PEP_Section_C,_L,_M_and_SOO.pdf

Draft Sections C, L, M and SOO under the USAID PEP Activity USAID/Philippines

DRAFT SECTIONS C, L, M AND STATEMENT OF OBJECTIVES UNDER THE

USAID-PNG ELECTRIFICATION PARTNERSHIP ACTIVITY SOLICITATION

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 TITLE OF ACTIVITY

USAID-PNG Electrification Partnership Activity

C.2 ACTIVITY GOAL

The goal of the USAID PNG Electrification Partnership Activity is to contribute significantly to achieving the goal of connecting 70% of Papua New Guinea’s population to electricity by 2030. To accomplish this goal, the Contractor will facilitate reaching a target of [Offeror proposed number] new electricity connections by the end of the Activity. Contributions to this target will come from various interventions outlined in the four objectives of this activity.

C.3 BACKGROUND

C.3.1 Introduction

In November 2018, at the Asia-Pacific Economic Cooperation (APEC) Summit, Papua New Guinea invited Australia, Japan, New Zealand and the United States to work together to support its goal of connecting 70% of its population to electricity by 2030. The Papua New Guinea Electrification Partnership (PEP) recognizes that access to electricity is fundamental to economic growth and is foundational for the development of the private sector and industries. Papua New Guinea has one of the lowest electricity access rates in the region with only 13% of households having access to reliable electricity. To achieve the 70% household electrification target by 2030, PNG will rely on increased collaboration between its government institutions, the private sector and development partners.

To inform planned activities and coordination of the PEP, a multi-agency mission from Australia, Japan, New Zealand and the U.S. participated in the Trilateral Partnership for Infrastructure Investment Meeting, which was held from April 9-10 in Port Moresby, Papua New Guinea. From this technical scoping trip, targeted areas for partnership have been identified considering the multitude of projects that are either planned or ongoing by other development organizations.

The proposed set of interventions supports the Indo-Pacific Strategy, particularly the Asia Enhancing Development and Growth through Energy (EDGE) Initiative which supports market-based energy policy and reforms, modernization of energy infrastructure and expanded access to affordable, secure and reliable energy supplies.

https://www.usaid.gov/energy/asia-edge https://www.usaid.gov/energy/asia-edge

C.3.2 Power Situation

The current generation capacity of the country’s two main grids, Port Moresby (POM) and Ramu is very low at around 320 MW, 50 MW of which are supplied by independent power producers (IPPs). About 63% of the generation capacity is sourced from hydro, gas and geothermal while 37% from diesel power thermal sources. PNG has established transmission and distribution networks in the urban centers of Port Moresby, Ramu Valley (Lae, Madang and Highlands area) and Gazelle Peninsula as well as 19 isolated independent power grids servicing provincial centers. Of these three major grids, Ramu power system is connected to 9 provinces. Moreover, it is estimated that 280 megawatts of power is being generated by mining companies for their own consumption.1 The National Energy Rollout Plan (NEROP) estimates that electricity demand will grow by 300 MW by 2030 through expanded connections and future demand from the mining and commercial/industrial and other sectors.

The current national electricity tariff is very high at nearly 30 cents per kilowatt hour. One of the reasons for the high tariff is the reliance on expensive imported thermal resources, which accounts for 37% of total generation. PNG is endowed with generous indigenous energy resources such as hydro, natural gas, oil, geothermal and other renewable energy sources such as wind and solar. By reducing costs through cheaper domestic energy resources, PNG can reduce their very high generation costs. The World Bank’s recently completed study, Delivering Affordable, Sustainable and Reliable Power to PNG, identifies hydro and gas as the least cost generation options moving forward. The study also identifies new opportunities for solar and wind integration for the POM grid as well as in off-grid locations.

