Location: Azerbaijan

Business sector:Power and energy

Project number:73118

Funding source:

EBSF - EBRD Shareholder Special Fund

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

12 Apr 2018

Closing date:

03 May 2018   at  23:59   London

Access eSelection

1. Project Description

The European Bank for Reconstruction and Development (the “EBRD” or the “Bank”) is launching a new technical cooperation project (the “Project”) to provide technical assistance to the Ministry of Energy of the Republic of Azerbaijan (the “Ministry”), with the development and implementation of the legal and institutional reforms required for the operation of the newly established independent energy regulator, in line with the relevant provisions of the EU 3rd Energy Package and the Strategic Roadmap on Utilities of Azerbaijan approved on 6 December 2016.

The Project will consist of two Phases: (i) legislative work and initial training on core regulatory practices as described herein, and (ii) implementation, training and capacity building as part of Phase 2. The launch of Phase 2 is conditional on the performance of the Consultant and availability of funding. The scope of work and objectives of Phase 2 will be confirmed during Phase 1. . Certain activities from Phase 1 and Phase 2 may run in parallel so the Consultant should be prepared to lead the two Phases and relevant work streams, as provided above, in parallel.

2. Assignment Description

The Bank now intends to engage a consulting firm or group of firms (the "Consultant") to help with the implementation of the Project activities. Specifically, the Project will have the following objectives:

• To develop an implementation plan for the operation of the new independent energy regulator in Azerbaijan based on best regulatory practices in the EU member countries and adapted to the national constitutional, legal, regulatory and institutional framework (the “Implementation Plan”).
• To draft primary legislation that would provide for a legal framework for the energy regulator consistent with the EU model of energy regulation (“Law on Energy Regulator”) and propose relevant amendments to the existing primary and secondary legislation to ensure consistency with the proposed legal framework.
• To provide support to the Ministry during the consultation process in order to increase transparency and ensure participation of all stakeholders in the development of the Implementation Plan, and the draft Law on Energy Regulator and amendments to the existing legislation.
• To organise two presentations on best practices in accordance with the EU Third Energy Package including, among others, on core regulatory functions, with a comparative overview of such regulation and tariffs in Azerbaijan and peer countries.

3. Assignments Tasks

To achieve the objectives, the selected Consultant is expected to carry out the following describe below. The activities of the Consultant will, to the extend this is practically feasible, take account of the timeframe and milestones provided in the Decree establishing a new energy regulatory agency approved by the President of the Republic of Azerbaijan on December 22, 2017 (the “Decree”).

• Inception meeting

• Organise an inception visit in coordination with the Ministry and the expert-level Energy Regulatory Working Group to be established (“ERWG”), with the purposes of informing the main stakeholders about the project, discussing and agreeing the work plan and the timing of the key project deliverables.
  • Comparative Analysis and Implementation Plan
• Elaborate on the 2016 INOGATE Report regarding the functioning of the independent energy regulator in Azerbaijan, as produced under the INOGATE Technical Secretariat and Integrated Programme in support of the Baku Initiative and the Eastern Partnership energy objectives.
• Provide a comparative analysis of the legal, regulatory and institutional framework governing the energy regulators in EU member states, including analysis of relevant provisions of the “EU Third Energy Package”, and carry out an assessment of the strengths and weaknesses as well as potential applicability of such legal, regulatory and institutional framework in Azerbaijan (“Comparative Legal and Regulatory Analysis”). This shall include a mapping exercise of the organization and functions of the Minister of Energy and of the newly-established energy regulatory agency.
• Review the relevant national legislation and prepare a list of all laws and regulations that will need to be drafted, amended or revoked to ensure consistency with the agreed concept note for the energy regulator to become fully operational in line with the EU 3^rd Energy Package (“Recommendations for Legal and Regulatory Amendments”).
• Draft an implementation plan for developing the regulatory functions of the energy regulator including: (i) a detailed analysis of the existing regulatory environment taking into account legal, institutional, budgetary and other considerations and relevant activities carried out by other state agencies (with the objective to avoid overlaps in competence); and (ii) specific recommendations on the structure, institutional arrangements, budget, functions, staffing, and other matters related to the effective functioning of the regulator (“Implementation Plan”).
• Present the Comparative Legal and Regulatory Analysis, Implementation Plan and the Recommendations for Legal and Regulatory Amendments to the Ministry and ERWG during at least two meetings/workshops convened for the purposes of the Project and incorporate the received comments and feedback into the final version of the aforementioned documents.
• Organise additional capacity building events, if needed, which will be previously agreed with the Ministry and EBRD.
  • Legal and Regulatory Drafting
• Prepare a draft of the legislation necessary for the independent energy regulator in accordance with the Implementation plan agreed with the Ministry and the ERWG, including but not limited to a draft Energy Regulator law and a new charter for the energy regulatory agency in line with EU’s Third Energy Package. Such legislation shall include the following provisions among others:

