RFQ_95332419Q0065_(FINAL)(SIGNED).pdf

SOLICITATION/CONTRACT/ORDER FOR COMMERCIAL ITEMS

OFFEROR TO COMPLETE BLOCKS 12, 17, 23, 24, & 30

1. REQUISITION NUMBER PAGE 1 OF

2. CONTRACT NO. 3. AWARD/EFFECTIVE

DATE

4. ORDER NUMBER 5. SOLICITATION NUMBER 6. SOLICITATION ISSUE

DATE

7. FOR SOLICITATION

INFORMATION CALL:

a. NAME b. TELEPHONE NUMBER (No collect calls)

8. OFFER DUE DATE/

LOCAL TIME

9. ISSUED BY

13b. RATING

14. METHOD OF SOLICITATION

CODE

15. DELIVER TO 16. ADMINISTERED BY CODE

18a. PAYMENT WILL BE MADE BY CODE 17a. CONTRACTOR/

OFFEROR

CODE

FACILITY

CODE

CODE

TELEPHONE NO.

17b. CHECK IF REMITTANCE IS DIFFERENT AND PUT SUCH ADDRESS IN

OFFER

18b. SUBMIT INVOICES TO ADDRESS SHOWN IN BLOCK 18a UNLESS BLOCK

BELOW IS CHECKED

RFQ IFB RFP

SEE ADDENDUM

19.

ITEM NO.

20.

SCHEDULE OF SUPPLIES/SERVICES

21.

QUANTITY

22.

UNIT

23.

UNIT PRICE

24.

AMOUNT

(Use Reverse and/or Attach Additional Sheets as Necessary)

25. ACCOUNTING AND APPROPRIATION DATA 26. TOTAL AWARD AMOUNT (For Govt. Use Only)

28. CONTRACTOR IS REQUIRED TO SIGN THIS DOCUMENT AND RETURN

DELIVER ALL ITEMS SET FORTH OR OTHERWISE IDENTIFIED ABOVE AND ON ANY

ADDITIONAL SHEETS SUBJECT TO THE TERMS AND CONDITIONS SPECIFIED

29. AWARD OF CONTRACT: REF.

DATED . YOUR OFFER ON SOLICITATION

(BLOCK 5), INCLUDING ANY ADDITIONS OR CHANGES WHICH ARE

SET FORTH HEREIN, IS ACCEPTED AS TO ITEMS:

30a. SIGNATURE OF OFFEROR/CONTRACTOR

30b. NAME AND TITLE OF SIGNER (Type or print) 30c. DATE SIGNED

31a. UNITED STATES OF AMERICA (SIGNATURE OF CONTRACTING OFFICER)

31b. NAME OF CONTRACTING OFFICER (Type or print)

COPIES TO ISSUING OFFICE. CONTRACTOR AGREES TO FURNISH AND

OFFER

13a. THIS CONTRACT IS A

RATED ORDER UNDER

DPAS (15 CFR 700)

SEE SCHEDULE

12. DISCOUNT TERMS

ARE ARE NOT ATTACHED

ARE ARE NOT ATTACHED

27a. SOLICITATION INCORPORATES BY REFERENCE FAR 52.212-1, 52.212-4. FAR 52.212-3 AND 52.212-5 ARE ATTACHED. ADDENDA

27b. CONTRACT/PURCHASE ORDER INCORPORATES BY REFERENCE FAR 52.212-4. FAR 52.212-5 IS ATTACHED. ADDENDA

11. DELIVERY FOR FOB DESTINA-

TION UNLESS BLOCK IS

MARKED

10. THIS ACQUISITION IS UNRESTRICTED OR SET ASIDE: % FOR:

SMALL BUSINESS

HUBZONE SMALL

BUSINESS

SERVICE-DISABLED

VETERAN-OWNED

SMALL BUSINESS

WOMEN-OWNED SMALL

BUSINESS (WOSB)

ECONOMICALLY

DISADVANTAGED

WOMEN-OWNED SMALL

BUSINESS (EDWOSB)

8 (A)

NAICS:

SIZE STANDARD:

STANDARD FORM 1449 (REV. 3/2005) BACK

19.

ITEM NO.

20.

SCHEDULE OF SUPPLIES/SERVICES

21.

QUANTITY

22.

UNIT

23.

UNIT PRICE

24.

AMOUNT

32a. QUANTITY IN COLUMN 21 HAS BEEN

RECEIVED INSPECTED ACCEPTED, AND CONFORMS TO THE CONTRACT, EXCEPT AS NOTED:

41a. I CERTIFY THIS ACCOUNT IS CORRECT AND PROPER FOR PAYMENT

32b. SIGNATURE OF AUTHORIZED GOVERNMENT

REPRESENTATIVE

32c. DATE

41b. SIGNATURE AND TITLE OF CERTIFYING OFFICER 41c. DATE

42a. RECEIVED BY (Print)

42b. RECEIVED AT (Location)

42c. DATE REC'D (YY/MM/DD) 42d. TOTAL CONTAINERS

40. PAID BY

32d. PRINTED NAME AND TITLE OF AUTHORIZED GOVERNMENT

REPRESENTATIVE

32e. MAILING ADDRESS OF AUTHORIZED GOVERNMENT REPRESENTATIVE 32f. TELPHONE NUMBER OF AUTHORZED GOVERNMENT REPRESENTATIVE

32g. E-MAIL OF AUTHORIZED GOVERNMENT REPRESENTATIVE

33. SHIP NUMBER 34. VOUCHER NUMBER 35. AMOUNT VERIFIED

CORRECT FOR

PARTIAL FINAL

37. CHECK NUMBER

38. S/R ACCOUNT NO. 39. S/R VOUCHER NUMBER

36. PAYMENT

COMPLETE PARTIAL FINAL

95332419Q0065

TABLE OF CONTENTS:

