RFI 72029425RFI00001 USAID West Bank and Gaza Energy Activity.pdf

REQUEST FOR INFORMATION AND SOURCES SOUGHT NOTICE

RFI Number: 72029425RFI00001

Activity: West Bank and Gaza Energy Project

Notice Type Request for Information and Sources Sought Notice

Issuance Date: January 3, 2025

Response Due Date: January 20, 2025 (17:00 Jerusalem time)

Response Email Address: ssakran@usaid.gov

The United States Agency for International Development (USAID) Mission in the West Bank and

Gaza issues this Request for Information (RFI) and Sources Sought Notice (SSN) to:

1. Gather information and suggestions to inform the design of a new energy project, and

2. Identify organizations with the capability to meet the anticipated requirements of this activity.

Interested parties may respond to the RFI, the SSN, or both.

This notice does not constitute a Request for Proposals (RFP) or a Notice of Funding

Opportunity (NOFO) and should not be interpreted as a commitment by the U.S. Government to issue a solicitation or award a contract, cooperative agreement, or a grant. Should a solicitation or NOFO be released, it will be published on the SAM.gov or Grants.gov websites, as appropriate. Interested organizations must submit their responses to any future solicitation or

NOFO independently.

The attached activity description is for informational purposes only and should not be regarded as final or binding language for any potential solicitation or NOFO.

Important Notes:

1. Submitting a response to this RFI and/or SSN does not confer any advantage to respondents in subsequent competitions.

2. Responses are not offers and will not result in any binding agreement with the U.S.

Government.

mailto:ssakran@usaid.gov https://www.sam.gov https://www.grants.gov

3. The U.S. Government will not compensate any party for information voluntarily provided in response to this request.

4. USAID reserves the right to use any submitted information without limitation or restriction; therefore, proprietary or confidential information should not be included in responses.

5. Applications, proposals, or resumes should not be submitted in response to this notice and will not be reviewed or considered.

Response Requirements

Responses to this RFI and/or the SSN must be in English and must not exceed the page limitation for each section:

a) Request for Information [No more than seven (7) pages]

USAID seeks feedback on the draft activity description to validate the feasibility of the proposed activity, and incorporate innovative and practical ideas into the final design.

The following questions aim to gather insights from interested parties with expertise in the energy sector.

1. General feedback on the overall draft activity description.

2. Specific Feedback to the following questions:

i. Are the expected results feasible and achievable within the proposed scope and timeframe?

ii. Do the expected results adequately address the identified challenges?

iii. What additional considerations or issues should be included to achieve the high-level results for the energy sector?

iv. Which specific areas or interventions should be prioritized to maximize impact within the energy sector?

v. What challenges might arise with the proposed approach, and how can they be mitigated?

vi. Are there specific innovative technologies, tools, or approaches that should be integrated to address the activity’s objectives effectively?

vii. What is the best approach to engage local organizations, including non-profits, civil society organizations, and small businesses in this sector?

viii. What are the most effective ways to incentivize private sector investment in the energy sector?

ix. What measures should be included to ensure the long-term sustainability of results after the activity ends?

x. Are there specific lessons from similar activities in other regions that could inform the design of this activity?

b) Sources Sought [no more than 3 (three) pages]

Interested organizations are requested to demonstrate their capability and experience to perform the planned activity requirements by providing the following information:

1. Organization name and contact information.

2. A one-page description of the organization and (if any) potential partners’ capabilities.

3. A two-page summary describing the organization’s and any partners’ experience in similar scope and magnitude to the services required, including experience in the West Bank and Gaza or the broader Middle East/North Africa region.

Responses should be sufficiently detailed to allow the government to evaluate the organization’s qualifications to perform this work.

Response Instructions

Responses must be submitted via email to Ms. Sandy Sakran, Senior Acquisition and Assistance

Specialist, at ssakran@usaid.gov by the specified due date. The subject line should read: “West

Bank and Gaza Energy Project – RFI/SSN.”

Each response must include the organization’s name, address, contact details (phone number and email), and the designated point of contact. USAID will acknowledge receipt of responses but will not provide feedback.

Thank you for your time and interest in USAID’s programs.

Sincerely, /S/

Daniel Harter

Contracting/Agreement Officer

USAID/West Bank and Gaza mailto:ssakran@usaid.gov

DRAFT ACTIVITY DESCRIPTION

West Bank and Gaza Energy Project1

C.1 PURPOSE AND OBJECTIVES

The purpose of this activity is to achieve a more reliable, resilient, and market-oriented energy sector in the West Bank while providing urgent power recovery needs in Gaza. This will be achieved through the following objectives:

1. Strengthening distribution utilities in the West Bank through enhanced technical and operational capacity, and improved financial sustainability through better accounting, financial planning practices, asset management, and investment planning capabilities.

2. Promoting industrial and commercial energy efficiency in the West Bank by promoting energy efficiency through standards and demonstration projects.