-Status, establishment, and selection of regulatory staff and management, main functions, competence and budget of the regulatory energy agency.

-Detailed description of the main functions and scope of regulation in accordance with the Decree.

-Duties of the regulatory energy agency in the electricity market

-Duties of the regulatory energy agency in the heating market

-Duties of the regulatory energy agency in the natural gas market

-Provisions on activities of the regulator, including tariffing, licensing energy market participants, supervisory and monitoring functions, capacity market regulation rules for dispute resolution, competence of the energy regulator to adopt their by-laws and other regulatory acts, enforcement regime and others.

• Based on feedback received and the Ministry’s approval of the Recommendations for Legal and Regulatory Amendments, prepare drafts of the relevant primary and secondary legislation that needs to be amended or revoked to ensure consistency and effective implementation of the new legal framework (the scope is to be confirmed with the Ministry and EBRD).
• Assess the strengths and weaknesses and the regulatory impact of the proposed legal and regulatory framework in accordance with the requirements under the national legislative process. The Consultant will recommend an appropriate strategy and approach (as needed) to introduce the new legislation and facilitate its implementation.
• Ensure a high level of stakeholders’ engagement on the draft produced to establish a wide consensus on the proposed solutions. As part of this, but not limited to, discuss the drafts produced under this section 3 with the Ministry and ERWG and donors community. Amend the drafts to implement the comments and feedback provided by stakeholders as instructed by the Ministry and EBRD.
  • Consultation Process
• Provide support to the Ministry in relation to planning and organisation of consultations with relevant stakeholders; present key project deliverables, such as the Implementation Plan and draft legislation and provide clarification notes on received questions / comments.
• Engage with ERWG and all relevant stakeholders to present, discuss and finalise the proposed changes to the legal, regulatory and institutional framework.
• Amend the drafts produced under section 3 above to implement the comments received in the consultation process.
• Further amend and finalise the drafts produced under section 3 above to implement any additional comments received during the Government and Parliamentary approval processes (the adoption and final implementation will continue in Phase 2).
  • Approval and Implementation Stage
• Draft a legislative adoption plan, setting out all steps necessary to adopt any new Law on Energy Regulator and required amendments to relevant primary and secondary legislation necessary for the operation of the independent energy regulator.
• Support the Ministry during consultation with relevant ministries, government agencies, and National Assembly to ensure approval of the proposed amendments by producing briefing papers, preparing presentations, carrying out supplementary legal and regulatory review, as required (part of these activities would continue to be carried out in Phase 2).
  • Capacity Building
• Organise two workshops with the members of the ERWG to deliver presentations on international best practices on effective core regulatory practices, renewable energy regulations, support mechanisms and tariffs, including preparing a comparative overview of renewable energy regulations and tariffs in Azerbaijan and peer countries.
• Organise capacity building workshops for members of the Energy Inspectorate departments to improve their technical knowledge and skills, as necessary to enable them to effectively perform their duties.
• Further capacity building activities would be carried out as part of Phase 2. The Training Programme will be developed as part of Phase 1 and the first round of workshops (described above) will be organised as part of Phase 1. The full Training Programme would be delivered as part of Phase 2.

