AMENDED_IDIQ_RFP_v.26_(Amendment_No._4_Section_M)_CLEAN.docx

SOL-674-16-000023

Power Africa Expansion

Re: Request for Proposal SOL-674-16-000023, Power Africa Expansion

Dear Prospective Offerors:

The U.S. Agency for International Development (“USAID”) intends to award a Multiple Award Indefinite Delivery, Indefinite Quantity (“IDIQ”) Contract to implement President’s Power Africa Initiative as described in Section C of this Request for Proposal.

USAID invites all interested and responsible organizations to submit offers in accordance with the requirements of this solicitation. USAID will conduct this procurement as a full and open competition under which any type of organization may submit a proposal. The procedures set forth in Federal Acquisition Regulation (“FAR”) Part 15 will govern the procurement. FAR Part 36 does not apply to this procurement as it does not contemplate Architect-Engineer or construction services. The North American Industry Classification System (“NAICS”) Code is 541611. The Authorized Geographic Code for procurement of goods and services under any task order issued under this IDIQ Contract is 935.

USAID anticipates that the maximum ordering limitation of the contract(s) resulting from this RFP will not exceed $900,000,000 over the ordering period. USAID anticipates the award of seven (7) IDIQ contracts, including three (3) IDIQ awards set-aside for small business concerns. USAID reserves the right to award more or less awards than this anticipated number. USAID anticipates issuing one initial task order upon award of the IDIQ contract. Attachment J.1 contains the initial task order. Attachment J.2 contains the Statement of Objectives. USAID estimates the following price range for the initial task order: $90,000,000 to $110,000,000.

Prospective offerors must submit questions about this solicitation to powerafricaidiq@usaid.gov by the time and date indicated above. Offerors must submit electronic and hard copies of offers in accordance with the instructions contained in Section L, “Instructions to Offerors.” Please note that USAID will find offers nonresponsive if they fail to comply with the material terms of this solicitation. As a result of the complexity of this requirement, USAID requires that offerors submit Past Performance Information to powerafricaidiq@usaid.gov and as outlined in Section L.5(2)(i) by the date indicated above, two weeks prior to the closing date for the submission of full offers. USAID will evaluate technically acceptable proposals in accordance with the evaluation factors in Section M, “Evaluation Factors for Award.” USAID will not evaluate technically unacceptable offers.

Issuance of this solicitation neither obligates USAID to award a contract nor commits USAID to pay for any costs incurred by the Offeror in preparing and submitting an offer. Offerors incur such costs at their own risk. Contract award under this solicitation remains subject to the availability of funds and other internal approvals. Furthermore, USAID reserves the right to reject any and all offers when considered by the Contracting Officer to serve the best interests of the U.S. Government.

USAID encourages prospective offerors to regularly check Federal Business Opportunities for any amendments to the solicitation. Thank you in advance for your interest in this procurement.

//s//

Michael Ashkouri, Esq.

Supervisory Regional Contracting Officer USAID/Southern Africa

See SF 33 Attachment contained in PDF.

PART I—THE SCHEDULE

SECTION B—SUPPLIES OR SERVICES AND PRICES/COSTS

B.1 Purpose

The United States Agency for International Development (“USAID” or the “Agency”) requires the Contractor to provide technical services described in the Statement of Work (“SOW”) in Section C of this Indefinite Delivery, Indefinite Quantity (“IDIQ”) Contract to implement the President’s Power Africa initiative (“Power Africa”). USAID Task Order Contracting Officers (“TOCOs”) will request Contractor services through the issuance of Request for Task Order Proposals (“RFTOP”) during the ordering period as specified in Section F.2.

B.2 Contract Type and Services

This is a Multiple Award IDIQ Contract. TOCOs may issue task orders in the following contract type: Cost-Plus-Fixed-Fee (“CPFF”) contracts (term or completion); Cost-Plus-Award-Fee (“CPAF”); Cost-Plus-Incentive-Fee (“CPIF”); any Firm Fixed-Price (“FFP”) type; or, any combination thereof. The Contractor must perform the services set forth in the task orders at prices consistent with Section B of this IDIQ Contract. The Contractor may use any contract type when awarding subcontracts of any duration permitted under Section F.2 during the first year of the IDIQ’s period of performance. For all subsequent years, the Contractor may use any contract type except Labor-Hour or Time-and-Material subcontracts, unless the IDIQ Contracting Officer provides written authorization to all IDIQ Contractors to modify this exception.

B.3 Maximum Contract Ceiling

This Multiple Award IDIQ has an overall ceiling price of $900,000,000. The maximum aggregate dollar value of task orders awarded to all contractors must not exceed this IDIQ Contract ceiling. USAID will neither subdivide the ceiling among the IDIQ awardees nor multiply it among awardees.

