Annex 1 - Draft SOW.pdf

ANNEX 1: DRAFT SCOPE OF WORK

Energy Indefinite Delivery Indefinite Quantity (IDIQ) III (Energy IDIQ III)

C.1 INTRODUCTION

The Energy IDIQ III aims to address the global demand for, and use of, modern energy services by fostering sustainable energy development in countries assisted by USAID. Task Orders under the Energy IDIQ III mechanism will provide USAID Missions, regional bureaus, host-country stakeholders, and partners with ready access to technical assistance and capacity building to implement programs that will improve energy sector performance through legal, regulatory, policy, governance, operational, financial, economic, transactional, and other support while improving the overall enabling environment for private sector investment. Activities may include interventions at multiple scales, from the household level to issues of global dimension. Task Orders also can support activities at the intersection of energy and any of USAID’s primary program areas, including but not limited to the following: agriculture and food security, economic growth and trade, democracy, rights and governance, education, climate variability and change, human population and health, social development and gender equality, disaster mitigation and response, reconstruction, environmental and natural resource management, and urban development.

The USAID Climate Strategy 2022-20301 is aligned with the goal of limiting global warming to

1.5 °C above pre-industrial levels. To achieve the 1.5 °C target, the world will need to reduce carbon dioxide emissions and global net greenhouse gas emissions from human activity by about 45 percent from 2010 levels by 2030 and reach net zero by 2050. Under the Climate Strategy, the Agency’s energy work will contribute by reducing or avoiding at least one billion tons of CO 2 equivalent emissions by 2030 in USAID partner countries.

In order to provide the greatest possible flexibility in implementing the Agency’s Climate Strategy, the energy sector is broadly defined in the context of this IDIQ. It spans energy production and transport, electricity generation, transmission and distribution, and supply and consumption of energy and associated services. In addition to the energy sector, work conducted under this IDIQ is anticipated to cover the energy nexus with other sectors such as health, agriculture, gender equality, and social inclusion. The sources of energy can be both renewable and non-renewable; however, the primary focus of the Energy IDIQ III is on climate-conscious, equitable, and sustainable energy programs that contribute to the Agency’s climate mitigation goals and strengthen the sector’s resilience to natural disasters while improving energy security and economic growth.

Under extremely limited conditions, support for oil and gas-related projects, such as highly efficient combined-cycle, gas-fired power plants, liquified natural gas (LNG) import terminals, and natural gas processing plants and pipelines, may be considered and guidance will be provided to the Contractors that will implement the IDIQ Task Orders. It is understood that projects to reduce and eliminate methane leaks and releases in the oil and gas sector as well as in

1 ‘USAID Climate Strategy 2022-2030’ - https://www.usaid.gov/climate/strategy https://www.usaid.gov/climate/strategy coal mining will not be restricted. This may include, for example, technical assistance on the preparation of methane regulations for the oil and gas industry up to feasibility studies to establish the technical and economic feasibility of measures to reduce methane leaks and releases at specified upstream, midstream, and downstream facilities.

Depending on the individual Task Order, USAID counterparts may include diverse groups, such as government ministries/agencies, energy utilities, independent regulatory authorities, research and development entities, consumer groups, public interest groups and other Non-Government Organizations (NGOs), banks, local and multinational corporations, and international financing institutions, such as the World Bank, the African Development Bank (AfDB), the Asian Development Bank (ADB), the Inter-American Development Bank (IADB), and the European

Bank for Reconstruction and Development (EBRD), among others.

USAID’s strong overseas presence and a long history of working with partner countries, international and local organizations, the private sector, and communities has established USAID as a trustworthy partner. This, combined with our commitment to engaging and learning from local partners, helps USAID understand the local economic, political, social, cultural, and institutional landscapes and supports the Agency’s ability to implement transformative programming. Strong links to countries and communities also enable the Agency to leverage other donor assistance and climate finance and to work collaboratively on policy reforms.

Together, these advantages position USAID to implement targeted, ambitious, and sustained climate actions in collaboration with its partners, while simultaneously enhancing efforts to accelerate the essential transformative change those partners seek. Addressing c limate change is especially important for USAID as it threatens the Agency’s very mission by increasing humanitarian needs and rolling back hard-won development gains.

USAID implements a broad range of energy sector programs, including those that promote environmentally-sound economic growth, rehabilitate energy sectors in post-conflict and post-disaster contexts, improve the resilience of energy systems, and enhance ene rgy security. The underlying goal of the Energy IDIQ III is to address the policy, institutional, technological, financial, and commercial issues that USAID assistance countries face in strengthening their energy sector and attracting the private sector investment needed to increase access to modern, safe, reliable, resilient, economic, and environmentally sustainable energy services through equitable and sustainable processes.

