2. SPARC Amendment 1 Revised RFP 72012124R00004 FINAL.pdf

REVISED RFP 72012124R00004 Amendment 1 SPARC Activity

RFP Issuance Date: October 30, 2023 Questions Due Date: November 7, 2023 at 15:00 Kyiv Local time Phase One Proposal Deadline: November 21, 2023 at 15:00 Kyiv Local time Phase Two Proposal Deadline: o/a February 2, 2024 pending Phase One Notices

SUBJECT: Request for Proposals No. 72012124R00004, USAID Securing Power, Advancing Resilience & Connectivity (SPARC) Activity

Dear Prospective Offerors:

The United States Government, represented by the U.S. Agency for International Development (USAID/Ukraine), is seeking proposals from qualified organizations interested in providing the services required to implement the SPARC activity in accordance with the terms and conditions stated in this Request for Proposals (RFP).

USAID anticipates awarding a single Cost-Plus Fixed Fee (CPFF) term type contract plus Procurement Completion Fee with 123,600 productive days level of effort (LOE) and a period of performance of five (5) years, subject to availability of funds.

USAID invites all interested and responsible organizations to submit offers in accordance with the requirements of this solicitation. USAID will conduct this procurement as a full and open competition under which any type of organization may submit a proposal. The procedures set forth in Federal Acquisition Regulation (“FAR”) Part 15 will govern the procurement. The geographic code for this procurement is 935, and the NAICS code is 541690.

The Government intends to conduct the evaluation in two phases, as described in Section M of this solicitation. Participation in Phase One is a mandatory part of this acquisition. Failure to participate in Phase One will preclude further consideration of the Offeror’s proposal. Phase Two submissions will not be accepted from any Offeror who has not participated in Phase One.

Proposals must be submitted in accordance with the instructions listed in Section L of this RFP.

Proposals received after the closing date and time will be processed as late and handled in accordance with FAR 52.215-1. Only electronic submissions will be accepted. It is the responsibility of the Offeror to ensure that its proposal is received timely in its entirety and USAID bears no responsibility for data errors or delays resulting from transmission or conversion processes. Proposals not in conformance with this RFP may be excluded.

Issuance of this RFP does not in any way obligate the U.S. Government to award a contract, nor does it commit the U.S. Government to pay any costs incurred in the preparation and submission of an offer.

Furthermore, the Government reserves the right to reject any and all offers, if such action is considered to be in the best interest of the Government.

This RFP can be viewed and downloaded from https://sam.gov. Amendments to solicitations are occasionally issued and will be posted on the same website. USAID advises interested parties to regularly check the above websites for amendments.

Offerors not registered in SAM should start the process as soon as possible as registration is required before Phase Two proposal submission.

For further information on the SAM process:

https://www.workwithusaid.org/resource-library/registration-eggspectation;

https://sam.gov/content/entity-registration

Thank you for your interest and we look forward to your participation.

All questions, comments, and/or requests for clarifications must be sent in writing to Contracting Officer Carter Saunders and casaunders@usaid.gov and kyivrcoeg@usaid.gov no later than the date and time indicated above.

Thank you for your interest and we look forward to your participation.

Sincerely, /S/

Craig Riegler Director Regional Contracting Office USAID/Ukraine https://sam.gov/content/entity-registration mailto:casaunders@usaid.gov mailto:kyivrcoeg@usaid.gov

5. PROJECT NO.

CODE

7. ADMINISTERED BY

2. AMENDMENT/MODIFICATION NO.

CODE

6. ISSUED BY

8. NAME AND ADDRESS OF CONTRACTOR

4. REQUISITION/PURCHASE REQ. NO. 3. EFFECTIVE DATE

9B. DATED

PAGE OF PAGES

10A. MODIFICATION OF CONTRACT/ORDER NO.

10B. DATED

1. CONTRACT ID CODE

FACILITY CODE CODE

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:

The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers

E. IMPORTANT:

is extended,

(a) By completing Items 8 and 15, and returning __________ copies of the amendment; (b) By acknowledging receipt of this amendment of each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR AC- KNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY is not extended.

12. ACCOUNTING AND APPROPRIATION DATA

(REV. 10-83)

is required to sign this document and return ___________ copies to the issuing office. is not, A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.

15C. DATE SIGNED

B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).

RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

D. OTHER

Contractor

16C. DATE SIGNED

14. DESCRIPTION OF AMENDMENT/MODIFICATION

16B. UNITED STATES OF AMERICA

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

15A. NAME AND TITLE OF SIGNER 16A. NAME AND TITLE OF CONTRACTING OFFICER

15B. CONTRACTOR/OFFEROR

STANDARD FORM 30 STANDARD FORM 30

(Type or print) (Type or print)

(Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

(No., street, county, State and ZIP Code)

(If other than Item 6)

(Specify type of modification and authority)

(such as changes in paying office, appropriation date, etc.)

(If required)

(If applicable)

(SEE ITEM 11)

(SEE ITEM 13)

(X)

(X)

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,

IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

(Signature of person authorized to sign) (Signature of Contracting Officer)

01 See Block 16 C.

USAID/Ukraine USAID/Kyiv Regional Contract Office Dept. of State 5850 Kyiv Place Washington, D.C. 20521-5850 one

1 1

9A. AMENDMENT OF SOLICITATION NO.

