Attachment_C_-_Questions_and_Responses_v4.pdf

Amendment No. 5 – Attachment C (Questions & Responses)

**Note: For purposes of clarity, “Seller,” “Developer,” “Contractor,” “Offeror” and “Successful Bidder” are synonymous and refer to the same party.

Question No. 1: There are many things that are in progress: agreements between government departments, project documents? When will these be finalized and how long will the vendors have to consider them?

RESPONSE:

USAID and DABS appreciate the patience of potential offerors in this solicitation process. The Request for Proposals attached as Attachment B is a revised RFP in its entirety. The revised Power Purchase Agreement and associated agreements (Escrow Agreement, Lease Agreement, etc.) will be posted on the DABS website www.dabs.af on or about February 29, 2016.

As set forth above, the revised schedule of deadlines is provided hereinabove.

Question No. 2: What does USAID/DABS/GoA take away from this [pre-proposal conference] meeting?

USAID has made number of changes to the RFP recommended by those that attended the conference in Dubai. USAID and DABS recognize that in future projects additional changes need to be made that will simplify the process and standardize it to reflect best practices for development of this kind of project.

This is the first project of its kind in Afghanistan and will help to create the conditions for private investment in energy projects in Afghanistan.

Question No. 3: Do you have a number of bidders in mind for commercial/bid auction in mind?

There is a danger to really high technical requirements, as you will have a low number of bidders in reverse auction.

USAID does not have a predetermined number of offerors to participate in the reverse auction. In accordance with RFP section L.10, Step II, all offerors whose project proposals will be determined technically acceptable will be invited to participate in the online competitive reverse auction.

Question No. 4: If the goal is to attract investment to Afghanistan, and if USAID is restricted by so many rules, let this be an Afghan led process, where USAID acts as secondary stakeholder (Off budget project) that provides the financing. This is an example project. The Minister and the President should have been here today. The DABS president should have been here to listen to investors and to build the right model.

Note that this is the first renewable energy project of 10MW capacity to be implemented in Afghanistan through a public-private partnership. The role of USAID therefore is to trigger, facilitate and support with financial incentives formation of these partnerships in the energy sector. USAID and DABS are in agreement that without this USAID support, it would be difficult to attract private sector involvement in addressing the energy needs of Afghanistan. As

Amendment No. 5 - Attachment C (Questions and Responses) suggested, USAID agrees and anticipates that future successful partnerships between DABS and private sector will be built based on this experience.

Question No. 5: $10M USD might look good for a 10MW plant in India, but because of the challenges in Afghanistan, developers would rather have no government grant, and therefore, no technical constraints or technical consultant, no government complications, and faster implementation timeline. Then developers only get paid for the energy they produce.

DABS would be pleased to see IPPs offer power with no grants or other government subsidies; the fact is that they have not done so to date.

Consequently, USAID and DABS are seeking to incentivize the first project to attract energy developers. Government incentivation for infrastructure projects, not only of the renewable variety, is common practices in many countries.

Question No. 6: Recommend that you have a PPA process that transcends this project, so that it can be used for multiple projects. Whatever specific incentives USAID can provide to this project to bid down the price should be an add-on that should not change the PPA. It should not change the PPA. Recommend that you pay over 5 years rather than EPC on Day 1, it still provides a good return and maintains the USAID process. But it helps to separate the incentive from the rest of the project.

As the first project of its kind in Afghanistan, USAID and DABS agreed that this hybrid mechanism was best suited for this pilot. This opinion will be considered in future projects.

Question No. 7: If incentives were staged, and separate from the PPA, it would be the only solution. Keep providing the incentives after the project is being built, come in the investment after it is built. Why are you interested in how people build it and when if you are not paying them before they build it? Investors are interested in the Terms and Conditions.

See response to Question 6 above.

Question No. 8: The project seems unbalanced and risky, there is no guarantee that when work is complete that the company gets paid (even when commissioned properly).

How do you expect the developer to front all investment capital? Why is there not more transparency? Risks seem to outweigh the benefits.

Because USAID understands that the developer will meet the initial capital costs, the contract deliberately includes a payment schedule and method based on milestones stated in Section B.4 of the RFP to enable the developer recover the costs quickly. In accordance with B.4, the developer will be paid 20% (lump sum) of the contract price upon successful installation and cold commissioning of every 2MW of power installed.