C.2 BACKGROUND

C.2.1 Overview

The lack of sufficient, accessible, affordable, and reliable energy is a major impediment to achieving USAID’s core objective of poverty reduction. A modern energy sector underpins not only economic growth but also the expansion and improvement of services in all sectors of development, from food security and health to education. However, in some parts of the developing world, nearly two-thirds of the population does not have access to electricity. Even where there is access, much of this access is inequitably distributed, and the global energy demand is projected to rise by over 70 percent by 2040, with nearly 90 percent of that growth expected to come from developing countries. Because of its vital importance, the generation, transmission, and distribution of electricity receives significant attention and resources from both governments and international development agencies. However, public sector funds alone will be unable to meet the billions of dollars of new investment that are required to address the scale of the global challenge, necessitating wider mobilization of the private sector.

Sustainably meeting the growing energy demands of developing countries in the coming years requires overcoming numerous obstacles, particularly those that constrain investment. The supply of energy services in many countries is of poor quality due to opera tional inefficiencies, difficulties in reaching dispersed and marginalized populations, and unsustainable pricing and tariff structures. These issues are compounded by the use of outdated energy technologies and practices, persistent application of ineffective energy sector policies, and limited, and inequitably accessible, technical capacity of sector personnel in governing ministries, regulatory agencies, and utilities. Governments often subsidize electricity prices as a means to spur industrial growth and address issues of social equity. However, such practices have proven unsustainable, as utilities are unable to get sufficient revenue to expand energy systems to meet increasing demand or to even properly maintain and repair existing facilities. With unreliable energy systems, countries are hindered in their ability to attract capital, including private investment, and are unable to sufficiently support social objectives such as improved health care and education. Due to these challenges, energy stakeholders are often unable to invest in the grid modernization, renewable energy, and energy efficiency needed to transform their energy sector.

C.2.2 Challenges

USAID energy programs often encounter challenges that require innovative solutions tailored to local conditions. The Energy IDIQ III Contractors will need to offer tested and proven solutions as well as innovative approaches to overcome these challenges.

Some examples of energy sector challenges experienced by USAID’s partner countries may include the following:

● Lack of political commitment to energy sector reforms

● Institutional corruption

● Unreliable power for those with access and limited power access for rural and/or disadvantaged populations

● Failing infrastructure resulting from high electricity theft, leading to a persistent lack of funding to carry out utility operations and maintenance

● Weak governing institutions that inhibit decision-making on urgent energy and climate needs

● Poor enabling environment for attracting investment, including lack of effective/trusted policy or legal and regulatory frameworks

● Weak financial sector which is unable to attract and manage capital to implement investment projects

● Shortage of qualified workforce as well as limited skills and capacity and limited availability of training opportunities, especially among and for women

● Lack of climate-resilient infrastructure technologies that can withstand and recover from natural disasters

● Unreliable or nonexistent information systems and lack of data to support market reforms

● Legacy of general distrust among energy sector stakeholders

● Inefficient and high energy-consuming industries (such as cement, coal mining, and transportation) that provide minimal salary employment to rural populations

● Lack of adherence to international standards and best practices in mitigating harmful environmental and social impacts

● Dominant vertically integrated utilities and resistance to structural and institutional change

● Artificially low tariffs, high subsidies, and cross-subsidies

● Inflation and resulting unaffordable tariffs whose burden falls disproportionately on poor and vulnerable populations

● History of conflicts between neighboring countries and resulting lack of political will to promote regional energy cooperation and energy exchange

● Greater risk of investment uncertainties due to political and social unrest

● Operational and management difficulties due to conflict, social inequalities, terrorism, civil unrest, pandemic events, and natural disasters

● Growing cybersecurity threats, including ransomware and data loss

C.3 TECHNICAL THEMES

The Energy IDIQ III covers the following cross-cutting energy sector technical themes:

1. Climate change mitigation;

2. Energy sector reform;

3. Transparent procurement processes and procedures, competitive markets, and fair trade;

4. Equitable and inclusive workforce development;

5. Advanced technologies for utilities and customers;

6. Energy sector resilience and disaster preparation, response, and recovery; and

7. Environmental and social justice.

These themes are interrelated and likely to be combined in Task Orders that are awarded under the IDIQ mechanism.

C.3.1 Climate Change Mitigation

The USAID Climate Strategy 2022-2030 aligns the Agency’s programs and investments with its emissions reductions target. Accordingly, USAID’s energy programs will support catalytic activities to drive energy sector transition that reduces or avoids emissions and enhances climate resilience.