PNG has a fragile power system given its topography and aging power infrastructure. In a study conducted by the World Bank, PNG ranked fifth in terms of the countries with the greatest number of power outages averaging 42 each month.2 System losses, both technical and non-technical, were consistently high from 2015 to 2017, averaging almost 25%,3 about 20% of which were due to unmetered consumption. In a survey of energy consumers in the industrial city of Lae, 80% of the customers were very dissatisfied with the supply of electricity to their home/establishments. Major complaints included affordability of the electricity tariffs, efficiency of power delivery, resolution of complaints, sustainability of power options being considered by the country, adequacy of regulations and enforcement and current available energy options.4

With support from the World Bank, the Government of PNG (GPNG) developed the NEROP, which is the blueprint for implementing the electrification program with the target of reaching 70% by 2030. Given the geography and settlement patterns of PNG’s population, it is estimated that grid electrification is the least-cost option for providing access to approximately 75% of the nation’s future population; while off-grid systems are recommended for the other 25%.5 The table below summarizes current level of grid access and options for grid and off-grid electrification through 2030. These estimates may be further refined through future more detailed planning and updates to the NEROP.

1 ADB 2018 Pacific Energy Update 2 https://post courier.com.pg/png-fifth-power-outages/, June 29, 2018 3 Delivering Affordable, Sustainable and Reliable Power to Papua New Guineans, World Bank, July 2018, p. 52 4 An Appraisal of PNG National Energy Policy 2018-2028, Papua New Guinea University of Technology, pp 7-8 5 Delivering Affordable, Sustainable and Reliable Power to Papua New Guineans, World Bank, July 2018, p. 49

Table 16 - Summary of grid level access and options for electrification

C.3.3 State of PPL

Founded in 1963, PNG Power Limited (PPL), formerly known as the Papua New Guinea Electricity Commission (ELCOM), is a fully integrated authority responsible for the generation, transmission, distribution and retailing of electricity servicing almost 112,000 customers throughout the country. Under the Electricity Industry Act of 2002, PPL took over all of ELCOM’s assets, liabilities, rights, titles and personnel. PPL is a State Owned Entity previously under the oversight of the Ministry of State Owned Enterprises (MSOE) and oversight is currently transitioning to the Ministry of Information Communication and Technology (ICT) and Energy. Kumul Consolidated Holdings Limited (KHCL) is mandated to hold the shares for corporatized state entities like PPL. A Board was created by the Ministry of State Owned Enterprises (MSOE) through which PPL provides annual financial and operational reports and a five-year business plan to KHCL.

PPL has numerous challenges with the foremost being aging infrastructure, high non-technical losses (non-payment for electricity), oversized workforce, and political interference.

An assessment of PPL’s financial and operational performance from 2015 to 2017 revealed that the entity has been in financial distress affecting its capacity to fund planned investments, therefore constraining PPL to provide reliable services to its customers.

Electricity is very costly in PNG with PPL’s average tariffs for 2017 registered at $0.279/kWh7. Despite its comparatively high weighted tariffs, PPL has limited funds to cover its debt service and capital expenditure requirements. Further, the operating costs and expenses of $250 million are considered oversized for a company with 112,000 customers and $270 million of revenues.8 Major operational costs include staff and overhead costs and fuel, which represent 34% and 26%, respectively, of its total revenues. Since 2013, tariff rates

6 PNG Electrification, World Bank, May 2017, p. 5 7 Delivering Affordable, Sustainable and Reliable Power to Papua New Guineans, World Bank, July 2018, p. 49 8 Ibid.

have not been adjusted to allow PPL to reflect the true cost of service and allow for a reasonable rate of return.

C.3.4 Electricity Regulation

The Independent Consumer and Competition Commission (ICCC) has broad responsibilities across the economy regulating transport, insurance, fuel and energy sectors. Consistent with the Independent Consumer and Competition Act of 2000, the Electricity Industry Act of 2002 mandating the body to exercise economic regulation by overseeing the conduct of the generation, transmission, distribution and sale of electricity. The Commission consists of three Commissioners, which are appointed by the Prime Minister and serve on such terms and conditions as determined by the Parliament.

Specifically, the Commission is tasked to plan and to coordinate the supply of electricity throughout the country, set electricity tariffs, develop and implement regulatory standards for electricity service including reliability indices, lay the groundwork to allow third party access arrangements in the electricity industry and promote consumer protection.

Regulation of the electricity industry was further defined under the 2009 Electricity Industry Policy of Papua New Guinea, which states that while the ICCC is the overall regulator, the technical regulation has been delegated to PPL. As a technical regulator, PPL is responsible for ensuring compliance to standards in generation and network assets and enforcement of codes and guidelines for electrical installations.9 PPL considers exercising technical regulation as an additional burden both administratively and financially. It is envisioned that the technical regulation of the electricity industry will eventually be transferred to the Department of and Energy.) The National Energy Policy also proposes creating a new entity, the National Energy Authority, which would spin off from ICCC. This new entity requires bill passage from Parliament.