B.4 Minimum Obligated Amount

This basic IDIQ Contract includes an initial obligation of funds in the amount of $25,000 to cover the minimum order guarantee USAID must order. The Contractor must furnish the minimum order amount of services. Following this initial obligation, individual task orders will obligate funds to cover the work required under that task order.

B.5 Fixed Fee Ceiling

(a) The fixed fee ceiling does not apply to FFP or cost-reimbursement incentive task orders.

(b) For each CPFF task order issued under this IDIQ, the TOCO and the Contractor must negotiate a fixed dollar amount for fee. In negotiating the fixed fee, the TOCO must consider the policies and factors for establishing fixed fee set forth in FAR § 15.404-4. In addition, the TOCO must consider applicable USAID policy on establishing a fixed fee.

(c) The fixed fee for any individual task order must not exceed [Offeror proposes ceiling percentage] of a task order’s estimated cost, excluding fixed fee. The fixed fee ceiling applies to the prime contractor and any subcontractor.

(d) The TOCO may tie the fixed fee dollar amount to the level of effort for a term task order or to specific deliverables or milestones for a completion task order.

(e) The Contractor must negotiate fees for CPIF and CPAF task orders with the TOCO in accordance with the terms of this IDIQ Contract and applicable regulations.

(f) Grants Under Contract.

(i) The fee ceiling provided in paragraph (c) above does not apply to “Grants Under Contract” (“GUC”), if any, or other costs that have a separate fee ceiling established in the contract.

(ii) Separate Fixed Fee Ceiling Applicable to GUCs.

(1) The amount of fixed fee, if any, applicable to GUCs in any individual task order must not exceed [Offeror proposes ceiling percentage] of the task order GUC cost.

(2) If the TOCO issued a Letter of Credit to the Contractor for GUC-related expenditures, the amount of the fixed fee, if any, applicable to GUCs in any individual task order must not exceed [Offeror proposes ceiling percentage] of the task order GUC cost.

B.6 Labor

B.6.1 Unburdened Ceiling Daily Rates

(a) This Section B.6 does not apply to FFP task orders, FFP subcontracts, or FFP contract line items.

(b) Unburdened Ceiling Daily Rates (“CDR”) apply to all labor (i.e., the prime contractor, subcontractor, Third Country Nationals (“TCNs”), Cooperating Country Nationals (“CCNs”), and consultant salaries) on cost-type task orders. CDRs assume a productive, eight hour work day.

(c) Additional requirements and approvals under the IDIQ Contract may apply to labor costs, including, but not limited to the following:

(i) Agency for International Development Acquisition Regulation (“AIDAR”) § 752.7007, Personnel Compensation (July 2007), as provided in Section I.26;

(ii) Approval of subcontractors as required under FAR Part 42;

(iii) Approval of any final salary rates that exceed the Contractor Salary Threshold (“CST”);

(iv) AIDAR § 722.170, Employment of third country nationals and cooperating country nationals, Rules requiring that CCN and TCN labor comply with a USAID Mission’s Local Compensation Plan (“LCP”), as provided in Section I.13.

(d) The Contractor will negotiate approved labor rates at equal to or lower than the CDRs. The TOCO will provide the final approval of any labor rate. USAID will not pay any daily rate that exceeds the CDR set forth in Table 1 without prior TOCO approval.

(e) The CDR for personnel listed in Table 1 is “unburdened” and must only include salary costs or consulting rates of the individual providing the services. The CDR must not include the following:

(i) Payroll costs (e.g., fringe benefits, Federal Insurance Contributions Act (“FICA”), allowances, differentials);

(ii) Indirect costs applicable to labor; and,

(iii) Profit or fee, if any.

(f) The CDRs set forth in Table 1 apply to Year 1 of the IDIQ’s period of performance. An escalation rate of [Offeror proposes escalation rate]% per contract year applies to those CDRs.

(g) The CDRs apply to all consented subcontractors under this IDIQ Contract and new subcontractors proposed for specific cost-type task orders.

The unburdened CDR for each labor category set forth in Table 1 represents the mid-level and senior-level rate for each labor category. If a task order requires junior-level personnel, then the Contractor must propose rates reasonably below the mid-level unburdened CDR.

Table 1. Labor Categories

Table 2. Definition of Labor Categories

(h) Locally-Hired National Personnel or Other Non-U.S. Expatriate Rates. The Contractor must pay all locally hired national personnel and other non-U.S. expatriates in accordance with AIDAR 722.170. Further, the Contractor must pay salaries for locally-hired personnel and non-U.S. expatriates under this IDIQ Contract and any resulting subcontract in accordance with AIDAR 752.7007, “Personnel,” after factoring the prevailing compensation paid to personnel performing comparable work in the cooperating country as determined by USAID and consideration of the individual’s education, work experience, and recent and relevant salary history. Unless otherwise authorized by USAID, CCN, and TCN compensation must not exceed the prevailing compensation paid to personnel performing comparable work in the cooperating country as determined by USAID. Also, the Contractor must pay locally-hired national personnel in the currency of the cooperating country unless otherwise authorized by USAID.