The final version of the Escrow Agreement will be published on the DABS website on or about February 29, 2016 and provide information regarding the financial guarantees that will be provided to the developer.

Question No. 9: This is a hybrid project with a lot of technical/commercial overhead. The requirements of the RFP are very intense considering the small size of the project. There is a conflict between the Engineering Procurement Construction (EPC) and IPP approach.

USAID understands that the industry practice would be for DABS to enter into a single PPA with a developer where the developer is responsible for the design, construction, operation and sale of power to DABS. In this case, however, it has been determined to utilize this hybrid approach.

Regarding the intensity of the requirements, USAID understands that some non-US bidders may not be familiar with USG procurement documents. An effort has been made with the revisions to the PPA and RFP to address concerns regarding any conflict between these two agreements.

Question No. 10: As investors, effort and resources are going into preparing documentation, requires considerable amount of investment from Day 1, requirements put on by USAID are more related to EPC rather than IPP. There is a lot of effort going into providing documentation (more than usual IPP model), spending a lot of time to prove acceptability, waste of resources from the developer perspective, methodology / approach is uncomfortable. How will bidders recover these costs?

Just as offerors are rightly concerned with recouping their investment, USAID also wants to award the contract to a responsible developer to ensure success of the project. The successful offeror must be determined technically competent, based on the requirements set forth in Section M, and thus eligible for USG funding.

Question No. 11: Investors love legacy processes and this project is entirely new. Suggest that the order of events is that the PPA is first issued, then vendors look for partners and investors, and then implement the project. There are a lot of details coming from the top that are very unusual for these types of projects, and they make it very difficult for the developers. For an investor, the $10M incentive is attractive, but they have to look at the other money involved, and wonder if their money is safe or not. Complicating details will make or break this project.

USAID has explained in its responses to the above questions why it’s involved in this pilot project. This project is in many respects non-standard and is expected to be a unique pilot project. Offerors need to make their own assessment of the value and risks of bidding on this unique project.

Question No. 12: On page 4 of Attachment 2, Program Background and Context,” reference is made to a “10 MW Solar Diesel hybrid” as a key solution for providing interim relief to the power shortage in Kandahar.

Given this program objective, can the contractor opt to retrofit the MTU diesel plant at Breshna Kot with an intelligent hybrid controller that maximizes solar energy usage by regulating the operation of the MTU generators based on real-time availability of solar energy instead of putting in the prescribed 15 minutes of battery storage at the Solar PV site to accommodate downstream voltage and frequency fluctuations? By this question we mean (i) regulating the operation of the diesel plant to accommodate the real-time performance of the solar PV plant; rather than (ii) regulating the operation of the solar PV to accommodate the diesel plant.

On the basis of terms and conditions provided in RFP, PPA and other documents, the successful offeror is only required to design, build, finance, own, commission, operate and transfer the Solar Facility. No change in scope is envisaged at this point.

Interconnection requirements and synchronization with the MTU generators external to the solar plant are DABS’ responsibility. Note, however, that the developer is responsible for providing the synchronization panel within the plant facilities.

In addition, note that battery requirement of the original Section C has been removed. Offerors should be award of the need for a battery backup system in order to maintain supply to auxiliary elements of the plant in the event of a grid failure. Those auxiliary elements include communications, security, switchgear operation and others. Bidders should size the backup battery system accordingly.

Question No. 13: Should the bidder provide cost information in step 1 of proposal submission?

No. Technical acceptability is determined in Step 1. Cost information is not required until Step 2, which will be determined during the reverse auction phase. Proposal requirements are provided in Section L of the USAID solicitation.

Question No. 14:

So before submitting proposal i have a question that can we bid in this subject solicitation or no because i saw on Attachment A8 8B which is USAID Interested Vendor List and DABS INTERESTED VENDOR LIST which is already short listed company's from both parties so is this for those company's who are already listed as interested vendor or for all company's who have the capability for such work in inside Afghanistan.

USAID and DABS welcome participation by all potential offerors. The

Interested Vendors List is only intended to support offerors by providing a list of vendors that have expressed their interest in supplying their equipment or services to potential offerors for this specific project. To no extent is there a restriction, prescription or endorsement of any vendors.

The RFP Section L sets forth the requirements for offerors to be eligible to participate in this solicitation.

Question No. 15:

[Company] wants to bid on the subject solicitation, as we have seen the announcement some later and did not participated in Pre - Proposal Conference which were held in UAE, still [Company] can participate in bidding for the subject solicitation?