Another aspect of the regulatory environment is the Organic Law on Provincial Government and Local Level Government of 1995, which granted authority to 19 provincial and 299 local governments to regulate their respective electricity services10.

C.3.5 Off-grid Electrification

The World Bank estimates that at least 25% of PNG’s population will never be connected to the formal grid. PPL does not serve these populations as their mandate only extends 10 kilometers from the existing grid. More remote areas receive electricity through a third-party service provider. Serving this population is much more cost effective through off-grid approaches and currently there is minimal investment and no national agency responsible for off-grid electrification. There is substantial private sector interest in developing off grid solutions but this segment of the population requires creative service models. Competition for loads that are less than 10 MW are encouraged regardless of the service provider’s coverage areas. Under the State’s Community Service Obligation (CSO) policy, service providers for off-grid areas may be funded by the State through a competitive tender. However, the

9 Electricity Industry Policy, August 2009, p. 13 10 PNG’s Energy Sector and Estimation of Renewable Energy Resources in Morobe Province, Papua New Guinea: Solar and Wind Power for New Umi Township. p. 41 implementation framework for the CSO policy is yet to be defined. Currently, PPL is also providing electricity to off-grid areas through the National Budget allocation and reduced dividends to the State. This arrangement, however, has not been sufficient to expand rural electrification.11

C.3.6 Domestic Gas Utilization

PNG’s proven and probable natural gas reserves are estimated at 8 trillion cubic feet (tcf) while an estimated additional 30 tcf of underdeveloped recoverable resources remain untapped.12

The recently completed World Bank study on least cost generation options identifies a strong business case for gas to power generation as a flexible energy source which can be produced at a minimal cost. One option for a new gas power plant is in the PNG highlands on Exxon’s existing gas production facility. The ExxonMobil LNG project, which was completed in 2014 was the first of its kind and became the top-revenue export product in the same year. In 2017, the gas production and processing facilities produced 8.3 million tonnes of LNG, an increase of 20% from the original design specification of 6.9 million tonnes per annum (MTA).13 Gas resources are all now being exported, but economic analysis and political commitment indicate opportunities for increased domestic utilization. PPL is in discussion to relocate and refurbish two existing GE turbines to Exxon’s Hides location to produce electricity. Phase II of the project would be a new gas to power plant at the same location, which could be developed in phases up to 110 MW to serve the Ramu Grid and planned mining projects in the region. This project will drive down the cost of power generation compared to more expensive liquid fuel and more capital-intensive hydropower and geothermal projects.14 Recently, the government prioritized the use of natural gas for domestic energy requirements and the planned development of a gas master plan is essential to encourage private sector investments in the entire value chain.

C.4 PROBLEM STATEMENT

Access to affordable and reliable electricity is integral to achieving PNG’s economic and social development objectives. PNG is rich in energy resources with abundant renewable energy as well as natural gas resources but the country currently has one of the lowest electrification rates in the Asia Pacific Region. The PEP targets an ambitious goal of 70% electrification by 2030 from the current level of 13%. Over five years, the USAID PNG Electrification Partnership Activity aims to achieve intermediate progress toward this goal through the strengthening of key energy sector institutions, develop off-grid electrification and increased private investment. Therefore, the development hypothesis of this activity is that if technical, financial and organization capacities of key energy sector stakeholders and institutions improve, then institutions will have greater ability to invest in electrification expansion and partner with the private sector to meet PEP targets.

11 Electricity Industry Policy, August 2009, p. 10 12 Delivering Affordable, Sustainable and Reliable Power to Papua New Guineans, World Bank, July 2018, p. xiv 13 ExxonMobil PNG LNG website 14 Delivering Affordable, Sustainable and Reliable Power to Papua New Guineans, World Bank, July 2018, p. 94

The PEP target of 70% electrification by 2030 requires the country to add 70,000 connections annually, which is estimated to cost more than $100 million per annum. In recent years, PPL has added approximately 10,000 connections annually. In 2019, PPL is increasing their new connections to 32,000. This is, however, way below the target of annual connections to meet the PEP goal. Given this huge undertaking, the PEP presents a strategic opportunity for partners to contribute resources and work together to reach the targeted electrification level.