Listing of Incorporated Purchase Requisitions Section B - Supplies or Services and Prices/Costs Section C - Description/Specifications/Work Statement Section D - Packaging and Marking Section E - Inspection and Acceptance Terms Section F - Delivery or Performance Section G - Contract Administration Data Section H - Special Contract Requirements Section I - Contract Clauses Section J - List of Documents, Exhibits, and other Attachments Section K - Representations, Certifications, and Other Statements of Offerors Section L - Instructions, Conditions and Notices to Offerors Section M - Evaluation Factors for Award

Listing of Incorporated Purchase Requisitions

Incorporated Purchase Requisition Numbers:

DPE-PR-19-0111

Section B - Supplies or Services and Prices/Costs

Item Number Base Item Number

Supplies/Services Quantity Unit

0001 Base Period: Kosovo Reliable Energy Landscape Project (RELP)

Evaluation

1 LT

Contract Type:Time and Materials Unit Price

Other Direct Costs Extended Price

Description:

POP Start (est.): 08/28/2019 POP End (est.): 08/27/2020

Purchase Requisitions DPE-PR-19-0111

IDC Type: Not Applicable

Supplies/Services Quantity Unit

1001 Option Period 1: Kosovo Reliable Energy Landscape Project (RELP)

Evaluation

1 LT

Contract Type:Time and Materials Unit Price

Other Direct Costs Extended Price

Description:

POP Start (est.): 08/28/2020 POP End (est.): 08/27/2021

Purchase Requisitions

Option:

Option Time Date: 8/28/20 Option Time Duration: 364 Option Time Units: Days

Supplies/Services Quantity Unit

2001 Option Period 2: Kosovo Reliable Energy Landscape Project (RELP)

Evaluation

1 LT

Contract Type:Time and Materials Unit Price

Other Direct Costs Extended Price

Description:

POP Start (est.): 08/28/2021 POP End (est.): 08/27/2022

Purchase Requisitions

Option:

Option Time Date: 8/28/21 Option Time Duration: 364

Supplies/Services Quantity Unit

3001 Option Period 3: Kosovo Reliable Energy Landscape Project (RELP)

Evaluation

1 LT

Contract Type:Time and Materials Unit Price

Other Direct Costs Extended Price

Description:

POP Start (est.): 08/28/2022 POP End (est.): 08/27/2023

Purchase Requisitions

Option:

Option Time Date: 8/28/22 Option Time Duration: 364

Supplies/Services Quantity Unit

4001 Option Period 4: Kosovo Reliable Energy Landscape Project (RELP)

Evaluation

1 LT

Contract Type:Time and Materials Unit Price

Other Direct Costs Extended Price

Description:

POP Start (est.): 08/28/2023 POP End (est.): 08/27/2024

Purchase Requisitions

Option:

Option Time Date: 8/28/23 Option Time Duration: 365

Clauses incorporated by reference

None

Clauses incorporated by full text

DPE IE Section B

B.1. FAR 52.216-1 -- Type of Contract (APR 1984)

The Government contemplates award of a time-and-materials (T&M) contract resulting from this solicitation.

B.2. Funding Type

This contract will be funded, at the time of award, with no-year Due Diligence funding. As such, funding obligated to this contract may be used during the life of the contract.

B.3. Limitation of Funds -- Incrementally Funded Contracts

In accordance with clause MCC 52.232-72, "Limitation of Funds -- Incrementally Funded Contracts," funds in the amount of [TBD] have been allotted to this contract. It is contemplated that funds now obligated under this contract will cover the work to be performed until [TBD]. If the contractor considers the funds obligated under this contract to be insufficient to cover the work to be performed until the date specified herein, or another date agreed to by the parties, the contractor shall notify the contracting officer in writing and indicate the date on which it expects expended funds to approximate 75 percent of the total amount obligated. The notice shall state the estimated amount of additional funds required to continue performance through the date for which incremental funds are provided.

The Contractor shall not perform work on the contract which exceeds the total amount actually allotted by the Government to the contract. The Government is not obligated to reimburse the Contractor for costs incurred in excess of the total amount allotted by the Government to this contract. The contractor assumes the risk for any increased costs beyond what the Government obligates.

B.4. Labor Rates and Other Direct Costs (ODCs)

Labor rates at the inception of a contract period will carry through as "fixed-price" without adjustment for the life of that contract period.

Hours by labor category and pricing under ODCs are estimates only and may be increased/decreased as necessary for successful completion of the contract requirements and as approved by the COR/PM. However, the contractor's expenditures at any given point shall not exceed the total obligated amount or the total ceiling price for this contract as specified herein.

Using the template below, Offerors must include all proposed labor categories, fully-burdened hourly rates and Other Direct Costs (ODCs) for each contract period identified above.

PRICING SUMMARY PER CONTRACT PERIOD

Base Option 1 Option 2 Option 3 Option 4 TOTAL

Total Labor Hours

Total Labor Costs

Total ODCs $ - $ - $ - $ - $ - $ -

Total Est. Cost $ - $ - $ - $ - $ - $ -

Base Period – Period of Performance TBD (est. 12 Months)

Item # Description(2) U/I Qty Rate Total

LABOR

0001 hr.

hr.

hr.

hr.

Total Labor Hours - -

Labor Sub-Total

ODCs(1)

G&A and/or Subcontract

Handling Fees (if applicable)

Subcontracts – Data Collection (Plug Number)

$150,000

ODC Sub-Total

Total Estimated Value (Base Period)

Option Period I – Period of Performance TBD (est. 12 Months)

Item # Description(2) U/I Qty Rate Total

LABOR

1001 hr.

hr.

hr.

hr.

