1.1       Purpose of the Mission

The inception-phase assessment constitutes the analytical nucleus and strategic inflection point of the INVEST4Libya programme. Its purpose is to subject the project’s entire architecture—its Theory of Change, logical framework, and reform delivery design—to a scientific, methodologically defensible examination anchored in internationally recognised standards.

Over six months (January–June 2026), a senior, multidisciplinary team of experts will conduct a PEFA-informed, IMF- and WBG-aligned diagnostic across Libya’s macro-fiscal, financial-governance, and enterprise-development systems. The assessment’s mandate is not descriptive but determinant: to establish the empirical and institutional foundations upon which all subsequent implementation will rest, and to ensure that every reform measure under INVEST4Libya is credible, feasible, and sequenced within Libya’s political-economy constraints.

1.2       Strategic Context

Libya’s reform trajectory stands at a systemic crossroads, defined by structural dependence on hydrocarbons, recurrent fiscal shocks, and the fragmentation of public-sector authority. The volatility of oil revenues, the duplication of institutions, and the erosion of fiscal discipline have created a macro-economic environment where public finance, monetary policy, and investment regulation operate in isolation rather than synergy.

In this context, INVEST4Libya operates as a strategic convergence platform—a mechanism through which fiscal credibility, financial-sector governance, and private-sector dynamism can be realigned into a coherent national development pathway. The inception assessment is therefore conceived not as a baseline study but as a sovereign-scale diagnostic, designed to:

·         Identify and prioritise fiscal and financial reforms that can deliver early, confidence-building results without destabilising macroeconomic balances;

·         Evaluate institutional interdependencies among the Ministry of Finance (MoF), Central Bank of Libya (CBL), Audit Bureau, Ministry of Economy and Trade (MoE), and Privatisation and Investment Board (PIB)—the limited but decisive set of actors whose coordination determines systemic coherence; and

·         Establish the analytical foundations for a sequenced reform roadmap, linking fiscal transparency to financial governance and to the investment ecosystem required for entrepreneurship, innovation, and sustainable growth.

The Stakeholder Network Analysis highlights that reform feasibility in Libya depends less on formal mandates than on institutional alignment and signalling. Progress in one node—budget reliability or payments transparency—reverberates across the system, creating credibility loops that attract investment and consolidate reform momentum. Conversely, failure in a critical institution can cascade through the network, eroding trust and policy traction.

The inception assessment must therefore operate at a strategic altitude: mapping incentives, constraints, and interdependencies with a level of analytical depth comparable to that of IMF Article IV Consultations or World Bank Financial Sector Reviews. It must blend macroeconomic modelling, institutional diagnostics, and applied political-economy analysis into a coherent whole, yielding outputs that can withstand scrutiny by international financial institutions, policymakers, and peer reviewers alike.

1.3       Expertise France Strategic Positioning

As the implementing agency and lead technical partner of INVEST4Libya, Expertise France (EF) approaches this inception assessment as a demonstration of methodological excellence and institutional credibility. EF’s ambition is to deliver a diagnostic exercise that meets the highest standards of analytical and academic rigour.

This aspiration reflects EF’s dual identity as both a technical cooperation agency and a centre of methodological innovation within the French Development ecosystem. The Agency’s added value lies in its capacity to integrate:

·         International standards with contextual intelligence,

·         Empirical analysis with political-economy reasoning, and

·         Operational feasibility with academic-grade precision.

Accordingly, the ToRs target only senior, high-calibre experts with demonstrated experience in large-scale fiscal, financial, and institutional reform diagnostics. Entry-level or generalist profiles will not be considered. This mission demands strategic discernment, analytical discipline, and thought leadership commensurate with assignments commissioned by the IMF, the World Bank, or the EU at headquarters level.