72012124R00004 TO ALL OFFERORS x

X

October 30, 2023

The purpose of this Amendment No. 01 is to:

1. Provide answers to the questions received in response to Request for Proposal(RFP) No.72012124R00004, SPARC Activity in Ukraine; and

2. Revise Request for Proposal (RFP) No.72012124R00004. All changes made to the revised RFP are highlighted in yellow. All other terms of the RFP remain unchanged.

Craig Riegler Supervisory Contracting Officer

BY 11/10/2023

X

/s/

REQ-121-24-0000XX

720121

SPARC (RFP) No. 72012124R00004 Amendment 1

Table of Contents

PART I - THE SCHEDULE 8

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS 8

B.1 PURPOSE

B.2 CONTRACT TYPE

B.3 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

B.4 BUDGET

B.5 INDIRECT COSTS AND ADVANCED UNDERSTANDING ON CEILINGS

B.6 COST REIMBURSABLE

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 TITLE

C.2 PURPOSE AND THEORY OF CHANGE

C.3 BACKGROUND

C.4 COMPONENTS

C.5 OPERATING PRINCIPLES

C.6 CONSTRUCTION [APPLICABLE ONLY TO ADDED A&E/CONSTRUCTION

ACTIVITIES]

SECTION D - PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (JAN 1993)

D.2 BRANDING STRATEGY

SECTION E - INSPECTION AND ACCEPTANCE

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY

REFERENCE

E.2 INSPECTION AND ACCEPTANCE

SECTION F - DELIVERIES OR PERFORMANCE

F.1. NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY

REFERENCE

F.2. PERFORMANCE PERIOD

F.3. PLACE OF PERFORMANCE

F.5. PERFORMANCE STANDARDS

F.6. LEVEL OF EFFORT (LOE)

F.7. KEY PERSONNEL

F.8. PLANS, REPORTS, DELIVERABLES

F.9. GEOSPATIAL REPORTING REQUIREMENTS

F.10. CONSTRUCTION IMPLEMENTATION PLAN (CIP) [APPLICABLE ONLY TO

ADDED A&E/CONSTRUCTION ACTIVITIES]

SECTION G - CONTRACT ADMINISTRATION DATA

G.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY

REFERENCE

G.2 CONTRACTING OFFICER

G.3 CONTRACTING OFFICER’S REPRESENTATIVE (COR)

G.4 CONTRACTOR’S PRIMARY POINT OF CONTACT

G.5 PAYING OFFICE

G.6 INVOICING INSTRUCTIONS

G.7 ACCOUNTING AND APPROPRIATION DATA

G.8 CONTRACTOR'S PAYMENT ADDRESS

G.9 TECHNICAL DIRECTION/RELATIONSHIP WITH USAID

PART II CONTRACT CLAUSES

SECTION H - SPECIAL CONTRACT REQUIREMENTS

H.1. ADDITIONAL REQUIREMENTS FOR PERSONNEL COMPENSATION

H.2. AUTHORIZED GEOGRAPHIC CODE

H.3. ADS 302.3.5.19 USAID-FINANCED THIRD-PARTY WEB SITES (NOV 2017)

H.4. LANGUAGE REQUIREMENTS

H.5. ENVIRONMENTAL COMPLIANCE

H.6. FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL

CONFERENCES (ADS REFERENCE 350MAA)

H.7. EXECUTIVE ORDER ON TERRORISM FINANCING

H.8. CONSENT TO SUBCONTRACT

H.9. ELECTRONIC PAYMENT SYSTEM

H.10. GRANTS UNDER CONTRACT

H.11. LOGISTIC SUPPORT

H.12. SUBMISSION OF DATASETS TO THE DEVELOPMENT DATA LIBRARY

(DDL) (OCT 2014) ADS 302.3.5.21

H.13. RESTRICTIONS AGAINST DISCLOSURE (AAPD 16-02) (MAY 2016)

H.14. LIMITATION ON ACQUISITION OF INFORMATION TECHNOLOGY

(APRIL 2018) (DEVIATION NO. M-OAA-DEV-FAR-22-03c and M-OAA-DEV-AIDAR- 22-06c)) (APRIL 2022)

H.15. FAR 4.21 PROHIBITION ON CONTRACTING FOR CERTAIN COVERED

TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES OR

EQUIPMENT (SECTION 889) (DEC 2021)

H.16. SECURITY

H.17. SEXUAL MISCONDUCT (DECEMBER 2020)

H.18. AIDAR 752.222-70 USAID DISABILITY POLICY - ACQUISITION (DEC 2004) .. 56

SECTION I - CONTRACT CLAUSES

I.1. 52.252-2 CLAUSES INCORPORATED BY REFERENCE (FEB 1998)

I.2. AIDAR 752.252-2 AIDAR CLAUSES INCORPORATED BY REFERENCE (MAR

2015)

I.3. FAR 52.204-1 APPROVAL OF CONTRACT (DEC 1989)

I.4. AIDAR 752.7007 PERSONNEL COMPENSATION (JUL 2007)

I.5. AIDAR 752.229-71 REPORTING OF FOREIGN TAXES (JULY 2007)

I.6. FAR 52.204-25 – PROHIBITION ON CONTRACTING FOR CERTAIN

TELECOMMUNICATIONS AND VIDEO SURVEILLANCE OR EQUIPMENT (NOV

2021)

I.7. FAR 52.217-8 OPTION TO EXTEND SERVICES (NOV 1999)

I.8. FAR 52.247-67 SUBMISSION OF TRANSPORTATION DOCUMENTS FOR

AUDIT (FEB 2006)

