Background:
Geothermal potential in Turkey is estimated to be around 4 GWe, of which only 300 MW, barely 7% of the estimated potential, has been developed by around ten sponsors (nearly 50% of the capacity is controlled by the top two). One of the key barriers to development is the combination of i) high specific investment costs (3 – 5 million USD/MW), with ii) high project development risks, particularly at the initial phase. Early stage exploration and drilling costs account for as much as 40% of the total project costs, with production drilling requiring 2 – 4 million USD per well. The high risks associated with early stage geothermal energy projects makes commercial debt financing very hard to obtain. Geothermal developers finance exploration and drilling activities from their equity resources, posing a major financing barrier to the development to the existing licenses.
Concessional funds are thus needed in order to partially mitigate financial risks associated to the exploration and resource development-phases and catalyse investments. The license expiration period under the New Electricity Market Law has significantly stimulated license-holders in seeking finance to develop renewable energy projects. GPPs are in the forefront of this effort but are still being hindered by the early stage financing gap.
Programme Description:
The main objective of this Programme is to help the Government of Turkey to mitigate the geothermal projects’ risks and provide comfort to lenders (including EBRD) interested in providing finance at the early stages of project development. Moreover, the assignment will help the interested developers to initiate projects according to the best industry practice, and assist the Ministry of Energy and Natural Resources (MoENR) with implementing the existing geothermal legislation (mainly the New Electricity Market Law No. 6446) and other related regulations.
The European Bank for Reconstruction and Development (EBRD or the Bank) is seeking to engage between three and five consultants (the Framework Consultants) to work with the private sector developers to deliver additional generation capacity from geothermal sources according to the best industry practice and assist the MoENR in adopting and executing relevant regulatory steps for the scale-up of geothermal power in Turkey.
The Programme will comprise several sub-assignments (the Activities) to be undertaken by the Framework Consultants who will be awarded Framework Agreements upon completion of this selection process. Performance of each Activity will be determined by the results of the secondary competition undertaken in accordance with the Bank’s Procurement Policies and Rules (PP&R), as described at the end of the Notice.
The main Activities will include the following services to be performed by the Consultants:
Pipeline Preparation: undertake project identification, conduct initial analysis of the indicative pipeline and prepare early due diligence for first projects to be financed under the Early Stage Geothermal Development Programme.
Risk Mitigation Analysis: propose ways of mitigating project risks specific to geothermal power plants by mainstreaming global best practices in the exploration and development of geothermal resources.
Early Stage Exploration: recommend best practices in the geological, geochemical and geophysical activities during surface exploration; provide support the developers in launching suitable shallow drilling campaigns; modelling of the resource potential for power production including any possible interference with existing plants/licenses.
Production Drilling Campaign: review well designs to maximise drilling success rate; provide support in implementing best drilling practices.
Plant Construction Phase (subject to project needs): assess the construction and operational risks of the plant and propose ways of mitigating such risks; evaluate the projects’ expansion capacity and replicability in preparation for a plant expansion.
Environmental Support
- Review the environmental & social (including health & safety) standards to be applied during construction and deliver an draft action plan to ensure inclusion of best practices;
- Sustainability assessments to determine optimal geothermal development approaches, covering the main technologies
- Assess proposed environmental approval procedures and standards to best reflect the characteristics of sustainable geothermal energy projects; and
- Provide Environmental & Social support at the project level
Project Development Support:
- Screen projects to assess their technical and commercial viability;
- Assist with project preparation, including: (a) project permits and licensing; (b) feasibility studies; (c) commercial negotiations (e.g. with regulators and network operators); (d) legal support in preparation of loan documentation; and (e) project management;
- Conduct project monitoring to ensure successful completion and continued implementation of required institutional support measures.
- Contribute to the development of the local capacity in applying global best practices and techniques in this highly specialised sector.
Assignment Start Date and Duration: The Programme is expected to start in in the second quarter of 2015 and will have an estimated overall duration of 5 years.
Cost Estimate for the Programme: EUR 2 million (exclusive of VAT), subject to availability of funding.
The Consultant must determine whether any VAT would be chargeable on the services and the basis for that determination, without taking into consideration the special status of the Bank as an IFI 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 (e.g. 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: It is expected that the assignment will be implemented with funding by the European Union under "EBRD – EU Energy Efficiency and Renewable Energy Programme for Turkey".
Eligibility: There are no eligibility restrictions
Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms with experience and a strong track record in international project advisory works in the field of geothermal energy, resource and energy efficiency, working with public administrations in providing key policy recommendations.