B.6.2 Minimum Qualifications

The Contractor must provide personnel that meet the minimum education and experience requirements set forth in Table 3. These minimum qualifications for mid-level and senior-level personnel correspond to the Unburdened CDRs set forth in Table 1.

Table 3

B.6.3 Subcontractor Labor Rates

The following provides guidance for various subcontracting arrangements:

(a) The Prime subcontracts with an approved subcontractor from the original IDIQ competition. The unburdened CDR’s for the prime contract apply to the subcontractor.

(b) The Prime contracts with a new subcontractor not yet approved. The unburdened CDR’s for the prime contract apply to the new subcontractor.

(c) Prime subcontracts with a new subcontractor not yet approved and may or may not have a different cost accounting system that only processes fully burdened rates. Further, subcontractor proposes rates that are “above” the prime IDIQ rates. The Prime may then include in its TO proposal, (i) the fully burdened rate proposed to the Prime by the Subcontractor,(ii) allocation of the Prime’s indirect costs in accordance with established accounting practices, and (iii) a reasonable profit. If the rates proposed to USAID, inclusive of the Prime’s allocable indirect costs and a reasonable profit are above the Prime’s unburdened CDRs , the Prime must disclose the amount of the indirect costs, and the amount of the proposed profit that were added to the Subcontractor’s proposed rates. A reasonable profit will be negotiated by the TOCO for the specific TO. The CDRs of the subcontractor must not exceed the prime’s CDRs in the IDIQ contract.

B.6.4 Unburdened CDR Rate Changes

(a) Parties to this IDIQ Contract may propose additional labor categories, rates, and descriptions. The Contractor must submit a proposal requesting the modification of Section B.6.1, providing a rationale for the proposed labor rates. The IDIQ Contracting Officer will review these proposals and determine if the revised rates are reasonable, realistic, and serve the best interests of the U.S. Government (“USG”). If the IDIQ Contracting Officer accepts the rates, then USAID will incorporate the new rates into the IDIQ Contract through a modification.

B.6.5 Billing Central Management Costs

(a) The Contracting Officer has determined that a key (full time) technical manager is not necessary or required to administer this basic IDIQ Contract. Contractors will not be authorized to bill USAID directly for IDIQ management costs under this IDIQ Contractor or under task orders. Contractors must propose a centralized management structure that allows for recovery of IDIQ management costs as part of its indirect costs.

B.7 Indirect Costs and Advanced Understanding on Ceilings

(a) This Section B.7 only applies to prime contractors performing cost-type task orders.

(b) Pending establishment of revised provisional or final indirect cost rates, USAID will reimburse allowable indirect costs on the basis of the following negotiated provisional or predetermined rates and the appropriate bases pursuant to the contractor’s current executed Negotiated Indirect Cost Rate Agreement (“NICRA”):

Table 4

[To Be Determined at Award]

Prime Contractor: [•]

Base of Application: [•]

Source: [•])

Period: [•]

Note: The unshaded columns in Table 3 are the current approved indirect cost rates for the prime contractor.

(c) The Contractor must not change its established method of classifying or allocating indirect costs without the prior written approval of the IDIQ Contracting Officer.

(d) USAID will reimburse the Contractor for indirect costs at the final negotiated rates, but not in excess of the ceiling rates specified in Table 3.

(e) For FFP task orders, the indirect cost ceiling rates serve only as the basis of negotiation.

(f) The Contractor can recoup indirect costs (e.g., overhead, G&A, etc.) as other direct costs if it is part of the Contractor’s usual accounting procedures, consistent with FAR Part 31 and the Contractor’s NICRA.

B.8 Reimbursable Costs

For cost-reimbursement task orders, USAID will only reimburse the Contractor for allowable costs in accordance with FAR § 52.216-7, “Allowable Cost and Payment,” FAR § 52.216-8, “Fixed Fee,” FAR § 52.232-20, “Incentive fee,” FAR § 52.216-10, “Limitation of Cost,” and FAR § 52-232-22, “Limitation of Funds,” if applicable, and AIDAR 752.7003, “Documentation for Payment.”

END OF SECTION B

SECTION C—STATEMENT OF WORK

C.1 Introduction

This IDIQ Contract allows for the provision of all technical assistance and engineering consulting services that fall within the scope of work specified in this Section C to implement USAID’s activities that support Power Africa. The services provided under this IDIQ Contract require expertise in project development, finance, legal, engineering, regulatory affairs, and utility operations, among others.

The Contractor must provide services in the following functional areas:

1. Generation, Transmission, and Distribution Transactions

2. Finance

3. Legal

4. Engineering

5. Planning

6. Electric Utility Reform and Restructuring

7. Electricity Access

8. International Power Exchange and Power Trading

9. Demand-Side Management and Energy Efficiency

10. Cleaner Energy Technologies

11. Gas

12. Governance

13. Legal and Regulatory Framework

14. Coordination and Cooperation

In addition to the functional areas identified above, the Contractor should note that Institutional Strengthening, as well as Sustainability, Climate Change, and Gender (addressed separately below), are crosscutting themes, reflected in each of the areas of services listed above.

