Procurement notice

Assignment Description: The City of Rivne (population approximately 255,000), has approached the European Bank for Reconstruction and Development ("EBRD") requesting a loan to support the rehabilitation and modernisation of their municipal district heating infrastructure. This is a high priority project for the City in terms of the development of municipal structured financing with an international financial institution. Recent increases of gas prices in Ukraine create strong demand for energy-saving investments.

Heat in Rivne is generated and distributed by two municipally owned district heating companies, UE RCC "TeploTransService" and UHE RCC "Komunenergya" operating, in practice, as a single unit ("TeploTransService" or the "Company") with a unified organisation, one management and one common office location.

The Company is actively looking for different options to update and modernise their heat and hot water infrastructure and improve their service to the end consumers. One of the main long-term strategic objectives is to convert the distribution networks design from 4 pipes to 2 pipes through the introduction of individual heat substations at the building level. Accurate regulation of heat and hot water is expected to match the actual, fluctuating needs of the buildings and the individual needs of the consumers resulting in massive savings of energy. In addition, installation of heat meters will allow for reforming the tariff structures based on actual consumption instead of normative tariffs.

This will also decrease the heat demand and consequently lower the required costs of upgrading the heat generation facilities.

Other long-term options to upgrade the district heating infrastructure in Rivne, identified by the Company are (i) merging of small network loops due to increased efficiency and lower maintenance and operation costs, (ii) modernisation of equipment at the production plants to save fuel and electricity, and (iii) introduction of mini co-generation plants in order to decrease the purchase costs of electricity and to enable significant increase of total efficiency of the production units. In addition, conversion of the existing boilerhouse to be fired with local peat or peat-based bricks/pellets is under the consideration.

To consider these options, the EBRD requires a consultant (the "Consultant") to carry out a feasibility study, which will include identification of a long-term investment strategy and a detailed assessment of the priority investment programmes proposed, detailed financial analysis of TeploTransService, as well as preparation of an overall procurement and project implementation plan (the "assignment").

The key specific objectives of the Consultant are to:

(i) define the long-term investment needs of the Company and prioritise them with the bankable project below nominated as the first investment project;
(ii) define a bankable project to improve district heating services in Rivne;
(iii) develop affordable least cost and cost effective investment programmes in the district heating infrastructure according to best applicable technology, availability of local fuels and with strong environmental benefits;
(iv) prepare an environmental audit, analysis and action plan;
(v) prepare an affordability analysis to ensure the sustainability and affordability of the project;
(vi) prepare a financial analysis of the Company and financial projections; the projections shall be fully consistent with the strategic development plan and be based on prudent assumptions on service Company revenues and expenditures. Financial projections shall include annual balance sheets, income, cash flow statements and standard sensitivity analysis;
(vii) assess the potential for carbon credit trade;
(viii) prepare a procurement and implementation strategy including detailed plans for the contracting, financing and implementation of the project.

Overall, the feasibility study is intended to set out the scope of the priority investments with the emphasis on the achievement of high energy efficiency, reliability and cost savings benefits, and include detailed projections of financial and economic internal rates of return and pay back schedule for the investments.

Assignment Start Date and Duration: The assignment is expected to start in June 2008 and last for 12 weeks.

Maximum Budget available for the Assignment: EUR 195,198; Exclusive of VAT.

The consultant must determine whether any VAT would be chargeable on the services and the basis for that determination, without taking into consideration the Bank's special status as an international financial institution and state this to the Bank in their response to the Invitation for Expressions of Interest. To the extent that a consultant incurs input VAT on goods and services purchased in connection with the provision of services (eg VAT on airline ticket) which is not otherwise recoverable by the consultant from the local tax authority, the gross cost to the consultant of such expenses shall be treated as a reimbursable expense.

Funding Source: The project is expected to be funded out of the EBRD-Canadian Technical Cooperation Fund 2006-2009.

Eligibility: There are no eligibility restrictions.

Consultant Profile: Corporate services are required. It is envisaged that the following multi-disciplinary expertise will be needed for the purposes of this assignment:

- Team Leader with comprehensive experience in similar assignments in Eastern Europe and countries with similar climatic conditions as in Rivne and in working with international financial institutions.
- Technical specialist(s) and engineer(s) in district heating and combined heat and power plants.
- Financial analysts with experience of due diligence of Ukrainian (or similar) companies.
- Environmental specialist(s) with specific expertise in district heating projects. These experts must have a good knowledge and understanding of the EBRD environmental requirements, demonstrated experience of previous work with international financial institutions and with utilities in the Ukraine (or similar countries).
- Institutional and regulatory issues specialists.

It is recommended that a part of the consultancy input will be carried out by local sub-consultants (for instance, financial due diligence).

Status: Interested firms are hereby invited to submit expressions of interest.

In order to determine the capability and experience of consulting firms seeking to be shortlisted, the information submitted should include the following:

- company profile, organisation and staffing;
- details of experience or similar assignments undertaken in the previous five years, including their locations;
- CVs of staff who could be available to work on the assignment.

The above information should not exceed 20 pages excluding CVs.

Expressions of Interest should be submitted, in English, electronically through eSelection, to reach the EBRD not later than the response date given above.

CSU Contact Person:
Angela Levitsky
Tel: + 44 20 7338 6363
E-mail: levitska@ebrd.com

Note: Selection and contracting will normally be made from responses to this notification. The Consultant will be selected from a shortlist, subject to availability of funding.