Capacity Building of the new Albanian Transmission System Operator

Procurement ref: 9005-EOI-45690
Location: Albania
Business sector: Power and energy
Project number: 45690
Funding source: EBRD Shareholders Special Fund
Contract type: Consultancy Services
Notice type: Invitation for expressions of interest (loan or grant funded)
Issue date: 01 Mar 2018
Closing date: 03 Apr 2018 at 15:00 Local time

Executing Agency (Client): Albgaz Sh.a.

The Client Contact Person:

Mr Genci Gjeçi, CEO

“Bulevardi Zhan Dark” No. 3

Tirana, Albania

Tel: +355 69 70 38672

Email: genci.gjeci@albgaz.al

Project Description: The European Bank for Reconstruction and Development (the EBRD or the Bank) will provide technical assistance to the newly established Albgaz Sh.a. (the "Client or the "Company") for capacity building for its legal and regulatory function.

Albgaz, the natural gas Transmission System Operator (TSO) for Albania, was established in January 2017 and is responsible for the operation, development and maintenance of the country’s gas transmission, distribution, storage, and LNG infrastructure. Albania does not have a significant natural gas production and is currently not connected with any of the regional natural gas networks. The upcoming Trans-Adriatic Pipeline (TAP) is expected to be a cornerstone of Albania’s gasification.

Assignment Description: The Client now intends to select and contract a consulting company (the “Consultant”) to provide assistance in the form of capacity building for its legal and regulatory function (the “Assignment”).

The main objectives of the Assignment are:

Capacity building of Albgaz with a view to strengthening its legal and regulatory unit;
Tasks to operationalise the tariff methodology and tariffs;
Tasks to operationalise the network code (in particular, facilitating access to the network, including capacity allocation and balancing); and
Assistance to enhance network planning functions within Albgaz (including planning capital expenditure).

The Assignment will consist of two phases. The commencement of Phase II will be conditional on the successful completion of Phase I deliverables. Sign-off of Phase I completion and approval of Phase II commencement must be obtained by both the Client and the Bank.

The selected Consultant is expected to provide the following services:

Phase I

1. Capacity building of legal and regulatory unit

a. Advice to strengthen the capacity of the internal TSO unit in charge of regulatory strategy for the TSO so that its activities are in line with the Energy Community acquis communautaire and best international practices. In particular assistance in establishing internal process and monitoring activities for:

Drafting a short/mid-term regulatory strategy for the TSO; Assessing the potential economic and strategic impact and new business requirements emerging from new regulation;
Establishment and review of : tariffs , network codes and service quality levels (see point 3 and 4 below);
Cooperation with other stakeholders in particular: Government, energy regulator, international institutions (eg., Energy Community and IFIs);

b. Gap analysis of technical skills which would be recommended for the company`s regulatory capacity;

c. Develop the first short and medium term regulatory strategy for the TSO;

d. Structuring and strengthening the compliance monitoring and reporting process in the company, including enhancing the compliance officer’s expertise as well as its independence and operational capabilities;

Phase II

2. Operationalising tariff methodology

a. Support in understanding principles of tariff methodology and active participation in development process driven by ERE.

b. Assistance on the calculation of key inputs to the tariff methodology, consisting of:

Advice on the approaches to estimating key parameters (for example, value of assets, rate of return) that should lead to recommendations.
Providing the TSO with guidance on how such parameters should be estimated in practice (technical modelling requirements).
Assistance on developing tariff structures in line with EU guidelines such as the ACER Framework Guidelines on transmission tariffs.

3. Operationalising network code

a. Developing detailed procedure for implementing the network code (currently being prepared by Albgaz and ERE) – providing access to the network (e.g. capacity booking, nominations, capacity allocation) and balancing arrangements. Procedures should cover areas such as:

Procedural and operational steps:
Does a separate unit need to be set up? How does it interact with other functions?
What documentation (including contracts) should the TSO develop?
What information should the TSO collect and what information should it publish?
What procedures should the TSO put in place to lower transaction costs for market operators to book capacity (reflecting the requirements of the Network Code and other related documents)?
Technical: what systems does the TSO need to procure to implement the procedural and operational recommendations? The output could be a detailed technical specification that the TSO can use as a basis for the procurement of such systems.