USAID and DABS welcome participation by all potential offerors in this solicitation. Information announced in the Pre-Proposal Conference is presented in this Amendment at Attachment A.

Question No. 16:

Suggestion 1: In Qualification and Experience it states:

Describe Offeror’s experience within the last five years in installing, maintaining and managing on-site photovoltaic systems, including under Power Purchase Agreement, of similar magnitude and complexity as required by this solicitation. The Offeror must demonstrate that within the last five years, it has completed at least two (2) turnkey solar power projects of at least five MWp or higher. One of these projects must be under a Power Purchase Agreement (where the Offeror owns and operates the system, selling power to the host power utility) and in satisfactory continuous operation for at least one or more years (from the date of submission of the proposal).

Please find below our reasoning for a request to change this part of the qualification:

The typical structure for a solar project is that one party is the Owner (and signs the PPA) and another party is the Contractor (Engineering, Procurement and Construction Contractor and O&M Contractor). This make the qualification criteria of building two 5MW plant, with one of them Owned by the same party quite difficult for most companies to achieve As this project is in Afghanistan, the project should be open to companies that have shown experience investing in the Country (even if they do not have experience with investing with solar, provided that they have a technical solar partner)

Proposed Change:

Describe Offeror’s experience within the last five years in installing, maintaining and managing on-site photovoltaic systems, including under Power Purchase Agreement, of similar magnitude and complexity as required by this solicitation. The Offeror (or Consortium as a whole) must demonstrate that within the last five years, it has;

- As the Lead EPC Contractor, completed at least two (2) turnkey solar power projects of at least five MWp or higher. These projects must in satisfactory continuous operation for at least one or more years (from the date of submission of the proposal).

- For at least one of these projects, the Offer must be the O&M Contractor And either:

- Have one project of at least 5MW under a Power Purchase Agreement (where the Offeror owns and operates the system, selling power to the host power utility) and in satisfactory continuous operation for at least one or more years (from the date of submission of the proposal). Or;

- Have experience investing in Afghanistan, and can demonstrate the ability to raise sufficient capital to fund projects of similar size.

RESPONSE:

The Qualification requirement of Section L.10(c)(i) Specialized Experience is modified as set forth in the revised RFP in Attachment B.

Question 17: To build two 5MW plants and operate one, this would increase the number of potential bidders. Suggest change to separate building and operating, bidding them together will remove a large portion of the qualified bidders.

See Response to Question 16 above.

Question 18: What is the timeframe of release of the two performance bonds ($500,000 each)?

RESPONSE:

USAID has removed the requirements related to payment of a performance and payment bond for the USAID Award.

Question No. 19: 10 percent of the contract price is required as a performance bond, is the $1M USD performance bond given by USAID?

As set forth in the response to Question 18 above, the bond requirements has been removed.

Question No. 20: Power plants are built continuously. It is possible that the last 2 mW might not be built before DABS defaults. In this case, what happens to the bond?

The terms and conditions of the USAID Contract are separate from the obligations of DABS pursuant to the PPA. As set forth in the response to Question 18 above, the bond requirements of the USAID Contract have been removed.

Question No. 21:

Page 17 (Section C.4) - When can we get the complete template of the performance guarantee for this project?

USAID has removed the requirements related to payment of a performance and payment bond for the USAID Award.

Question No. 22: Seller letter of credit – can DABS explain the duration of the seller letter of credit and the amount? Also the time DABS would need to obtain the letter of credit?

THE FOLLOWING RESPONSE WAS PROVIDED BY DABS:

As provided in the PPA, the Seller Letter of Credit means “an unconditional, irrevocable, direct-pay, divisible, and transferable on demand bank guarantee in favour of the Purchaser.” This Letter of Credit will be issued by a bank or other financial institution reasonable acceptable to the Purchaser.

The amount of the Letter of Credit is US$ 1.8 million. The duration of the letter of credit will be set forth in the PPA; it is anticipated that the letter of credit will be in place through three (3) years after the Commercial Operations Date (as defined in the PPA).

Question No. 23:

In reference of the subject RFP, I hereby would like to know if we can have a letter of credit from an Afghan Bank for financing the project. In order to finance the project most of the Afghan companies would need investment partner and that could be most probably in the form of a bank operating in Afghanistan.

A letter of credit is a document from a bank guaranteeing that a seller will receive payment in full as long as certain delivery conditions have been met. In the event that the buyer is unable to make payment on the purchase, the bank will cover the outstanding amount.