3. Catalyzing private investment in the West Bank by creating a more conducive environment for private sector engagement, attracting increased investment through risk reduction mechanisms and streamlined processes, and promoting advanced energy solutions to accelerate innovation and participation.

4. Supporting Gaza's immediate energy needs by providing emergency power-related recovery efforts.

Through this activity, the USAID/West Bank and Gaza Mission seeks to contribute to the following high-level goals for the energy sector:

1. Increase domestic electricity production from renewable energy sources to 30 percent by 2030.

2. Advance sustainable energy practices

3. Reduce electricity losses to improve grid efficiency and reliability.

4. Increase private sector-led investment and innovation to support a market-oriented energy sector.

5. Restore Gaza’s energy supply to meet immediate needs.

All interventions implemented under this activity must comply with the Taylor Force Act (TFA), which prohibits USAID/West Bank and Gaza from providing assistance that directly benefits the

1 USAID refers to the activity interchangeably as the “Energy Project”, “the Activity” or “the Project.” Interested organizations and individuals responding to this RFI/SSN can propose a new name for the project that follows USAID guidance on project naming (ref. USAID Graphic Standards Manual, https://www.usaid.gov/branding).

Palestinian Authority (PA). This includes funding infrastructure that a PA ministry or other PA entity is responsible for operating or maintaining, as well as any activities that directly increase tax revenue for the PA. The Contractor must develop and implement interventions that align with these requirements while achieving the activity’s purpose and objectives.

C.2 DEVELOPMENT CHALLENGE

The energy sector in the West Bank and Gaza faces significant challenges in meeting growing electricity demand while ensuring system reliability and financial sustainability. In the West

Bank, around 87 percent of electricity is imported from the Israel Electric Corporation (IEC), supplemented by up to 80 megawatts (MW) from Jordan. Despite substantial renewable energy potential, renewables account for only about 5 percent of electricity supply. Electricity demand is growing at an estimated 3.5 percent annually, with peak demand reaching 1,100 MW in 2023 and projected to double by 2040. Current supply arrangements provide only 950 MW of firm capacity, leading to shortages during peak periods.

High electricity costs and reliance on imports have heightened interest in energy efficiency, which, though still underdeveloped, has the potential to reduce demand by up to 25 percent, particularly in the industrial and commercial sectors that account for 60 percent of electricity consumption. Palestinians pay the highest electricity prices in the Middle East and North Africa region, averaging 16 cents per kilowatt-hour—significantly higher than neighboring countries.

For industry, electricity costs constitute 40 percent of production expenses, while households allocate 9 percent of their income to electricity, far exceeding the recommended 5 percent threshold. This financial strain has led to payment defaults by connection point owners, exacerbating significant debt owed to the IEC and constraining the ability of electricity distribution companies (DISCOs) to invest in critical upgrades.

The operational challenges faced by the five DISCOs further strain the energy sector.2 Technical and commercial losses average 23 percent, undermining financial sustainability. Approximately

40 percent of transformers and switchgear are operating beyond their intended lifespans, requiring urgent upgrades. Supervisory Control and Data Acquisition (SCADA) systems cover only 30 percent of the distribution network, limiting real-time monitoring and control capabilities. The absence of automated fault detection and restoration systems exacerbates inefficiencies. Reliability metrics highlight these shortcomings, with the System Average

Interruption Duration Index (SAIDI) reaching 25 hours annually and the System Average

Interruption Frequency Index (SAIFI) averaging 30 interruptions per customer per year. These figures are far above industry standards, where SAIDI typically ranges from 1 to 2 hours and

SAIFI from 1 to 2 interruptions per year.

2 For a map of the DISCO catchment areas, see page 9 of أیلوفلسطینفيالمتجددةالطاقةنحواالنتقالإلدارةاستراتیجیةتوجھات https://mas.ps/cached_uploads/download/2024/09/10/strategic-paths-energy-study-arb-v3-1725970355.pdf

Private sector participation in the energy sector remains limited, with only $45 million invested in renewable energy projects over the past five years. Local banks have extended $15 million in financing for renewable energy and energy efficiency projects, a fraction of the market’s potential. Barriers include complex permitting processes, particularly in Area C,3 and the absence of standardized power purchase agreements. Despite these challenges, Independent

Power Producers (IPPs) in the West Bank have established a combined capacity of 50 MW, signaling some progress.

In Gaza, the events of October 7, 2023, severely disrupted an already fragile energy sector. Prior to these events, Gaza relied on electricity imports from Israel (approximately 120 MW), supply from Egypt (around 20 MW), and local generation from the Gaza Power Plant (averaging 70

MW), which was constrained by limited fuel availability. Electricity supply averaged only 10–12 hours per day, affecting basic service provision and economic activities. The ongoing crisis has left critical facilities—including hospitals, water and wastewater treatment plants, and humanitarian support operations—without reliable power, creating an urgent need for emergency energy solutions.