Total Labor Hours - -

Labor Sub-Total

ODCs(1)

G&A and/or Subcontract

Handling Fees (if applicable)

Subcontracts – Data Collection (Plug Number)

$20,000

ODC Sub-Total

Total Estimated Value (Option Period I)

Option Period II – Period of Performance TBD (est. 12 Months)

Item # Description(2) U/I Qty Rate Total

LABOR

2001 hr.

hr.

hr.

hr.

Total Labor Hours - -

Labor Sub-Total

ODCs(1)

G&A and/or Subcontract

Handling Fees (if applicable)

Subcontracts – Data Collection (Plug Number)

$20,000

ODC Sub-Total

Total Estimated Value (Option Period II)

Option Period III – Period of Performance TBD (est. 12 Months)

Item # Description(2) U/I Qty Rate Total

LABOR

3001 hr.

hr.

hr.

hr.

Total Labor Hours - -

Labor Sub-Total

ODCs(1)

G&A and/or Subcontract

Handling Fees (if applicable)

Subcontracts – Data Collection (Plug Number)

$20,000

ODC Sub-Total

Total Estimated Value (Option Period III)

Option Period IV – Period of Performance TBD (est. 12 Months)

Item # Description(2) U/I Qty Rate Total

LABOR

4001 hr.

hr.

hr.

hr.

Total Labor Hours - -

Labor Sub-Total

ODCs(1)

G&A and/or Subcontract

Handling Fees (if applicable)

Subcontracts – Data Collection (Plug Number)

$100,000

ODC Sub-Total

Total Estimated Value (Option Period IV)

TOTAL COST SUMMARY

Description(2) U/I Qty Rate Total

LABOR

hr.

hr.

hr.

hr.

Total Labor Hours - -

Labor Sub-Total

ODCs(1)

G&A and/or Subcontract Handling

Fees (if applicable)

Subcontracts – Data Collection (Plug

Number)

$310,000

ODC Sub-Total

Total Estimated Cost

NOTE (1): MCC anticipates approximately $310,000.00 worth of data collection subcontracting costs for which the requirements are unknown at this time. To be fair to all vendors providing a quotation, a plug number is utilized for data collection subcontracting costs in the respective periods in which data collection is expected to occur. However, if you believe this plug number is inadequate, please advise during the Question and Answer period of the solicitation. "Data Collection Subcontract(s)," as used in the tables above, refers only to the cost of subcontracting a data collection firm and any associated indirect costs (e.g., subcontract handling fees). It does not include any prime contractor labor associated with overseeing/managing the data collection effort; this time should be incorporated into the level of effort proposed under the respective Labor CLIN. Subcontracting costs for data collection are subject to the requirements of FAR 52.244-2, Subcontracts.

NOTE (2): If applicable, offerors shall specify their proposed indirect rates and costs (e.g., General and Administrative (G&A) and/or Subcontractor Handling). Indirect costs must be presented as a separate line item. ODCs shall not include profit/fee.

NOTE (3): A job description shall be included for each labor category proposed. The job description must identify essential and non-essential tasks that are assigned to a specific position. It must also identify reporting relationships and shall also describe required qualifications, minimum requirements, working conditions and desirable qualifications.

(End of SECTION B)

Section C - Description/Specifications/Work Statement

Section C

C.1. Introduction and Background

The Millennium Challenge Corporation (MCC), a Federal Corporation created in 2004 under Title VI of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, is responsible for the stewardship of the Millennium Challenge Account. MCC, an innovative foreign assistance program designed to reduce poverty by promoting sustainable economic growth, is based on the principle that aid is most effective in countries that promote good governance, economic freedom and investments in people.

MCC places a strong emphasis on Monitoring and Evaluation (M&E), particularly independent evaluations, as part of the program's implementation for two reasons:

• First, a founding principle of the MCC initiative is a focus on results, and independent evaluations are a necessary part of measuring progress towards poverty reduction in MCC countries.

• Second, the MCC, as well as other donors, governments, and organizations can apply lessons from good evaluations to invest and/or scale up programs that work.

Evaluations should be categorized as either Impact Evaluation or Performance Evaluations per below and as detailed in MCC's 'Policy for Monitoring and Evaluation of Compacts and Threshold Programs,' March 15, 2017 (Note:

https://www.mcc.gov/resources/doc/policy-for-monitoring-and-evaluation ), which is available on MCC's website.

• Impact Evaluation – A study that measures the changes in income and/r other aspects of well-being that are attributable to a defined intervention. Impact evaluations require a credible and rigorously defined counterfactual, which estimates what would have happened to the beneficiaries absent the project. Estimated impacts, when contrasted with total related costs, provide an assessment of the intervention's cost-effectiveness.

• Performance Evaluation – A study that seeks to answer descriptive questions, such as: what were the objectives of a particular project or program, what the project or program has achieved; how it has been implemented; how it is perceived and valued; whether expected results are occurring and are sustainable; and other questions that are pertinent to program design, management and operational decision making. MCC's performance evaluations also address questions of program impact and cost-effectiveness.

C.1.1 Kosovo Threshold Program https://www.mcc.gov/resources/doc/policy-for-monitoring-and-evaluation

The MCC Threshold Program with Republic of Kosovo will provide up to $49 million to support significant policy reforms in improve electricity supply through promoting energy efficiency and renewable energy generation, as well as promote transparent and responsive governance. The Threshold Program will run for up to four (4) years after signing of the threshold program grant agreement in early September 2017.