A letter of credit is not working capital to finance this project and therefore, would not satisfy the requirement of providing evidence of a commitment of a minimum $10 million of working capital to finance the construction and operation of the proposed PV system. See RFP, Section L.10(c)(i).

With regard to the source of working capital financing, Offerors may utilize

Afghan or international financing institutions.

Question No. 24:

PPA – Seller Letter of Credit Page 29 - Is there any detailed requirements of the Seller Letter of Credit? such as issuing bank\amount\condition etc.it shall be the Standby Letter of Credit according to our understanding.

The revised PPA will set forth the details and requirements related to the Seller Letter of Credit. The revised PPA will be posted on or about February 29, 2016.

Question 25: Will the project be exempt from paying import duties on project materials (not just equipment)?

Per the bilateral Agreement between US Government and Government of Afghanistan, the project is eligible to be exempted from import duties/taxes on commodities. USAID will assist the successful bidder obtain exemption certificates from GOA.

Question 26: Unclear whether the developer is paid in USD or Afghanis, Afghanis are depreciating and payments don’t always happen on time. Need to be sure of income in USD, there needs to be a forward looking contract and a backstop.

Payment to the contractor for system installation under the USAID Contract will be in US Dollars.

DABS has also confirmed that payments to the Seller for sale of power to DABS under the PPA will also be in USD.

Question No. 27:

Page 9 (Section B.1) - How does the USAID make the payment? by T/T or others?in US Dollars or Local Currency? And when can we get the Condition Precedents list for the drawdown of the USAID FUND?

With regard to the USAID Contract, USAID will make milestone payment in US

Dollars in five tranches. Payments will be released upon achievement of cold commissioning of increments of 2 MW installed capacity of the SPV plant, as set forth in Section B.4. The requirements and standards for achieving cold commissioning are set forth as Attachment J-10 to the Revised RFP.

Question No. 28: Program will run in 5 tranches, each one has 2MW peak. Is there a pre-phase before the 15 year phase? Can we start production before and sell when produced, or is it all “wasted” before the whole project is commissioned?

The USAID milestone payments set forth in Section B.4 of the USAID Contract will be paid based upon cold commissioning through 8 MWp commissioning.

Actual commissioning will take place once 10 MWp is ready.

THE FOLLOWING RESPONSE WAS PROVIDED BY DABS:

DABS is not obligated to purchase power generated before the Actual COD however, the revised PPA has a provision for sale and purchase of power generated before Actual Commissioning, in case the Seller and DABS choose to do so.

Question No. 29: Referring to paragraphs v) and vii) in Section h), Interconnection

Requirements, on page 16: The RFP says the new dedicated 18-km 20 kV power line from the solar PV plant to Breshna Kot will connect into “the 20 kV bus” at the Breshna Kot substation . It also says “the Grid and PV system side must have matching Voltage, Frequency and phase sequence required for safe operations of the PV installation.” Furthermore, “It is important that the

(solar) power plant is designed to operate satisfactorily in parallel with the grid, under the voltage and frequency fluctuation conditions, to export the maximum possible units to the grid.”

However, as shown in Attachments 3a and 3b, there actually are four 20 kV bus systems (A-1, B-1, A-2 and B-2) at Breshna Kot. We know that each bus must be energized and operated independently (although the A and B systems can be bridged) because the power sources at Breshna Kot (i.e., Kajaki hydro, MTU diesel and QSA diesel) are not synchronized at this time.

Given these facts, what exactly is meant as the “the 20 kV bus” and “the grid” in the above statements in the RFP? Exactly where at the Breshna Kot substation will the new 20 kV feeder from the solar PV plant be connected?

The contractor is also required to provide a “Synchronizing panel at the SPV

Paralleling with Grid.” Which existing power source at Breshna Kot is the contractor’s Solar PV plant supposed to be synchronized with? Are that MTU1 and MTU2 feeders synchronized and commonly controlled by the ABB switchgear shown in Attachment 3c?

The solar plant will now be connected to Shorandam Industrial Park (SIP) and not the Breshna Kot Substation as previously planned. The connection from

SPV to SIP will be a 20kV, about 6 km, 2x185mm2 ACSR. There will be a DABS provided double-circuit connection facility between SIP and Breshna Kot

Substations. The developer will need to provide its own synchronizing panel at the SPV. DABS is upgrading the relaying at SIP and BKT to enable synchronizing (synchro-checking) between the busses.