About 40 percent of energy sector greenhouse gas (GHG) emissions come from the production of electricity, with the direct consumption of fuels such as oil, coal, or gas in transportation, industry, and buildings making up the balance. Addressing energy needs in each of these areas through low-carbon solutions will be essential to make progress on climate mitigation goals. At the same time, USAID will seek opportunities to support increased investment and job growth through the clean energy transition including in project development and construction, operations and maintenance, and green supply chain support.

On the side of electricity generation, USAID will continue its work on auctions and other large -scale competitive power procurements to increase the renewable energy share. In the utility space, the Energy IDIQ III envisions greater project development and investments in innovative and commercially proven technologies, such as distributed generation, rooftop solar, battery storage, smart grid, and grid-integrated smart appliances that lead to emissions reduction.

Further, on the demand side, USAID programs may support: the design of new, energy -efficient buildings, by incentivizing building retrofits through policies, standards, and direct engagement with manufacturers, utilities and consumers; assessing opportunities for private sector engagement to enable electric transportation growth, by supporting planning and regulations for improved vehicle efficiency and electric vehicles (EVs); conducting energy audits in residential, commercial, and industrial sectors; subsidy reform; business process improvements in industry;

and opportunities for industrial decarbonization, including green hydrogen.

C.3.2 Energy Sector Reform

Growth and effective service delivery in the energy sector depend on consistent planning, timely investment, and sound operational practices. USAID programs rely on national stakeholders and industry expertise to implement tailored and appropriate energy sector reforms. The organizational and management capacity of public institutions, civil society, and the private sector are directly linked to the sustainable management of energy services. Of particular importance is the need to attract private sector investment to fund new development.

In order to support countries in their development of sustainable enabling frameworks, USAID is committed to human resource and institutional capacity of partner organizations and host-country government agencies to improve energy sector management and governance. This framework includes:

1. Visionary policy makers: Ministries and regional energy agencies need to be well equipped with economic data, tools, and best practices to develop sustainable energy strategies, to attract investments into modern energy systems, and to promote cross-boundary energy trade. Concerted efforts will be placed on increasing the operational capacity of these institutions and ensuring access to a qualified and gender-balanced workforce.

2. Independent regulatory authorities: In order to guide energy sectors to be sustainable and resilient, regulators must have sufficient resources to carry out their duties and the requisite technical expertise. They must be free from political interference with their decisions and have both legal authority and financial foundation for carrying out their duties of protecting the interests of consumers and creating equal opportunities for all market participants.

3. Financially viable utilities: As the backbone of the sector, it is essential that energy utilities are on a path to financial solvency. Interventions must support utilities' ability to operate independently from subsidies and charge fair and reasonable tariffs that not only cover the prudently incurred costs of generation, transmission, and distribution, but also incentivize efficiencies and improvements in service delivery.

4. Informed, fairly treated and empowered consumers: Consumers who have equal opportunity and access to information, tools, and resources can make well-informed decisions that enable them to carry out productive livelihoods and reduce their households’ energy costs. USAID believes this is only possible in an environment built on respect and dignity. Inclusion builds a culture of belonging by actively inviting the contribution and participation of all people. USAID also recognizes the need for explicit inclusion of all people, with a focus on gender and inclusion of rural, local, and Indigenous Populations, to ensure people are not overlooked in planning for equitable access to resources, to work towards equitable access, and to ensure opportunities for growth are not missed.

USAID will work with all these stakeholder partner organizations to support their efforts to develop policies and to draft laws and regulations that increase energy security.

C.3.3 Competitive and Transparent Market Processes and Procedures

Open and transparent rules for energy markets ensure that there are no deliberate market barriers to new entrants and that all market players operate according to fair rules. Transparency is fundamental to the delivery of competitive electricity markets. Principles of market relations need to be reflected in legislation and regulations. Timely and reliable data help market participants–including generators, suppliers and traders–to understand past events and help predict the likely evolution of supply, demand, and transmission conditions as they impact price formation. The availability of relevant data to regulators and other third parties also allows for more effective monitoring of electricity markets and the detection of market power abuse. A critical aspect of transparency is that it eliminates, or very substantially reduces, differences in available information between market participants, thus increasing the trust and confidence needed for them to engage in trade and make decisions.

Public policies, investment, and governance must be transparent and efficient, devoid of any perception of corruption throughout all segments of the energy value chain. Contractors will assist partner governments to achieve fair and balanced treatment for both investors and consumers.

C.3.4 Equitable and Inclusive Workforce Development

USAID has a long-standing commitment to promote women’s economic empowerment, promote gender equity in climate change mitigation, and empower youth, including underserved and marginalized populations, to be part of the energy sector workforce. USAID energy programs will integrate robust and research-proven workforce strategies in clean energy planning and operations to support the following results:

1. All workers are trained to enter the energy sector with the skills employers need to plan, implement, operate, and maintain clean energy technologies;

2. Local communities and the women and youth within those communities benefit from job creation and retention; and

3. Young women and men professionals are empowered to contribute to the proliferation of clean energy by integrating new skills into their work, including data analysis, forecasting, and geospatial information systems (GIS).