MCC's Kosovo Threshold Program addresses two key constraints to Kosovo's economic growth: an unreliable supply of electricity; and real and perceived weakness in rule of law, government accountability and transparency. MCC's investments are designed to strengthen the power sector by fostering a market-driven approach to lowering energy costs for households and businesses, encouraging energy efficiency, and developing new sources of electricity generation. The program also supports the Government of Kosovo's efforts to improve decision-making and accountability by increasing the accessibility and use of judicial, environmental, and labor force data.

The Kosovo Threshold Program will invest up to $49 million and focus on two projects:

Project 1: Reliable Energy Landscape Project (RELP)

Project 2: Transparent and Accountable Governance (TAG)

The scope of this contract is to provide independent evaluation services in support of the Reliable Energy Landscape Project.

The evaluation will cover the Pilot Incentives for Household Investment in Energy Efficiency (PIEE) activity and sub-activities, the District Heating Metering (DHM) activity, and the Independent Power Producer (IPP) activity. The evaluation of RELP seeks to understand (a) the degree to which planned activities are implemented, (b) the validity of the program logics including its assumptions and outcome/results, (c) lessons learned from project implementation and (d) the sustainability of those results. The design and implementation of the evaluation will be closely coordinated with the Millennium Foundation of Kosovo (MFK) (Note: MFK website: https://millenniumkosovo.org/), the accountable entity in Kosovo responsible for management of the Threshold Program.

More information on the Kosovo Threshold Program and a copy of the Threshold agreement are available at https://www.mcc.gov/where-we-work/program/kosovo-threshold-program

C.1.2 Kosovo Country Context and Program Development

Kosovo is a small developing country, located in South-East Europe on the Balkan Peninsula, with a population of 1.8 million, spread across 10,908 km, making it one of the most densely populated countries in the region. Ethnic Albanians make up the majority of the population (92%), while the largest minority is represented by ethnic Serbs (5%). Kosovo is one of the youngest nations, declaring independence in 2008; Kosovo's population is also one of the youngest, with a median age of 27 years.

With a GDP per capita of EUR 2,935 (~$3283, Government of Kosovo, 2016) (Government or GoK) and average income around EUR 360 (~$402) per month, Kosovo is one of the poorest countries in Europe. According to the Kosovo Agency of Statistics (Kosovo Statistical Agency, 2011), around 30% of the population is living below the national poverty line. While growth has not been fast enough for the country to converge with the level of wealth of comparators, it has been remarkably stable. Kosovo was one of only four countries in Europe to record positive growth rates in the years following the global financial crisis, with average annual growth of 3.5% since 2010. Private consumption was the main driver of growth, which was fueled by the growth in remittances, public sector wages, and social transfers. The inflows of remittances have enhanced the stability of the economy and financed most of the country's trade deficit. Investment, which lags behind saving, has flowed mainly into residential and commercial construction (Central Bank, 2016). Annual flows of foreign direct investment remain below levels received by comparable countries.

Kosovo is a services-oriented economy, with services making up around 50% of GDP, and is not as intensive in agriculture as one might expect, with agriculture making up only around 12% of GDP. Kosovo's main trading partners continue to be the western Balkan and EU countries. As of September 2015, around 31% of total exports were designated to EU countries.

Kosovo's export sector is dominated by mining commodities, but high-value agriculture is a growing contributor. Key challenges for Kosovo continue to be reforms aimed at strengthening public administration to increase the quality of and access to public services, improving the business climate, and upgrading public infrastructure. These reforms, closely embedded in the EU integration process, are key policy instruments to attract direct investments of the scale, scope, and quality necessary to increase productivity in key sectors of the economy, generate "catch up" growth and ultimately reduce the high rates of unemployment and poverty.

https://millenniumkosovo.org/ https://www.mcc.gov/where-we-work/program/kosovo-threshold-program

The poverty rate at the national poverty line, having fluctuated between 35% and 45% before 2008, had fallen to 30% by 2011. More recent official poverty estimates are not yet available, but initial indications are that poverty continued to decline in 2013 and 2014. The employment rate (26.9%) and the labor force participation rate (41.6%) have remained extremely low and stagnant (World Bank, 2015). Kosovo's young population represents both a promising resource on which to base future growth as well as a growing source of concern. With unemployment of 15 to 24 year-olds at 58%, the economy has not shown the ability to create enough opportunities to employ the country's youth. Furthermore, the female labor force participation rate is the lowest in the region and among the lowest in the world. Female labor force participation rate (LFPR) rates in neighboring countries such as Serbia, Albania, Montenegro or Macedonia are in the low to mid 50s percentages, compared to 18% in Kosovo. Women's unemployment rates are high and entrepreneurship rates lower than for comparators. Women in Kosovo account for just 8% of individual entrepreneurs, compared to 33% in the Eastern Europe and Central Asia region, and also about a third globally.

After selection to develop a compact in December 2015, MCC and the Kosovo government counterparts began working on a constraints to growth diagnostic analysis (Constraints Analysis) (Note: Hausmann, R., Rodrik, D. & Velasco, A., 2005. Growth Diagnostics. Copy at http://www.tinyurl.com/kqodran), identifying 1) unreliable supply of electricity, 2) reality and perception of rule of law, and 3) poor environmental services, as binding constraints. The CA also identified low women's labor force participation as a potential barrier to an even and fair distribution of beneficiaries that would have to be considered when designing projects.