PPL is the main government counterpart for the PEP. Over the last 14 months, PPL has started a reform program, which includes the hiring of a new Managing Director. PPL has also established a new senior management team and created focused divisions on their core business of generation, transmission/distribution and commercial retail. These divisions previously did not exist. Advancing PPL reforms and supporting the utility’s sustainability and financial viability is crucial to enable future investment to meet PEP’s electrification targets, and ultimately achieve self-reliance in the energy sector.

Improving regulatory quality is likewise critical to ensure reliable and cost-effective service delivery and consumer protection. For a sector that is positioned to allow greater private sector participation, regulatory oversight is key to sustaining market stability and competitiveness.

C.5 PERFORMANCE WORK STATEMENT

[To be inserted at the time of award from the successful Offeror’s proposal.]

C.6 KEY CONSIDERATIONS

The PEP Contractor will work with key national government entities such as PPL, ICCC, Department of ICT and Energy, select local government units or District Development Authorities, the private sector, universities and other development partners/donors and non-government organizations that contribute to the PEP goals.

Activity implementation must take into account the following considerations in designing its implementation approach:

● Consideration of PNG’s demography and ethnic diversity. With a population of more than 8 million in 2017, 60% of which are 25 years old and below, Papua New Guinea has one of the most diverse cultures with more than 1,000 ethnic groups and 800 local languages spoken. These tribal communities are highly decentralized and community members have strong allegiance to cultural practices and beliefs, hence interaction with members of these tribal communities should consider these sensitivities. About 80% of the population lives in rural areas and rely on natural resources for its daily subsistence.

The Contractor will design strategic approaches for implementing community-based energy systems, capacity building support and technical assistance by recognizing local practices, diversity and livelihoods.

● Advanced coordination with other donors. Several donors are already working to assist the PNG government in pursuing its electrification goals. Convergence and coordination with other donor-funded projects is key to leverage other resources, scale up development impacts, and better meet the needs of the PNG Government. Development partners under the PEP have agreed to sustain dialogues through participation in future Trilateral coordination platforms and the planned PEP Governance Committee. A list of other donors and their ongoing activities can be found in Annex 1. The Contractor will work with other donors and the PNG government to ensure close strategic planning and implementation.

● Synergies with other USAID activities. The Contractor will coordinate, cooperate and communicate with the Pacific-American Climate Fund (PACAM) and an upcoming biodiversity project called, “Lukautim Graun” (look after the environment) and find synergies in order to optimize resources and enhanced results. Lukautim Graun will work both at the national and local levels to strengthen governance of natural resources for biodiversity conservation. At the site level, the project intends to work in the Bismark Forest Corridor across four provinces: Madang, Chimbu, Eastern Highlands, and Jiwaka to conserve biodiversity in priority places by demonstrating and replicating conservation actions that reduce the key threats to biodiversity.

Potential partnership with other on-going USAID energy activities managed in Washington, DC such as Energy Regulatory Partnership Program, the Sector Reform and Utility Commercialization activity among others.

● Human and Institutional Capacity Development (HICD). The Contractor will review

HICD programs for further development for select PNG government agencies including PPL ICCC, the Department of ICT and Energy and other government agencies involved in the energy sector, and follow the guidelines developed by USAID (Reference, Human and Institutional Capacity Development Handbook, October 2010, http://pdf.usaid.gov/pdf_docs/pnadt442.pdf). The Contractor may present similar HICD programs for better results and monitoring features.

● Robust public and community participation. The Contractor will hold public outreach activities, multi-stakeholder consultations and other public fora in partnership with relevant local organizations, media groups and other development partners that will directly contribute to achieving the rural electrification goals and reforms in the power sector.

● Procurement of smart technologies. The Contractor will consider utility performance improvement procurements that may include, but are not limited to information technologies/architecture that support the meter-to-cash process, mobile billing and collection and data management and analytics; and integrated energy modeling software. These technologies will be factored into the design to improve utility reliability, efficiency and maintenance. Prior to proposing the procurement of these technologies, the activity must leverage private sector resources that are willing to partner with USAID to implement these technologies.