C.3.5 Advanced Technologies for Utilities and Customers

In line with the USAID goal of eradicating extreme poverty, USAID’s energy programs support countries in their efforts to expand access to modern energy services, while ensuring that the electricity supply is reliable, affordable, and environmentally sustainable. Programs implemented by USAID will prioritize the ultimate benefits and expanded opportunities offered to energy consumers. Opportunities to integrate new technologies that support improved service delivery and customer engagement in power sector planning and operations will be pursued.

Further, while many utilities have deployed technologies and equipment such as advanced metering infrastructure, pre-paid meters, and other internet-based customer service and billing software and tools, there has been a lag in extracting and using the data that is being collected to enhance utility operations.

C.3.6 Energy Sector Resilience and Disaster Prevention, Preparation, Response, and

Recovery

A robust energy sector is a key component to improving resilience to and recovery from natural, human, and technological threats including natural disasters and cyber-attacks. USAID is often called upon to improve national or local government and electricity utility capacity to prepare for and respond to natural or man-made disasters that affect the energy sector, including those related to climate variability and change. In the coming years, designing climate-resilient infrastructure and ensuring USAID’s partners are prepared for resilience across the energy sector will be critical to ensuring sector health. USAID’s energy programs offer opportunities for citizen engagement and specifically to ensure that the women, youth, indigenous people, and marginalized and local communities have an opportunity to contribute to and benefit from the energy sector resilience efforts.

C.3.7 Environmental and Social Justice

In light of the focus on decarbonizing the energy sector to support global climate change goals, it will be particularly important to integrate environmental and social considerations to support a just transition. Just as Environmental and Social Impact Assessments (ESIAs) are critical to the development of new energy infrastructure, the same approach can be used when analyzing the impacts of programs and projects that will be supported to drive the energy sector transition.

Examples would include the retirement of coal-fired power plants and identifying alternate employment opportunities for impacted staff. Further, it is important that all stakeholders, especially vulnerable communities and marginalized groups, have access to take part in policy and regulatory discussions as well as program and project development, making sure that they benefit from those projects.

C. 4 TECHNICAL SERVICES

This Energy IDIQ III allows for the provision of technical assistance services, including consulting and engineering services, within the scope of work specified in this section, to implement USAID’s activities worldwide. The Energy IDIQ III Contractors and their consortia members must consider social and cultural realities when developing Task Order proposals.

Pursuant to Section F.10, “Ordering Procedures,” the USAID Task Order Contracting Officer

(TOCO) will request Contractors to provide services through the issuance of Task Orders. The TOCO may issue Task Orders specific to geographic regions or countries, function areas, and possibly for specific tasks or deliverables. USAID may prioritize specific countries and regions based on US government foreign policy objectives and transaction opportunities. As required for each Task Order, the Contractors will be capable to provide services in the following technical areas:

1. Diversification and security of energy supply

2. Energy sector planning

3. Generation, transmission, and distribution projects

4. Finance and investments

5. Legal and regulatory reforms

6. Feasibility studies and environmental and social assessments

7. Improving utility performance

8. Energy efficiency

9. Decarbonization in buildings, transport, and industry

10. Energy stakeholder support and consumer engagement

11. Private sector engagement

12. Resilient information technology (IT), digitalization, data, and cybersecurity

13. Increasing affordable energy access

14. Anti-corruption

15. Circular economy

16. Workforce and institutional development

17. Monitoring, Evaluation and Learning (MEL)

18. Grant management2

19. Construction3

20. Additional support areas4

C.4.1 Diversification and security of energy supply

Security of energy supply remains a top priority of USAID’s partner countries. Energy security can be achieved through energy diversification, which means using different energy sources, suppliers, and transportation routes to reduce dependence on a single resource or provider. A country that diversifies its energy mix insulates itself from energy disruptions and strengthens its energy security.

2 Secondary to the overall scope of objectives, see Section C.7.1 3 Secondary to the overall scope of objectives, see Section C.7.8 4 Secondary to the overall scope of objectives, see Section C.4.20

Examples of tasks the Contractors may be required to implement or support implementation by local actors may include, but are not limited to the following:

1. Support stakeholders to develop robust energy policies that enhance energy security.

2. Support the development of national energy market legislation and the multistakeholder review process.

3. Facilitate cross-border trade, market coupling, and the establishment of energy markets

(national and regional).