EF’s approach to this inception phase is therefore twofold:

1.     To ensure that the analytical process and deliverables meet the highest international benchmarks of methodological transparency, coherence, and validation; and

2.     To position EF as a trusted technical interlocutor capable of translating complex reform diagnostics into actionable, nationally owned strategies for Libya’s sustainable economic transformation.

1.4       Strategic Imperative

This inception assessment findings will precise the operational methodology of INVEST4Libya. Its success will:

·         Establish the empirical baseline for programme implementation and future evaluations;

·         Provide the analytical foundation for adjusting the Description of Action, Theory of Change, and logical framework; and

·         will contribute to the enhancement of methodologies and practices underpinning EF-led diagnostics in fragile and transitional environments.

The objective of this assignment is to produce a clear, evidence-based and institutionally grounded diagnostic of Libya’s financial sector and investment climate. This diagnostic will provide the factual basis for defining reform priorities under SO2 and will guide follow-up activities on legal modernisation, financial-infrastructure strengthening, and investment-climate reforms.

It will assess the performance and governance of financial institutions, the adequacy of financial-sector legislation, the functioning of market infrastructures, and the main barriers that limit domestic and foreign investment.

Throughout the assignment, the expert will coordinate closely with the teams working on SO1 (PFM) and SO3 (Entrepreneurship and MSME development), ensuring that all three assessments are consistent, mutually reinforcing, and aligned with Libya’s broader economic-governance agenda.

More specifically the expert will:

1.      Financial-Sector Institutional Assessment

·         Review governance arrangements of CBL, commercial banks, specialised banks, MFIs and fintech firms (mandates, roles, internal controls, supervision clarity).

·         Analyse financial soundness based on available performance indicators on liquidity, solvency, intermediation patterns and operational efficiency.

·         Assess operational performance and efficiency, including lending practices, risk-management procedures, credit-approval cycles and internal audit functions.

·         Examine intermediation trends, including credit growth drivers, sectoral allocation patterns, and constraints to productive lending.

·         Analyse access-to-finance gaps, focusing on MSMEs, women, youth, and underserved regions.

·         Assess digital readiness, including digital banking usage, mobile payments, core banking systems, and fintech adoption.

·         Evaluate green finance potential, including institutional readiness to support climate-aligned investment or sustainability reporting.

2.      Financial-Infrastructure Review

·         Assess payment systems, including real-time settlement capabilities, interoperability, digital payments penetration, and cybersecurity resilience.

·         Examine credit information systems (coverage, data quality, reporting standards, integration with lenders, and usage by financial institutions).

·         Review collateral frameworks, registry systems, enforcement mechanisms, and obstacles to secured lending.

·         Analyse digital-finance platforms, such as mobile money, e-banking portals, authentication systems, and digital identity enablers.

·         Assess FX mechanisms, including transparency, operational efficiency, and the impact on private-sector transactions.

o   Evaluate grievance and dispute-resolution mechanisms, including credit-related complaints handling and financial-sector consumer protection practices.

o   Identify gaps, fragmentation, or duplication in financial-infrastructure governance and oversight.

3.      Legal and Regulatory Mapping

·         Compile and review all relevant laws and regulations, including banking law, investment law, fintech/DSP regulations, payments law, credit information rules, AML/CFT frameworks, and sustainable finance legislation.

·         Identify inconsistencies and overlaps that create uncertainty or hinder effective market functioning.

·         Identify outdated or missing legislation, especially linked to fintech, digital payments, cybersecurity, credit reporting, and investment facilitation.

·         Assess regulatory enforcement capacity within key institutions (CBL, MoET, MoF, investment bodies).

·         Benchmark Libya’s regulatory environment against regional comparators and international standards (e.g., FATF, IOSCO, Basel principles).

·         Highlight priority areas for legal and regulatory modernisation, including simplified procedures, improved transparency, and streamlined investment governance.

4.      Investment Climate and Barriers Assessment

·         Analyse investor-facing constraints, including licensing procedures, administrative complexity, access-to-finance limitations, and regulatory bottlenecks.