I.9. AIDAR 752.228-3 WORKER’S COMPENSATION INSURANCE (DEFENSE

BASE ACT) [(DEVIATION JUN 2022)] CLASS DEVIATION NO. M-OAA-DEV-

AIDAR-22-10c

I.10. AIDAR 752.7005 SUBMISSION REQUIREMENTS FOR DEVELOPMENT

EXPERIENCE DOCUMENTS (SEP 2013)

PART III – LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS 69

SECTION J - LIST OF ATTACHMENTS

J.1. ATTACHMENT 1 - BUDGET TEMPLATE

J.2. ATTACHMENT 2 - PAST PERFORMANCE TEMPLATE

PART IV – REPRESENTATIONS AND INSTRUCTIONS 70

SECTION K - REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS

OF THE OFFEROR

K.1. NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY

REFERENCE

K.2. FAR 52.204-8 ANNUAL REPRESENTATIONS AND CERTIFICATIONS (MAR

2023)

K.3. FAR 52.204-24 REPRESENTATION REGARDING CERTAIN

TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES OR

EQUIPMENT (NOV 2021)

K.4. FAR 52.204-26 COVERED TELECOMMUNICATIONS EQUIPMENT OR

SERVICES-REPRESENTATION (OCT 2020)

K.5. FAR 52.209-7 INFORMATION REGARDING RESPONSIBILITY MATTERS

(OCT 2018)

K.6. FAR 52.209-13 VIOLATION OF ARMS CONTROL TREATIES OR

AGREEMENTS-CERTIFICATION (NOV 2021)

K.7. FAR 52.230-1 COST ACCOUNTING STANDARDS NOTICES AND

CERTIFICATION (JUN 2020)

K.8. FAR 52.230-7 PROPOSAL DISCLOSURE – COST ACCOUNTING PRACTICE

CHANGES (APR 2005)

K.9. SIGNATURE

SECTION L – INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS OR

RESPONDENTS

L.1. FAR 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY

REFERENCE

L.2. FAR 52.216-1 TYPE OF CONTRACT (APR 1984)

L.3. FAR 52.233-2 SERVICE OF PROTEST (SEP 2006)

L.4. GOVERNMENT OBLIGATION

L.5. GENERAL INSTRUCTIONS

L.6. PROPOSAL SUBMISSION

L.7. PHASE ONE: INSTRUCTIONS FOR PREPARATION OF THE PHASE ONE

PROPOSAL

L.8. PHASE TWO: INSTRUCTIONS FOR THE PREPARATION OF THE PHASE

TWO TECHNICAL PROPOSAL

L.9. COST PROPOSAL INSTRUCTIONS

L.10. WAIVERS UNDER FAR PART 4.2101 PROHIBITION ON COVERED

TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES AND

EQUIPMENT (JUNE 2023)

SECTION M - EVALUATION FACTORS FOR AWARD

M.1. GENERAL INFORMATION

M.2. PHASE ONE

M.3. ADVISORY NOTIFICATION

M.4. PHASE TWO

M.5. COST PROPOSAL EVALUATION

M.6. EVALUATION OF PAST PERFORMANCE

M.7. DETERMINATION OF THE COMPETITIVE RANGE AND CONTRACT

AWARD

M.8. SOURCE SELECTION

M.9. AWARD DECISION

PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to provide technical assistance and other services as described in detail in Section C.

B.2 CONTRACT TYPE

This is a Cost-Plus-Fixed-Fee (CPFF) Term Type Contract, plus Procurement Completion Fee. For the consideration set forth below, the Contractor must provide the level of effort described in Section F6 in implementing the requirements in Section C.

B.3 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

a. The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, if any, is $ [TBD]_________. The fixed fee, if any, is $ [TBD]_________. The estimated cost plus fixed fee, if any, is $ [TBD]_________.

b. Within the estimated cost plus fixed fee (if any) specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee, if any) for performance hereunder is $_________. The Contractor shall not exceed the aforesaid obligated amount.

c. Funds obligated hereunder are anticipated to be sufficient through _________.

B.4 BUDGET

a) The budget for this contract is as follows:

Line Item Total

Direct Costs $ [TBD]

Grants Under Contracts $15,000,000

Procurements $295,000,000

Indirect Costs $ [TBD]

Total Estimated Cost $ [TBD]

Fixed Fee (Term) $ [TBD]

Fixed Fee (Procurement) $ [TBD]

Total Cost Plus Fixed Fee $ [TBD]

b) The inclusion of any costs in the above cost categories does not obviate the requirement for prior approval by the Contracting Officer of cost items designated as requiring prior approval by any of the terms and conditions of this contract, including the applicable cost principles (see FAR § 52.216- 07, “Allowable Cost and Payment”); nor does it constitute a determination of allowability by the Contracting Officer of any item of cost, unless specifically stated elsewhere in this contract. Also, these amounts may not be adjusted without a written modification signed by the Contracting Officer.

The Contractor must not bill any amounts against this contract in excess of the amounts specified for each line item.

B.5 INDIRECT COSTS AND ADVANCED UNDERSTANDING ON CEILINGS

Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs must be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases for prime contractors:

Offeror Rate % Rate % Ceiling Rate % Rate % Ceiling Rate %

Base of Application

Source: (insert)

Period: (insert)

*Add rates and ceiling per NICRA. Offeror may leave out ceiling rates for Fringe Benefits

The Contractor will make no change in its established method of classifying or allocating indirect costs that impacts this contract without the prior written approval of the Contracting Officer.

