Feasibility Study on Sustainability-Linked Bonds Mechanisms in PNG Consultancy

PROJECT BACKGROUND

Papua New Guinea (PNG) faces increasing climate-related risks, with significant implications for its economy, infrastructure, and communities. In recent years, the country has experienced extreme weather events, including floods, cyclones, and prolonged droughts, which have disrupted agriculture, fisheries, and essential infrastructure. These climate impacts threaten sustainable development and underscore the urgency of proactive climate action. In response, the Government of PNG has committed to ambitious climate actions under its Enhanced Nationally Determined Contributions (NDCs) and National Adaptation Plan (NAP). To support these efforts, innovative financial instruments such as Sustainability-Linked Bonds (SLBs) are being explored to mobilize climate finance and incentivize climate-resilient development. For instance, SLBs can link financial returns to measurable environmental outcomes, creating a powerful incentive for both public and private sectors to achieve climate targets.

The Global Green Growth Institute (GGGI) seeks to conduct a comprehensive feasibility study on introducing an SLB mechanism in PNG. This feasibility study is part of the Climate First (CF) Project supported by the Department of Foreign Affairs and Trade (DFAT), which aims to strengthen PNG’s climate finance architecture and mobilize international climate finance. The study contributes directly to the achievement of the CF Project’s Output 2.2 (development of climate rationale for project preparation) and Output 4.3 (development of financing mechanisms). The results will provide evidence-based information to support the design of climate finance instruments and mobilize up to USD 400 million in international climate finance.

This study will assess the viability of SLBs within the local context, examining factors such as institutional capacity, regulatory frameworks, market readiness, and alignment with existing green finance and refinancing facilities. By evaluating the best international practices alongside PNG’s unique economic and environmental landscape, the study will identify opportunities, challenges, and pathways for successfully implementing SLBs. It will also take into account ongoing activities by development partners such as the IMF and IFC, ensuring coherence and complementarity.

A critical component of the study will be a comparative analysis of the costs of climate action versus inaction over a 50-year horizon. This analysis will be disaggregated into adaptation, mitigation, and loss & damage, providing a nuanced understanding of the economic and social consequences of delayed or insufficient climate action. For example, failing to invest in resilient infrastructure could exacerbate damage from cyclones, whereas timely adaptation measures may safeguard livelihoods and reduce long-term economic losses. Similarly, proactive mitigation through renewable energy investments may yield savings compared with the rising costs of carbon-intensive development. By quantifying these trade-offs, the study will provide a strong economic and policy rationale for SLBs as a mechanism to finance climate priorities, ensuring that investment decisions are both efficient and impactful.

Through this feasibility study, GGGI aims to provide actionable recommendations to guide the Government of PNG, financial institutions, and development partners in designing and implementing SLBs. The study will serve as a foundation for mobilizing private sector participation, strengthening national climate finance architecture, and ultimately advancing PNG’s transition towards a low-carbon, climate-resilient economy. By connecting international experience with local realities, this study will illustrate how SLBs can play a pivotal role in closing the financing gap for sustainable development and ensuring measurable climate outcomes.

OBJECTIVES AND SCOPE OF THE ASSIGNMENT

The overall objective of this consultancy is to provide an evidence-based assessment of the feasibility and potential of introducing a SLBs mechanism in Papua New Guinea. The study aims to support the Government of Papua New Guinea (GoPNG) in understanding the viability, design options, and strategic benefits of SLBs as a tool to mobilize climate finance, incentivize measurable climate action, and strengthen the national framework for sustainable development.

The specific objectives are to:

• Climate Cost and Investment Case Analysis: Conduct a comprehensive economic, social, and environmental cost analysis of climate action versus inaction over a 50-year horizon, covering adaptation, mitigation, and loss & damage components. The analysis will quantify potential losses under different climate scenarios, providing a robust investment case for climate action and establishing the economic rationale for PNG’s potential issuance of Sustainability-Linked Bonds (SLBs), aligned with PNG’s NDC, NAP, and MTDP IV.
• SLB Feasibility, Institutional Readiness, and Framework Development: Assess the legal, financial, regulatory, and institutional feasibility of introducing SLBs within PNG’s public finance and debt management systems. Develop an International Capital Market Association (ICMA) aligned SLB Framework, including KPI selection, Sustainability Performance Targets (SPT) calibration, bond characteristics, reporting and verification procedures, and market analysis (pricing, investor appetite, and financial incentives). Benchmark PNG’s readiness against international best practices and integrate the analysis with ongoing programs by IMF, IFC, ADB, and other partners.
• Implementation Roadmap and Stakeholder Engagement: Prepare a detailed roadmap outlining key actions, institutional responsibilities, capacity needs, and sequencing for SLB structuring and issuance over 18–24 months. Propose governance arrangements for MRV, data management, and inter-agency coordination. Facilitate a stakeholder validation workshop to refine findings and build consensus among GoPNG, financial institutions, and development partners on the recommended pathway forward.