4. Deliverables

The Consultant shall submit the following written reports/deliverables for the Project:

• Inception Report

The Consultant will prepare an Inception Report after the Project’s launch in Baku (the “Inception Meeting”), which would confirm the detailed scope of the Project, timeline for the key deliverables, and would establish the organisation, processes and tools for its timely and effective implementation.

- Due: 2 weeks following the Inception Meeting

• Comparative Analysis and Implementation Plan (Report)

The Consultant will prepare a report covering all information outlined under section 3.2 above. The report should be submitted to the Ministry and the EBRD, in electronic format (Microsoft Word and Acrobat pdf).

- Due: 4-5 weeks after the Inception Meeting

• Legislation

First draft of Legislation. The Consultant will prepare a first draft of the proposed law/s governing the energy regulator under section 3.3.1 above.

- Due: 6-7 weeks after the Inception Meeting

Final draft of Legislation. The Consultant will submit the final draft of the proposed legislation, developed under section 3.3.1 above, addressing the relevant Ministry’s and EBRD’s comments on the first draft. Further presentation of the final draft at EBRD’s offices and/or to the Ministry may be required.

- Due: TBC

• Amendments to existing Legislation, regulatory Charter and supporting documents

First draft of Amendments to existing Legislation and supporting regulatory documents. The Consultant will prepare a first draft of the documents described in section 3.3 above, except for deliverables produced earlier as stipulated in section 4.3. This draft will be presented to the EBRD and the Ministry for comments.

- Due: TBC

Final draft of Amendments to existing Legislation, regulatory Charter and supporting documents. The Consultant will address comments/revisions provided by the relevant Ministry and the EBRD and prepare final drafts of the documents described in section 3.3, except for deliverables produced earlier as stipulated in section 4.3.

- Due: TBC

• A working plan of the consultation process shall be produced by the Consultant in accordance with section 3.4 with the prior approval from the Ministry and EBRD.

- Due: TBC

• An Implementation Report shall be produced by the Consultant in accordance with section 3.5, including the legislative adoption plan, with the prior approval from the Ministry and EBRD.

- Due: TBC

• Organisation and delivery of training presentations by the Consultant in accordance with section 3.6, with the prior approval from the Ministry and EBRD.

- Due: TBC

• Final Report

Draft Final Report. The Consultant will submit the Report to the Bank no later than two weeks after completion and acceptance of all other deliverables under the project, containing a summary of the work done and results obtained. It should also deal with any outstanding matters or additional work required for satisfying the objectives of the project. The Consultant will incorporate any changes/modifications that may have been proposed by the Bank or the authorities based on the periodic reports.

- Due: TBC

Final Report. The Final Report will incorporate all comments received on the Draft Final Report. It may include reports or sections of reports produced earlier in the Project, including the regular reports and shall be complete and in a form, which can be presented to a third party, i.e. the donor.

- Due: TBC

5. Status of Selection Process: Interested firms or groups of firms are hereby invited to submit expressions of interest. The Consultant will be selected in accordance with the EBRD’s Corporate Procurement Policy.
6. Assignment Start Date and Duration: The duration of Phase 1 of the Project will be six months, suggesting a timeframe Phase 1 from early June 2018 to December 2018. The scope of work and objectives of Phase 2 will be confirmed during Phase 1. The launch of Phase 2 is conditional on the performance of the Consultant and availability of funding.
7. Cost Estimate for the Assignment: EUR 475,000 exclusive of VAT for Phase 1. 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.
8. Funding Source: The Project will be funded by the EBRD Shareholders Special Fund.
9. Eligibility: There are no eligibility restrictions.
10. Consultant Profile: The Consultant will be a company / consortium of companies with substantive experience in the energy sector, comprising experts with extensive policy, legal drafting and regulatory experience and solid economic/technical capacity. The Consultant will have extensive experience in working on international standards and best practice for the energy sector regulation and market operation, including substantial legal and regulatory drafting experience in line with the EU Third Energy Package, as well as significant experience in emerging markets (such as CIS countries).