C.2 Background

On June 30, 2013, President Obama launched Power Africa, a partnership between the USG, African governments, the private sector, international organizations, non-governmental organizations (“NGOs”), and bilateral and multilateral partners to double access to electricity in Sub-Saharan Africa (“SSA”).

Initially, Power Africa focused on the countries of Liberia, Ghana, and Nigeria in West Africa and Ethiopia, Kenya, and Tanzania in East Africa. In addition, Power Africa worked with select regional institutions, including the Economic Community of West African States (“ECOWAS”), East African Commission (“EAC”), African Union Commission (“AUC”), and the East and West Africa Power Pools. However, on August 5, 2014, at the U.S.-Africa Leaders’ Summit, President Obama announced an expanded commitment to Power Africa, increasing the goals to 30,000 megawatts (“MW”) of power generation capacity and at least 60 million household and business connections, and pledging $300 million in annual assistance to expand the reach of Power Africa across SSA.

Power Africa focuses on completing individual power sector transactions quickly and cost-effectively by attracting private investment and helping countries make critical power sector reforms. Partnership is the heart of Power Africa’s strategy, which aims to achieve its goals by leveraging the collective resources of three different types of organizations: (i) Development and strategic partners, including multilateral finance institutions, bilateral aid agencies, and government agencies[footnoteRef:1] that provide direct support for power sector transactions; (ii) more than 100 private sector partners including developers, project developers/sponsors, financiers, equipment suppliers, and industry associations (the “Private Sector Partners”); and, (iii) African governments that help create the enabling environment necessary for power sector transactions to move forward. [1: Power Africa brings together a total of 12 USG agencies and departments in a “whole of government” approach. These include: USAID, Overseas Private Investment Corporation (“OPIC”), U.S. Export‐Import Bank (“Ex‐Im”), Millennium Challenge Corporation (“MCC”), U.S. Trade and Development Agency (“USTDA”), U.S. African Development Foundation (“USADF”), the Department of Commerce (“DOC”), the Department of Energy (“DOE”), the Department of Treasury (“Treasury”), the Department of State (“DOS”), the Department of Agriculture (“DOA”), and the U.S. Army Corp of Engineers (“USACE”).

Power Africa’s private sector partners have committed more than $31 billion to power generation and distribution projects across SSA. Power Africa’s development partners, including the African Development Bank (“AfDB”), World Bank Group (“WB”), and the Government of Sweden, have collectively committed an additional $9 billion as part of Power Africa. The European Union is aligning with Power Africa to fund more than $2.8 billion in sustainable energy activities across the region. Power Africa also has strong partnerships with the African Union, the United Nations’ Sustainable Energy for All (“SE4ALL”) initiative and the International Renewable Energy Agency. This approach leverages partners’ collective technical expertise, financial contributions, and relationships in the power sector. The capabilities and resources provided by the other USG agencies and Power Africa Partners can be found at www.usaid.gov/powerafrica.

USAID coordinates the interagency implementation of Power Africa and serves as the primary deliverer of USG technical assistance and transaction support to advance its goals. USAID provides policy support, technical assistance and analysis, grants, capacity-building, and loan guarantees to advance Power Africa projects and critical reforms, with USAID teams across SSA helping administer from the field.

The Coordinator for Power Africa (the “Coordinator”) manages the USG initiative from offices located at USAID’s Mission to Southern Africa (“USAID/Southern Africa”) in Pretoria, South Africa. The Coordinator works with USAID bilateral and regional missions in SSA to develop and oversee annual work plans and ensure budget allocations align with Power Africa priorities. Power Africa has two Deputy Coordinators, one based in South Africa and a second based in Washington, D.C.

The Coordinator works closely with White House staff, the USG interagency Power Africa Working Group (“PAWG”) in Washington, D.C., and other Power Africa partners, including bilateral and multilateral donors, NGOs, financial institutions, and the private sector to coordinate Power Africa activities, ensure collaboration, and leverage resources to achieve Power Africa goals. Representatives from the DOC, USTDA, DOE, and OPIC also have representatives located with Power Africa in South Africa to ensure the greatest synergies possible.

In addition to its main office in South Africa, Power Africa also has an office located at USAID headquarters in Washington, D.C., managed by the second Deputy Coordinator.