  
  SCOPE AND KEY TASKS:

  1. Climate Cost and Investment Case Analysis

  • Conduct an economic, social, and environmental cost analysis comparing climate action versus inaction over a 50-year horizon.
  • Quantify potential losses under different climate scenarios (adaptation, mitigation, and loss & damage) to establish the economic rationale for SLBs.
  • Link findings to PNG’s NDC targets, National Adaptation Plan (NAP), and Medium-Term Development Plan IV.

    2. SLB Feasibility and Institutional Readiness Assessment

    • Evaluate the legal, financial, regulatory, and institutional feasibility of introducing SLBs within PNG’s existing public finance and debt management systems.
    • Review enabling policies, laws, and regulations (including Public Finance Management Act, Debt Strategy, and Climate Change Act).
    • Assess institutional capacity across key agencies (Department of Treasury, BPNG, CCDA, etc.) to structure and monitor SLBs.
    • Benchmark PNG’s readiness against successful sovereign SLB issuers (Chile, Uruguay, Colombia and regional examples if any).

      3. SLB Framework Development (ICMA-Aligned)

      • Develop an SLB Framework consistent with the ICMA Sustainability-Linked Bond Principles, including:
      • Identification of Key Performance Indicators (KPIs) aligned with PNG’s national climate and development priorities.
      • Calibration of Sustainability Performance Targets (SPTs) using credible baselines, benchmarking, and time-bound targets.
      • Definition of bond characteristics, such as coupon step-up/step-down mechanisms.
      • Establishment of reporting and verification procedures, including options for Second-Party Opinions (SPOs) and post-issuance verification.

        4. Financial and Market Analysis

        • Conduct a comparative analysis of potential SLB structures versus traditional sovereign issuance (pricing, investor base, fiscal impact, and risk profile).
        • Analyze potential coupon spread differential and financial incentives/disincentives under various SPT achievement scenarios.
        • ssess investor appetite through market sounding with regional and international investors, IFIs, and ESG funds.
        • Identify potential lead arrangers, underwriters, and technical partners for a future transaction.

          5. Roadmap for Implementation and Stakeholder Engagement

          • Develop a Roadmap for SLB Structuring and Issuance, outlining key actions, responsible agencies, capacity needs, and sequencing over 18–24 months.
          • Propose governance arrangements for MRV, data management, and inter-agency coordination.
          • Facilitate a validation workshop with GoPNG stakeholders, financial institutions, and development partners to test and refine recommendations.

            6. Integration with Development Partner Programs

            • Map how the proposed SLB mechanism can leverage and complement ongoing programs by IMF , IFC, ADB, and other partners.
            • Explore opportunities for blended finance, partial guarantees, or technical assistance that could support the pilot issuance.

              
              DELIVERABLES AND PAYMENT SCHEDULE

              The Consultant will deliver the following outputs within the agreed timeline. Payments will be made upon satisfactory submission and acceptance of each deliverable by GGGI.

              Deliverable/

              Output

              Scope of Work

              Timeline

              Payment (%)

              1. Inception Report (Work Plan)

              Detailed methodology, including data collection plan, analytical framework, and stakeholder mapping. Outline approach for climate cost modeling, institutional assessment, and SLB framework development. Include initial risk assessment, assumptions, and timeline. Confirm understanding of GoPNG priorities and coordination mechanisms.

              Within 10 working days of contract signing

              10%

              2. Climate Cost and Investment Case Report

              Conduct economic, social, and environmental cost-benefit analysis comparing climate action versus inaction over a 50-year horizon. Include modeling of adaptation, mitigation, and loss & damage scenarios; quantification of potential losses; and linkage to PNG’s NDC, NAP, and MTDP IV. Provide visual data outputs (tables, graphs, and scenario summaries).

              📚 𝗗𝗶𝘀𝗰𝗼𝘃𝗲𝗿 𝗛𝗼𝘄 𝘁𝗼 𝗚𝗲𝘁 𝗮 𝗝𝗼𝗯 𝗶𝗻 𝘁𝗵𝗲 𝗨𝗡 𝗶𝗻 𝟮𝟬𝟮𝟯! 🌍🤝 𝗥𝗲𝗮𝗱 𝗼𝘂𝗿 𝗡𝗘𝗪 𝗥𝗲𝗰𝗿𝘂𝗶𝘁𝗺𝗲𝗻𝘁 𝗚𝘂𝗶𝗱𝗲 𝘁𝗼 𝘁𝗵𝗲 𝗨𝗡 𝟮𝟬𝟮𝟯 𝘄𝗶𝘁𝗵 𝘁𝗲𝘀𝘁 𝘀𝗮𝗺𝗽𝗹𝗲𝘀 𝗳𝗼𝗿 𝗨𝗡𝗛𝗖𝗥, 𝗪𝗙𝗣, 𝗨𝗡𝗜𝗖𝗘𝗙, 𝗨𝗡𝗗𝗦𝗦, 𝗨𝗡𝗙𝗣𝗔, 𝗜𝗢𝗠 𝗮𝗻𝗱 𝗼𝘁𝗵𝗲𝗿𝘀! 🌐