● Gender. In February 2019, the Women’s Global Development and Prosperity (W-GDP)

Initiative was signed through the Presidential National Security Memorandum. This whole-of-government initiative aims to promote women’s economic empowerment globally to benefit 50 million women by 2025. In the energy sector, USAID’s Engendering Utilities Program works to promote gender equity. Specifically, it focuses on enhancing gender equity through global best practices in the employee life cycle of electric utility operations with the goal of improving core business outcomes for the http://pdf.usaid.gov/pdf_docs/pnadt442.pdf utility. At PPL, despite having a woman as Acting Managing Director, there is more work across the institution that can be done to increase the participation and decision making of women.

● Private sector engagement. The Asia EDGE Initiative is anchored on engaging the private sector. As the economy grows, demand for energy will increase, thus, the country requires huge financial investments including from the private sector. USAID’s private sector engagement is a strategic approach to planning and programming through which USAID consults, strategizes, aligns, collaborates, and implements with the private sector for greater scale, sustainability, and effectiveness of development outcomes across all sectors. The activity must clearly identify the role of the private sector in each of the Tasks and qualify the private sector’s resources that will contribute to achieving the goals of the PEP. Due diligence is expected to be performed by USAID of the private sector partners.

● Environmental compliance and climate risk management. Development should be environmentally sound, and interventions will be compliant with environmental regulations. As such, the Contractor must ensure adherence to the provisions in Title 22 of the Code of Federal Regulations, Part 216. In addition, the Contractor must comply with PNG’s environmental laws and procedures.

This Activity will be proactive and robust in its strategy against potential climate change impacts. Climate Risk Management (CRM) is now required for new USAID strategies, projects and activities. The Contractor will identify expected climate change impacts over the life of the project’s expected benefits and demonstrate how those risks will be reduced in order to ensure effectiveness and sustainability of the project’s objectives in the face of climate variability and change.

● Sustainability. USAID recognizes that sustainability of interventions is indispensable to meet long-term development objectives. As the Agency plays a leading role in Asia EDGE, the Contractor must highlight the principles behind strengthening energy security and expanding access across the Indo-Pacific region by engaging with local organizations either through subcontracts or grants to develop their institutional capacity, encourage ownership of results and ensure sustainability of reforms.

● Grants Under Contract. PEP includes a Grants Under Contract (GUC) component of

$[Offeror propose] million. The main objective of GUCs is to provide support to organizations that will partner with PEP to contribute to the success of the PEP objectives.

[END OF SECTION C]

L.X INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL

PROPOSAL

[To be provided as part of any resulting solicitation.]

L.X Page Limitations

[As part of this RFI response, we kindly ask Offerors to provide a suggestion to USAID regarding the number of pages they believe is necessary to provide a flexible and adaptive PWS and a detailed corresponding LOP.]

L.X Content of the Technical Proposal

Factor 1: Technical Requirements

As part of the Technical Requirements, the Offeror is requested to submit a Performance Work Statement (PWS). The PWS of the successful Offer(s) will be incorporated into the resulting contract. The Offeror is also requested to submit a Life of Project Approach (LOP) describing how the PWS will be implemented. This section also includes instructions that are cross-cutting in that they should be considered in drafting the PWS and the LOP.

As part of this Factor the Offeror is also requested to propose a target number of new electricity connections to be achieved by the end of the Activity per Section C.2. The Offeror must provide a justification for this number under the LOP. Additionally, Offerors are requested to propose a Grants Under Contract component with a ceiling appropriate for the proposed PWS. The Offeror must provide a justification for this ceiling and describe proposed interventions under the LOP.

(i) Performance Work Statement (PWS)

The PWS is a major component of the Technical Proposal. The PWS submitted in response to this solicitation must address the objectives and adhere to the additional requirements set forth in the Statement of Objectives (SOO) and consistent with the Key Considerations in Section C. The PWS must be specific, complete, presented concisely, and responsive to the instructions herein. The proposed Performance Work Statement (PWS) must describe WHAT the Offeror proposes to achieve and complete based on the SOO objectives. The PWS is expected to allow for flexibility and adaptive management during implementation.

(ii) Life of Project Approach (LOP)

The “Life of Project Approach” describes HOW the Offeror intends to implement its proposed PWS over the life of the project. The Offeror must convincingly describe their proposed approach, methodologies, and activities to successfully implement the proposed

PWS.