Reimbursement for indirect costs must be at final negotiated rates, but not in excess of ceiling rates specified above. The Government must not be obligated to pay any additional amount associated with indirect costs above the ceiling rates established in the contract. This advance understanding must not change any monetary ceiling, cost limitation, or obligation established in the contract.

B.6 COST REIMBURSABLE

The U.S. dollar costs allowable shall be limited to reasonable, allocable and necessary costs determined in accordance with FAR 52.216-7, Allowable Cost and Payment, and AIDAR 752.7003, Documentation for Payment.

B.7 PAYMENT OF FIXED FEE

a) Subject to FAR 52.216-8, Fixed Fee, payment of ($TBD) of the fixed fee shall be allocated based upon the proportion of the level of effort (LOE) specified in Section F.6 that was provided by the Contractor in the period covered by the invoice. Normally, the Contractor will be paid the portion of the fee specified that corresponds to the proportion of LOE delivered by the Contractor during the period covered by the invoice. In the event that the Contractor does not provide the total LOE stipulated in Section F.6, the total amount of fixed fee will be reduced in similar proportion. For example, if the Contractor has expended 85% of the total level of effort, then the Contractor is entitled to 85% of the fixed fee amount, provided that the performance and compliance has been otherwise satisfactory.

b) The remaining ($TBD) of fixed fee (“Procurement Completion Fee”) under this contract is tied to the achievement of procurement deliverables for specific equipment and goods procurement within the Procurement Line Item in B.4 and described in C.4.4. Goods and equipment deliverables, plus associated Procurement Completion Fee, will be negotiated on a prospective fiscal quarterly basis between the Contractor and the Contracting Officer (CO). Procurement Completion Fee per procurement must be proportionate to the equipment procured and performance standards, e.g. delivery, must be established based on objective, best practice standards in accordance with FAR 11.4. Upon successful achievement of a deliverable, the Contractor must provide evidence of its achievement to the Contracting Officer’s Representative (COR). Upon COR receipt and written acceptance of the deliverable, the Contractor must submit an invoice for the amount of the associated Procurement Completion Fee following the conclusion of the respective quarter.

c) Procurement Completion Fee for procurements not achieved do not, without the approval of the Contracting Officer, roll over into other procurements. The Procurement Completion Fee paid for a specific procurement may be reduced by 15% by the Contracting Officer, with the advice of the COR, in the event of the Contractor not meeting procurement performance objectives, such as procurement completed but with unexcusable, untimely delivery. Based on verified, objective performance beyond expectations and with the advice of the COR, the CO may negotiate additional Procurement Completion Fee beyond the current TEC plus fixed fee, not to exceed $1,000,000 total, pending availability of funds and subject to statutory fixed fee limitations. The CO is not mandated to exercise this authority.

B.8 MULTI-YEAR CONTRACT

This contract is subject to the requirements of FAR 17.106. In determining cancellation ceilings, the Contracting Officer has determined that – considering reasonable pre-production or startup, labor learning, and other nonrecurring costs to be incurred and which normally would be amortized – the cancellation ceiling for each contract year after the first is $0.

[ END OF SECTION B ]

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 TITLE

The title of this contract is the USAID Securing Power, Advancing Resilience & Connectivity Activity (“program” or “activity”).

C.2 PURPOSE AND THEORY OF CHANGE

The principal purpose of this contract is to provide strategic technical and procurement assistance to the Government of Ukraine (GOU), focusing on enhancing the resilience, reliability, affordability, and security of the electricity, natural gas, and district heating sectors. This includes addressing the challenges posed by the current war, as well as preparing for future post-war reconstruction in Ukraine. This contract aligns with the standards set forth by the European Union’s (EU) Energy Acquis Communautaire (https://www.energy-community.org/legal/acquis.html), which entails incorporating measures that promote market integration with competitive European energy markets, thereby fostering private sector-driven investments.

C.3 BACKGROUND

The GOU, along with international donors, has conducted numerous studies to establish the specific requirements needed for the restoration of critical infrastructure. In April 2023, Ukraine pledged to formulate a National Energy and Climate Plan. The recent Ukraine Recovery Conference (https://www.urc-international.com), held in London in July 2023, allowed the Ukrainian Government to present the postwar recovery plans for all sectors (https://www.urc-international.com/urc2022-recovery-plan) with specific emphasis on the energy sector. During the Conference, the G7+ countries committed to the Clean Energy Partnership, supporting Ukraine’s sustainable energy infrastructure recovery and reconstruction.

Key stakeholders in Ukraine’s energy sector include:

● Government Authorities: Ministry of Communities, Territories, and Infrastructure Development; Ministry of Energy; Cabinet of Ministers; and Parliament Verkhovna Rada, Municipal Governments

● Regulatory Bodies: National Energy and Utilities Regulatory Commission, National Securities and Stock Market Commission, Anti-Monopoly Committee of Ukraine

● Electricity Sector: UkrEnergo (electricity transmission system operator); EnergoAtom (nuclear power operator); CenterEnergo (thermal power operator); OblEnergos (nationalized and privately-owned electricity distribution system operators); the “Guaranteed Buyer”; and the “Market Operator”

● Natural Gas Sector: GasTSO (natural gas transmission system operator); Naftogaz (natural gas producer); UkrTransGas (Naftogaz-owned underground gas storage system operator);

and OblGas companies (natural gas distribution system operators)

● Municipal Sector: Municipally-owned district heating utilities

● Energy Producers: UkrHydroEnergo (hydroelectric power producer); CenterEnergo (coal-based thermal power operator); EnergoAtom (nuclear power generator) and other public, municipal and private power generators

● Other Stakeholders: Market participants; other international donors and organizations

C.4 COMPONENTS

All activities and interventions conducted within the components below must be approved by COR and are subject to the COR’s direction.