C.1.3 Reliable Energy Landscape Project (RELP) Context

The core problem for the lack of reliable electricity in Kosovo is that demand significantly outstrips supply. This is due to a variety of reasons on both the supply and demand sides of the equation. On the supply side, the energy sector faces unexpected shortfalls in supply, caused mainly by old and unreliable generation infrastructure, and the resultant need to import very expensive emergency supply. In January 2017, for instance, production from existing plants fell to 350 megawatts (MW), from a "nameplate capacity" of 1,480 MW, due to unexpected mechanical failures, requiring costly imports (at roughly 2

– 3 times the cost of the regulated end-user tariff) and load shedding to make up the remaining roughly 850 MW of demand. A USAID study estimated the cost to businesses of irregular supply of electricity is almost €300 million annually. Because imported energy is expensive, and efforts to import more are subject to political issues outside of Kosovo's control, imports do not provide a viable long term solution to meeting demand.

Expanding Electricity Supply

Kosovo has put in place incentives for private independent power producers (IPPs) to enter the market, such as feed-in-tariffs (FIT) and priority dispatch for renewable energy. However, a number of factors have prevented IPPs from entering the market, including limited experience and expertise in renewable energy projects, challenges in attaining finance, copious permits of different durations from a wide set of government agencies, and others. While strides have been made in opening the market to IPPs, firms still face roadblocks in bringing their projects online. In particular, financing of IPPs has proved problematic in Kosovo. While there are numerous commercial banks with excess liquidity, they have been hesitant to provide project financing due to, among other things, a claim of lack of resources to assess renewable energy project risk (e.g., to assess feasibility studies), low confidence in project sponsors due to a lack of previous experience in energy projects, inconsistent quality of feasibility studies provided raising questions of actual capacity factors of specific locations identified by IPPs, and low trust in the creditworthiness of the energy off-taker (KOSTT – the Kosovo Transmission System and Market Operator J.S.C.). Given the nascent nature of the renewable sector and the newly established framework support scheme, there is also a perceived risk regarding the general bankability of Power Purchase Agreements (PPAs) and a resulting first-mover problem where there are potentially high returns, but cost of entry to the market is perceived to be very high. There is work that needs to be done, as well, on the timing and implementation of PPAs to make them useful as credit support for loans (for instance, IPPs need a signed PPA to obtain a loan, but they cannot get a signed PPA until they are ready to produce electricity). The Energy Regulatory Office (ERO) has suggested that these issues will be addressed in the Secondary Legislation.

Another problem that was identified for IPPs starting up is the variety of permits and licenses, and the high cost of coordinating among national and local government entities, that they must secure in order to start construction. The permits are granted by a wide variety of national and local government agencies and all have different terms. Thus potential IPPs often have to reapply for permits that have lapsed before they manage to obtain the full suite of required permits. If IPPs do manage to complete construction, grid capacity constraints can still create disincentives to off-takers to encourage or allow renewable energy into the system.

Demand Side Management https://growthlab.cid.harvard.edu/publications/growth-diagnostics-0 https://growthlab.cid.harvard.edu/publications/growth-diagnostics-0 http://www.tinyurl.com/kqodran

Another way to address the electricity constraint is through better demand side management. Households are the primary consumers of electricity, accounting for 60-70% of total energy demand. Public buildings account for approximately 15% of demand, and commercial and industrial firms account for 20% (three quarters of which is from a single nickel smelting company). Increasing the efficiency of energy use faces many challenges and is being addressed by a number of donors in different ways. Energy efficiency of public buildings and options for households with access to financing have been addressed by the World Bank, EU, EBRD, and GIZ, among others, but no one has yet addressed the large portion of electricity demand that stems from household energy use.

Housing stock in Kosovo is largely uninsulated and households end up spending a large proportion of their income in the winter on energy. According to an American University of Kosovo study, only 26% of homes have wall insulation, 33% have roof insulation, 46% have double-glazed windows, and 84% have insulated water tanks. All households switching from incandescent bulbs to CFL or LED bulbs alone could drop electricity demand dramatically. Low and middle-income families spend an average of 13% of their incomes, and roughly 14% of the poorest households spend over 30% of their incomes on energy, while also consuming a relatively low quantity of electricity. There is low awareness that investments in energy efficiency or in different heating systems could yield significant life-cycle cost savings, compounded by a general lack of ability to pay for this kind of investment, particularly on the part of the poorest households, which are generally considered un-bankable. Even for those who may wish to invest in more efficient systems to realize savings over the long term, finding energy auditors and paying for the audits that will identify the appropriate interventions are further obstacles to households in effectively increasing their energy efficiency. Businesses report that households will usually choose the immediately cheapest option in construction, over options that might save them money in the longer term. Further, the building code, and the legal framework on building energy efficiency are new and have not yet been implemented, further exacerbating the low energy efficiency of housing stock. A lack of alternatives to inefficient space heaters or electric boilers contributes, as well, to high household energy use.

One alternative is district heating (generally piped heated water to neighborhoods from a central plant). While the district heating system in Pristina has recently been revitalized and could be a cost-effective alternative for many households, as it utilizes cogeneration from the Kosovo B power plant, energy from district heating could be consumed more efficiently. One reason why district heating is presently not as cost-effective an option as it could be, is that individual households cannot control the flow and its use is billed based on square footage rather than on actual consumption. As a result, households will often use the "open-window" technique to regulate temperature.

Electricity is regularly reported by virtually all stakeholders as their top constraint. Expenses related to energy use are extremely high not just for businesses, but also for households and potential entrepreneurs. While many improvements have been made in the way of liberalizing the electricity market and adopting European legislation standards, there are still strides to be made in implementation of those policies and reducing costs to businesses and households.