The LOP must reflect the Offeror’s understanding of the services and requirements described in Section C and the SOO and demonstrate a convincing approach to implementing the PWS and achieving the objectives laid out in the SOO. The Offeror must discuss how PEP will effectively leverage opportunities from partnerships and address the challenges present in the PNG energy sector. The approach must identify the most significant project risks, including the rationale for these risks, expected impacts to the proposed approaches and interventions, and strategies to eliminate or mitigate these risks.

As part of the LOP approach, the Offeror must submit a start-up/ mobilization plan for the first 90 days.

(iii) Cross-cutting Considerations

In developing the PWS and LOP, the Offeror must consider the following:

For Objective 1: Strategic Approach to Strengthening Utility Operations and Financial Viability

Given the multitude of donors that currently and planning to provide assistance to PPL, the Offeror must be able to present strategic tasks and corresponding approaches to addressing PPL’s operational and financial issues, including a change management plan as identified in Section C and how such improvements will lead to significant contribution in achieving the electrification goals. The Offeror must be able to present and incorporate innovative approaches which may include but not limited to smart technologies, mapping/advanced analytical tools and IT infrastructure, multi-sectoral participatory process in community engagement and behavioral change/relational interventions to prevent electricity pilferage to accelerate PPL’s operational and financial improvements.

For Objective 2: Approach to Developing Viable Off-Grid Electrification Models

Implementation of Objective 2 is contingent upon the assessment of viable sites, which will be undertaken during the first year of project implementation. USAID reserves the right to add sites or change sites if it deems necessary and strategic or in response to government priorities or in consideration of security, natural disasters, and other challenges that would impede on the capacity of the project to deliver assistance. The Offeror must propose and justify illustrative sites in the LOP, taking into account other considerations listed below:

a) Low service coverage vis-à-vis projected high electricity demand

b) Presence of capable and willing local partners, including women organizations

c) Implementing or has plans of implementing programs related to electricity distribution/retail

d) Existing livelihoods that could benefit from increased access to electricity

e) Potential collaboration with other existing projects that promote biodiversity conservation and sustainable natural resource management.

Moreover, the Offeror must be able to demonstrate a solid understanding of the electrification challenges for each site and discuss a tailored approach for addressing the challenges. For approaches that involve national government agencies, the Offeror must be able to explain how the approach/es will complement and/or advance the work at the local level. Grants may be utilized to achieve the goals of Objective 2.

For Objective 3: Prioritizing Interventions to Strengthen Energy Regulation.

Section C identifies key considerations that need to be addressed to strengthen energy regulation. In the proposal, the Offeror must prioritize and rationalize the tasks considering various regulatory policies at the national and sub-national levels.

For Objective 4: Catalyze Private Investment for Energy Projects

This Objective is not a “stand alone” activity. It cuts across Objectives 1, 2 and 3. The Offeror must identify ways to catalyze private investments/engagements as means to achieving the goals of the PEP. Offerors that are able to demonstrate a commitment from a private sector partner will be viewed more favorably in this area of catalyzing private investment.

For each of the objectives, as appropriate, the Offeror must integrate into the PWS and LOP, gender considerations to address gender gaps and promote women’s empowerment across the tasks and interventions. The Offeror should also identify expected climate change risks and demonstrate how those risks will be reduced in order to ensure effectiveness and sustainability of the project’s objectives in the face of climate variability and change.

Factor 2: Institutional Experience and Capability

The prime Offeror and its proposed major subcontractor/s combined must demonstrate the extent of their experience and capabilities in implementing electrification projects similar to the PEP activities. The Offeror must describe their achievements and/or lessons learned from these similar programs and explain how they will be applied to contribute to the success of PEP. The Offeror must specify whether the work by the Offeror was done as a prime contractor or subcontractor.

For institutional capability, the Offeror must demonstrate the ability to leverage Public Private Initiatives (PPI) or Private Sector Investments envisioned under the SOO.

Factor 3: Contractor Past Performance Information

A. The Offeror (including all partners of a joint venture) must provide performance information for itself and each major subcontractor (one whose proposed cost exceeds 20% of the Offeror’s total proposed cost) in accordance with the following:

1. List in an annex to the technical proposal up to five (5) of the most recent (active or ended no more than 5 years ago) and relevant contracts/agreements for efforts similar to the work in the subject proposal for the Offeror and up to (3) three for each major subcontractor using the template provided in Attachment X [to be provided as part of any resulting RFP]. Indicators of relevant performance are contracts of similar scope, geographic coverage and/or complexity.

