Non-Payment Insurance Services (Services)
Request for Expressions of Interest

Created in 1977, PROPARCO is the private sector financing arm of Agence Française de Développement (AFD). PROPARCO’s mission, being a catalyst for private investment in developing countries, targets growth, sustainable development and the achievement of the Sustainable Development Goals (SDGs).
PROPARCO plays a key role in AFD Group and the French cooperation mechanism: financing and supporting projects led by companies and financial institutions in developing and emerging countries (DAC countries) . PROPARCO finances operations which aim at being economically viable, socially equitable, environmentally sustainable and financially profitable.
Complete information on PROPARCO is available at www.proparco.fr/en.

PROPARCO aims at deploying mobilisation of the private credit insurance market through the subscription of non-payment insurance on portions of PROPARCO-originated credit transactions over a wide range of sectors and geographies. The contemplated instrument is NPI i.e. Non-Payment Insurance (NPI).
An NPI framework agreement setting out the terms and conditions on which all participating insurers will cover transactions will be negotiated with a selected panel of insurers as explained further below. Individual NPI policies will be concluded on a transaction-by-transaction basis between PROPARCO and participating insurers wishing to cover each transaction selected by PROPARCO. Depending on the risk appetite of insurers, NPI policies will cover a variety of sectors, tenors and transaction structures.

The purpose of this Request for Expressions of Interest is to select a panel of private insurance partners to work with PROPARCO for NPI.
Insurers selected to particpate in the NPI framework agreement will be made up of two groups:

(i) The selected insurers must meet the eligibility criteria

(ii) Of those meeting the eligiblity critera, the selection committee will select, based on the selection criteria specified further below, 2 groups of insurers to join the panel:

a. a 1st group (Group 1) of 5 insurers will participate in the negotiations of the NPI framework agreement. The 5 highest scoring insurers will be selected into Group 1;

b. a 2nd group (Group 2) of insurers will be invited to join the framework agreement once agreed with Group 1. All insurers reaching a score at or above 40 points, and not already part of Group 1, will be selected into Group 2;

(iii) Insurers meeting the eligibility criteria but with a score from the selection criteria below 40 points will not be eligible to participate in the NPI framework agreement or to provide the Services.

The panel will eventually consist of insurers from Group 1 and Group 2 that have agreed to the terms and conditions of the NPI framework agreement, and agree. to insure transactions through an insurance broker. PROPARCO will then from, time to time, request insurers who are parties to the NPI framework agreement to submit their offers for NPI cover in respect of specific credit transactions it will present. A NPI policy can be signed at inception of the underlying transaction (primary) or anytime after the underlying transaction is signed (secondary).
For each individual transaction proposed for insurance, PROPARCO will each time select the most suitable offer(s).

The NPI framework agreement will have an initial duration of 4 years. In that period, PROPARCO expects to contract non-payment insurance cover for a total notional amount estimated between 600M EUR eq. and 1BN EUR eq.

This Request for Expressions of Interest is open to insurance companies, see further details below. Any person that submits a response to this Request for Expressions of Interest (Applicant) shall submit only one application. For Applicants who have the ability to provide cover using multiple securities (e.g. Lloyd’s Syndicate capacity plus company paper) please submit both options under one application, detailing, where necessary, in the eligibility criteria and selection criteria questions 1 and 4 - 8 any differences between each (e.g. ratings applicable to each security, tenor capabilities etc). For the avoidance of doubt, if submitting more than one security, the selection criteria questions 2 and 3 should be answered as a total amount.

Eligibility and selection criteria are specified in the following paragraphs of this Request for Expression of Interest. Applicants must provide information evidencing that (i) they meet the eligblity criteria; and (ii) are qualified and experienced to perform the Services by including information to address the selection criteria set out below. For that purpose, documented evidence of recent and similar services shall be submitted with the Applicant’s response.

Eligibility criteria
First, the selection will be carried out based on consideration of following eligilbity criteria. An application that does not meet any of these requirements will be rejected:
1. Appropriate license in place to provide NPI for PROPARCO, an entity registered in the European Economic Area.

2. Minimum external rating of A- from an eligible ECAI noting that in case of multiple ratings per legal entity, at least two ratings should stand at or above A- (or equivalent).
Insurers that meet these requirements and agree to participate in the NPI framework agreement will be the participating insurers on PROPARCO’s insurer panel.