Addressing these challenges requires a coordinated, multi-faceted approach. In the West Bank, efforts should focus on enhancing the capabilities of DISCOs, modernizing infrastructure, streamlining regulatory processes, and promoting private sector investment in renewable energy. In Gaza, immediate priorities include providing emergency power solutions to meet humanitarian needs while laying the groundwork for long-term restoration and resilience.

Through targeted interventions and enhanced collaboration, the Palestinian energy sector can progress toward a more sustainable and reliable future.

C.3 STATEMENT OF WORK

This activity consists of three core components focused on achieving a more reliable, resilient, and market-oriented energy sector in the West Bank, with a fourth component dedicated to addressing Gaza’s energy recovery needs. The components are as follows:

● Component 1: Strengthen Distribution Sector Performance

● Component 2: Promote Industrial and Commercial Energy Efficiency

● Component 3: Increase Private Sector Investment

● Component 4: Respond to Gaza’s Energy Needs

3 Areas A, B, and C in the West Bank refer to administrative divisions established under the Oslo Accords. Area A is under full Palestinian civil and security control, Area B is under Palestinian civil control and Israeli security control, and Area C, comprising about 60% of the West Bank, is under full Israeli control, including security and land management. For a map of West Bank Access Restrictions, see United Nations Office for the Coordination of Humanitarian Affairs.

https://www.ochaopt.org/content/west-bank-access-restrictions-may-2023 https://www.ochaopt.org/content/west-bank-access-restrictions-may-2023

C.3.1 Theory of Change

IF comprehensive technical capacity building, financial practices, and operational improvements are implemented at distribution utilities, AND IF local renewable energy development is accelerated while energy efficiency is promoted through demonstration projects and standards, AND IF private sector investment is facilitated through standardized frameworks and risk reduction mechanisms, AND IF recovery efforts are provided to support immediate power needs in Gaza, THEN the West Bank and Gaza's energy sector will achieve greater reliability, resiliency, and market orientation.

BECAUSE these interventions build capacity, attract investment, and address critical gaps in energy supply and infrastructure.

The long-term development impact includes:

● Improved energy security and reduced dependence on imports.

● Enhanced economic growth through a reliable and efficient power supply that supports industries, businesses, and households.

● Increased environmental and financial sustainability through the adoption of locally sourced and affordable energy solutions.

● Increased private sector participation in energy development, driving innovation and market competitiveness.

● Stabilized electricity supply in Gaza through emergency power solutions for critical facilities and humanitarian operations, establishing foundation for future system restoration.

The restoration of Gaza's power infrastructure is critical for enabling essential services, supporting recovery efforts, and meeting urgent humanitarian needs. This optional component provides flexible, rapid-response support to address immediate power needs while laying the groundwork for longer-term system recovery. This option will be exercised should the political and security situation permit, and upon approval of the USAID Mission. Implementation will require close coordination with Israeli authorities and the international donor community to ensure efficient resource allocation and maximum impact.

C.3.1.1 Key Pathways of Change:

1. Distribution Sector Strengthening

IF distribution utilities receive advanced grid management systems, technical training, modern asset management strategies, loss reduction mechanisms, and improved safety and cybersecurity frameworks, THEN they will achieve improved operational efficiency, strengthened financial sustainability, and reliable service delivery.

BECAUSE these interventions address core technical, financial, and operational challenges while building long-term institutional capacity to manage energy systems more effectively.

2. Energy Supply Diversification

IF the activity conducts comprehensive grid integration studies, introduces energy storage solutions, and implements energy efficiency standards, THEN the energy sector will achieve increased adoption of local renewable energy, reduced energy intensity, and enhanced system stability.

BECAUSE these interventions mitigate technical barriers, create enabling conditions for local clean energy development and adoption, and support the integration of distributed energy resources into the grid.

3. Market Development

IF the activity establishes streamlined procurement processes, introduces bankable frameworks, and partners with local financial institutions to develop financial mechanisms, THEN the sector will attract increased private investment, greater availability of commercial financing, and scaled deployment of advanced energy solutions.

BECAUSE these interventions reduce investment risks, demonstrate the commercial viability of renewable energy projects, and create a conducive environment for private sector engagement.

4. Gaza Recovery and Resilience

IF early recovery efforts in Gaza focus on emergency power restoration and local renewable energy deployment, THEN Gaza will achieve improved access to energy for critical services.

BECAUSE these measures address urgent humanitarian needs while laying the foundation for long-term energy security and sustainability in Gaza.

C.3.1.2 Critical Assumptions:

1. The political and security situation allows for effective implementation of activities in the

West Bank and Gaza.

2. Israeli authorities cooperate on permits, approvals, and cross-border energy solutions.

3. Targeted distribution utilities demonstrate commitment to reform, modernization, and operational efficiency improvements.