4. Develop roadmaps to increase renewable energy and interconnections to diversify energy sources, including through aggregators and larger supply chains to contribute to energy security.

5. Address reliability and power quality issues through foundational distribution network investments, digitization, and modernization of national grids through smart grids, smart meters, internet of things (IoT), and distributed energy resources (DER).

C.4.2 Energy sector planning

In order to reduce emissions and make progress toward “net zero” targets, there is a need for governments, regulatory agencies, and electric utilities to strengthen power sector planning, making it balanced and flexible. In general, planning in many developing countries has tended to be piecemeal and fragmented, rather than integrated, and with little access to the relevant and up-to-date data and information needed for accurate long-term supply and demand forecasting. The planning that does take place often focuses primarily on expanding base-load generation to meet an aggregated demand forecast without taking into account the need and opportunities for investment in more efficient transmission and distribution of electricity, demand -side management, renewable energy technologies, or off -grid resources such as micro-grids, while reducing emissions.

USAID’s Energy Division supports Integrated Resilience and Resource Planning (IRRP) to transform the way governments, regulatory agencies, and electric utilities plan the expansion of the power sector. In emphasizing IRRP over traditional master planning, USAID aims to strengthen institutional planning capacity, improve data collection and analytics, and identify cost-effective opportunities for energy efficiency and load reduction at the customer level, maintenance of existing and new systems, or scaling up of the energy sources most useful to end-users. Resiliency is an element of IRRP that seeks to address deficiencies in contingency planning at utilities.

The introduction of the IRRP process does not obviate the need for master plans; in fact, various master plans for generation, transmission, and distribution may be outputs of an IRRP process or inputs to an IRRP process. Further, many countries appear to lack distribution master plans where electric utilities are now aggressively expanding both urban and rural distribution networks. In addition, USAID has seen a need in countries with natural gas resources and gas master plans to use IRRP to develop an integrated power system master plan. At a higher level, some countries have undertaken Low Emission Development Strategy (LEDS) planning through multi-stakeholder processes that improve indicative planning across key economic sectors, including the power sector. Crucial to developing and implementing these plans is inter-ministerial coordination, access to data and analytical tools, coordination between national to sub-national government, and private sector engagement.

Contractors may be required to provide power sector planning services, including tools and needed support to local actors to gather data for IRRPs. Specific tasks will be further defined in the Task Orders, as appropriate. They may involve, but not be limited to the following:

1. Advise and assist in implementation of IRRP processes with counterparts such as electric utilities, regulatory agencies, energy commissions, and ministries.

2. Support review and analysis of strategic sector plans and IRRPs using modeling and other tools, integrating electricity generation and decarbonization strategies like LEDS, Nationally Determined Contributions (NDCs), and long-term net zero.

3. Provide technical assistance and analysis of tariffs for the integrated power system master plans, including system integration studies and system operations analysis to determine technical and operational aspects needed to ensure integration of intermittent generation resources.

4. Design, review, and conduct analysis of transmission and distribution master plans, including socio-economic surveys of communities to be connected as a baseline for future impact evaluations as well as equitably identifying communities for grid service versus identification of communities for off -grid solutions.

5. Support regional institutions on cross-border trade, transmission projects, and international power exchange and trading transactions.

6. Support the design of energy markets and review and support drafting of Grid Codes.

C.4.3 Generation, transmission, and distribution projects

If prioritized in a Task Order, a project-centered and/or transaction-centered approach provides partner governments, the private sector, and donors with a focal point to galvanize collaboration, emphasizes near-term results, and drives systemic change that will facilitate greater private sector involvement. The approach seeks to accelerate the pace of project development by identifying key milestones, risks, and challenges, while also identifying interventions that can effectively help project stakeholders address such challenges. By helping projects reach financial closure as quickly as possible, USAID seeks to not only increase availability of renewable energy in the near-term but also to create models that facilitate future private sector investment.

In this case, Contractors must tailor technical assistance and financial resource interventions to each transaction, including procurements such as reverse energy auctions, taking into account the country’s specific political, economic, social, and energy circumstances, as well as actions undertaken by private sector stakeholders, other donors, and USAID partners. Interventions vary significantly when comparing projects at different stages of the project cycle or projects of different magnitude. Before selecting projects to support, Contractors will evaluate the critical path for each project and confirm that projects are technically and financially feasible while being affordable for electric utilities and their customers. Contractors also will critically a ssess the financial feasibility of each selected project, including the financial capacity of the buyer to pay for the power generated.

Contractors will support open, transparent, and competitive transaction processes. Competitive procurements in the power sector generally result in better value for the power purchaser in the form of timely project execution, lower costs and prices, and greater efficiency in plant operation. Depending on the sub-national, national, and regional conditions, Contractors may provide transaction support and technical assistance to national and sub-national governments, state-owned and investor-owned electric utilities, rural energy agencies, and private sector entities, including project developers, energy service companies, investors, and lenders.