C.1.4. Reliable Energy Landscape Project (RELP) Activities

The objective of the Kosovo Reliable Energy Landscape Project (RELP) is to reduce the gap between energy demand and supply, by lowering energy use through piloting household investments in energy efficiency, switching to cost‐effective non‐ electricity sources of heating, and reducing barriers to independent power producer ("IPP") entrants to the market. The project is divided into following activities and sub-activities:

Activity 1.1 - Pilot Incentives for Household Investment in Energy Efficiency (PIEE)

- Household Efficiency Retrofits (HER)

- Apartment Building Efficiency Retrofits (AER)

- Women Energy Entrepreneur Technical Assistance (WEE)

Activity 1.2 - District Heating Metering

Activity 1.3 - Independent Power Producer Project Finance Facilitation (IPP)

As of March 2019, all activities are in the procurement or startup phase. These activities are expected to ramp up by mid- 2019. The descriptions of the activities below outline the MCC and MFK vision for these activities but no Implementing Contractors have yet come on board and identified a work plan for implementation. The Evaluator is being procured concurrently to the ICs to enable maximum coordination.

Activity 1.1: Pilot Incentives for Household Investment in Energy Efficiency (PIEE)

Pilot Incentives for Household Investment in Energy Efficiency (PIEE) is the first activity of RELP which aims to provide incentives for residential consumers to invest in retrofits to reduce household energy consumption, as well as incentives aimed at increasing the involvement of women in energy sector business opportunities, and efficiency investments. The primary technical focus of the PIEE intervention packages are energy efficiency measures that will reduce the consumption of electricity for heating and promote the use of energy efficient heating devices. At the close of the Threshold Program there should be clear recommendations that MCC can make to GoK about the most cost-effective EE models identified.

• Household Efficiency Retrofits (HER) Sub-Activity

To date, the energy efficiency measures supported by the government and donor community have been mostly confined to public sector buildings, while the largest consumers of electricity in Kosovo are households. This project is proposed to address two root causes of consumer over-use of electricity: a) the general lack of consumer awareness of energy saving measures (e.g., sealing the building envelope) and their benefits and b) the lack of ability for households to pay for them. The proposed approach to address these root causes involves a mix of incentive piloting, and technical assistance/capacity building. One of the key objectives of HER is to test and evaluate the most cost-effective incentive delivery approaches for different beneficiary groups, as well as to deliver the best behavior change approaches, that can be scaled up beyond the Threshold Program.

Participation in the HER sub-activity will be open to individual residences (including individual homes and individual apartments) throughout Kosovo with the incentive level determined by a range of criteria (developed by the implementer in close coordination with MFK) associated with environmental, social, economic, and technical objectives of the RELP. The incentive levels and other intervention package design variables will be varied over time as part of the iterative design process to test and evaluate the most cost-effective approaches for different beneficiary groups.

Energy efficiency retrofits which qualify for the HER intervention package will be prioritized depending on energy audits, and budget restrictions, but are expected to primarily include:

o Improving thermal insulation in walls and roofs;

o Energy-efficient windows and/or external doors (wind fangs where applicable);

o Weather sealing o Energy-efficient water heaters (including solar thermal water heaters where applicable);

o Energy-efficient biomass stoves and furnaces.

o Energy-efficient lighting bulbs

The Implementing Contractor is expected to employ an iterative design framework for the HER intervention package which is based on the principles of behavior economics. Intervention elements to be adjusted and tested include monetary incentives (rebates), as well as lending instruments and financing schemes (the Behavior Change & Outreach component of the HER is excluded from iterative design framework). In order to implement iterative study for HER, some randomization will be required to select households for interventions as well as comparison group (control or counterfactual), and baseline data will need to be collected before implantation of the EE retrofits occurs.

Subsequent rounds of data will be collected by the implementing contractor to assess results of the pilot interventions. While the implementer is in charge of baseline and subsequent data collection, the evaluator will serve as a critical data quality check on the baseline data collection and consequently will use the baseline data to inform their analysis. Implementation of iterative study in HER will result in clear lessons learned and best practices that will be useful to national stakeholders which will inform the design of future residential energy efficiency incentive schemes.

• Apartment Building Efficiency Retrofits (AER) Sub-Activity

The AER sub-activity will provide grants to apartment communities in competitively selected municipalities to implement energy efficiency upgrades to common areas and the thermal envelope. This sub-activity is not expected to include a rigorous iterative study. The Implementing Contractor is expected to conduct a baseline study to inform the specific design of the sub-activity.

Qualifying retrofits can include, but are not limited to:

• Improving thermal insulation in outside walls and roofs;

• Energy-efficient windows and/or external doors (wind fangs where applicable);

• Weather sealing of common areas;

• Energy-efficient water heaters (including solar thermal water heaters where applicable);

• Energy-efficient biomass stoves or furnaces that use sustainable fuel sources;

• Retrofit of central heating system boilers and installation of thermostatic heating valves (for multi-family apartment buildings -MAB, that have standalone central systems);

• Energy-efficient lighting bulbs.

Approved AER intervention package projects will receive a package of funding from the RELP, participating municipalities, and apartment residents.

• Women Energy Entrepreneur Technical Assistance (WEE) Sub-Activity

The WEE sub-activity is designed to ensure equal economic opportunities for women in the energy sector, because the unusually low female labor force participation in Kosovo was identified as a barrier to equitable and inclusive growth. A two pronged approach has been adopted to achieve this goal: (i) Women Energy Entrepreneur Technical Assistance and Grant (WEE), and (ii) Internships/apprenticeships and scholarships for young women in the energy sector.

The support this sub-activity provides includes a mix of technical assistance to help enterprises understand critically needed energy efficiency (EE) upgrades, business development assistance, and partial grants to make needed investments in their operations to reap efficiencies and grow their businesses.