4. The private sector responds actively to market opportunities created by activity interventions.

5. Local financial institutions are willing to engage in energy sector financing.

6. Regional cooperation supports the development of energy infrastructure and integration.

7. Gaza recovery efforts are not significantly hindered by security, logistical, or political challenges.

C.3.1.3 Risk Mitigation Strategies:

1. Adopting a tailored and phased implementation approach to minimize disruption and adapt to changing conditions.

2. Maintaining robust stakeholder engagement across all levels.

3. Designing the program with flexibility to respond and adapt to unforeseen challenges and emerging opportunities.

4. Coordinating closely with other donor initiatives and multilateral programs to align resources and avoid duplication of efforts.

5. Establishing a robust monitoring and evaluation framework to track progress, assess risks, and enable timely course corrections.

C.3.2 Strategic Linkages

This activity is designed to align with and support the USAID/West Bank and Gaza Mission strategy, USAID agency-wide priorities, and the national sector plans for the West Bank and

Gaza.

The activity directly contributes to USAID/West Bank and Gaza Development Objective (DO) 1

“Inclusive Governance and Stability Enhanced” by promoting good governance and institutional capacity within the energy sector. Through the modernization of distribution utilities, the activity strengthens transparency and accountability, ensuring equitable and reliable energy service delivery while fostering resilience in conflict-affected communities.

The activity also advances DO 2 “Broad-Based Economic Development Enabled” by reducing barriers to economic growth through enhanced access to reliable energy supply. By integrating local renewable energy, promoting energy efficiency, and catalyzing private sector investment, the activity supports the growth of local businesses and industrial productivity. This creates a more market-oriented and resilient energy sector that drives economic expansion and improves livelihoods.

Additionally, the activity supports DO 3 “Resilience and Human Development Outcomes

Strengthened” by enhancing energy access in Gaza to meet basic needs. By improving energy reliability and promoting renewable energy adoption, the activity also reduces dependence on external aid and creates opportunities for disadvantaged groups, including women and youth, to participate in the energy sector and contribute to improved human development outcomes.

At the Agency level, the activity aligns with USAID’s broader priorities, including addressing climate change through the USAID Climate Strategy 2022–2030. The activity promotes local renewable energy integration, energy efficiency, and climate-resilient infrastructure to mitigate climate risks and support sustainable development. The activity also supports USAID’s Private

Sector Engagement Policy by fostering investment opportunities, leveraging private capital, and enabling public-private partnerships within the energy sector. Furthermore, the activity is consistent with USAID’s Gender Equality and Women’s Empowerment Policy, integrating gender considerations to empower women and marginalized groups, ensuring equitable participation and benefits from energy advancements. In line with USAID’s commitment to localization, the activity builds the capacity of Palestinian institutions to take ownership of energy solutions and sustain progress.

The activity aligns with the Palestinian National Renewable Energy Action Plan and the Energy

Efficiency Action Plan, which prioritize renewable energy expansion, energy efficiency improvements, and reducing dependence on imported electricity. By supporting national goals to modernize distribution utilities, enhance grid reliability, and develop local energy markets, the activity ensures alignment with national development priorities and contributes to broader sustainability and energy security objectives.

C.3.3 Activity Components

C.3.3.1 Component 1: Strengthen Distribution Sector Performance

Under this component, the contractor must conduct a comprehensive assessment of the infrastructure, technical, financial, and operational needs of the five DISCOs in the West Bank, ensuring that at least three DISCOs are targeted. The assessment should identify baseline conditions, gaps, challenges, and priority areas for interventions, along with tailored recommendations to address the specific needs of each DISCO. Not all activities under each sub-component will necessarily be implemented for all the targeted DISCOs; the assessment will determine the prioritization of both DISCOs and the activities for each targeted DISCO. The selected DISCOs and activities must be approved by the Contracting Officer's Representative

(COR) as part of the yearly work plans. The Expected Results outlined in each sub-component establish benchmarks to guide implementation and evaluate the overall impact of the activity across the targeted DISCOs.

C.3.3.1.1. Sub-Component 1.1: Strengthen Technical and Operational Capacity

Based on the comprehensive assessment conducted, the contractor must enhance the capacity of at least three DISCOs under this sub-component by prioritizing improvements to support the integration of increasing local renewable energy generation and cross-border power flows. This includes the deployment of advanced grid management technologies, improvement of business practices, and implementing targeted workforce development initiatives. Accelerating local renewable energy development in the West Bank is a strategic imperative for enhancing energy security, reducing power supply costs, and advancing climate objectives. Despite significant renewable energy potential, its integration presents complex technical and administrative challenges. The contractor must deliver tailored technical and operational solutions to address these challenges, promoting the development of local renewable energy projects. This combined approach will equip DISCOs to deliver reliable, resilient, and efficient energy infrastructure and services, ensuring sustainable and high-quality energy distribution.