Selection criteria
Second, each application that meets the eligibity criteria will be evaluated and ranked based on the considerations of the following selection criteria.
- Top 5 ranking insurers will be invited to form part of Group 1 to negotiate the NPI framework agreement:
- Other insurers, provided they reach minimum score of 40 points (over total of 100) will be invited to form part of Group 2

1. Rating(s) from eligible ECAI at or above AA- (or equivalent)

2. Support for Development Finance Institutions (DFIs): total volume of NPI business with DFIs (to include DFI, MDB, bilateral agencies) expressed as:
a. Total current aggregate USD limit of liability as at 31st December 2023;
b. Total current aggregate USD limit of liability as at 31st December 2023 as a % of overall portfolio;
c. Total USD limit of liability bound in each calendar year (2021, 2022, 2023)

3. Support for DAC countries: total volume of NPI business in DAC countries split by region Asia and the Balkans / Africa / Central and Latin America expressed as:

a. Total current aggregate USD limit of liability as at 31st December 2023
i. In Asia and the Balkans:
ii. In Africa:
iii. In Central and Latin America
b. Total current aggregate USD limit of liability as at 31st December 2023 as a % of overall portfolio
i. In Asia and the Balkans:
ii. In Africa:
iii. In Central and Latin America

c. Total USD limit of liability bound in each calendar year (2021, 2022 and 2023)
i. In Asia and the Balkans:
ii. In Africa:
iii. In Central and Latin America

d. Top 5 countries based on aggregate USD limit of liability bound in 2021, 2022 and 2023
i. In Asia and the Balkans:
ii. In Africa:
iii. In Central and Latin America

4. Country exclusions: please list DAC countries where you are “off-risk” / unable to offer support (based on Obligor location)

5. Transaction type exclusions: out of the following categories, please list transaction types that you are unable to support:

Asset finance, Bonds, Corporate Finance (secured and unsecured) to corporate counterparties and financial institutions, Derivatives, Portfolios, Project Finance, Re-Packs, Structured Commodity Finance, Subordinated Debt/Tier 2 Capital, Trade Finance, Securitisations or other forms of SRTs, DPRs.

6. Maximum policy tenor: (private credit vs sovereign and sub-sovereign including any exemptions such as project finance)?

7. Maximum and minimum line size for any one transaction: (private credit vs sovereign and sub-sovereign)?

8. Programmatic / innovative structures: programs or other relevant activity with DFIs over the past 3 years > please provide written detail / explanation

Among the submitted applications a maximum of 5 Applicants will be selected to form part of Group 1 with whom PROPARCO will negotiate the terms of the NPI framework agreement, the terms of which will govern the basis on which the Services will be provided by the final panel of insurers i.e. members of Group 1 and Group 2 who will enter the NPI framework agreement.

Scoring grid
Criteria , Maximum score per criterion
Ratings , 10
Support for Development Finance Institutions , 15
Support for DAC countries, 15
Country Exclusions, 10
Transaction type exclusions, 15
Maximum policy tenor, 15
Minimum and maximum line size for any one transaction, 10
Programmatic / innovative structures, 10
TOTAL 100

The application to this Request for Expressions of Interest must be submitted via email maceh@proparco.fr and rakoutzas@proparco.fr no later than 18:00 Paris time on Friday 6 September 2024.
The application shall be submitted together with the following documents:
1- Signed Non Disclosure Agreement as per template attached (unless a valid NDA is already in place between PROPARCO and the Applicant). Any alteration to the attached template shall be first discussed with PROPARCO
2- Copy of Applicant’s insurance licence valid for EEA operations
3- Rating evidence (showing exact name of the Applicant)
4- Documentation and information to address the selection criteria
PROPARCO will aim to respond to Applicants notifiying them of the outcome of the Request for Expressions of Interest within 2 weeks of the deadline.
Please note the selected insurers will be the subject of a KYC, AML CFT and anticorruption due diligence process that will be conducted after they have been notified of their selection. Satisfactory diligence outcome for PROPARCO will be a prior condition to the signing of the NPI framework agreement for each insurer.

CONTACTS
PROPARCO - Mobilisation,Strategy and Partnerships (MSP) team
to the attention of Hélène Macé and Anne-Sophie Rakoutz
Telephone: +33 1 53 44 62 94 (H. Macé); +33 1 53 44 47 04 (AS. Rakoutz)
Email: maceh@proparco.fr and rakoutzas@proparco.fr
Interested Applicants may obtain further information at the addresses below during office hours:
maceh@proparco.fr, rakoutzas@proparco.fr except during the period between 23 and 27 August 2024.