C.4.1 Component 1: Enhanced Energy Supply

The sub-objective of this component is to provide all required technical assistance to the Ukrainian government and related entities to meet and exceed the requirements for EU integration and mobilize private sectors-led investments. The Contractor must strive to achieve the following results:

1. Ukraine is able to meet demand and deliver energy to its energy customers with an adopted plan for short- and mid-term needs;

2. Implementation of an adopted plan for the removal of all non-market mechanisms, including those governing renewable energy development;

3. Facilitation of a minimum of $1 billion in energy investments, primarily sourced from the private sector, for energy generation and delivery to Ukrainian energy customers.

The Contractor must update and/or develop compliant energy market models for Ukraine’s electricity, natural gas, and district heating sectors, based on the enacted electricity, natural gas, energy regulator, REMIT (Regulation on Energy Markets Integrity and Transparency) laws and other relevant laws based on EU Directives: (https://www.energy-community.org/dam/jcr:42be4f40-e842-430d-b7cb-40939ca935ed/20072023_UEMO_REMIT_Law_final_clean.pdf) The Contractor must maximize the utilization of Ukraine’s existing natural resources while guiding the country’s transition to low carbon and renewable energy resources, and enhancing strategies for emission reduction. The Contractor must provide support for the optimization of Ukraine’s underground gas storage assets, including planning for strategic reserves serving European partners.

This component includes, but is not limited to, the following:

Sub-component 1.1 Energy Generation and Supply

The Contractor must develop and update compliant energy market models that encompass Ukraine’s electricity, natural gas, and district heating sectors. These models and plans must prioritize the optimal use of existing water resources and underground conventional and unconventional petroleum resources. This includes formulating strategies for coal mines, ensuring the transition towards low-carbon energy sources, such as natural gas, biomethane, and hydrogen-capable energy generation. The Contractor may not support coal mine operation, development, or production without USAID prior approval. The Contractor must support reductions in emissions in energy generation in alignment with Ukraine’s national energy and climate change plan (https://www.kmu.gov.ua/en/news/natsionalnyi-enerhetychnyi-i-klimatychnyi-plan-ukrainy-maie-https://www.energy-community.org/dam/jcr:42be4f40-e842-430d-b7cb-40939ca935ed/20072023_UEMO_REMIT_Law_final_clean.pdf https://www.energy-community.org/dam/jcr:42be4f40-e842-430d-b7cb-40939ca935ed/20072023_UEMO_REMIT_Law_final_clean.pdf staty-chastynoiu-povoiennoho-vidnovlennia-krainy-iuliia-svyrydenko), supporting regular plan updates as required.

The Contractor must support the transition of existing generation technology towards more flexible, load-following, and peaking purposes. Furthermore, the Contractor must advance the development of integrated renewable energy sources incorporating market-based solutions, and improve district heating by incorporating modern technologies, including high-performance co-generation power plants and the utilization of industrial waste heat.

The Contractor must assess resource adequacy using probabilistic methods, while also formulating more deterministic, cost-effective energy generation plans for the short-term (0-5 years), mid-term (6-15 years) and long-term (16-30+ years). Additionally, the Contractor must facilitate the enhanced utilization of Ukraine’s underground storage assets, potentially extending their utility to serve as a strategic reserve for European countries, traders, shippers, and suppliers.

Sub-component 1.2 Energy Delivery and Storage

The Contractor must review and periodically, at the COR’s direction, update ten- or five-year network development plans for Ukraine’s electricity, natural gas, and district heating networks, encompassing both the transmission and distribution segments. The objective for this is to address the requirements of present and forthcoming decentralized power generation, including intermittent renewable energy resources. This task involves evaluation of, and if necessary, decommissioning networks that are economically unjustified.

The Contractor must provide assistance to electricity and natural gas transmission system operators.

This assistance must include enhancing cross-border transmission capacities, particularly with respect to European networks. This collaboration must strengthen the overall capacity and efficiency of transmission across borders.

Sub-component 1.3 Legal and Regulatory Measures

The Contractor must provide assistance for developing key legislative and regulatory measures necessary to establish competitive energy markets in Ukraine. This assistance must promote the constitutional independence of the energy regulator and robust oversight of regulated energy transmission and distribution sectors. Additionally, the Contractor must support the energy regulator in maintaining market integrity and transparency within non-regulated generation and supply sectors.

The Contractor must support the phased discontinuation of non-market entities, such as the Guaranteed Buyer, as well as mechanisms like Public Service Obligations and all other cross-subsidies facilitated through state-owned entities (e.g. NaftoGaz, EnergoAtom, and UkrHydroEnergo). Additionally, the Contractor must assist in the expansion of the Housing and Utilities Subsidy program to cover all vulnerable households facing energy poverty.

The Contractor must improve the GOU’s management of energy networks, aiming to enhance accountability and empower system operators. This may include granting management rights for planning, procurement, operation, maintenance, and disposal of capital assets and the establishment of financial accountability mechanisms to the GOU through dividends and audited profit statements.

The Contractor must provide technical assistance for the re-privatization of electricity and natural gas distribution system operators, particularly nationalized during the ongoing war. The Contractor must provide support to these utilities to improve their financial performance and profitability.