Illustrative Activities:

● In collaboration with utilities, develop or update five-year network and operations plans, and establish a joint working group to coordinate activities among DISCOs. This includes identifying critical infrastructure constraints hindering the advancement of the distribution energy sector, such as power line upgrades, renewable energy project integration, and ancillary infrastructure needs. The plans should include prioritized, actionable recommendations for donor and multilateral bank support, and private sector engagement.

● Conduct grid impact studies to evaluate the integration of renewable energy and distributed energy resources (DERs). These studies will assess load flow, system stability, voltage regulation, fault levels, and overall grid performance.

● Establish standardized grid connection requirements for DISCOs, including technical standards, testing protocols, and streamlined permitting procedures to support renewable energy integration.

● Design and support deployment of guidelines and operational procedures for battery energy storage systems with advanced control capabilities for frequency regulation, peak shaving, and black start functionality.

● In collaboration with local and international stakeholders such as the European Bank for

Reconstruction and Development, support the expansion of electricity interconnections by undertaking comprehensive technical feasibility studies, developing detailed engineering designs, implementing grid reinforcement measures to enhance system stability, establishing operational protocols and procedures, and designing commercial frameworks to facilitate cross-border energy trading.

● Install and configure distributed energy resource management systems (DERMS) for advanced monitoring, control, and optimization of renewable generation.

● Implement automated feeder reconfiguration and fault location, isolation, and service restoration (FLISR) systems with real-time monitoring for enhanced grid resilience.

● Provide hands-on training in industry-standard power system software for network planning, analysis, and optimization.

● Develop a robust cybersecurity framework for at least two DISCOs to reduce cyber vulnerabilities across procurements, business processes, and operational systems. This includes the development and operationalization of cyber incident response plans to effectively address and mitigate potential cyberattacks on distribution systems.

● Deploy health and safety management protocols with staff training.

● Apply Six Sigma methodology to develop improvement plans for utility management training, focusing on utility management, leadership, and technical skill development.

Expected Results:

● Five-year network development plans are developed or updated for at least three

DISCOs, including comprehensive investment plans that outline project scopes, estimated costs, implementation timelines, possible funding sources, and expected outcomes.

● At least five critical infrastructure constraints in the distribution network for each of the three targeted DISCOs are identified and prioritized to enhance grid reliability, resulting in the initiation of at least five private sector or donor-supported projects based on actionable recommendations outlined in the five-year network development plans.

● Grid impact studies are completed for at least three DISCOs, identifying and prioritizing at least 10 critical grid constraints related to the integration of renewable energy and distributed energy resources. Based on the studies, the DISCOs adopt at least five actionable recommendations, which result in measurable improvement in grid reliability, such as a 15 percent reduction in outages related to grid instability and a 10 percent increase in the capacity for renewable energy integration.

● Recommendations for grid code updates are developed and adopted and tested by at least three DISCOs, fully aligned with international best practices for renewable energy integration, accompanied by online step-by step investor guidelines detailing compliance with at least five technical standards and three testing protocols. These improvements should result in streamlined permitting procedures, reducing approval time for private sector projects by 30 percent from the baseline timeline.

● At least five battery energy storage systems deployed in targeted DISCOs.

● A comprehensive technical feasibility study and detailed engineering design for the existing electricity interconnection infrastructure with Jordan, enabling the import of at least an additional 80 MW of additional energy capacity to diversify the energy supply.

● Successful installation and operationalization of at least two DERMS, covering at least 50 percent of renewable generation assets in the targeted distribution utilities.

● Deployment of FLISR systems in at least two DISCOs, to achieve a reduction in fault response times by at least 30 percent and a 20 percent decrease in grid downtime.

● Certification of at least a total of 20 engineers from at least three DISCOs in the use of industry-standard power system software, such as PSS®E and DIgSILENT, for network planning, analysis, and optimization.

● Cybersecurity strategy is developed and adopted by at least three DISCOs. The strategy includes the development of digital architecture for targeted DISCOs that aligns with both the five-year network plans and the associated infrastructure investment plan.

● ISO 45001-compliant health and safety management system deployed in at least two distribution companies, to reduce workplace incidents by at least 20 percent within 12 months of implementation.

● At least 50 utility managers and staff from targeted DISCOs are trained in utility management, leadership, and technical skills, with at least 70 percent demonstrating improved competencies through post-training evaluations.

C.3.3.1.2. Sub-Component 1.2: Improve Financial Sustainability

Financial sustainability lies at the core of effective electricity distribution operations, directly impacting service quality, system reliability, and the sector's long-term viability in the West

Bank. DISCOs currently face challenges, including significant technical and commercial losses, aging infrastructure, and tariff structures that insufficiently reflect operational costs. The contractor must address these critical challenges through a comprehensive approach that combines modernized asset management practices, and data-driven investment planning to ensure long-term financial sustainability.

Illustrative Activities:

● Develop commercial loss reduction strategies, including targeted public awareness campaigns to address electricity theft, billing irregularities, and payment compliance.