Assumptions for PIEE Design

The Implementing Contractor for PIEE is expected to take the following assumptions into consideration when developing the approach and determining the level of effort to complete the services described in this section. The Evaluator can use the same assumptions to understand the expected scope of the activities they will be expected to evaluate. This section is for the Evaluator's information only to communicate the complexity and scale of the activity.

HER intervention package estimations

• Geographic Region: open to all eligible applicants throughout Kosovo

• Individual Residence Retrofits: estimated 2,600

• Date for Completion of all Retrofits: September 30, 2021

AER intervention package estimations

• Participating Municipalities: 5

• Apartment Retrofits per Municipality: 5

• Apartment buildings: 25

• Date for completion of all AER intervention package retrofits: September 30, 2021.

WEE intervention package estimations

• Geographic region: open to all eligible applicants throughout Kosovo

• Female entrepreneurs receiving TA: TBD

• Female entrepreneurs receiving partial grants: TBD

• Grant funding disbursed: $1 million

• Date of completion: September 30, 2021

Activity 1.2 - District Heating Metering (DHM)

District Heating Metering is the second activity of RELP. This activity will support heating electricity consumption reduction by expanding quantity-based district heat metering on the Termokos district heat supply network in Pristina. Implementing consumption-based heat metering will reduce demand on the district heat network and support expansion of heat supply services to new consumers which rely on electricity for heating, as well as improve the service for the consumers who already reside in buildings connected to district heating services.

The DHM activity will focus on implementing district heat metering services for customers on the Termokos network, including installation of consumption-based heat metering in individual apartments and installation of thermostatic heating valves with built-in balancing function on radiators.

Assumptions for DHM Design

The Implementing Contractor for DHM is expected to take the following assumptions into consideration when developing the approach and determining the level of effort to complete the services described in this section. The Evaluator can use the same assumptions to understand the expected scope of the activities they will be expected to evaluate. This section is for the Evaluator's information only to communicate the complexity and scale of the activity.

Scope of Metering Requirements: From the provided consumer database from Termokos following data concerning the residential sector has been identified:

• Approx. 12,140 apartments are connected (based on an average apartment size of 70 m2);

• The total heated area of connected apartments is approx. 850,000 m2;

• The total number of radiators is approx. 60,700 (based on average 5 radiators per apartment);

Heating System Typology: Four different types of heating systems exist in the residential building sector.

• Heating system with "vertical" distribution;

• Heating system per apartment with "horizontal" distribution;

• Heating system to several apartments with "horizontal" distribution;

• Heating system per apartment with flat substation and "horizontal" distribution;

Some buildings are further connected to the DH system through a "group substation", a substation covering several individual buildings. 10,050 customers (83%) have "vertical" heating systems, while the remaining customers have "horizontal" heating systems.

Substations

• Flat Substations (FSS) – FSS per apartment exist, but the number of FSS and meters installed needs to be further assessed.

• Building Substations (BSS) – There are in total 400 substations, i.e. 40 SS without heat meter. The 40 SS are all small stations.

• Group Substations (GSS) – There are in total 10-15 GSS.

Activity 1.3 – Independent Power Producer Project Finance Facilitation (IPP)

IPP project finance facilitation activity is the third activity of RELP which aims to expand the Kosovo Credit Guarantee Fund's (KCGF) mandate in establishing a new Renewable Energy (RE) IPP Guarantee Window and to create a Kosovo Project Acceleration (KPA) Program within MFK. It directly addresses electricity supply and some of the longer-term outcomes that the Program foresee. The activity foresees the following tasks:

- Developing a standardized framework for renewable energy project financing that follows international best practices while also ensuring it is contextualized to the Kosovo market that is applicable to all sector stakeholders including IPP developers, commercial banks, KCGF, and relevant government ministries.

- Training IPP developers, banks, KCGF, and local consultants on the use of the template documents and spreadsheets.

- Facilitating the development of a pipeline of bankable RE IPP transactions in the standardized format for submission to the partner banks.

- Establishing a KPA Advisory Committee consisting of key renewable energy stakeholders including government regulators, commercial banks, and RE IPP developers to develop the standardized framework for renewable energy project financing. This will lead to a market clarity that facilitates efficient and faster transactions, creates a pipeline of bankable projects, which as a result reach financial close.

- Capacity building for Termokos and ERO, as well as support for designing the consumption-based tariffs.

The implementation roadmap for expanding KCGF's mandate to allow for the creation of the RE IPP Guarantee Window contains six key steps:

(1) Signing an Memorandum of Understanding (MOU) with KCGF stakeholders;

(2) Modifying the KCGF guarantee agreements to include renewable energy

(3) Procuring experts and required infrastructure to expand KCGF's mandate;

(4) Training KCGF staff and management;

(5) Support KCGF to obtain and allocate capital for RE IPP Guarantee Window ; and

(6) Determining pricing and tenor for the RE IPP Guarantee Window.

The implementation roadmap for establishing the Kosovo Project Acceleration Program contains five key steps:

(1) Developing the standardized framework for renewable energy project financing in Kosovo;

(2) Establishing the KPA Advisory Committee;

(3) Provide training on the standardized framework and templates;

(4) Procuring technical assistance for IPP developers; and

(5) Facilitating initial RE IPP submissions to KCGF.

Together, these tasks are expected to standardize the documentation required for IPP to apply for financing resulting in market clarity and more efficient financial transactions. The activity also expects to provide technical assistance to bankable IPP projects so they can make it to financial close. The guarantee through KPA is expected to lower the financial risk that lending institutions foresee in backing IPP projects and allow IPP entrants into the market. This activity is expected to result in an increase in electricity production in the long term.