The Contractor must conduct an evaluation of the potential benefits of merging the gas transmission system operator with the current NaftoGaz-owned underground gas storage operator, or alternatively, pursuing the unbundling of the underground gas storage operator. This evaluation must take into account regulatory oversight, international confidence, and required legal and regulatory measures. Based on the outcome of the evaluation and at the direction of the COR, the Contractor must provide support for the option approved by the GOU and the energy regulator.

The Contractor must provide targeted assistance to state, municipal, and USAID-prior-approved private sector entities ensuring proper governance, sound financial practices, and the implementation of effective operation and maintenance activities.

Sub-component 1.4 Financial and Economic Analyses

To ensure a comprehensive understanding of the financial requirements and transparent operations of state-owned entities in the energy sector, the Contractor must develop models for balance sheets and cash flow statements. Beneficiary entities include transmission system operators, UkrEnergo and Naftogaz, underground gas storage operator, CenterEnergo, UkrHydroEnergo, EnergoAtom, the Guaranteed Buyer, Nominated Electricity Market Operator, Universal Service Supplier, the Supplier of the Last Resort, and others as deemed necessary by the COR. Special attention must be given to the nationalized electricity and natural gas distribution system operators. Their balance sheets and cash flow statements must undergo modeling, and any proposed measures, such as tariff adjustments should be finalized before offering these utilities for private sector ownership. The Contractor must formulate options for both concession-based or privatization-based ownership.

These models must be used as tools for assessing the financial stability of these institutions, informing government interventions for state budgetary support, ensuring transparency in financial management, and evaluating proposed tariff changes and their impacts on various consumer groups, including households, commercial and industrial customers, and vulnerable populations.

Furthermore, the Contractor must employ financial and economic analyses in the implementation of a regulatory asset base tariff system for all regulated utilities, with a distinct emphasis on enhancing the bankability of network development investments through the utilization of regulatory tariff periods.

The Contractor must also use financial analysis to address issues contributing to insolvency in the energy sector, particularly those related to previous power purchase agreement-based feed-in tariffs.

The Contractor must advocate for market based, affordable, and equitable remedies for investors and Ukrainian end-users.

Sub-component 1.5 Investment Planning and Promotion

The Contractor must review and prepare investment project proposals within the domains of energy generation, delivery, storage, and energy efficiency. These projects may originate from USAID or, with prior COR approval, other stakeholder requests. The Contractor’s support must encompass concept development, pre-feasibility, and the necessary environmental and social impact analyses, which may involve collaboration with other USAID activities. In cases where these projects are owned by the state or municipal government, they may be jointly presented to investors in partnership with Ukrainian government stakeholders or international financial institutions. The Contractor must give particular emphasis and priority to non-recourse project financing.

C.4.2 Component 2: Improved Demand-Side Management

The sub-objective of this component is to mobilize energy efficiency investments in the commercial and industrial entities, lower energy intensity of these sectors, and facilitate investments. The Contractor must support initiatives that reduce energy consumption through conservation and technological advancements that will lead to decreased demand for energy supply, ultimately leading to lower costs for all energy consumers. The Contractor must actively engage in the preparation and adaptation process of the Ukraine's Energy and Climate Change plan, should it not already been adapted. The Contractor must strive to achieve the following results:

1. Ukraine meets or exceeds the annual targets for the municipalities and industrial customers for at least two years during the implementation of the activity, as described in 2.1 below;

2. Facilitation of a minimum of $1 billion in demand-side management investments, primarily sources from the private sector.

This component includes, but is not limited to, the following:

Sub-component 2.1 Energy Demand Projection and Identification of Interventions

The Contractor must conduct a comprehensive analysis of existing GOU energy efficiency and emission reduction plans, as well as the National Energy and Climate Change Plan and targets. This analysis must identify all consumer groups, as well as the gaps in households, commercial, municipal, and industrial energy users. Subsequently the Contractor must develop a plan aimed at reducing energy intensity in both industrial customers and municipal utilities for the duration of Ukraine’s National Energy and Climate Change plan. This plan must serve as a guiding framework for the implementation of Sub-components 2.2 and 2.3 below.

Sub-component 2.2 Reduction of Energy Intensity of Industrial Customers

The Contractor must provide technical assistance to a minimum of three state-owned industrial entities, subject to USAID prior approval. Assistance should include the identification of technological and process improvements, and pre-feasibility, economic, and cost-benefit analyses.

The Contractor must collaborate with the selected entities to secure financing through commercial or international finance institutions and oversee the full process through financial closure.

Sub-component 2.3 Reduction of Energy Intensity of Municipal Utilities

The Contractor must provide technical assistance to a minimum of three municipally owned utilities, such as those involved in district heating or water and wastewater services, subject to USAID approval. Assistance should include the identification of technological and process improvements, and pre-feasibility, economic, and cost-benefit analyses. The Contractor must collaborate with the selected entities to secure financing through commercial or international finance institutions and oversee the full process through financial closure.

