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Chernivtsi District Heating Project – Corporate Development Support Programme

Procurement ref:




Business sector:

Municipal and environmental infrastructure

Funding source:

Sida-EBRD Ukraine Energy Efficiency and Environment Consultant Cooperation Fund

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

11 Mar 2016

Closing date:

01 Apr 2016   at  12:00   Chernivtsi

Executing Agency (Client):

Municipal Communal Enterprise «Chernivtsiteplokomunenergo»
19A, Maksymovycha street, Chernivtsi city, 58018, Ukraine

Project Description:

The district heating company “Chernivtsiteplokomunenergo” (the “Company” or “CTE”), a municipal utility wholly owned by the City of Chernivtsi (“Chernivtsi” or the “City”) has approached the European Bank for Reconstruction and Development (“EBRD” or the “Bank”) requesting a loan to support its energy efficiency priority investment programme (“PIP”) in the DH infrastructure.

Chernivtsi, with a population of 264,000, is the regional centre of the Chernivtsi oblast in the western part of Ukraine, close to the Romanian border. The Company is the only distributor of DH services in the City, with the total employee headcount of ca. 500 people, supplying heat to approximately 593 residential apartment buildings in the City. The Company generates heat in 89 boiler houses and distributes heat through 99,3 km of distribution networks.  The boiler houses are using natural gas.

The PIP will focus on increasing energy efficiency, reducing fuel, electricity and water consumption and other maintenance and operating costs, improving the reliability and quality of district heating services. The PIP will be implemented over a period of three years. It is expected that the PIP, as structured, will reduce the operating costs for the Company and will save up to 8890 thousand m3 of natural gas, 5400 MWh of electricity, and 5800 m3 of water each year, as well as increase the quality of heat and hot water services to the consumers. The PIP will include, inter alia:

  • Installation of Individual Heating Substations;
  • Installation of a bio-fuel boiler with a net capacity of 10.0MW;
  • Rehabilitation and modernization of large boiler houses;
  • Rehabilitation and/or replacement of small boiler houses;
  • Rehabilitation and replacement of DH networks;
  • Installation of dispatching and monitoring system.
  • Heat meters  installation;
  • Repair works at selected boiler houses boiler houses;
  • Rehabilitation and replacement of DH networks.

The PIP will directly benefit 24 per cent of the City population connected to the district heating system while indirectly benefiting all of the connected households. The Individual Heat Substation (“IHSs”) component of the project covers installation of 268 units in residential buildings connected to the system. The IHSs districts will serve as an example of complete district heating system loop operated with modern technology such as pre-insulated pipes, frequency converters and automatic heating substations, which ultimately increases quality of provided services to the end-consumers.

The Project addresses urgent investments aiming at improving energy efficiency as well as the Company’s quality of district heating service provision, and also reducing losses incurred in the distribution networks. The introduction of IHSs represents the first step on the customer demand side to transfer control of heating from the supplier to the end-users.

Assignment Description:

As part of the Project, the Company will need to improve its corporate governance and financial and operational performance, maintain financial ratios and other covenants, calculate tariffs based on actual heat consumption and ensure that tariffs are reviewed periodically in order to ensure full cost recovery. The Company will also sign a Public Service Agreement with the City, which will clarify the responsibilities of the City, the Company and the customers regarding the provision of heating services.

The overall objective of the Assignment is to improve the commercial standing of the Company and enable it to implement the Project, as well as ensure that the services are equitably provided to the end-consumers and are of a high quality. Specific objectives are to assist the Company to, inter alia:

  • identify, discuss with the Company and with the City, and implement the necessary corporate, financial and operational improvements to meet the related covenants included in the EBRD finance documents. This will be achieved via the development and implementation of a Financial and Operational Performance Improvement Programme (“FOPIP”);
  • develop, negotiate with the City and adopt a Public Service Contract (“PSC”);
  • assist the Company with regular heat tariff calculations and submissions to the Regulator; help the Company submit investment programmes adjustments to the Regulator; 
  • develop and implement a medium to long term Corporate Development Plan (“CDP”) and corporate planning process, so it may continue its transition towards an entirely commercial entity;
  • analyse the impact of planned tariff increases on the end-consumers, with a particular focus on vulnerable groups, and develop guidelines for the municipality for the mitigation of any negative impacts; and
  • develop and implement policies which promote equal opportunities and non-discrimination.

Status of Selection Process: Interested firms or group of firms are hereby invited to submit expressions of interest.

Assignment Start Date and Duration: The Assignment is expected to start in Q2 2016 and has an estimated overall duration of 24 months.

Cost Estimate for the Assignment: EUR 200,000 (exclusive of VAT).The Consultant must determine whether any indirect taxes/VAT are chargeable on the proposed services and state the basis for such. If any indirect taxes/VAT are payable, the Client will have to pay indirect taxes/VAT element to the services directly to the Consultant unless otherwise agreed.

Funding Source: It is anticipated that the contract will be financed by the Sida-EBRD Ukraine Energy Efficiency and Environment Consultant Cooperation Fund (SWUK). Selection and contracting is subject to the availability of funding.

Eligibility: There are no nationality eligibility restrictions.

Consultant Profile: Corporate services are required. The Consultant should ensure that the appropriately qualified experts are available, as required, for each of the different tasks outlined above. It is expected that the assignment will be led by an appropriately qualified project manager with experience in the district heating sector and in implementing the key areas of this assignment, accompanied by both key and supporting experts.

The Consultant would likely comprise the following key expertise and some individuals may fulfil more than one role:

  • Team Leader/District Heating Expert;
  • District Heating Institutional and Regulatory Expert;
  • Financial Specialist;
  • Environmental and Social Specialist;
  • Legal Expert;
  • Local Experts (including, inter alia, an expert with experience in local tariff regulation in the DH sector).

Submission Requirements: In order to determine the capability and experience of Consultants seeking to be shortlisted, 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 particularly 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.

3. CVs of key experts who could carry out the Assignment detailing qualifications, experience in similar assignments, particularly assignments undertaken in the previous five years, including information on contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, main activities, objectives.

4. Completed Consultant Declaration Form and Contact Sheet, the template for which is available from the following web-link:

The expression of interest shall not exceed 20 pages (excluding CVs Consultant Declaration and Contact Sheet).

One electronic copy of the expression of interest, in English and Ukrainian, should be submitted to the Client by email, marked “EXPESSION OF INTEREST for Chernivtsi District Heating Project – Corporate Development Support Programme”, to reach Client not later than at 12:00 (midday) on 1 April 2016 (Ukrainian time). One further electronic copy should be submitted to the EBRD’s contact person by the same due date.

The Client Contact Person:
Melenchuk Oleksandr, Director
Municipal Communal Enterprise «Chernivtsiteplokomunenergo»
19A, Maksymovycha street, Chernivtsi city, 58018, Ukraine
Tel: +380372241135
Fax: +380372241135

The EBRD Contact Person:
Larissa Gosling
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
Tel: + 44 20 7338 6338
Fax: +44 20 7338 7451

Important Notes:

1. The selection will normally be made from responses to this notification only. Consultants will not be asked to submit a proposal. The highest-ranked Consultant will be selected from a shortlist and be invited to negotiate the contract, subject to availability of funding.

2. The shortlist criteria are as follows:

(a) Firm’s previous project experience in delivering corporate development programmes for district heating projects similar in scope, nature and complexity (35%)

(b) Firm’s previous project experience in Ukraine (15%)

(c) CV of Key Experts (Project Manager, DH Institutional and Regulatory Expert, Financial Expert, Legal Expert, Environmental and Social Expert, Local Experts) (50%)

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