C.3 IDIQ Objectives and Expected Results

As the Power Africa initiative enters its third year, it has set two ambitious targets to expand access to power across SSA by 2030:

1. Increase installed power capacity by 30,000 MW; and

2. Create 60 million new connections to double electricity access in SSA.

This IDIQ Contract will serve as Power Africa’s principal tool to achieve these targets, which comprise the core objectives of this IDIQ Contract. Results towards these targets are ultimately the measure of successful Contractor performance. To guide their implementation, Power Africa’s strategy, or Roadmap (Attachment J.7) is built on three strategic pillars and it is underpinned by a strong, global partnership approach. The three strategic pillars are:

1. Getting to 30,000 MW. Power Africa’s approach to increase generation starts and ends with energy deals. The Contractor will prioritize support for the following:

a. Transactions rooted in a country’s national power strategy, particularly those using renewable technologies, such as solar, wind, biomass, and geothermal;

b. Economically feasible hydropower projects when they are developed in an environmentally and socially sustainable manner.

c. Renewable energy opportunities as they are crucial for the diversification of African energy markets, increasing energy security, the expansion of off-grid access, and the mitigation of environmental damage.

d. Non-renewable projects with lower carbon emissions, including natural gas;

e. In limited circumstances, other non-renewables like fuel oil where there are no viable affordable alternatives and, whenever possible, help countries transition from fossil fuels to cleaner generation sources; and

f. Transmission projects that unlock generation capacity, as well as operational improvements that increase the available capacity at existing and planned generation plants.

2. Getting to 60 million connections. Creating new generation capacity is not an end unto itself. New MW are only important if they can be delivered to homes and businesses. Therefore, the Contractor will perform the following:

a. Coordinate the expansion of electricity grids to connect to approximately 35 to 40 million homes and businesses by scaling up our support for large-scale urban and rural grid roll-out programs. African partner governments are responsible for managing and coordinating their grid development, while our work will focus on ensuring that every step of the transmission and distribution value chain receives adequate technical and financial support.

b. Intensify Beyond the Grid efforts in order to provide access to rural areas. Even by 2030, many households in SSA will still be too far from urban areas and major transmission lines to connect directly into the grid. To reach these households, Beyond the Grid, a Power Africa sub-initiative supporting off-grid and small-scale solutions, particularly rooftop solar and micro-grids, will expand access to electricity to those who will not be grid-connected by 2030 for an additional 25 to 30 million connections.

3. Unlocking energy sector potential. To reach 30,000 MW and 60 million connections, the Contractor will support the development of effective institutions within partner governments and regional organizations that can support and maintain sustainable power projects. Three critical enablers are necessary to ensure that transactions are effectively identified and completed:

a. Governments need laws, regulations, and institutions in place that are capable of developing and managing the country’s power sector. This includes developing appropriate legal and regulatory frameworks to attract sustainable investment, and ensure that regulators and oversight bodies have sufficient expertise, experience, and authority to manage the sector. Power Africa is supporting and will continue to support governments with targeted policy interventions that move transactions forward (such as developing competitive procurements and frameworks for public-private partnerships (PPPs)). This also includes support to governments, regulators, and utilities to achieve cost-reflective tariffs and improve utility balance sheets in order to increase service reliability. These interventions will help attract responsible investors, facilitate effective government oversight, and ultimately enable governments to sustainably expand access.

b. We will facilitate national and regional power sector integration through support of regional power pools and electricity trade. Regional efforts unlock new generation and connections opportunities, improve generation efficiencies, and help stabilize national grids.

c. We will ensure long-term sustainability of reforms and new power generation by investing in African institutions; supporting capacity building in local governments and civil society organizations; promoting the establishment of private sector trade associations; and facilitating dialogue between the private sector, governments, civil society, and development partners.

Although specific targets will be developed in each Task Order, it is expected that the Contractor will support the objectives outlined above in all aspects. Expected results include, but are not limited to the following:

1. Development of a healthy pipeline and portfolio of new power generation projects from the concept phase right up through late stage development and ultimately financial close, which will help Power Africa achieve its generation targets;

2. Power generation and transmission projects brought to financial close and ultimately commissioned;

3. Substantive increase of electricity access to households and businesses through new connections (both on and off grid);

4. A notable increase in private and public investment in the power sector in SSA, including the number and quality of actors participating in power projects, and a reduction in transaction costs as a means of stimulating and expediting power sector investments; and

5. Measurable and observable improvements in the legal and enabling environment and institutional capacity to grow and manage the power sector in SSA, including: the capacity of the power sector workforce; system operations and planning; the financial viability of utilities; the quality of regulatory and legal frameworks; and policies that lead to a more efficient electricity sector and cross-border trade.

C.4 Power Africa Achievements

Since its launch in 2013, Power Africa has brought more than 4,300 MW of generation projects to financial close. Under Beyond the Grid, a sub-initiative that drives investment in off-grid and small-scale energy solutions, Power Africa has funded companies and projects expected to achieve more than 1 million new connections.

The below list provides examples of the achievements over the last two years:

· Ethiopia: Reykjavik Geothermal. Supported in the execution of the Power Purchase Agreement (“PPA”) for the country’s first Independent Power Producer (“IPP”) and geothermal project representing 500 MW of power potential at the Corbetti geothermal energy field. Supported through Power Africa technical and transaction assistance.

