfDB) or another multilateral development bank. A subsequent full feasibility study would detail a project plan, political and multilateral engagement and full articulation of programme design and financial structuring.

This is required in order to take a Peace Bond to scale, likely to be in the order of USD 150 -300 million. The study should outline the key food storage facilities that a use-of-proceeds bond would finance, including investments at differing levels of scale, considering the business diligence work that has been conducted to date. The study will focus on key geographies in Kenya, Uganda, or Ethiopia, and specifically on cereal and grain storage. It is estimated the technical assistance required for such a concept would cost approximately USD 1-2million. Hence this pre-feasibility study is a key step to catalysing subsequent stages of the possible project.

The pre-feasibility study would have two interrelated and interdependent facets to be delivered coherently in one report:

1. Detail, within key geographies in either Kenya, Uganda, or Ethiopia for scaled up food storage facilities identified by the financial analysis, identifying key grains and market access logistics. This part must incorporate considerations for community impact and potential to enhance local stability.
   1. This analysis must also consider the difference in food storage capacity between pastoralist versus agricultural landscapes, and aim towards identifying solutions to bridging this gap whilst still minding possible areas of yield.
   2. Considering the combination of highly bankable large scale grain storage facilities, with grant-based adaptation programming to balance conflict sensitivity concerns of lack of equal distribution of resources between farmer and agropastoral and pastoral communities.
2. Mapping of key farmer cooperatives and national food transport/logistics agents and companies, with a focus on their capacity for enhancing food security and economic resilience in the region.
3. Proposing technical solutions that encourage collaboration between stakeholders and improve inventory systems, considering the broader impact on local peace and stability.
4. Conducting desktop conflict analysis and political economy analysis identifying key barriers to cooperation, conflict sensitivity risks and peace responsiveness opportunities within the context of food storage opportunities identified by food expert.
   1. Crucial to this will be a mapping and analysis of the various stakeholders/interest groups, as well as motivations and possibly historical contribution to conflict
5. Mapping of socio-economic and political economic dynamics as they relate to food storage industry, post-harvest loss and farmer cooperation. Accompanied by an analysis of how such dynamics affect the food storage industry, emphasizing technical solutions that promote cooperation and reduce post-harvest loss
6. Proposing and outlining both direct dedicated peacebuilding actions as well as indirect peacebuilding approaches required to ensure the success of food storage facilities and/or agro-industry adaptation programming, forming part of the portfolio approach of the proposed Peace Bond. This could include recommendations for conflict-sensitive approaches to managing these facilities, promoting trust among farmers and cooperatives and ensuring equitable access and benefit-sharing.
7. Incorporating considerations for community impact and potential to enhance local stability.

The study would be based on interviews with key experts, select community stakeholders, desktop research of existing sources and be validated via a field visit with key actors. The study will provide key recommendations for next steps and be disseminated with other key regional and multilateral development bank partners.

C. Tasks

This would be based on the following key tasks and deliverables:

It is envisaged the work would be conducted by two different researchers/experts with distinct areas of expertise – one technical food storage expert and one peacebuilding expert with geographic expertise in some combination of Kenya, Ethiopia, Uganda. Their work would be split into two areas (technical food storage expert in work area A and peacebuilding expert in work area B) In spite of the differing work areas, it is crucial that they are mutually reinforcing, creating a cohesive report as opposed to being treated as strictly parallel workstreams. The research will therefore be expected to integrate the two work areas with a collaborative framework for the experts to share insights and findings, resulting in technical solutions that are informed by peacebuilding considerations and vice-versa.

1. Political-economic and technical analysis and mapping pertaining to (work area A):
   1. Understanding key and optimal geographies for scaled up post-harvest food storage and connected transport and logistical requirements. Including a strong consideration of possibilities and solutions in nomadic/pastoral lowlands so as to open an avenue for addressing the historical inequalities between food production regions.
   2. Informed by preliminary peacebuilding insights, to guide the selection of highly specific geographies, considering areas where enhanced food storage, agropastoral resilience interventions can also contribute to conflict mitigations (work area B)
   3. Mapping of key existing food storage infrastructure and industry in relevant geographies and identification of technical, logistical and investment gaps based on key informant interviews and existing literature.
      1. Including a peace lens to the infrastructure mapping, specifically looking for how these facilities can impact local peace dynamics (work area B)
2. Desktop conflict analysis pertaining to (work area B):
   1. Political economy and social dynamics of farmer cooperation in the relevant specific geographies based on key informant interviews and desktop research
   2. Mapping of key socio-political barriers to cooperation on food storage.
   3. Mapping of conflict sensitivity risks and peace responsiveness opportunities.
      1. With a focus on opportunities where improved food storage and logistics can directly support peacebuilding efforts (informed by work area B)
3. Stakeholder analysis of potential future partners, as well as spoilers (both work areas A and B)
   1. Mapping of key civil society, peacebuilding and local/regional government representatives. (work area B)
   2. Mapping of key potential local farmer cooperatives, networks, private sector actors engaged in food storage sector and identification of food transport/logistical companies/agents. (work area A)
   3. Mapping of key intergovernmental, multilateral and regional development banks. (work area B)
   4. Organising findings into a shared framework that outlines stakeholders’ influence on both the technical feasibility of food storage solutions and the socio-political landscape
4. Key informant interviews with early phase critical stakeholders. (both work areas)
   1. Interview questions to cover both technical and peacebuilding aspects in an integrated manner
5. Field visit/s in relevant geography and/or regional hub once specific geographies are identified between Kenya, Uganda, or Ethiopia. (both work areas). Ideally field visits to be conducted together between experts, so as to organically inform one another’s workstreams as well as provide better insights to integration. If not done together, a workplan for in-depth post-field briefings is needed.
6. Outline of early programme design and programmatic intervention scope and parameters
   1. Development of early-phase high-level theory of change and investment peace strategy aligned with the Peace Finance Impact Framework (PFIF) developed by Finance for Peace. The theory of change must also be based upon the technical aspects of research related to food storage, as well as peacebuilding elements.(work area A & B)
   2. Identification of key peacebuilding and technical market access and other food storage supply chain logistics required outside of direct food storage facilities (work area A)
   3. Proposal of options for high-level technical programmatic interventions that would encourage greater cooperation between key agents, including farmers, civil society (work area A)
7. Regular joint reporting and correspondence of progress on a uniform template to ensure consistency and the merging of insights (both work areas)
   1. To designated Interpeace and FAO focal points
8. Final pre-feasibility report containing the aforementioned key components including executive summary and recommendations for key next steps. The executive summary should highlight how recommendations for food storage infrastructure can contribute to peace, ensuring that the link between food and security and peace is clear and actionable. (both work areas).

D. Timeframe and Deliverables

The research will last approximately 47 days maximum per researcher, to be completed by the end of Q3 2024. The exact allocation of days corresponding to the deliverables specified in section C will be jointly determined by the Finance for Peace team and the successful researcher(s) during the kick-off meeting at the beginning of the assignment.

E. Reporting and feedback

The tasks listed above are to be performed in an interactive and iterative process in collaboration with the Finance for Peace initiative.

The successful researcher(s) will work under the direction of Daniel Hyslop, Head of Research and Senior Peacebuilding Advisor at Interpeace and also report to designated focal point at FAO.

F. Budget

As stated in section D above, the full-time number of workdays for the above dates is a maximum of 47. The daily rate is to be determined based on the experience of the researcher(s).