Specific tasks that Contractors will provide, or support local actors’ provision of, will be further defined in the Task Orders, as appropriate. They may include, but not be limited, to the following activities:

1. Provide technical support to address specialized issues related to renewable generation projects, such as site assessments for potential renewable or energy efficiency projects, including variable renewable and micro-grid integration with the grid and geothermal exploration costs and risks.

2. Provide advisory services to assist in the negotiations to bring transactions to financial close, including pre-feasibility studies, data collection for feasibility studies, and business planning.

3. Provide support for Public Private Partnerships (PPPs), including management contracts, concessions, and divestiture.

4. Support small demonstration pilot projects through grants, studies, and trainings.

5. Assist with design and evaluation of international competitive tenders for generation, transmission, and distribution projects, including reverse energy auctions and integrated generation, transmission, and/or distribution concessions.

6. Assist counterparts to prepare proposals and projects to obtain financing under loans and grants approved by multilateral development banks and other international financial institutions, as well as provide assistance and training on carrying out tender procedures and completing specific tenders to ensure efficient application of approved funds.

7. Assist with incentivizing customs tariffs (e.g., value-added tax) for energy access products and equipment, including batteries and other products core to the operation and maintenance of off-grid energy resources.

C.4.4 Finance and investments

Increased equity investment and commercial debt financing for both private power projects and state-owned electric utilities are essential to expanding the power sector and facilitating the rapid expansion of renewable energy. In many countries, government funding still provides a substantial share of capital for power sector development, with bilateral and multilateral development assistance and finance also playing a critical role; however, in order to achieve ambitious targets, far greater private sector participation and financing are required. Contractors may be required to provide independent financial advisory services, including financial modeling, and financial arrangement services for projects.

Specific tasks that Contractors will provide, or support local actors’ provision of, will be further defined in the Task Orders, as appropriate. They may involve, but not be limited to the following:

1. Provide independent financial modeling, financial advisory, and financial arrangement services to governments, electric utilities, developers, investors, and lenders to bring transactions to financial close. Advise governments, electric utilities, developers, investors, and lenders on guarantees and credit enhancement mechanisms to lower capital costs and/or extend the tenor of financing available for projects.

2. Train, convene, and mobilize local and international pension funds and other institutional investors to invest in energy and power infrastructure in partner countries, including through the development of new financing structures, instruments, and vehicles.

3. Assist governments on project finance and structuring and developing credit supports, guarantee schemes, and other financing enhancements, including comfort letters;

obtaining multilateral development bank Partial Risk Guarantees (PRG); and interfacing with commercial financiers and investors to bring projects to financial close.

4. Provide technical assistance and develop financing instruments and vehicles such as green power infrastructure bonds that generate increased investment in the power sector by pension funds.

5. Formulate innovative business models and financial products to assist in the development of clean energy and energy access markets, including without limitation the development of new insurance and other risk mitigation instruments and approaches.

6. Assist eligible projects with identifying and accessing funds, including through the Clean Development Mechanism and the Green Climate Fund.

7. Develop generation, transmission, and distribution investment plans.

8. Review renewable energy taxation policy and develop recommendations on how to incentivize import and installations of renewable equipment.

C.4.5 Legal and regulatory reforms

High-quality legal advice to governments, regulatory agencies, electric utilities, developers, investors, and lenders in structuring transactions and negotiating independent power producers

(IPP) and PPP power project agreements is vital to achieving USAID’s objectives. Contractors may be required to provide legal advisory services in support of partner governments and other stakeholders as appropriate.

defined in the Task Orders. They may involve, but not be limited to the following:

1. Provide legal transaction advisory services to governments, electric utilities, developers, investors, and lenders in the development, structuring, tendering, and negotiation of IPP and PPP power generation, transmission, and distribution projects.

2. Develop and deliver workshops and trainings for government ministries and agencies, regulators, judges, law schools, and the private sector on PPA negotiations and other legal documents required in IPP and PPP generation and transmission projects.

3. Develop national and sub-regional energy sector laws and regulations.

4. Develop legal frameworks for standalone mini-grids and integration of mini-grids into the grid.

5. Draft energy market laws and regulations and other documents, such as Grid Code, power trading and market rules, licenses, and market monitoring procedures.