· Rwanda: Gigawatt Global. First ever utility-scale solar energy facility (8.5 MW enough for 15,000 homes) at the Agahozo Shalom Youth Village. Supported through a U.S.-Africa Clean Energy Finance Initiative (“ACEF”) early stage grant.

· Kenya: Lake Turkana Wind project. Power Africa, through OPIC, approved $250 million in financing for this 310 MW wind power generation project. Through the Grid Management Support Program, funded by Power Africa, the Kenyan government has determined the national electric grid’s absorption capacity for wind power, enabling the signing of the PPA with Lake Turkana Wind Power. In addition, Power Africa, through the US Treasury Department, supported the AfDB’s “Partial Risk Guarantee” to the lenders for the associated transmission line.

· Nigeria: Afam 150 MW natural gas power plant. Supported through Power Africa assistance to the National Bulk Trader in the negotiation of the PPA.

· Nigeria: Azura-Edo 450 MW natural gas power plant. Supported through Power Africa assistance to the National Bulk Trader in negotiating the PPA; first IPP in Nigeria in 10 years following recent power sector reforms; OPIC approved up to $50 million in financing. The project is now in the construction phase.

· Ghana: Cenpower Kpone 350 MW IPP natural gas power plant. Supported through Power Africa assistance on the negotiation of the PPA and tariff.

C.5 Power Africa Transactions and Reforms Program and Other Implementing Mechanisms

In May 2014, USAID awarded the Power Africa Transactions and Reforms Program (“PATRP”) contract for the provision of technical assistance, capacity building, and project transaction support services to advance Power Africa’s goals in the initial six priority countries.

PATRP focuses on four programmatic areas:

1. Institutional Support to the Power Africa Coordinator’s Office

2. Late Stage Transaction Support

3. Small Scale Projects and Rural Electrification/Mini‐Grids Support

4. Regulatory and Institutional Strengthening and Policy Reform

It is expected that a number of functional areas and activities within this IDIQ may overlap with those of PATRP. The Contractor will coordinate closely with and take direction from the Power Africa team in order to avoid redundancies and to maximize possible synergies. In addition, USAID deploys a number of other implementing mechanisms described in Attachment J with which the Contractor must coordinate.

In addition, PATRP currently maintains the Power Africa Tracking Tool (PATT), a web portal that provides easily accessible information on power transactions across SSA. These transactions as well as additional information can be accessed via a mobile application. The Contractor must provide information for the PATT, depending on the country and type of work required in the Task Order.

C.6 Required Contractor Services

This IDIQ Contract allows for the provision of technical assistance services, including engineering consulting services, within the scope of work specified in this section, to implement USAID’s activities in support of Power Africa’s achievement of the President’s goals.

This IDIQ Contract covers a total of 49 countries in SSA with the exception of those countries USAID has identified as Critical Priority Countries (“CPCs”) in the region (e.g., South Sudan). Currently, USAID has 33 bilateral missions and 4 regional missions covering the remainder of the 54 countries (also referred to as “non-presence” countries). These missions cover countries speaking a variety of languages with differing socio-economic barriers; thus, the Contractor must consider social and cultural realities when developing task order proposals.

Pursuant to Section F.10, “Ordering Procedures,” the TOCO will request Contractors to provide services through the issuance of task orders. The TOCO may issue task orders specific to geographic regions or countries, function areas, and possibly for specific tasks or deliverables. USAID may prioritize specific countries and regions based on USG foreign policy objectives and transaction opportunities.

As required for each task order, the Contractor will provide services in the following areas:

1. Generation, Transmission, and Distribution Transactions

2. Finance

3. Legal

4. Engineering

5. Planning

6. Electric Utility Reform and Restructuring

7. Electricity Access

8. International Power Exchange and Power Trading

9. Demand-Side Management and Energy Efficiency

10. Cleaner Energy Technologies

11. Gas

12. Governance

13. Legal and Regulatory Framework

14. Coordination and Cooperation

Contractors should note that Sustainability, Climate Change, Institutional Strengthening, and Gender (see Section C.7) are crosscutting themes of this IDIQ Contract that must be reflected in each of the areas of services listed above.

C.6.1 Generation, Transmission, and Distribution Transactions

Power Africa employs a transaction-centered approach to directly address the constraints to project development and investment in SSA’s power sector. Shifting the typical development paradigm to a transaction-centered approach provides partner governments, the private sector, and donors with a focal point to galvanize collaboration, emphasizes near-term results, and drives systemic change that will facilitate greater private sector involvement.