● Provide capacity-building to DISCOs to support the implementation of net billing systems for distributed energy resources, including rooftop solar photovoltaics (PV) with battery systems.

● Develop a strategy for implementing a cost-reflective tariff methodology, that would incentivise time-of-use rates and demand charges.

● Acquire and install asset management systems and train utility staff.

● Develop an integrated financial planning framework that links load forecasting, system constraints, and multi-year capital improvement plans to guide strategic investments.

This framework will be closely aligned with the five-year network and operations plans developed under Component 1, ensuring that investment decisions are informed by technical and operational priorities.

Expected Results:

● A comprehensive loss reduction strategy is developed and adopted by at least two

DISCOs, targeting a 20 percent reduction in non-technical losses to enhance revenue collection and improve overall financial sustainability.

● At least two DISCOs are trained and equipped with tools to pilot and operationalize net billing systems for distributed energy resources.

● A cost-reflective tariff methodology is developed, tested, and piloted for at least one

DISCO to increase revenue collection by at least 10 percent.

● At least two time-of-use tariff structure simulations conducted to assess consumer behavior, load-shifting benefits, and economic impacts.

● ISO 55000-compliant asset management systems deployed in at least three DISCOs, improving reliability and operational efficiency.

● At least 20 utility staff trained in asset inventory management, condition assessment techniques, and maintenance prioritization, to increase asset utilization by 20 percent.

● Multi-year financial plans are developed and adopted by at least three DISCOs, optimizing capital expenditure allocation through the integration of load forecasting, system constraints, and prioritized investments, leading to enhanced operational efficiency and system reliability.

C.3.3.2 Component 2: Promote Industrial and Commercial Energy Efficiency

Energy efficiency represents a critical pathway to reduce power demand, lower operating costs, and enhance energy security across the West Bank's key economic sectors. While significant potential exists for energy efficiency improvements, particularly in agriculture and municipal water treatment facilities, adoption remains constrained by market barriers, technical capacity limitations, and underdeveloped regulatory frameworks. The contractor must address these challenges through a strategic combination of demonstration projects, professional certification programs, and standards development.

Illustrative Activities:

● Implement demonstration pilots for energy-efficient technologies and practices in agriculture, focusing on improving energy efficiency in water pumping systems, promoting productive uses of energy (PUE), and distributing energy-efficient equipment for agricultural processing. These efforts will be coordinated with USAID/West Bank and

Gaza’s (WBG)BG’s Quality Technologies Revitalizing Agriculture activity (Q’tra) and informed by successful international models.

● Implement demonstration pilots for energy-efficient technologies and operational practices in municipal water treatment, emphasizing reducing energy consumption and enhancing system sustainability. These efforts will be coordinated with USAID/WBG’s

Non-Revenue Water Management activity and informed by successful international models.

● Support industry associations in promoting energy efficiency, including developing case studies and financial models that demonstrate investment returns from energy efficiency projects across key sectors.

● Support the establishment or adaptation of an energy audit certification program by leveraging existing international standards and frameworks. This includes developing tailored training materials, certification procedures, and facilitating partnerships with relevant certification bodies to ensure alignment with best practices and recognition of certified energy auditors.

● Train and certify local energy service companies (ESCOs) in audit procedures.

● Develop or update building energy codes to improve energy efficiency in the design, construction, and renovation of buildings in collaboration with industry stakeholders.

● Establish or update performance standards for building equipment in partnership with industry associations and technical experts to promote energy efficiency improvements across multiple sectors.

Expected Results:

● At least four demonstration projects are implemented in the agricultural sector, showcasing energy-efficient water pumping systems, PUE, and energy-efficient equipment for agricultural processing, serving as replicable models for broader adoption in the agricultural sector.

● At least one demonstration project is implemented in municipal water treatment facilities, highlighting energy-efficient technologies and operational practices, serving as replicable models for broader adoption in the municipal water sector.

● Five case studies or pilots developed in collaboration with industry associations or private sector entities showcasing financial and environmental benefits of energy efficiency projects.

● A recognized energy audit certification program is established or adapted in alignment with ISO 50002 standards.

● At least 10 ESCOs are trained and certified in energy auditing procedures, to enable the completion of at least 50 energy audits annually across key industrial and commercial sectors.

● Building energy codes are developed or updated and adopted that would lead to a projected 15 percent reduction in energy consumption for new and retrofitted buildings over baseline practices. At least 20 professionals, including architects, engineers, and construction managers, are trained on the new codes to ensure effective implementation.

● Performance standards for at least five categories of building equipment (e.g., HVAC systems, lighting, and appliances) are established or updated and adopted across multiple sectors. Implementation of these standards results in a projected 10 percent improvement in energy efficiency for compliant equipment. At least one industry association is engaged in the development process to ensure alignment with technical and market needs.