Question No. 30: Total capacity of PV plant is planned to be 10MW at peak, if there are bad weather conditions and peak decreases, will this be a point of concern for

DABS?

THE FOLLOWING INFORMATION WAS PROVIDED BY DABS:

The revised PPA has a clause governing power fluctuations based on weather and other conditions outside the Seller’s control. Offerors are advised to review the revised PPA in detail.

Question No. 31: There is uncertainty about what developers are supposed to build. There is space for interpretation (10 MW AC), developers are trying to do an optimization based on cost per KW/hour basis. The more boundaries you put on that, the harder it becomes. If you get paid by KW/h, why is there a minimum requirement?

The 10MW ac requirement was determined as the amount needed by DABS to ensure the project is viable and worth the effort.

Question No. 32: As long as you have the warranty of the equipment, you cannot make requirements based on weather. Minimum production must be linked on a monthly basis to the radiation. Has to be fixed on a radiation sensor number rather than an absolute value, with performance factor.

See Response to Question 31 above.

Question No. 33: This is a 10MW peak (not 10MW AC cross) power plant, with a gross potential of 5MW peak from area described in tender, but only 20kV powerline. Can you explain how it will work?

Based on the technical study, it is determined that the 20 kV line is sufficient.

Most of the distribution networks in Afghanistan operate at 20 kV. DABS will control losses by selecting appropriate sizing of conductors and double circuit lines. DABS will construct a D/C 20 kV line from the Plant to the SIP Plant. The size of the conductor will be 185 mm2.

Question No. 34: A 20kV power line will tolerate a 5MW peak, not more. You need at least a 35kV line to make a good design for a 10MW peak. This will generate massive losses

See response to Question 33 above.

Question No. 35: Specifications of modules of solar panels, written that solar panels should have an RFID tag on every panel. Is this correct? We have reached out to multiple companies who say this is not possible.

This requirement has been removed from the USAID RFP.

Question No. 36: How will USAID handle issues on which the developer and USAID disagree?

Specifically, design requirements mandated by the USAID RFP. What is the mechanism to solve these issues? For example, concrete road doesn’t provide power. This approach is at odds with an IPP process, where the costs are optimized to achieve greatest power generation at lowest possible cost. Either the question is asked during the bidding process or after.

The USAID contract has dispute resolution procedures and clauses.

Specifically, the responsibility for determining the type of road to install in the solar plant lies solely with the developer. The intention of USAID is not to specify the design of the plant but to ensure a successful project capable of providing power for 15 years is built.

Question No. 37: Metering system - specified on high voltage side (very unusual), tolerances in PPA are 0.2%, meaning that the primary and secondary metering must vary each by .1%. This specification can only be met on the low voltage side. If you have a metering system on the low voltage side, then it works. If it is on the high voltage side, the coupling system has a higher tolerance. Recommend change to low voltage side.

The meter is to be installed on the DABS side of the transformer that interconnects the plant with the DABS distribution system. Consequently, DABS does not pay for losses incurred within the plant.

Question No. 38: Why would the solar plant be 18km from the substation? Why can’t the solar power plant be right next to the feeder point, with clusters of small generation units next to feeding points? Then the problems disappear, including security related issues. Security should be taken over by DABS. How will these claims be handled?

The land selected is owned by the Government of Afghanistan and has clear title. The solar plant will be connected to Shorandam Industrial Park (SIP) and not the Breshna Kot substation. There will be a connection facility between

SIP, Breshna Kot substations and the solar plant. Offerors must make their own security arrangements and have adequate insurance in accordance to the terms of the PPA.

Question No. 39: In USAID solicitation, it is written that the Gen-set is 3X12MW while the actual in sites are 3(6X2MA in each site), which one will be connected with the PV park, 1X (6x2MVA)?

The solar plant will be connected to the Shorandam Industrial Park. The capacity of Shorandam Diesel plan at SIP is 8 x 2000 kVA.

Question No. 40:

What are the type of grounding for all levels voltage? Is direct grounding, grounded via small resistor, grounding by arc-suppression-coil or un-grounded?

The grounding will be based on the relevant IEEE or NEC or other equivalent accepted international standards applicable for the grounding of all levels of voltage of PV system of this capacity.

Question No. 41:

Please provide the test method to measure 10MW AC on the high side of the 400V/20KV transformer.

