Expert on ESCO market development

BACKGROUND

The objective of this Project is to accelerate implementation of energy efficiency measures in public buildings in Ukraine through the ESCO modality, utilizing EPC contracts, by leveraging over significant private sector investment over its five-year implementation period as well as by introducing a Nationwide Energy Management Information Systems (EMIS) for Ukraine.

In recent years there has been an increased interest in the provision of energy services to achieve energy and environmental goals. In particular, some new companies providing energy services to final energy users, including the supply and installations of energy efficient equipment and/or the building refurbishment. These companies, defined as Energy Service Companies (ESCOs), differ from the traditional energy consultants or equipment suppliers as they can also finance or arrange financing for the operation and their remuneration is directly tied to the energy savings achieved.

The Project considers ESCOs as important agents to promote energy efficiency improvements in public buildings. Though lately ESCO modality in municipal public sector demonstrated rapid growth by number of tenders announced, ESCO market in Ukraine is in development stage as actual number of ESCO contracts signed is far from potential and the amount of financing attracted is even less so.

Numerous barriers still hamper ESCO market development in Ukraine. In particular, introduction of ESCO mechanism in public sector still needs legal improvements, and implementation of thermo-modernization in budgetary institutions with the attraction of credit resources is still an issue. At the same time, high investment risks and cost of capital limits ESCO-funded measures to few measures with high return rate. This dictates a necessity to look for new approaches and models to insure effectiveness and sustainability of ESCO modality in the country.

The UNDP Project that started from 2017 has implemented and facilitated at least 52 pilot projects using energy performance contract (EPC) modality in selected public buildings in 10 municipalities to demonstrate the energy and cost-saving potential of energy efficiency measures. Some legislative initiatives aimed at improvement of business environment for ESCO modality has been developed and adopted, new business models and financial instruments has been field – tested.

In order to satisfy requests for identification of potential EPC projects from partner municipalities or other Ukrainian cities, when accepted by the Project, UNDP invites national candidates to send their applications for the Expert on ESCO market development who will help manage the EE project development process and support municipalities in planning and implementation of energy efficiency measures in public buildings sector under the EPC modality. In addition, Expert will help to prepare the list of answers on frequently asked questions both from municipality and ESCO side regarding the EPC process.

The consultant will promote UNDP’s mandate as a gender-responsive organization with zero tolerance to any kind of discriminatory and abusive behaviour, including sexual harassment, sexual exploitation, and abuse

DUTIES AND RESPONSIBILITIES

Objectives of the assignment

The main objective of the assignment is to provide high-level expertise to support the Project:

• facilitate the cooperation of the Project with different municipalities and ESCOs and
• provide with the recommendations on possible ways to implement ESCO given the on-going hostilities in the Country;
• advise the Project team on the matters related to ESCO market development.

Duties and Responsibilities

Under the overall supervision of the Project Manager and the Technical Advisor on ESCO guidance, the selected Consultant on ESCO market development will perform the following tasks:

• Collaborate with municipalities (and/or an asset holder entity – e.g. municipal department of education or health care etc.) to agree on the incremental support from the Project.
• Provide recommendations regarding new partners to sign MoUs and implement more pilots (at least 10 MoUs).
• Facilitate online meetings with partner cities/municipalities and potential new partners on the ESCO aspect.
• Provide recommendations concerning partners for assistance in the development of recovery plans based on energy efficiency standards and technologies (minimum 8 plans).
• Provide recommendations concerning partners who need assistance from the Project in drafting grant applications or project proposals to raise funds for projects to improve the energy efficiency of social and humanitarian facilities and infrastructure of territorial communities (at least 8 applications and proposals).
• Provide recommendations and help collect information for organizing energy audits involving the Project (15 audits).
• Provide recommendations and assist in collecting information on possible pilot projects using EPC, taking into account the requirements of shelter development in conditions of optimal combination of different sources of capital expenditure financing.
• Advise Project partners and provide an outlook on different scenarios of ESCO perspectives.
• Assist municipalities and ESCOs in the preparation of tender documents to ensure they convey clear objectives and organizational/technical/financial aspects; and include necessary inputs (e.g. energy audit, data on energy consumption, detailed description of the current condition of energy systems, and management of the building, clear supplier selection criteria, etc.)
• Update handbook on ESCO with answers to frequently asked questions both from the municipality and ESCO side regarding the EPC process.
• Run and participate in the negotiations with ESCOs.
• Develop recommendations on the optimal model of lending funds to energy service companies in Ukraine with the support of the Project (including through the creation of an ESCO fund), taking into account the practices of leading EU countries and the experience of implementing financial assistance to innovative businesses in Ukraine.
• Advise the Project team on various issues related to the ESCO model, if necessary.
• Prepare final report on the completion of the assignment.