C.3.3.3 Component 3: Increase Private Sector Investment

C.3.3.3.1 Subcomponent 3.1: Facilitate Private Sector Investment

Private sector investment is essential to accelerate renewable energy deployment and energy efficiency improvements across the West Bank's power sector. While investment opportunities exist, private sector participation remains constrained by regulatory uncertainty, complex and variable approval processes, and other challenges to project development. The contractor must address these challenges through a comprehensive approach that combines streamlined technical requirements, transparent procurement processes, and bankable contract structures to create an enabling environment for private investment.

Illustrative Activities:

● Design a competitive Independent Power Producer (IPP) procurement framework including standardized prequalification criteria, tender documents, and evaluation methodologies.

● Develop standardized bankable Power Purchase Agreement (PPA) template incorporating international best practices for risk allocation, payment security, and dispute resolution.

● Identify and develop complete investment packages for renewable energy projects including technical studies, designs, and financial models for private sector investment in

Areas A and B of the West Bank. In coordination with USAID/WBG’s Trade, Investment, and Finance activity (TIFA), initiate investor outreach campaigns and host 2 private sector investment forums.

● Support renewable energy development in Area C, in alignment with national energy strategies by conducting technical feasibility studies, assessing grid connection requirements, performing social and environmental impact assessments, and developing financial models to attract private sector investment. If conceptually approved by the

Israeli Civil Administration (ICA), prepare detailed project designs and facilitate the permitting process to enable project implementation.

● In coordination with USAID/WBG’s TIFA, establish financial mechanisms with local banks and international financial institutions for renewable energy and energy efficiency investments.

Expected Results:

● A competitive IPP procurement framework is established for and adopted by at least three DISCOs, incorporating prequalification criteria, tender documents, and a comprehensive evaluation methodology, enabling transparent and efficient IPP selection processes.

● A bankable PPA framework and template is developed for at least three DISCOs, ensuring clear roles and responsibilities, equitable risk allocation, and robust payment security, effectively encouraging private sector investment in renewable energy projects.

● At least 10 investment packages for renewable energy and energy efficiency projects are identified and fully developed, leading to private sector commitments exceeding $5 million in total in Areas A and B of the West Bank.

● Additional investment packages in Areas A and B within the Jerusalem District Electricity

Company catchment area are fully developed for utility-scale renewable energy projects, enabling the installation of over 10 MW of local renewable energy capacity in partnership with the private sector.

● At least five renewable energy projects in Area C are technically, environmentally, and financially evaluated. If conceptually approved by the ICA, these projects are then fully designed and submitted for permitting through engagement with the ICA, enabling private sector investment and advancing project implementation.

● Financial mechanisms and on-lending products are established by local banks in partnership with international financial institutions, and in collaboration with

USAID/WBG’s TIFA, resulting in at least $5 million in concessional loans or credit lines for local renewable energy and energy efficiency investments.

C.3.3.3.2 Subcomponent 3.2: Promote Advanced Energy Solutions

Advanced energy solutions represent opportunities to modernize the West Bank's energy sector while advancing sustainability goals. The growing interest in grid edge technologies, such as electric vehicles (EVs), and the strategic importance of reliable power supply for industrial zones create compelling opportunities to demonstrate innovative energy technologies and business models. The contractor must design two pilot projects that can be replicated for sustainable transportation and for establishing the foundations for microgrid solutions while stimulating private sector collaboration in the West Bank.

Illustrative Activities:

● Develop an e-mobility strategy or vision including charging infrastructure master plan, grid impact studies, smart charging protocols, and payment platforms.

● Implement renewable energy-powered EV charging pilot projects and facilitate partnerships to scale adoption through collaborations with private sector investors.

● Conduct a comprehensive techno-economic assessment of microgrid potential across the West Bank. This activity will identify priority sites for microgrid deployment, evaluate technical feasibility and economic viability, and analyze regulatory and policy requirements to enable implementation. The assessment will also explore scalability and replicability, incorporating stakeholder input to align with local needs and capacities.

● In coordination with USAID/WBG’s TIFA activity, design and implement microgrid projects in industrial zones including technical specifications, control systems, business models, and financing structures to provide sustainable and resilient energy solutions.

Expected Results:

● An e-mobility strategy is developed within at least one distribution utility, including a charging infrastructure master plan that identifies at least 10 strategic locations, completion of two grid impact studies, adoption of three smart charging protocols, and establishment of a unified payment platform to facilitate seamless billing and transactions.

● Renewable energy-powered EV charging pilot projects are successfully implemented, resulting in the installation of 10 EV charging stations. These pilots demonstrate the feasibility of renewable-powered e-mobility solutions, attracting private sector interest and providing a foundation for scaling adoption.

● At least two partnerships are facilitated with private sector investors to scale EV charging infrastructure, generating additional investment commitments exceeding $1 million to support further deployment.

