Audit for the SEforALL Universal Energy Facility
Results-Based Financing (RBF) and Universal Energy Facility (UEF)
2020 marked the start of the final decade to achieve SDG7 – access to affordable, reliable, sustainable and modern energy for all – by 2030. The world is not on track and a renewed sense of urgency and new approaches are required.
Access to sustainable and appropriate finance is a key barrier to the achievement of SDG7 that this programme has been designed to address. Providing finance at the speed and scale needed to achieve SDG7 requires a paradigm shift towards results-based financing (RBF). RBF allows governments and donors to shift an appropriate level of risk of delivery to the private sector, provides greater certainty to industry about access to the level of financial support required, and aggregates financing and scales support across multiple countries.
The Universal Energy Facility (UEF) is a multi-donor RBF facility established to support the electrification of households, businesses, public institutions, and other potential electricity consumers in sub-Saharan Africa that do not have reliable access to modern electricity services. The UEF provides incentive payments (i.e., grants) on a ‘results-based’ approach to selected eligible organizations that develop and operate systems and provide verified electricity connections.
The main objective of the programme is to provide a funding mechanism that allows for scale, speed, and efficiency to achieve universal energy access by 2030 – in alignment with SEforALL’s business plan. In October 2020, the UEF was opened to mini-grid developers in Sierra Leone and Madagascar and in January 2021, the UEF opened in Benin. In the first quarter of 2022, the UEF expects to expand to Stand-Alone Solar for Productive Use, starting in Malawi. More information on the UEF can be found here.
SEforALL, in collaboration with several donors and partners, including The Rockefeller Foundation, Shell Foundation, Power Africa, Good Energies, UK aid, Carbon Trust and Africa Minigrid Developers Association (AMDA), established the UEF facility and the framework around it, in response to growing demands from the energy access sector for results-based financing.
As part of its framework, the UEF is subject to an audit on an annual basis with the scope defined in the Operating Manual to be:
The UEF’s structure and operations shall be independently audited on an annual basis upon approval of the UEF Advisory Board to ensure compliance with the Operating Manual and key success metrics are being met.
The objective of this audit is to confirm the compliance with the Operating Manual in the period to 31 October 2021, including an assessment of the adequacy and effectiveness of the financial management and internal control framework for the transactions, following a sample of 2-3 grants to developers through the process.
The review of the key success metrics is the subject of a separate evaluation and is outside the scope of this procurement.
Scope of work
The scope of the audit is to confirm compliance with the Operating Manual. The auditor organization is expected to independently review in detail the Operating Manual and ensure that the program team is conducting activities as per the outlined structure and objective of the UEF.
The audit should be carried out in accordance with International Standards on Auditing (ISA). Sufficient audit evidence should be gathered to substantiate in all material respects the accuracy of operations and activities. The audit must clearly identify the risks associated with the program and the efficacy and adequacy of polices and controls put in place to mitigate these risks.
The auditor is expected to submit a draft audit report within four weeks from the date of commencement of the audit assignment. Further to the audit report itself, the auditors will also be asked to formulate recommendations for improvements to the UEF program.
The period to be covered by the audit is from the date of launch in October 2020 to 31 October 2021.
The contract is expected to run for three months from the date of signature.