·         Review institutional roles of MoET, investment promotion bodies, LIA, and sector-specific regulators.

·         Assess financial constraints on private investment, including cost of capital, collateral requirements, depth of financial markets, and availability of long-term financing.

·         Identify cross-cutting institutional barriers, such as weak data-sharing, fragmented mandates, or inconsistent policy signals.

·         Map investment opportunities in priority growth sectors (e.g., green energy, digital services, agriculture value chains), aligned with national strategies.

·         Identify potential co-financing mechanisms, blended finance opportunities, and areas attractive for international investors.

·         Provide an evidence-based view of market potential and constraints shaping investor decisions.

5.      Baseline and Data Framework Development

·         Compile all available financial-sector data, including institutional reporting, regulatory data, bank balance sheets, performance indicators, and investment data.

·         Assess data quality and availability, identifying gaps, inconsistencies or reliability issues.

·         Define key baseline indicators for financial stability, access-to-finance, digitalisation, and investment climate performance.

·         Develop a data-inventory matrix, clearly identifying data sources, custodians, and reporting responsibilities.

·         Provide technical recommendations for strengthening financial-sector data governance and coordination among institutions.

6.      Stakeholder Consultation and Validation

·         Conduct interviews and focus groups with CBL departments, MoF, MoET, LIA, banks, MFIs, fintech firms, investors, associations and development partners.

·         Organise structured thematic consultations, including financial regulation, digital finance, investment promotion, and financial inclusion.

·         Validate findings with national institutions, ensuring accuracy and contextual grounding.

·         Coordinate systematically with SO1 and SO3, ensuring cross-component consistency on fiscal-financial linkages, MSME finance, and investment bottlenecks.

·         Document stakeholder perspectives and integrate them into the consolidated diagnostic.

7.      Final Integrated Diagnostic and Reform Roadmap

·         Prepare the Financial Sector and Investment Climate Assessment Report, integrating all analytical strands.

·         Propose a sequenced reform roadmap, including short-term quick wins, medium-term institutional improvements, and long-term legal or structural reforms.

·         Define baseline indicators and monitoring mechanisms to track reform progress.

·         Confirm and validate, in consultation with Libyan partners, the priority areas for technical assistance under INVEST4Libya. Identify coordination points with other donors (EU, IMF, WB, AfDB, bilateral programs).

·         Produce executive summaries and policy briefs in English and Arabic for decision-makers.

The assignment will follow a structured and proportionate methodology designed to produce a factual, validated and realistic baseline diagnostic of Libya’s financial sector and investment climate.

The approach combines desk-based review, targeted data collection, focused institutional interviews and structured consultations. The methodology will unfold through a phased process, integrating international diagnostic tools with tailored national engagement strategies.

The analysis will build on existing findings from prior assessments, including previous EU-funded programmes, and will focus on validating, updating, and deepening the evidence base where persistent or emerging gaps remain.

Across all phases, the expert shall maintain systematic coordination and methodological coherence with the diagnostic exercises under SO1 and SO3, ensuring that the three components remain fully aligned and mutually supportive given their intrinsic interdependencies.

1.  Start-Up, Desk Review and Analytical Framework

This initial phase establishes the analytical structure of the assignment and ensures alignment with INVEST4Libya partners and national authorities.

The expert will:

• Conduct a desk review of existing assessments, including CBL reports, Audit Bureau findings, IMF/WB diagnostics, ENABLE outputs and donor studies.
• Map institutional stakeholders and confirm focal points for engagement (CBL, MoF, MoET, LIA, commercial banks, MFIs, fintech actors).
• Develop an Analytical Framework covering the seven core work areas: institutional performance, financial infrastructure, legal/regulatory coherence, investment climate, data baseline, consultations and final synthesis.
• Coordinate with SO1 and SO3 team leaders to ensure shared definitions, analytical boundaries and alignment of cross-cutting themes.
• Prepare an Inception Note summarising the scope, analytical framework, consultation plan, methodological approach and timelines.