C.4.3 Component 3: Strengthened Energy Markets

The sub-objective of this component is to create an enabling business environment in energy markets by providing confidence to all market participants and investors in the Ukrainian energy sector. The Contractor must provide assistance towards the advancement of Ukraine’s energy markets. This must include coupling the electricity market with Europe, increasing energy market competition, and the establishment of a gas hub in Ukraine. All market development activities must result in affordability for Ukrainian energy consumers. The Contractor must strive to achieve the following results:

1. The international fora, such as the Energy Community Secretariat Ukraine Market Observatory (https://www.energy-community.org/Ukraine/observatory.html) acknowledge that Ukrainian energy markets have successfully achieved EU requirements for competition, and completed electricity market coupling with Europe;

2. A minimum of 15% of spot electricity market executed trades are done through market coupling trades.

This component includes, but is not limited to, the following:

Sub-component 3.1 Energy and Natural Gas Market Competition

The Contractor must conduct a comprehensive review on the competition issues within both the electricity and natural gas markets, and provide recommendations for further steps to USAID.

Subsequently, the Contractor must engage in a collaborative process with other stakeholders to reach a consensus on how to improve competition and must then support the implementation of these recommendations by assisting relevant stakeholders.

Sub-component 3.2 Impact of Energy Markets Coupling with Europe

The Contractor must conduct a comprehensive review on the impact of market coupling in both the electricity and natural gas markets, and provide recommendations for further steps to USAID.

Subsequently, the Contractor must engage in a collaborative process with other stakeholders to reach a consensus on the appropriate approach and must then support the implementation of this approach with the relevant stakeholders. This coupling must be at least on the Net Transfer Capacity-based, and the Flow Based-coupling roadmap should be agreed by relevant Ukrainian and European stakeholders authorities.

Sub-component 3.3 Continued Energy Markets Development https://www.energy-community.org/Ukraine/observatory.html

The Contractor must conduct comprehensive reviews, including cost-benefit analyses, on different segments of the energy markets, including, but not limited to:

● Day-ahead, intraday, balancing, ancillary services, and bilateral market in electricity

● Spot and organized bilateral markets with physical and financial delivery products in natural gas and electricity markets, as well as EU’s Single Day-Ahead Coupling framework.

The Contractor must provide recommendations for further steps to USAID, inclusive of power exchanges and market clearing. Subsequently, the Contactor must engage in a collaborative process with other stakeholders to reach a consensus on the appropriate approach, and must then provide technical assistance to the stakeholders to implement the improvements. Furthermore, the Contractor must provide technical assistance to the energy and financial regulators to ensure transparency and integrity of energy markets.

Sub-component 3.4 Gas Hub Development

The Contractor must conduct a comprehensive review on the proposed development of a gas hub in Ukraine. This review should include analysis on leveraging domestic natural gas production and available underground gas storage assets, as well as utilizing gas storage assets as a strategic reserve by European countries. In implementing the review the Contractor must utilize a collaborative process with other stakeholders to reach a consensus approach and assist in the implementation process.

C.4.4 Component 4: Procurement Agent

The sub-objective of this component is to provide both program implementation-required and wartime and post wartime-needed procurements. The Contractor must procure through this activity a range of energy sector equipment for regular program implementation and in response to current wartime needs in Ukraine. These procurements will address priorities identified by the GOU in support of its energy sector stabilization, restoration, and modernization efforts. Equipment needs may include but are not limited to hardware/software for system operators, the electricity market operator, energy regulator or other government stakeholders; construction equipment and materials;

and highly technical energy equipment such as auto-transformers, power transformers, power generators, and cogeneration units which may need to be imported into Ukraine.

The Contractor must promptly initiate procurements based on the needs identified by USAID and should also provide recommendations to USAID for potential procurements identified by other GOU stakeholders and partners. All procurement needs must be approved through the work plan by the COR and the Contractor must assess and certify the ability of the recipient to operate and maintain the equipment or goods received. If the recipient does not have the ability to operate or maintain the equipment or goods, the Contractor must either present a plan to bring the recipient to the required level or not provide the equipment or goods.

The Contractor must establish all procurement, accountability, import, and delivery logistical processes (“end to end”), from the identification of the procurement needs to the final delivery in

Ukraine with the purpose of delivering needed goods as promptly as possible to Ukraine to meet stakeholder/beneficiary needs, particularly those related to winterization. This encompasses both procurements originating outside of Ukraine and those within the country. The Contractor must maintain robust, accountable quality control systems to detect and address non-compliances, fraud risk, and schedule delays, minimizing adverse impacts. In case of procurement or delivery delays or non-compliances, the Contractor must promptly inform the COR, provide reasons for the delays or noc-compliance, and propose remedies or alternative solutions.

Through the work-plan and as otherwise requested by the COR, the Contractor must provide the COR a detailed list of equipment and material lists of past, current, and planned procurements with detailed information, including a technical justification, approximate or actual cost, delivery timeline, location/beneficiary, subcontractor/vendor, and impact information (such as number of people benefited) that is updated in real-time.

C.5 OPERATING PRINCIPLES

The Contractor must ensure the following are integrated in implementation of the program:

C.5.1 SUSTAINABILITY

The success of the program is dependent on the sustainability of the competitive energy market measures implemented by the GOU and the independent regulator. The Contractor must develop sustainable technical and institutional capacity to lead to functional energy markets and increased transparency and effective regulatory oversight while being ambitious in performance per Section F.5, particularly in the first two years of implementation.

To support sustainability, the Contractor must promote the participation of local organizations. This can be achieved through subcontracts or grants or other reasonable modalities if they support local organizations to develop their institutional capacity, take ownership of the results, and contribute to the long-term sustainability of energy market reforms.

C.5.2 ANTI-CORRUPTION

The Contractor must combat corruption by helping to establish a transparent and predictable regulatory environment that is less prone to corruption and abuses by utility managers and public authorities. The Contractor must incorporate specific anti-corruption elements in its approach, including but not limited to performing appropriate due diligence assessments and responsibility determinations on potential partners, including grant recipients and subcontractors.