4. Network planning and capital expenditure

a. Provide the TSO with a review of the key types of planning its needs to undertake (for example, capital expenditure plans for regulatory reviews and improvements to the Ten Year Network Development Plan).

b. Advise on the processes that should be put in place to undertake network planning, covering areas such as:

The data the TSO should collect and use;
Preparation and use of feasibility studies; and
Criteria used by the TSO to develop and choose between different capex options (for example, the timeframe over which investment cycles are considered, etc.)
Procedures for Open Season.

c. Advise on “off the shelf” pipeline operations & maintenance contract benchmarks.

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

Assignment Start Date and Duration: The Assignment is expected to start in May and has an estimated overall duration of 9 months.

Cost Estimate for the Assignment: EUR 290,000 (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 EBRD Shareholders’ Special Fund. Please note selection and contracting will be subject to the availability of funding.

Eligibility: There are no eligibility restrictions based on the consultant’s country origin.

Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms with:

1. Economics expertise with previous project experience in the economic regulation of gas transmission networks, including:

calculation of network tariffs based on different methodologies (e.g. incentive regulation, cost-plus) the preparation of calculation tools for TSO;
structure of gas transmission tariffs;
developing arrangements for the utilisation of transmission network capacity;

2. Sector expertise with previous project experience providing support to establish a gas TSO regulatory functions; engaging in the market design of the gas market in an early stage of development;

3. Technical expertise with previous project experience in: capacity building to establish a regulatory function; the development and implementation of network codes; the planning of capital expenditures; and the systems and processes needed for balancing and capacity allocation on the gas transmission network; and previous project experience in working in a policy dialogue engagement with multiple stakeholders including local authorities, private and public sector companies and international institutions;

4. Legal expertise with previous project experience in: Albanian law; developing regulatory acts and bylaws regulating activities of the transmission system operator as well as contracts for the provision of services by the transmission system operator;

5. Local expertise with previous project experience of working in the Albanian energy sector and the EU energy sector would be an advantage.

The Consultant’s expert team is expected to include key experts as follows:

a. Team Leader with previous professional experience in gas network projects, including providing support to establish a gas TSO regulatory functions; engaging in the market design of the gas market in an early stage of development; and previous project experience in working in a policy dialogue engagement with multiple stakeholders including local authorities, private and public sector companies and international institutions.

b. Economic expert with previous professional experience in the calculation of network tariffs based on different methodologies (e.g. incentive regulation, cost-plus) the preparation of calculation tools for TSO; structure of gas transmission tariffs; and developing arrangements for the utilisation of transmission network capacity.

c. Technical Expert with previous professional experience in the development and implementation of network codes; the planning of capital expenditures; and the systems and processes needed for balancing and capacity allocation on the gas transmission network;

c. Legal expert with previous professional experience in Albanian law; and developing regulatory acts and bylaws regulating activities of the transmission system operator as well as contracts for the provision of services by the transmission system operator;

d. Local experts with previous professional experience of working in the Albanian energy sector and the EU energy sector.

Submission Requirements: In order to determine the capability and experience of Consultants seeking to be shortlisted, the information submitted should include the following:

(a) brief overview of the firm/group of firms including company profile, organisation and staffing (max. 2-4 pages);

(b) details of similar experience of firm or group of firms and related 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, assignment budget, percentage carried out by consultant in case of association of firms or subcontracting, main activities, objectives;

(c) 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.

(d) 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

(e) Brief technical proposal (max. 5 pages) explaining the technical approach, the methodology for implementing the tasks, addressing key challenges and team input;

The expression of interest shall not exceed 25 pages (excluding CVs and contact sheet).

Expressions of Interest should be submitted in English electronically to the Client’s Contact Person by email, to reach the Client not later than the closing date. The complete expression of interest shall be one file (pdf) to be uploaded to eSelection. The EBRD reserves the right to reject applications of experts submitting more than one file. Only if the permissible file size (4 MB) is exceeded, the Consultant may split the expression of interest into further files.

Notes:

1. The selection will be made from responses to this notification only, on the basis of the selection criteria set out in this notice. The highest-ranked Consultant will be selected from a shortlist and be invited to negotiate the contract, subject to availability of funding.

2. Any updates and clarifications on this procurement notice shall be announced as updates on this notice, without any other notification. Consultants are requested to periodically check the notice for updates. Failure to take the updates into account while preparing the response may result in disqualification or penalties to the evaluation criteria.

3. The evaluation criteria are as follows:

(a) Firm's or group of firms' previous project experience in similar tasks as described in section Consultant Profile (40%);

(b) CV of key experts (40%).

(c) Adequacy of proposed technical approach, the methodology for implementing the tasks, addressing key challenges and Team Input (20%).