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

1. Key Expert No. 1 (Team Leader / Senior International Energy Expert) with preferably at least 10 years of experience in working on international standards and best practice for the energy sector regulation and market operation. It is intended that the international senior expert (either team leader or deputy team leader) spends at least 70% of their time in Baku, which would facilitate the implementation of the project, especially in relation to stakeholder engagement activities.
2. Key Expert No. 2 (Senior International Legal / Regulatory Expert(s)) with preferably at least 10 years of experience in legal and regulatory drafting in line with the EU Third Energy Package.
3. Key Expert No. 3 (Senior International Economics Expert) with preferably at least 10 years of experience in energy economics and energy regulation.
4. Key Expert No. 4 (Senior Local Legal / Regulatory Expert) with preferably at least 10 years of legal and regulatory experience in the energy sector in Azerbaijan.
5. Key Expert No. 5 (Senior Local Economics Expert) with preferably at least 10 years of experience in energy economics in Azerbaijan.
6. Key Expert No. 6 (Stakeholders Engagement Expert) with preferably at least 10 years of experience in stakeholder engagement in the EBRD region. Previous experience in stakeholder engagement activities in the energy and infrastructure sectors of the EBRD economies of operations (preferably CIS region) would be considered an advantage.

Non-key experts are expected to include an international energy engineering expert, research assistants, local lawyers, event organisers etc. to provide local support for the Project implementation.

The Consultant is expected to have energy sector experience in Azerbaijan. English, Azeri and Russian language capacities are required.

11. Submission Requirements: In order to determine the capability and experience of Consultants seeking to be selected for this assignment, the information submitted should include the following:
12. Company/group of firms’ profile, organisation and staffing (max. 2 - 4 pages).
13. 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 (max. 6 - 8 pages).
14. 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 (max. 3 pages per expert). For purposes of the submission, the CVs of the Pilot Country National Lawyers are not required.
15. A proposed approach for implementing the assignment (including a tentative work plan) and team allocation for the envisaged activities (max 5 pages).
16. Completed Consultant Declaration Form 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 50 pages.

The complete expression of interest (including CVs, Consultant Declaration and Contact Sheet) should be submitted, in English electronically through e-Selection, to reach the Bank not later than the closing date. The expression of interest shall be one file (pdf). The EBRD reserves the right to reject applications of firms submitting more than one file. Only if the permissible file size is exceeded (4MB), the Consultant may split the expression of interest into further files.

Bank Contact Person:

Laura Arnold

EBRD PODD

European Bank for Reconstruction and Development

One Exchange Square

London EC2A 2JN

e-mail: [email protected] (submissions should be sent through eSelection and NOT to this email address)

Notes:

1. This procurement notice is issued as part of a two stage competitive selection process. In the first stage, the expressions of interest received from consultants in response to this procurement notice will be evaluated and shortlisted. The shortlisted consultants will be then invited to submit proposals providing a more detailed scope and methodology for implementing the project.
2. During the second stage, the proposals providing a more detailed scope and methodology received from qualified consultants will be evaluated with a financial weighting criteria of 20%. The three highest-ranked consultants will be invited to a phone / video conference interview to present their expertise and the proposed methodology. The highest-ranked qualified consultant will be then invited to negotiate the contract, subject to availability of funding from an appropriate donor.
3. The criteria to be used in the first stage to shortlist the expressions of interest from consultants that will be invited to submit proposals for the project are:

(a) Firm’s previous project experience in working on international standards and best practice for the energy sector regulation and market operation, including substantial legal and regulatory drafting experience in line with the EU Third Energy Package, in particular in the region of EBRD operations, as well as strong local expertise (35%)

(b) CVs of key experts No. 1 – 6 (35%)

(c) Proposed approach to the assignment implementation, including work plan, methodology and team allocation (30%)

The template for the financial proposal is available from the following web-link:

http://www.ebrd.com/documents/procurement/boc-2018.xlsx

4. The criteria to evaluate proposals from qualified consultants in the second stage will be provided in the invitation to submit such proposals.