2. Data Collection and Baseline Analysis

During this phase, the expert gathers available quantitative and qualitative inputs and performs a baseline-level assessment consistent with inception-phase expectations.

The expert will:

• Collect available quantitative data from CBL, banks, MFIs, MoET, MoF and other institutions, focusing on liquidity, solvency, intermediation, access-to-finance indicators and digital usage.
• Conduct interviews with key institutions to clarify governance structures, operational constraints, regulatory interpretation and infrastructure challenges.
• Review financial-sector infrastructure (payments, credit registries, digital platforms) to identify major functional gaps and readiness constraints.
• Compile and analyse relevant financial, banking, investment and fintech legislation to identify inconsistencies and priority legal gaps.
• Conduct a light comparative review with selected regional peers to contextualise reform needs.
• Prepare preliminary mappings:
  • Institutional Mapping
  • Financial Infrastructure Snapshot
  • Legal/Regulatory Matrix
  • Investment Barriers Overview
  • Initial Data Inventory

Outputs from this phase constitute the analytical backbone of the final report, without yet drawing detailed reform recommendations.

3.      Consultations, Thematic Validation and Cross-Component Coordination

This phase ensures the diagnostic is grounded in institutional realities and benefits from stakeholder consensus.

The expert will:

• Conduct semi-structured interviews and small-group consultations with CBL departments, MoF, MoET, LIA, banks, MFIs, fintech providers, investors and development partners.
• Hold thematic discussions on:
  • financial-sector governance
  • financial infrastructure gaps
  • investment barriers
  • regulatory shortcomings
  • MSME finance and inclusion challenges
• Cross-check findings with SO1 and SO3 experts to ensure consistency on issues such as data constraints, coordination gaps, investment obstacles and private-sector financing trends.
• Organise regional and national validation workshops to present emerging findings, gather perspectives and adjust the analysis as needed.
• Document all feedback and integrate it into the consolidated diagnostic.

4.      Synthesis, Prioritisation and Reporting

The final phase consolidates analytical inputs and stakeholder insights into a structured and actionable output aligned with the inception-phase deliverables.

The expert will:

• Prepare the Financial Sector and Investment Climate Assessment Report, incorporating:
  • financial-sector institutional findings
  • infrastructure review
  • legal and regulatory mapping
  • investment barriers and opportunities
  • baseline indicators
• Develop a high-level reform priority note to guide follow-up activities under SO2.2 and SO2.3.
• Produce the Executive Summary, Policy Brief, and Validation Workshop Reports.
• Finalise a summary of donor coordination points relevant for the next phase of work.
• Present findings to Expertise France, EU DEL and Libyan stakeholders during a dissemination session.
• Ensure cross-component alignment with SO1 and SO3 in the final synthesis.

5.1       Governance Approach

The governance and validation architecture of the inception-phase assessment is designed to balance technical independence with institutional legitimacy. Given the strategic sensitivity of Libya’s fiscal and financial domains, the validation process must ensure that analytical findings are credible, nationally anchored, and internationally defensible.

The governance system rests on three complementary layers:

1. Expertise France (EF) – ensuring methodological rigour, operational discipline, and donor compliance;
2. Libyan Institutional Counterparts (CBL, MoF, MoET, LSA) – ensuring institutional relevance, data access, and contextual validation.
3. European Union Delegation – ensuring policy alignment, coherence with the EU Special Measure 2024, and donor visibility.

5.2       Institutional Configuration

The assessment’s governance structure will operate through a dual-validation mechanism between Expertise France and the Libyan Institutional Counterparts, supported by structured communication with the EU Delegation and EF Headquarters (Paris).

This configuration ensures that validation is both technically robust and politically grounded, maintaining a clear chain of accountability while preserving EF’s analytical autonomy.