Deliverables

1. A list of the recommendations regarding new partners to sign MoUs and implement more pilots (at least 10 MoUs) – by 01 October, 2022.
2. Minutes of the online meetings with partner cities/municipalities and potential new partners on the ESCO aspect – by 01 November, 2022.
3. Provide a list of the recommendations concerning partners for assistance in the development of recovery plans based on energy efficiency standards and technologies (minimum 8 plans) – by 15 November, 2022.
4. Provide a list of the recommendations concerning partners who need assistance from the Project in drafting grant applications or project proposals to raise funds for projects to improve the energy efficiency of social and humanitarian facilities and infrastructure of territorial communities (at least 8 applications and proposals) – 01 January, 2023.
5. Provide a list of the recommendations for organizing energy audits involving the Project (15 audits) – 01 February, 2023.
6. Provide a list of the recommendations on possible pilot projects using EPC, taking into account the requirements of shelter development in conditions of optimal combination of different sources of capital expenditure financing – 01 February, 2023.
7. A report on different scenarios of ESCO perspectives in Ukraine – 01 June, 2023.
8. Recommendations on the optimal model of lending funds to energy service companies in Ukraine with the support of the Project (including through the creation of an ESCO fund), taking into account the practices of leading EU countries and the experience of implementing financial assistance to innovative businesses in Ukraine – 15 November, 2022.
9. Handbook on ESCO with answers on frequently asked questions both from municipality and ESCO side regarding the EPC process, by 01 February, 2023.
10. Final report on collaboration with municipalities outlining, Project incremental support for current pilots, new MoUs and pilots to be implemented and energy audits conducted (with or without direct Project support) – by 30 September, 2023.

Management arrangements

The consultant will be responsible for the achieving of the objectives of the assignment. The Consultant will report to the Project Manager and will work closely with representatives of Ukrainian municipalities.

Consultant will be responsible for all personal administrative expenses associated with the assignment, which include printing costs, stationary, telephone and electronic communication.

Monitoring requirements / Terms of payment

Payment under this contract is to be made after acceptance of working plans and services delivered by the Consultant upon submission of an output report, other deliverables and an invoice indicating exact number of workdays and description of tasks performed.

The documents should be submitted in electronic or paper form in English or Ukrainian and should be developed in line with the UNDP principles of gender-responsive communications.

Payment will be released in 4 instalments:

• First instalment (25% of total contract amount) to be made upon achievement of Deliverables 1, 2, 3, 8

• Second instalment (25% of total contract amount) to be made upon achievement of Deliverables 4, 5, 6, 9

• Third instalment (25% of total contract amount) to be made upon achievement of Deliverable 7

• Forth instalment (25% of total contract amount) to be made upon achievement of Deliverable 10

COMPETENCIES

• Demonstrates integrity by modelling the UN’s values and ethical standards;

• Promotes the vision, mission, and strategic goals of UNDP;

• Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability;

• Treats all people fairly without favouritism;

• Fulfils all obligations to gender equality and zero tolerance for any sexual misconduct.