              ⚠️ 𝐂𝐡𝐚𝐧𝐠𝐞 𝐘𝐨𝐮𝐫 𝐋𝐢𝐟𝐞 𝐍𝐨𝐰: 𝐏𝐨𝐰𝐞𝐫𝐟𝐮𝐥 𝐓𝐞𝐜𝐡𝐧𝐢𝐪𝐮𝐞𝐬 𝐡𝐨𝐰 𝐭𝐨 𝐠𝐞𝐭 𝐚 𝐣𝐨𝐛 𝐢𝐧 𝐭𝐡𝐞 𝐔𝐧𝐢𝐭𝐞𝐝 𝐍𝐚𝐭𝐢𝐨𝐧𝐬 𝐍𝐎𝐖!

              Within 25 days of contract signing

              20%

              3. SLB Feasibility and Framework Report

              Assess PNG’s readiness for SLB issuance, including legal, regulatory, and institutional analysis (Treasury, BPNG, CCDA, etc.), policy review, and market readiness assessment. Develop an ICMA-aligned SLB Framework—defining KPIs, SPTs, bond characteristics, reporting and verification mechanisms—and benchmark against successful issuers (e.g., Chile, Uruguay, Colombia). Include financial and market analysis of investor appetite and potential financial partners.

              Within 45 days of contract signing

              30%

              4. Stakeholder Validation Workshop

              Organize and facilitate a workshop with GoPNG officials, financial institutions, and development partners to present preliminary findings, validate assumptions, and gather feedback. Workshop output should be documented and incorporated into the final report.

              Within 60 days of contract signing

              20%

              Note: The consultancy fee is inclusive of all professional fees. Any travel required will be arranged and covered separately by GGGI, in line with applicable policies.

              
              STANDARD INSTRUCTIONS FOR DELIVERABLES:

              • All deliverables shall be submitted in clear, professional English, following formats agreed with GGGI.
              • Reports must be concise, evidence-based, and properly referenced, with data sources clearly cited.
              • Internationally recognized analytical tools and methodologies shall be applied, consistent with GGGI’s quality standards.
              • Draft reports will be submitted for review and comments by GGGI; the consultant shall incorporate feedback and provide revised versions within one week.
              • All deliverables shall be submitted electronically in editable formats (MS Word, Excel, PowerPoint, as relevant) along with final PDF versions.
              • All outputs and materials produced under this consultancy shall remain the property of GGGI and the Government of Papua New Guinea.

                
                EXPERTISE REQUIRED

                The individual consultant is required to fulfill the following criteria:

                • Advanced university degree (Master’s or higher) in Finance, Economics, Environmental Policy, Climate Change, Sustainable Development, or related fields.
                • Minimum 15 years of professional experience in climate finance, sustainable investment instruments, or public financial management.
                • Proven experience conducting feasibility studies, cost-benefit analyses, or structuring innovative financial instruments such as green bonds or SLBs.
                • Strong understanding of climate change economics, including cost modeling for adaptation, mitigation, loss & damage.
                • Familiarity with SLB frameworks, global market trends, and performance-based financing mechanisms.
                • Experience working in developing country contexts; PNG or Pacific region experience is an asset.
                • Demonstrated ability to prepare comprehensive reports and deliver presentations to government and development partners.
                • Good command of spoken and written English. Tok Pisin is preferred but not mandatory.

                  
                  GENERAL INFORMATION

                  Project:

                  Individual Consultant – Feasibility Study on Sustainability-Linked Bonds (SLBs) Mechanism in Papua New Guinea

                  Duty Station

                  Remote with possible in-country consultations

                  Contract Duration

                  1st January- 31st March 2026

                  Consultant Level

                  Level 6

                  Total Fees

                  Up to 50,000 USD

                  
                  ADMINISTRATIVE INFORMATION

                  Candidates shall submit the following documents:

                  • CV
                  • Cover letter
                  • Proposed methodology and work plan

                    Date to close is Korean Standard Time (KST). Applications submitted after the deadline will not be considered Application. Cover Letter, and CV must be sent in English. A consortium, or a firm may not be engaged for the individual consultant assignment

                    Child protection – GGGI is committed to child protection, irrespective of whether any specific area of work involves direct contact with children. GGGI’s Child Protection Policy is written in accordance with the Convention on the Rights of the Child.