The approach seeks to accelerate the pace of project development by identifying key milestones, risks, and challenges, while also identifying USG and Power Africa Partner interventions that can effectively help project stakeholders address such challenges. By helping projects reach financial close[footnoteRef:2] as quickly as possible, Power Africa seeks to not only increase availability of power in the near-term, but to create models that facilitate future private sector investment. [2: The term “financial close” refers to an event in a project at which each of the conditions precedent to the initial drawdown of funds under the credit agreement are either satisfied by the project company, as borrower, or waived by the project lender(s). See The Law and Business of International Project Finance, Scott L. Hoffman (1998) at 702. Further, the financial close event implies that the project company has concluded with project lenders a complete package of permanent financing on a nonrecourse or limited recourse basis. The availability of permanent financing (i.e., debt with a grace period equal to the construction period plus a repayment period of at least 10 years) on reasonable terms and conditions is a key pre-requisite to attract long-term investment from the private sector into the power sector in SSA. ]

The Contractor must tailor technical assistance and financial resource interventions to each transaction, taking into account the country’s specific political, economic, social, and energy circumstances, as well as actions undertaken by private sector stakeholders, other donors, and Power Africa Partners. Interventions also vary significantly when comparing projects at different stages of the project cycle or projects of different magnitude.

Before selecting projects to support, the Contractor will evaluate the critical path for each project and confirm that projects are technically and financially feasible while being affordable for electric utilities and their customers. The Contractor will also critically assess the financial feasibility of each selected project, including the financial capacity of the buyer to pay for the power generated. Power Africa will support open, transparent and, to the extent feasible, competitive transaction processes. Competitive procurements in the power sector generally result in better value for the power purchaser in the form of timely project execution, lower costs and prices, and greater efficiency in plant operation.

Depending on the sub-national, national, and regional conditions, the Contractor may provide transaction support and technical assistance to national and sub-national governments, state-owned and investor-owned electric and gas utilities, rural energy agencies, and private sector entities, including project developers, energy service companies, investors, and lenders. Technical assistance activities must take into account the political, economic, social, and power sector circumstances in the country or countries where each planned project is located as well as actions undertaken by private sector stakeholders and other donors.

Specific tasks will be further defined in the task orders, as appropriate. They may include, but not be limited, to the following activities:

Transaction Advisory Services to Accelerate Projects to Financial Close

· Provide advisory services to assist in the negotiations to bring transactions to financial close including pre-feasibility studies, data collection for feasibility studies, and business planning.

· Provide support for PPPs, including management contracts, concessions, and divestiture.

· Support power and gas purchasers in relationship to the negotiation of key agreements on specific transactions.

· Assist in the privatization of generation, transmission, and distribution assets when requested by host governments.

Technical Assistance to Host-Country Institutions

· Provide technical assistance for development of IPP and PPP laws and regulations, including design and standardization

· Provide technical support to address specialized issues related to renewable generation projects, such as geothermal exploration costs and risks, and variable renewable and micro-grid integration with the grid.

· Assist on design and evaluation of international competitive tenders for generation, transmission, and distribution projects, including integrated generation, transmission, and/or distribution concessions.

· In collaboration with development partners and other USG agencies, provide early-stage project support, including grant funding for early-stage development costs (e.g., feasibility studies), technical assistance for project development, and/or guarantees.

· Assist counterparts to prepare proposals and projects to obtain financing under loans and grants approved by the WB and AfDB, as well as assistance and training on carrying out tender procedures and completing specific tenders to ensure efficient application of approved funds.

· Assist with consideration of modifying or removing import tariffs (e.g., value-added tax) for energy access products and equipment, including batteries and other products core to the operation and maintenance of off-grid energy resources.

Catalyze private sector investment in the power sector, including the off-grid sector

· Convene private sector partners to gather information regarding obstacles to power projects, ground-truth reform work, and learn of technical assistance needs of host-country institutions.

· Work with private sector associations to provide information on power sector opportunities in host countries.

· Design and support new financing facilities that enable private sector investors to increase participation in the power sector.

· Provide support for the development of transparent and competitive PPPs, joint ventures and IPP structures, including management contracts, concessions, and divestiture.

· Provide a wide range of advisory services (i.e., technical, legal, financial, regulatory, and/or IPP/PPP policy) to host country governments and off-takers to assist in project pipeline development, project identification, screening, feasibility and pre-feasibility assessment and design; and the negotiation of private energy power projects and related agreements necessary to bring transactions to financial close, including but not limited to tariff modeling, project selection and due diligence, competitive procurement, drafting and negotiation of PPAs, interconnection and transmission agreements, contracting and post-award monitoring, among others.

C.6.2 Finance

Increased equity investment and commercial debt financing for both private power projects and state-owned electric utilities are essential to expanding the power sector in SSA. Public funding still provides the lion’s share of capital for power sector development, with official development assistance also playing a critical role; however, the achievement of the increased generation targets for SSA requires far greater private sector participation and financing. The financing need for SSA’s power sector is currently estimated at $41 billion annually. At current spending levels from government, donors, and the private sector, the financing gap for the energy sector stands at roughly $23 billion annually for SSA countries.