The most acceptable industry standard method that applicable worldwide can be utilized for measuring 10 MW AC or the maximum output of the plant on the high voltage side of the step up transformer. It has been determined that the physical metering equipment is located at the high side of the 0.4/20 kV step up transformer.

Question No. 42:

Reference: SOL Section C.3.2 (C), paragraph 3, page 15.

The PV modules degrade slightly each year, but the first year`s degrade is higher. For crystalline silicon PV modules, first year`s degrade is about 2.5%, from the second year to twenty-fifth year, the average rate is 0.7% every year.

As a leader manufacturers of PV modules in China, we suggest you change the power warranty requirement to: 10 year power output is no less than 91.2%, 25 year power output is no less than 80.7%.

In the revised documents, both the RFP and PPA have been aligned to a degradation factor of 0.7%.

Question No. 43:

The battery stays in the technical requirement as is right?

The battery backup system requirement has been removed from the USAID RFP. However, an independent battery backup system charged by its own PV system is required to cover parasitic load at the plant.

See also response to Question 12 above.

Question 44: Perimeter Wall – what are the specifications (Fence/Type/CMU/Height)?

The choice of perimeter fencing is the responsibility of the Seller.

Question 45: Can DABS provide the operation profile of the generators?

This information is not necessary for preparation of bids; DABS will provide the information to the successful offeror.

Question 46: Are vendors paid on generation or on offtake by DABS?

The PPA provides that the Purchaser shall purchase and accept all Net Delivered Energy generated by the Facility and delivered at the Interconnection Point.

Question 47: Do performance summaries exist for the solar installations listed in Attachment 2? We are looking to review financial information and projections if they are available.

There are a few small capacity solar power facilities running in Kandahar.

These facilities are not owned by DABS and therefore performance summaries of solar plants specific to that region do not exist.

Question 48: What approvals are required from local authorities (building permits, connection permits, grid impact study)?

No permit is required for building. For the grid connection and grid impact study, DABS approval is required.

Question No. 49:

What is the local regulations, codes and mandatory requirement for the electrical design? Including lighting protection, over voltage protection, fair protection and grounding.

The MV system are as follows:

Frequency Maxi 50.5Hz, Mini 49.5Hz

Voltage Nominal 20kV, Max 24kV

Question No. 50:

Is there a geology survey?

No.

Question No. 51:

Is there a detailed meteorological data? As well as geotechnical and hydrometeorological data?

Meteorological data can be obtained from the Kandahar airport and solar radiation data form NREL solar resources map prepared for Afghanistan in 2007. No geotechnical data is available. USAID can provide a soft copy of the NREL solar resources map.

Question No. 52:

Is there a topographic map for the project area extension within 10 KM, scale is no less than 1/50000? Is there a topographic map for the project area, scale is no less than 1/2000?

A number of services provide topographic maps of the Kandahar area that may be purchased, such as Landinfo or Mappery. The bidder is responsible for obtaining the information.

Question No. 53: May we review power purchase agreements currently in place between DA Afghanistan Breshna Sherkat and existing solar facilities/providers listed in Attachment 2?

This is the first non-government related PPA and therefore there are no existing PPAs available for review.

Question No. 54: The issue is with the PPA and USGR is a secondary issue. The PPA is the base, if investors can live with the PPA, then people will bid. The PPA is not currently totally understood.

A further revised version of the PPA will be published on or about February 29, 2016, which is intended to address these concerns.

Question No. 55: There are three elements of a Solar PPA: land rights (how safe), radiation (production), PPA. The land rights and radiation are secure. The PPA is the only remaining issue.

Question No. 56: Someone should have come prepared with same terms and conditions as rest of the world, or better since it is Afghanistan.

The PPA and its ancillary documents were designed to cover a variety of contingencies due to the lack of a robust regulatory environment in Afghanistan. It is unique because in incorporates both a PPA agreement and a USAID Contract for the incentive so is different than “off-the-shelf” PPAs.

USAID and DABS anticipate improving on this model in future projects.

Question No. 57: Incentives have to be built into PPA rather than separate. There will be a security mechanism, every country needs to structure its own incentives.

For a variety of reasons USAID has chosen to structure the incentives in this manner. We are aware of the need to incorporate changes into PPAs for future projects.

Question No. 58: This project / concept of IPP has been practiced for decades. Instead of reinventing the wheel, you should have put together the best practices of PPP.