It is expected that the following key experts are to be included in the Consultant’s team:
• At least two geothermal power plant engineers with in-depth knowledge of the geothermal energy sector and experience in working with private geothermal power plant developers and operators;
• At least two geologists/geophysicist/geochemists with extensive experience in geothermal power development, particularly in surface testing methods and drilling;
• At least one drilling engineer with extensive experience in shallow, slim-hole and production geothermal drilling techniques and a successful track-record of geothermal resource development;
• An institutional economist or a lawyer with international experience in the geothermal energy development as well as in drafting regulatory/policy documents;
• A strong team of local experts (including geothermal engineers and geologists) with extensive experience in the energy and geothermal sectors and strong regulatory/political awareness who are able to communicate at high level in Turkish; and
• A team of local energy lawyers with significant experience in drafting commercial agreements, regulations, and operation manuals.
• A Programme Manager with excellent project management and organisational skills as well as ability to produce/edit highly technical reports in English (Turkish language skills will be an advantage).
• An environmental expert with extensive experience in the geothermal sector, in particular in Turkey and the region.
The experts’ previous experience in the field of their expertise in EBRD countries of operations would be an advantage.
Submission Requirements: In order to determine the capability and experience of Consultants seeking to be selected for this Programme, the information submitted should include the following:
1. Company/group of firms’ profile, organisation and staffing (max. 2-4 pages);
2. Details of previous project experience or similar assignments undertaken in the previous five years, including information on contract value, contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided (if different from duration) , main activities, objectives; percentage of work undertaken (if subcontractors)
3. CVs of key experts who could be available to work on the Programme;
4. Completed Consultant Declaration and Contact Sheet, the template for which is available from the following web-link:
http://www.ebrd.com/pages/workingwithus/procurement/notices/csu/contact_sheet.doc.
The above information should not exceed 20 pages excluding CVs and Consultant Declaration and Contact Sheet. The complete expression of interest (including CVs and Consultant Declaration/Contact Sheet) shall be submitted in English, as one file (pdf or Word) not exceeding 4MB to be uploaded to eSelection. It is recommended that Internet Explorer is used to access eSelection.
Expressions of Interest shall reach the Bank not later than the closing date/time. The EBRD reserves the right to reject applications which are administratively non-compliant.
Link to eSelection: https://eselection.ebrd.com/suite
The evaluation criteria for the Expressions of Interest will be as follows:
1. Consultant’s previous project experience related to geothermal pipeline preparation and project development for investments related to geothermal power and preferably for IFI’s (or equivalent). Previous similar projects in Turkey would be considered an advantage - 35%
2. Consultant’s previous project experience related to working with public administrations, risk mitigation and environmental standard and practices – 30%
3. CVs of key experts – 35%
Bank Contact Person:
Yvonne Wilkinson
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
Tel: + 44 20 7338 7123
E-mail: WilkinsY@ebrd.com
(submissions should be sent through eSelection and NOT to this email address)
Notes:
Selection process: following the invitation for Expressions of Interest, a shortlist of qualified and competent consultants will be formally invited to submit proposals. All EOIs will be evaluated based on the criteria specified in this Notice. The Request for Proposal package will be issued to shortlisted consultants through eSelection. Following evaluation of proposals and contract negotiations, the Bank intends to award Framework Agreements to the minimum of three and the maximum of five firms.
Framework Agreements for the Programme:
The objective of these Framework Agreements is to facilitate efficient implementation of the Programme and enable the Bank to call upon a shortlist of pre-qualified firms from which it can quickly and efficiently obtain reliable services at competitive prices. Under these Framework Agreements, the Bank will have the option, but not an obligation, to place individual assignments (Call-off Notices) with the selected Framework Consultants. In addition, the Framework Agreements will not limit the Bank's ability to contract other firms outside the Framework Agreements if it so chooses. The Framework Agreements will establish, in advance, the contract terms and agreements, fee structure, and procedures that will govern individual assignments, as specified in this Procurement Notice.
Call-Off Notice award mechanism (governed by the Bank’s PP&R):
The Bank will send to the Consultant(s) and may also send to the other consultant(s) with which the Bank has similar Framework Agreements, specific terms of reference for an assignment (Specific Terms of Reference). The Specific Terms of Reference will include a description of the tasks to be performed, time-schedules and reporting instructions. The Framework Consultant(s) shall respond by sending to the Bank a financial proposal for the assignment together with details of the expert(s) proposed to carry out the work. The Bank will then assess the response(s), agree on the Specific Terms of Reference, budget and expert(s) for the assignment(s) with the selected Framework Consultant and issue a call-off notice (Call-Off Notice) to the successful Framework Consultant.
The cost estimate for individual assignments (Call-Off Notices) will vary depending on their specific scope.