2. For all contracts listed above that are not in the U.S. Government Contractor Performance Assessment Reporting System, provide a list of contact names, job titles, mailing addresses, phone numbers, e-mail addresses, explanation of relevance to the proposed acquisition and a description of the performance to include:

● Scope of work or complexity/diversity of tasks;

● Primary location(s) of work;

● Period of performance;

● Dollar value; and

● Contract type, i.e., fixed-price, cost reimbursement, etc.

Note: USAID recommends that the Offeror alert the contacts that their names have been submitted and that they are authorized to provide performance information concerning the listed contracts if and when USAID requests it.

B. If extraordinary problems impacted any of the referenced contracts, provide a short explanation and the corrective action taken (FAR 15.305(a)(2)).

M.2 TECHNICAL EVALUATION FACTORS

(a) Technical proposals will be rated by a technical evaluation committee using the criteria shown in this section.

(b) The factors presented below are tailored to the particular requirements of solicitation. The factors (1) serve as the standard against which all proposals will be evaluated and (2) serve to identify the significant matters Offerors must address in their proposals.

The evaluation criteria are described as factors and sub-factors. Factor 1 is more important than Factor 2. Factor 2 is significantly more important than Factor 3.

Criteria Factor 1 Technical Requirements Factor 2 Institutional Experience and Capability Factor 3 Past Performance

Factor 1: Technical Requirements

The extent to which the Offeror demonstrates its understanding of the requirements of the PEP activity through their proposed PWS (addressing the “WHAT) and their proposed Life of Project approach (the “HOW” vis-à-vis the requirements of the SOO and the instructions in Section L).

The extent to which the Offeror’s PWS and LOP present a convincing approach/path to achieving the objectives of the PEP activity, integrating key considerations such gender and climate risk management as described in Sections C and L.

Factor 2: Institutional Experience and Capability

The extent to which the Prime Offeror and major subcontractors combined, demonstrate the requisite experience and capability described in Section L to enhance the likelihood of successful achievement of the PEP objectives.

Factor 3: Past Performance

(a) Performance information will be used for both the responsibility determination and best value decision. USAID may use performance information obtained from other than the sources identified by the Offeror/major Subcontractor. USAID will utilize existing databases of Contractor past performance information and solicit additional information from the references provided in Attachment X of this RFP [to be provided as part of any resulting RFP] and from other sources if and when the

Contracting Officer finds the existing databases to be insufficient for evaluating an Offeror’s performance;

(b) Adverse past performance information to which the Offeror previously has not had an opportunity to respond will be addressed in accordance with the policies and procedures set forth in FAR 15.3;

(c) USAID will initially determine the relevance of similar performance information as a predictor of probable performance under the subject requirement. USAID may give more weight to performance information that is considered more relevant and/or more current.

(d) The contractor past performance information determined to be relevant will be evaluated in areas of technical/quality of product or service, cost control, schedule/timelines, management/business relations, small business utilization, and regulatory compliance.

(e) An Offeror’s performance will not be evaluated favorably or unfavorably when:

(1) The Offeror lacks relevant performance history;

(2) Information on performance is not available, or

(3) The Offeror is a member of a class of Offerors where there is provision not to rate the class against a sub-factor.

When this occurs, an Offeror lacking relevant performance history is assigned a “neutral” rating. Prior to assigning a “neutral” past performance rating, the CO may take into account a broad range of information related to an Offeror’s performance.

ATTACHMENT 1: STATEMENT OF OBJECTIVES

1. OBJECTIVES

Objective 1: Demonstrate Measurable Increase in PNG Power Limited’s Financial Viability and Operational Efficiency PNG Power Limited (PPL) transforms itself into a strong partner, which is able to provide reliable energy, better serve customers, expand electricity connections and improve overall financial viability to undertake capital investments and partner with the private sector.

Result 1.1: PPL transformed into a financially viable entity capable of investing for future growth and partnering with the private sector.

Result 1.2: PPL’s non-technical losses, nearly $75 million annually, cut in half by the end of year three of the Activity. The World Bank is supporting this effort through the development of a revenue protection program with a focus on the procurement of 8,000 Advanced Metering Infrastructure (AMI) meters with smart automated functions. The Contractor will support PPL in their efficient rollout.