The Contractor will provide independent financial advisory services, including financial modeling, and financial arrangement services for Power Africa transactions.

Specific tasks will be further defined in the task orders, as appropriate. They may involve, but not be limited to the following:

· Provide independent financial modeling, financial advisory, and financial arrangement services to governments, electric utilities, developers, investors, and lenders to bring Power Africa transactions to financial close.

· Advise governments, electric utilities, and developers, investors, and lenders on guarantees and credit enhancement mechanisms to lower capital costs and/or extend the tenor of financing available for projects.

· Leverage existing platforms or develop new ones to help link projects with financing (e.g., the Private Financing Advisory Network (“CTI PFAN”).

· Train, convene, and mobilize local and international pension funds and other institutional investors to invest in energy and power infrastructure in Africa, including through the development of new financing structures, instruments and vehicles.

· Assist governments in the area of project finance and structuring and developing credit supports, guarantee schemes, and other financing enhancements, including comfort letters; obtaining multilateral development bank Partial Risk Guarantees (“PRG”); and interfacing with commercial financiers and investors to bring projects to financial close.

· Provide technical assistance and develop financing instruments and vehicles such as power infrastructure bonds that generate increased investment in the power sector by African pension funds.

· Work with other USG agencies, export credit agencies, banks, International Financial Institutions (“IFIs”), donors, and investors to provide funding for capital investment by distribution companies needed to significantly reduce aggregate losses.

· Provide technical support for the design of financing, revolving funds, public benefit funds, municipal bonds, and specialized financing mechanisms, such as clean technology funds.

· Formulate innovative business models and financial products to assist in the development of clean energy and energy access markets, including without limitation the development of new insurance and other risk mitigation instruments and approaches.

· Assist eligible projects with identifying and accessing funds through the Clean Development Mechanism.

· Facilitate access to credit guarantees and other financing mechanisms through USAID’s Development Credit Authority and other similar mechanisms to catalyze additional investment in the power sector.

· Facilitate access to financing mechanisms for energy service companies (“ESCOs”).

C.6.3 Legal

High-quality legal advice to governments, regulatory agencies, electric utilities, and developers, investors, and lenders in structuring transactions and negotiating IPP and PPP power project agreements is a vital component of Power Africa. Providing legal counsel to help establish the legal framework for micro-grids and grid integration in SSA countries is a growing focus for Power Africa. Currently, Power Africa works with the African Legal Support Facility (“ALSF”) at the AfDB to provide utilities and government ministries with direct legal advisory services in the negotiation or structuring of energy sector transactions or with capacity building to develop the legal foundations needed to properly negotiate contracts and other power project documents. Countries must formally request assistance from ALSF, which then negotiates the legal services with a number of pre-qualified international law firms. Another Power Africa legal tool is the U.S. Department of Commerce’s Commercial Law Development Program (“CLDP”), which has prepared, in conjunction with international and African lawyers, a PPA Handbook and provides training in the negotiation of PPAs.

The Contractor will provide independent qualified legal advisory services for Power Africa transactions, and to host governments as appropriate. Specific tasks will be further defined in the Task Orders as appropriate. They may involve, but not be limited to the following:

· Provide legal transaction advisory services to SSA governments, electric utilities, and developers, investors, and lenders in the development, structuring, tendering and negotiation of IPP and PPP power generation, transmission, and distribution projects.

· Develop and deliver in collaboration with the ALSF, CLDP, and other Power Africa development and private sector partners, workshops and trainings for government ministries and agencies, regulators, judges, law schools and the private sector on PPA negotiations and other legal documents required in IPP and PPP generation and transmission projects.

· Develop with the ALSF and CLDP a comprehensive PPA and power sector development curricula and training materials building off of the CLDP PPA Handbook to strengthen the capacity of legal and energy professionals in priority countries and support the establishment of self-sustaining PPA training courses (i.e., “train-the-trainer”). All materials will be open-source and made available on the internet.

· Develop model or annotated transaction documents for both power generation and transmission projects.

· Develop national and sub-regional energy sector laws and regulations (see Section C.6.13 below).

· Develop legal frameworks for standalone micro-grids and integration of micro-grids into the grid.

C.6.4 Engineering The Contractor will provide independent engineering services for Power Africa transactions. However, these engineering services do not constitute Architect-Engineer or construction services as defined in FAR Part 36. Instead, they refer to the provision of consulting services to support private sector power transactions (e.g., pre-feasibility studies, feasibility studies, among other things).

Power Africa generation projects encompass a range of technologies, including simple cycle and combined-cycle gas-fired power projects, large hydropower projects (applying the definition from the World Commission on Dams (“WCD”) report), small hydropower projects (under 10 MW plus any other project not defined as “large” under the WCD definition), utility-scale solar photovoltaic projects, small-scale solar and biomass projects under 10MW, and wind power projects.