6. Support regulatory bodies to draft and implement regulations that enable regional trade and cross-border trading.

C.4.6 Feasibility studies and environmental and social assessments

Contractors may be required to provide engineering reports such as pre-feasibility studies, feasibility studies, and environmental and social impact assessments on USAID’s energy programs and projects as well as those of governments, utilities, and private developers. All Contractors should use the USAID’s Community Engagement Guide5 for energy programs that may encompass a wide range of technologies such as utility-scale solar and wind, transmission and distribution lines and substations, distributed generation, batteries and other storage, micro -grids, mini-grids, “smart grid,” advanced metering infrastructure, pre-paid meters, smart meters, advanced combined-cycle gas turbines, natural gas systems, hydropower, and other technologies as they become commercially viable, including grid-integrated electric vehicles, civil nuclear, carbon capture and storage, ammonia, and hydrogen.

As countries pursue net zero policy objectives, there is a high probability of differential impact on consumer categories and socio-economic groups. Thus, in order to achieve a “just transition,” it will be necessary to carry out detailed studies to identify negative impacts and design measures to mitigate those impacts on local communities.

defined in the Task Orders, as appropriate. They may involve, but not be limited to the following:

1. Prepare pre-feasibility and full feasibility studies, including Environment and Social Impact Assessment (“ESIA”) reports for selected generation, transmission, and distribution projects.

2. Prepare technical due diligence reports on selected projects in various stages of development.

3. Provide engineering technical assistance to governments, electric utilities, developers, investors, and lenders.

4. Provide technical assistance in preparation of tenders for international competitive bidding for both Independent Power Producers (IPPs) and Engineering-Procurement- Construction (EPC).

5. Provide technical assistance on negotiations regarding IPPs, including Power Purchase Agreements (PPAs) and EPC contracts.

6. Support development of comprehensive social engagement strategies and plans as part of, or as a follow-on to, a broader ESIA scope of work–for example, in relation to both proposed projects and coal retirements.

5https://www.climatelinks.org/sites/default/files/asset/document/2022-

04/5a.%201_Community%20Engagement%20Reference%20Guide_30Mar22_508.pdf https://www.climatelinks.org/sites/default/files/asset/document/2022-04/5a.%201_Community%20Engagement%20Reference%20Guide_30Mar22_508.pdf https://www.climatelinks.org/sites/default/files/asset/document/2022-04/5a.%201_Community%20Engagement%20Reference%20Guide_30Mar22_508.pdf

7. Prepare environmental impact assessments of proposed USAID programs and prepare draft Initial Environmental Evaluations (IEE) or Environmental Assessments (EAs), consistent with the requirements of 22 CFR 2166, for USAID review and approval.

8. Identify approaches for addressing the needs of socially vulnerable consumers and marginalized communities, including mitigation and monitoring plans.

C.4.7 Improving utility performance

Electric utilities are the backbone of the power sector, yet their inadequate performance, especially of state-owned utilities in the USAID assistance countries, has hindered economic growth in the past and now threatens to derail work to achieve climate mitigation targets. The reasons for the underperformance of those utilities range from high-level governance issues including political interference and corruption, to low or limited utility management capacity, low or limited staff technical capacity, poor regulation including inadequate tariffs, and lack of access to capital, among others. Electric utilities that are not creditworthy are a major constraint on the achievement of USAID’s objectives.

Reform and restructuring are often proposed as solutions to the above challenges. The efficacy of any given reform or restructuring proposal significantly depends on the conditions in the specific country and electric utility. Contractors may be required to provide services in the area of electric utility improvement, including activities designed to drive operational, technical, and financial performance improvements.

Specific tasks that Contractors will provide, or support local actors’ provision of, will be further defined in the Task Orders. They may involve, but not be limited to the following:

1. Support regulatory agencies in the development of regulations on cost-based and incentive-based tariff methodologies.

2. Develop approaches to bolster grid resilience, disaster preparedness, and emergency response.

3. Develop electricity theft reduction program approaches that can be applied by utilities.

4. Support development and adoption of technical codes and standards for the operation of existing power generation, transmission, and distribution facilities.

5. Support development and implementation of demand response programs, such as air conditioning remote control and cycling, rooftop solar combined with batteries for local grid support, and electric vehicle charging and discharging for improved power quality.

C.4.8 Energy efficiency

Energy efficiency is a cornerstone strategy to improving energy security, reducing energy consumer costs, and achieving climate ambition in USAID partner countries. Energy efficiency emerges as the critical tool by which governments, industries, and the organizations that support them can simultaneously reduce the need for fossil fuels (and reduce the direct energy supply and price variability risks of imported fuels) while providing direct financial benefits in the form of energy bill savings to consumers. In addition to these direct effects, energy efficiency reduces

6 ‘USAID Environmental Compliance Procedures’ -https://www.usaid.gov/our_work/environment/compliance/pdf/216 https://www.usaid.gov/our_work/environment/compliance/pdf/216 the amount of fossil fuel and renewable energy infrastructure that will be needed to meet rapid growth in energy demands in USAID partner countries. Specifically, by reducing and shifting electricity loads, energy efficiency can help reduce constraints on transmission and distribution infrastructure and increase system reliability during periods of high demand.