● A comprehensive feasibility study is conducted, identifying at least five high-potential locations (e.g., industrial zones) for microgrid deployment in the West Bank, with a combined renewable energy capacity of 5MW to 10 MW. The study includes in-depth technical analyses (e.g., load estimation, system configuration, and sensitivity analysis), robust economic evaluations (e.g., cost-benefit analysis, levelized cost of energy, and return on investment), and social impact considerations (e.g., stakeholder engagement, local employment creation, needs assessments, and risk mitigation strategies).

Additionally, it provides regulatory guidance, examines financing mechanisms and partnership opportunities, and concludes with actionable recommendations to support the successful design and implementation of microgrids.

● At least one microgrid project, including energy storage, is fully designed and ready for implementation in an industrial zone, with support and financing secured from at least

50 percent of the industrial businesses within the zone.

C.3.3.4 Component 4: Respond to Gaza’s Energy Needs

The restoration of Gaza's power infrastructure is critical for enabling essential services, supporting recovery efforts, and meeting urgent humanitarian needs. This optional component provides flexible, rapid-response support to address immediate power needs while laying the groundwork for longer-term system recovery. This option will be exercised should the political and security situation permit, and upon approval of the USAID Mission. Implementation will require close coordination with Israeli authorities and the international donor community to ensure efficient resource allocation and maximum impact.

Potential focus areas include:

● Conduct rapid assessment of critical power infrastructure damage and prioritize urgent rehabilitation needs for essential services.

● Procure and deploy emergency power solutions including mobile PV generators, solar-battery hybrid systems, and temporary distribution networks.

● Procure and install critical distribution equipment and materials including transformers and switchgear, and distribution lines and poles.

● Procure and deploy essential spare parts to support maintenance and repair of power infrastructure.

● Collaborate with Israeli authorities and the international donor community to ensure alignment of efforts, avoid duplication, and maximize impact.

C.4 IMPLEMENTATION APPROACH

C.4.1 Geographic Targeting

The activity will adopt a tailored approach to address the specific needs and priorities of the targeted DISCOs in the West Bank, as well as in Gaza. Recognizing the unique operational, technical, and financial challenges faced by each utility and region, the contractor will ensure that assistance packages are customized to maximize impact and sustainability.

1. Assessment of Utility-Specific Needs: The contractor will conduct comprehensive assessments for each DISCO and, if the political and security situation permits, the immediate power needs in Gaza. These assessments will identify baseline conditions, key challenges, and priority areas for intervention, ensuring that tailored support to targeted utilities addresses the specific operational realities of each utility and maximizes the potential impact of USAID assistance to each.

2. Tailored Assistance Packages: Each targeted DISCO will receive a customized assistance package designed to address its unique challenges. These packages may include technical training, infrastructure upgrades, local renewable energy integration, energy efficiency measures, financial management support, and capacity-building initiatives. For

Gaza, assistance will align with the broader context of urgent needs.

3. Regional Context and Equity: The approach will consider the geographic and demographic characteristics of each utility’s service area, including population density, economic activity, and access to energy resources. Assistance will be distributed equitably, ensuring all regions, including underserved and vulnerable areas, benefit from program interventions.

4. Stakeholder Engagement: Close collaboration with the management teams of each

DISCO will ensure that assistance packages align with their strategic goals and operational priorities. The contractor will also engage with local governments, community and private sector actors to ensure interventions are contextually relevant and supported by stakeholders.

5. Capacity Building for Local Ownership: Capacity development efforts will be customized to build the technical and institutional capabilities of each utility. This includes training staff, establishing robust operational procedures, and implementing advanced systems to ensure local ownership and sustainability.

6. Scalability and Replication: The activity will incorporate scalable solutions and best practices to international standards that can be replicated across DISCOs. This approach ensures that successful interventions in one utility can inform and inspire broader sectoral improvements.

7. Gaza’s Challenges: For Gaza, tailored interventions will consider its unique energy challenges, including supply constraints, infrastructure limitations, and humanitarian concerns. Support will align with the broader development and reconstruction efforts, ensuring complementarity and coherence with ongoing initiatives.

8. Monitoring and Adaptive Management: The contractor will develop activity- and utility-specific monitoring frameworks to track progress and outcomes, allowing for adaptive management to address emerging needs or challenges. Regular evaluations will ensure that geographic targeting remains responsive to evolving conditions.

C.4.2 Sustainability Considerations

Sustainability is a cornerstone of this activity, ensuring that interventions have lasting impacts beyond the period of USAID support. For all interventions under this activity, sustainability is defined as the commercial outcomes and results that continue, and are scaled and replicated, in the absence of USG government assistance. The activity will deliberately integrate sustainability considerations across all components to strengthen local capacity, promote ownership, and establish mechanisms that ensure the continuation of results. Specific sustainability strategies include:

1. Institutional Capacity Building: Focus on strengthening the technical, operational, and financial capacities of local distribution companies and stakeholders.