C.1.5 Theory of Change for RELP

The objective of this project is reduce electricity consumption while maintaining at least the same level of outputs. As a pilot, the project also aims to create knowledge. As such, results beyond the stated objective in the theory of change are notional and not to be causally claimed by the project. They are what is logically expected to happen if the pilot were to be scaled.

Additional details about the theory of change and associated indicators are included in the M&E Plan for the Kosovo Threshold Program (Note: The Kosovo Threshold Program M&E Plan, and other Program documents are located at:

https://millenniumkosovo.org/resources/documents/).

(See Section J for the project logic for Kosovo Threshold Program Project 1 – Reliable Energy Landscape Project)

C.2. Scope

Critical Outcomes for RELP Evaluation

Note that this evaluation is expected to critically evaluate the following outcomes from the project logic, unless otherwise mutually agreed with MCC:

- Objective outcome: Reduced gap between Supply and Demand

- Reduced Electricity Consumption

- Increased Electricity Supply

- For PIEE o Apartment buildings retrofitted with energy efficient improvements o Cost effective energy efficiency model identified iteratively o Female owned businesses become more energy efficient o Increase women's economic participation in the energy sector

- For DHM o Decreased heat consumption o New households shift to district heating

- For IPP o IPP projects reach financial close

Coordination Plan for Implementing Contractors (IC) and Evaluator

- The Evaluator is directly hired by the Millennium Challenge Corporation (MCC) and the Implementing Contractor (IC) is hired directly by the Millennium Foundation of Kosovo (MFK). Key to the success of the evaluator is maintaining communication and coordination with MCC, MFK, and the implementer (see section C.4 Roles and Responsibilities)

- The Evaluator shall provide input to the sampling strategy and instruments for all rounds of data collection by the ICs, and then use the output data to quantitatively answer relevant evaluation questions. The ICs will be tasked with baseline and subsequent rounds of data collection, however, the evaluator will provide necessary data quality checks and maintain communication with the implementer.

- The Evaluator shall coordinate with the IC to ensure that the Evaluator's workplan and the IC's workplans are synced to allow ample time to provide the necessary input into sampling strategy and survey instruments.

C.3. Evaluation Questions and Guidance on Methodology

The Evaluator shall be responsible for answering the following evaluation questions in as rigorous a manner as possible. This list includes the priority questions for the evaluation, but is not exhaustive. These indicate the areas that MCC expects the evaluation will need to cover to comprehensively assess the outcomes of the projects.

The Reliable Energy Landscape Project Evaluation will be a performance evaluation. This evaluation shall use the appropriate combination of quantitative and qualitative methodologies to answer the evaluation question below (which also map to the critical outcomes identified in Section C.2). The independent evaluation will include a process study, assessing the fidelity of implementation to the original design, and setting the stage for the assessment of results further down the logical chain.

The Evaluator is not expected to conduct an exhaustive household-level survey but shall coordinate closely with the Implementing Contractors as they collect baseline and subsequent rounds of data to inform implementation. The Evaluator shall use the data collected by the Implementing Contractors, and administrative data from the utility if needed, to conduct independent data analysis and quantitatively answer a subset of the Evaluation Questions outlined in the next section.

Expected sources of available data by project component are listed below.

Expected Data Sources

Activity 1.1 PIEE

• AER: Household level quantitative baseline and endline data collection to be conducted by the IC (beneficiary and control households). The Evaluator shall provide technical review of the IC's instruments/ sampling strategy.

Administrative data from the utility and/or regulator to assess household level energy consumption should also be available. Evaluator to conduct primary rigorous qualitative data collection. Evaluator to include IC and administrative data in outcome analysis.

• HER: Household level quantitative baseline, and at least one more (possibly two) rounds of data collection to be conducted by the IC (beneficiary and control households). This is the only component that is iterative and the responsibility of data collection is on the IC. The Evaluator shall provide technical review of the IC's instruments/ sampling strategy. Evaluator to conduct primary rigorous qualitative data collection. Administrative data from the utility and/or regulator to assess household level energy consumption should also be available. Evaluator to include IC and administrative data in outcome analysis.

• WEE: No data collection by IC. Evaluator to collect primary rigorous qualitative data to evaluate progress toward hypothesized outcomes in the logic.

Activity 1.2 DHM: Household level quantitative data collection (baseline and endline) to be conducted by the IC (beneficiary and control households). Evaluator to collect primary rigorous qualitative data. Evaluator to include administrative data in outcome analysis.

Activity 1.3 IPP Finance Facilitation: No data collection by IC. Evaluator to collect primary rigorous qualitative data.

Evaluator to include administrative data in outcome analysis.

Evaluation Questions for the Reliable Energy Landscape Project

The evaluator is responsible for answering the following research questions. Some sub-questions will only be answerable using beneficiary-level survey data collected by the Implementing Contractors (IC). The Evaluator will identify the sub-questions and outcomes that will be at risk of not being answered if the scope and quality of the data from the ICs is not acceptable.

C.3.1 Were the activities implemented as designed? To what extent did the RELP accomplish the desired outputs outlined in the program logic?

C.3.2. Did the Pilot Initiatives for Energy Efficiency (PIEE) Activity result in reduced electricity consumption in the intervention areas? What components of the Program resulted in the largest change in energy consumption and why? Were energy savings, previously envisioned during preliminary baseline studies and energy audits, achieved and why? What critical lessons can be learned from the implementation of the PIEE Activity?

C.3.3. Did the PIEE Activity identify a cost effective model for reducing household energy use that could be scaled up nationwide?