REQUIRED SKILLS AND EXPERIENCE

Education:

• Advanced university degree (at least Specialist/Master) in Engineering, Law, Economics, Marketing, Public Administration or other relevant field;

Experience:

• Proven experience with the ESCO business model in the public sector of Ukraine and EPC contracts is a must. At least 3 years of direct experience in the field of ESCO (or other mechanisms to finance energy efficiency) is required.
• At least 5 years of relevant experience in professional/managerial/advisory services or expert work for the government, commercial or multilateral organization(s) related to energy and/or investments.
• Experience in energy/utility law and regulation field (a minimum of 2 years of working experience related to energy law development and/or enforcement).
• Prior experience in or advisory services to international organizations is an asset.
• Proven reports and/or publications record related to energy legislation, energy efficiency initiatives/projects, investments in EE sector or ESCO market development (at least 5 relevant publications).
• Understanding of the key issues faced by organization involved in energy and utilities sector in Ukraine, the political and regulatory background, the energy efficiency market gaps and opportunities.
• Excellent analytical, advisory, communication and writing skills.

Language Proficiency:

• Fluency in writing/speaking Ukrainian;
• Working level English.

Documents to be included when submitting the proposal

Applicants shall submit the following documents:

• Letter of interest/proposal;
• CV/P-11 including information about past experience in similar projects / assignments and contact details for referees;
• Financial proposal;
• Examples of reports/studies related to energy development, energy efficiency and environment.

Financial proposal

Lump-Sum based on Delivery of Outputs

The financial proposal shall specify a lump sum amount. In order to assist the requesting unit in the comparison of financial proposals, the financial proposal will include a breakdown of this daily fee based amount and number of anticipated working days.

Travel costs

Travel within Ukraine (if needed to deliver expected results) will be paid in addition to this payment for service in accordance with the UNDP rules and procedures. Consultations regarding travel options will be held with the Project Manager prior to planning of the trips and relevant logistics.

In the case of unforeseeable travel, payment of travel costs including tickets, lodging and terminal expenses should be agreed upon, between the respective business unit and the Contractor, prior to travel and will be reimbursed. In general, UNDP should not accept travel costs exceeding those of an economy class ticket. Should the Contractor wish to travel on a higher class he/she should do so using their own resources.

Evaluation criteria

The following criteria will be rated as indicated below:

• Advanced university degree (8 points max): PhD – 8 points; Masters/Specialist – 6 points.
• Proven experience with the ESCO business model in the public sector of Ukraine and EPC contracts is a must. At least 3 years of direct experience in the field of ESCO (or other mechanisms to finance energy efficiency) (20 points max): 5 years – 15 points, 5-7 years -18 points, 7 and more – 20 points
• At least 5 years of relevant experience in professional/managerial/advisory services or expert work for the government, commercial or multilateral organization(s) related to energy and/or investments (17 points max): 5 years – 12 points, 5-7 years -14 points, 7 and more – 17 points.
• A minimum of 2 years of working experience related to energy law development and/or enforcement (15 points max): 2 years – 8 points, 3-5 years -10 points, over 5 years – 15 points.
• Prior experience or advisory services to international organizations (3 points max) – 3 points;
• Proven reports and/or publications record related to energy legislation, energy efficiency initiatives/projects, investments in EE sector or ESCO market development (7 points max): 2 publications – 5 points, more than 2 publications – 7 points;
• Language skills (excellent written and spoken Russian and Ukrainian. Working level of English (pass/fail): yes- pass; no – fail.

Maximum available technical score – 70 points.

Evaluation method

Cumulative analysis

Contract award shall be made to the incumbent whose offer has been evaluated and determined as:

A) responsive/compliant/acceptable, and

B) having received the cumulative highest score out of a pre-determined set of weighted technical and financial criteria specific to the solicitation.

* Technical Criteria weight: 70%

* Financial Criteria weight: 30%

Only candidates obtaining a minimum 70% from the maximum available technical score would be considered for the Financial Evaluation.

The maximum number of points assigned to the financial proposal is allocated to the lowest price proposal and will equal to 30. All other price proposals will be evaluated and assigned points, as per below formula:

30 points [max points available for financial part] x [lowest of all evaluated offered prices among responsive offers] / [evaluated price].

The proposal obtaining the overall cumulatively highest score after adding the score of the technical proposal and the financial proposal will be considered as the most compliant offer and will be awarded a contract.