Commercial and financing terms should have been taken into consideration.

See the response to Question 55 above.

Question No. 59: Recommend considering the PPA process first, then after that, the $10M incentive. Developers tried talking to insurance companies, who were spooked by the country. If the PPA were well drafted, it would increase interest from investors.

RESPONSES:

Should USAID decide to fund additional similar projects in future, this suggestion may be considered.

Question No. 60: This is how it is done all over the world, because it gets you immediately to price bidding. Currently, the PPA is an obstacle. You have an obligation as the first issuers of a PPA in Afghanistan to create a reliable process.

Question No. 61: Will there be opportunity to negotiate penalty rates (other numbers) after the tender?

The terms and conditions of the PPA are set forth in the draft PPA to be posted on or about February 29, 2016. The final draft PPA will not be subject to substantial change.

As set forth in Section L.10 of the RFP, Offerors must affirmatively state their willingness to execute the PPA in substantially the final form presented in order for the Offeror’s proposal to be deemed technically acceptable in order to participate in the reverse auction.

Question No. 62:

Page 9 (Section B.1) - Shall the contractor need to set up a project company (Special Purpose Vehicle) in Afghanistan once the contractor have won the bidding? If that, is there any ownership structure limited of the project company?

THE FOLLOWING RESPONSE WAS PROVIDED BY DABS:

Pursuant to Afghan laws, the successful offeror must be registered as a public or private limited company under the laws of Afghanistan in order to do business in Afghanistan.

Question No. 63: The shareholders in the company can’t change for a certain period of time.

How long is this period of time? The vendor is involved for 15-years, need flexibility to change leadership.

The revised PPA has provisions on the transfer of ownership shares. Offerors are advised to read the PPA in detail.

Question No. 64: We understand that the SPV plant owner ship shall be with the offeror for the PPA duration of 15 years. Please clarify what happens to the plant ownership thereafter? ( ref Attachment 1 draft PPA)

After the end of project term, the plant will get transferred to DABS or its designee in accordance with the terms of the PPA.

Question No. 65:

Page 9 (Section B.1) - How long shall the contractor keep the title to the whole PV power plant, from which date to which date?

The term of the PPA is fifteen (15) years, unless terminated earlier in accordance to the terms of the PPA.

Question No. 66:

Page 9 (Section B.1) - Shall the contractor need to transfer the whole PV power plant to any entity once the contractor have completely fulfilled the PPA?

See Response to Question 65 above.

Question No. 67:

PPA – Termination Page 96 (a) - the PPA have made clear the termination date once the Seller/Purchaser Events of Default happened. However, we would like to know the normal duration of the PPA.

See Response to Question 65 above.

Question No. 68: It is better to spend time on front end (for fast scale-up, as solar is an incredibly scalable technology), than on back end. This project could be put it up in 10 weeks. If you get the process right, everyone will be interested and it will be built quickly.

This opinion will be considered in future projects.

Question No. 69: Escrow Agreement, what is the sovereign guarantee?

The final version of the Escrow Agreement will be published on the DABS website on or about February 29, 2016 and provide information regarding the financial guarantees that will be provided to the Seller.

Question No. 70: In addition to Escrow account, is it possible to get a bank guarantee for the payment? In the case of non-payment?

See Response to Question No. 69.

Question No. 71: Escrow is only for 6 months, for this investment, this risk may not be advisable. There needs to be a longer lifeline for the project, recommend further lifeline. Asking for more assurance for worst case scenario after 6 months.

See Response to Question No. 69.

Question No. 72: Will there be any problem with one [] company providing or have a partnership with more than one [other] company bidding for this contract…?

RESPONSE:

As set forth in Section L.8 of the RFP, no teaming entity can be a member of another consortium.

Question No. 73: We [ ] would like to visit the site of the subject project. Would you please guide us when and how can we do so.

DABS will accommodate site visits during the month of March.

Please contact: (i) Mr. Nangialai Miakhail (DABS) at nangialai.miakhail@dabs.af, with cc: to: Mr Rasoul Baki kajakidam@yahoo.com and Mr. Sam Nagwere at snagwere@usaid.gov.

DABS will coordinate these site visits. DABS will neither be responsible for arranging security nor will DABS or USAID reimburse any expenses related to the site visits.

mailto:nangialai.miakhail@dabs.af mailto:kajakidam@yahoo.com mailto:snagwere@usaid.gov