Result 1.3: Customer satisfaction of PPL’s services improved. Baseline assessment amongst customers conducted and rating of satisfaction increased by at least 20 percent by the end of the Activity.

Result 1.4: PPL’s capacity in competitive processes for selecting an Independent Power Producer developed.

Result 1.5: Support leadership development, improved human resources processes and technical training to promote gender empowerment within all levels of PPL.

Result 1.6: Feasibility studies for new gas to power generation projects developed

Result 1.7: Support economic and gender empowerment interventions for communities and households that benefit from new electricity connections Result 1.8: [If deemed necessary, the Offeror may propose one additional result to meet the higher level objective]

Note: To measure the overall impact of utility strengthening interventions, the Offeror must utilize existing methodologies or establishing new measurement tools to track improved performance and financial viability of PPL.

Objective 2: Develop Viable Off-Grid Electrification Models Develop viable off-grid electrification models that catalyze public or private investment to provide electricity to provincial centers, island communities and other remote populations to meet PEP electrification targets, reduce high supply costs, and bolster economic activities.

Support must consider climate risks associated with development off-grid solutions.

Result 2.1: A recommendation developed for off-grid solutions through creative service models. This must build upon IFC’s prior work through Lighting PNG. The Contractor must consider and evaluate appropriate energy options including solar home systems and mini grids powered by solar, wind, small-scale LNG, distributed hydro and battery storage. Off-grid systems that support community livelihoods must be prioritized.

Result 2.2: Investment models developed, which promote the aggregation of demand from multiple communities for potential off-grid project developers. One immediate area of focus should be the 17 provincial centers, which are not connected to the grid and are powered by diesel generation.

Result 2.3: Development of off-grid policy and regulatory framework supported.

Result 2.4: At least five operating energy systems established in off-grid areas.

Result 2.5 [If deemed necessary, the Offeror may propose one additional result to meet the higher level objective]

Note: Activities must be conducted in collaboration with the provincial governments and the private sector, as required. Selection of off-grid sites should be informed by other USAID investments in communities supported with biodiversity and environment programs.

Objective 3: Demonstrate Measurable Improvement in PNG’s Energy Regulator Strengthen PNG’s energy regulator to enable a vibrant energy sector that expands connections, increases generation capacity, promotes competition, increases private investment and follows a rules based system that ensures PNG’s self-reliance is not affected by predatory partners and non-economically viable investments.

Result 3.1: Technical support provided to the ICCC and/or the National Energy Authority, which must further develop and maintain expertise in project evaluation and build capacity regarding new energy sources. Support provided to bolster independence and technical expertise of the energy regulator.

Result 3.2: The current tariff calculation methodology updated and least cost generation project approaches identified.

Result 3.3: A National Power Development Plan developed, in partnership with the Department of Information, Communication and Technology and Energy.

Result 3.4: National Renewable Energy Development Plan Developed.

Result 3.5: Regulatory framework for off-grid electrification developed and/or implemented.

Result 3.6: [If deemed necessary, the Offeror may propose one additional result to

Note: To measure the overall impact of interventions supporting enhanced energy regulatory environment, the Offeror must utilize existing methodologies or establish new measurement tools to quantify how improved regulatory quality support from the activity increases investment, generates new energy sources and benefits consumers.

Objective 4: Catalyze Private Investment for Energy Projects Private sector engagement in the PNG energy sector increased in a manner that strengthens the sustainability and self-reliance of the sector. Partnerships must establish and support shared targets and interests of USAID, PNG partners and the private sector.

Result 4.1: Development of financial mechanisms and partnerships that facilitate increased energy sector investment and mitigate risk for project developers. This can include blending financing as well as other risk mitigation tools.

Result 4.2: Feasibility studies completed for future private sector investment opportunities.

Result 4.3: Awareness building, technical support and investment promotion activities supported that facilitate the private sector’s entry into the energy sector.

Result 4.4: [If deemed necessary, the Offeror may propose one additional result to

Note: Private sector engagement will be supported throughout all objectives but this specific objective supports cross-cutting interventions that will broadly catalyze investment in the sector. The Offeror is welcome to set targets for overall private sector investment mobilization for the activity

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