C.5.3 DONOR COORDINATION

At the direction of the COR, the Contractor must perform comprehensive coordination with key stakeholders, including the Energy Community Secretariat, the EU, World Bank, European Bank for Reconstruction and Development (EBRD), the U.S. Department of Energy, the U.S. State Department Bureau of Energy Resources, as well as other relevant sector donors. This coordination entails employing appropriate mechanisms for developing and monitoring progress towards the establishment of an enabling regulatory and legislative framework. It also includes facilitating energy policy and planning scenarios, as well as enhancing the development and integration of renewable energy resources within the power grid.

C.5.4 STAKEHOLDER PARTICIPATION

The Contractor must actively engage in public outreach efforts, organizing dialogues between public and private sectors. These efforts should yield tangible outcomes in the implementation of energy sector reforms and energy market development.

C.5.5 COORDINATION WITH OTHER USAID PROJECTS

The Contractor, with USAID support, must coordinate and communicate with other ongoing USAID activities in Ukraine and the broader Europe and Eurasia Region, when appropriate. This collaborative approach aims to leverage synergies and optimize outcomes in conjunction with fellow USAID implementing partners within the country.

C.5.6 GRANTS UNDER CONTRACT

The Contractor must implement a Grants Under Contract (GUCs) program to achieve activity targets and objectives. The Contractor must make grants in accordance with Section H.12.

C.5.7 INCLUSIVE DEVELOPMENT

Every dimension of human diversity has the potential to influence people’s needs, experiences, opportunities, and rights. Therefore the Contractor must take the varied perspectives, needs, and interests of Ukrainian citizens, communities, ethnic groups, private sector, and central/regional government bodies into consideration before implementing any significant interventions. Such interventions can include assisting in policy development and monitoring, drafting laws and regulations, establishing industry standards and product access rights, and designing and providing training programs.

C.5.8 GENDER

The program aims to create a more competitive and environmentally friendly energy sector, providing reliable electricity and gas delivery systems for all populations. To achieve this, the Contractor must ensure that men and women receive equal support within all USAID-funded activities and that gender awareness and gender dynamics are considered throughout all aspects of the project. The following steps must be taken by the Contractor:

● Attract local gender expertise in implementation.

● Improve the participation of women in decision-making at all levels on a best effort basis.

● Take into consideration different needs, attitudes and priorities of women and men to develop gender-sensitive policies and measures.

● Investigate the impacts of policies on women and men, applying methods and tools such as Gender Impact Assessments.

● Include wide-ranging structural and lifestyle changes in designing its mitigation responses, not only rely on technologies and markets.

● Build stakeholders and beneficiaries’ awareness that gender analysis is a vital component of the policy-making process.

● Elevate women leadership and empower women so that their views are reflected in policy debates.

● Support attention to the inclusion of women in formal decision-making and take affirmative measures to ensure women take part in decision-making processes at all levels.

● Include gender training modules in workshops for internship programs.

● Ensure that government officials are aware of gender equality provisions in laws and policies and be able to implement them.

● Work with the GOU counterparts to ensure that gender equality laws are understood and implemented.

● Develop partnerships with civil society organizations formed by women’s and gender advocates.

● Strive for at least 30/70% female/male or male/female participation in all activities (not less

30% and not more 70% of each sex).

● Provide grant recipients or sub-agreement recipients briefings on gender equality and gender analysis.

● Ensure staff accountability for developing gender-sensitive performance indicators for measuring the project’s success.

● Develop gender-sensitive performance indicators and incorporate them in the Management, Evaluation, and Learning (MEL) Plan.

● Disaggregate performance indicators data by sex as appropriate and feasible; and

● Clearly indicate the areas or aspects in which gender is relevant and specifically show in the

Implementation Plan and MEL how gender issues will be addressed, how results will be determined taking gender into account; and what resources will be provided to do this.

The Contractor must look for gender implications or opportunities in the program, seeking to address embedded gender issues and promote gender equity, as appropriate, in all phases of program implementation and internal management.

C.5.9 PUBLIC EVENTS AND DISTRIBUTION OF MATERIALS

The Contractor must seek USAID concurrence for meetings with any IFIs or Donor Institutions, as well as with GOU officials at the level of Department Head above. The Contractor must ensure that USAID is informed about meeting requests well in advance to be able to plan for USAID participation.

When invited to participate and present at public events such as conferences, roundtables, workshops, seminars, other meetings outlined above, the Contractor must make its best effort to ensure appropriate USAID representation and role at such meetings. The Contractor must invite USAID representatives to such meetings and events and provide them with appropriate program background information, presentation materials and talking points. Only when USAID representatives are not able to participate and present at such public events and meetings, and/or when the USAID explicitly authorizes the Contractor to do so may the Contractor participate in such public events and meetings on its own and make presentations and statements on behalf of USAID.

No program materials can be distributed without prior submission and approval from USAID.

Requests for USAID/Ukraine Energy Security through Project materials from IFIs, GOU, donors, embassies, or major private partners are to be directed to USAID for approval to distribute.

The Contractor must track and report all requests for materials and materials distributed in their quarterly reports.

C.5.10 ADAPTIVE MANAGEMENT

The Contractor must use an adaptive management approach that incorporates ongoing monitoring for contextual changes, stresses, and shocks, determine when adaptations are needed, and quickly pivot to…