Recent USAID programs have focused on energy efficiency standards and retrofits (including evaluation of market dynamics, regulatory costs and benefits, development of technical standards and stakeholder engagement), market priming and financing (including kick-starting markets for high-efficiency technologies by creating economies of scale and facilitating reduction of costs to end consumers), and policy and planning (including integration of energy efficiency into national power development and integrated resource plans, enabling targets and strategies for low emissions development strategies). Further innovation is needed from USAID implementing partners on commercial and residential financing, standards and codes enforcement, and government incentives to increase adoption of energy efficiency measures in USAID partner countries.

1. Facilitate increasing the efficiency levels of appliances and equipment sold in -country and national governments’ ability to support implementation of regional appliance performance standards.

2. Develop approaches for increasing enforcement of building codes with national and subnational governments.

3. Engage public sector building owners and private sector developers to devise commercial financing approaches for energy-efficient equipment and retrofits.

4. Help utilities understand how to manage overall demand and load through utility demand side management programs.

5. Facilitate development of Energy Management Systems and energy savings performance contracts to increase the ability of small- and medium-sized enterprises to invest in smart efficient equipment.

C.4.9 Decarbonization in buildings, transport, and industry

As governments continue to increase their climate commitments and set net zero goals, USAID’s energy programs will increasingly focus on approaches to increase the level of effort to help countries meet their goals, in line with USAID’s Climate Strategy. There is an attraction both to working broadly across the energy sector and beyond into other sectors where there is a strong nexus, such as energy efficiency of buildings, as well as to working systematically on the areas with the greatest potential for short- and medium-term emissions reductions. The challenge is to move beyond pilots and individual projects to efforts that have larger impact, i.e., scalability.

Utility-led energy efficiency programs combined with financing models with the private sector and banking industry are highly desirable.

1. Analyze the technical and economic potential of policies and technologies to sustainably reduce GHG emissions including the development of carbon abatement cost curves.

2. Measure, report, and verify (MRV) sector- and country-specific energy consumption and

GHG emissions, including development of tools and methodologies, as well as lessons learned.

3. Identify opportunities to economically deploy battery storage systems to support emissions reductions.

4. Promote distributed solar resources and rooftop solar through technical, legal, and policy support using traditional and innovative community-based models for deployment.

5. Support smart cities by developing conceptual studies for the implementation of digital energy networks, enabling energy efficiency and new business models to support distributed generation, Distributed Energy Resources (DERs), and electric mobility.

6. Design and support implementation of programs for large-scale deployment of low- or zero-emissions heating and/or cooling systems.

7. Design market-based mechanisms, policies, and standards to increase uptake of energy-efficient technologies and expand the use of demand response technology by utilities.

8. Promote green buildings by providing technical support to architects, engineers, developers, investors, and tenants to recommend energy efficiency measures in planned and existing buildings, with a view to achieving concrete, verifiable, and sustainable emissions reductions against the baseline design or as-built building.

9. Identify feasible approaches to decarbonize industrial production through enhanced energy efficiency, renewable energy, green hydrogen, and circular economy measures .

10. Train utility personnel to carry out energy audits on residential, commercial, and industrial customers.

C.4.10 Energy stakeholder support and consumer engagement

Energy consumers have a critical role to play both in energy sector reform and the drive to reduce emissions toward net zero goals. In order for that to happen, energy consumers and other stakeholders need to be informed. There are many challenges to informing and engaging with consumers and other stakeholders in developing countries. For example, in many countries there is no functioning mail service that would facilitate the delivery of messages from utilities to their customers. Likewise, while the internet may provide a ready alternative for communications, not all customers will have access to this network. Traditionally, customers would travel to the office of the utility to set up service, receive and pay bills, and lodge complaints. Fortunately, the proliferation of pre-paid and pay-as-you-go metering has lessened this need, but the communication challenges remain. Many nascent regulatory agencies and utilities fail at their obligation to inform consumers. Public hearings that are easily accessible to stakeholders are underused. Further, consumers have varied access to these existing communication channels, this access often depending on identity and social position, and they may not be adequately informed of their opportunities to manage and reduce energy consumption by, for example, purchasing energy-efficient appliances or applying for special financial incentives offered for energy audits.

The use of residential and small commercial consumers energy audits by utilities is not a common practice, as utilities prefer to focus their limited resources on serving large customers.

1. Advise on stakeholder advocacy and training in energy sector issues and the inclusion of consumers in the process of developing policies, such as through the Integrated…