Albania: Capacity Building of the new Albanian Transmission System Operator

Location:Albania

Business sector:Natural resources

Project number:73101

Funding source:EBSF - EBRD Shareholder Special Fund

Contract type:Consultancy Services

Notice type:Invitation for expressions of interest (CSU)

Issue date:19 Apr 2018

Closing date:10 May 2018   at  23:59   London

Access eSelection

Project Description: The European Bank for Reconstruction and Development ("EBRD" or the "Bank") will provide a 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 Bank now intends to select and contract a consultant (the "Consultant") to provide assistance in the form of capacity building for its legal and regulatory function.

The main objectives of the assignment are:
1. Capacity building of Albgaz with a view to strengthening its legal and regulatory unit;
2. Tasks to operationalise the tariff methodology and tariffs;
3. Tasks to operationalise the network code (in particular, facilitating access to the network, including capacity allocation and balancing); and
4. 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 subject to approval by both the Client and the Bank.

Specifically, the 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 and maintenance contract benchmarks.

Please find the full Terms of Reference here.

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

Assignment 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. Subject to availability of funding, the performance of the selected Consultant and the specific needs of the Bank the assignment may be extended beyond the current scope.
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 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 anticipated that the contract will be financed by the EBRD Shareholders' Special Fund.

Eligibility: There are no eligibility restrictions.

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 team is expected to include the following Key Experts:

1. 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.
2. 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.
3. 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;
4. 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;
5. Local Experts with previous professional experience of working in the Albanian energy sector and the EU energy sector.
   
   Submission Requirements: Interested consultants are hereby invited to submit expressions of interest.
   In order to determine the qualifications and competence of consulting firms 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. 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 explaining the approach andmethodology for implementing the tasks, as well as addressing the key challenges and team input.

The above information should not exceed 25 pages excluding CVs.

Expressions of Interest should be submitted, in English, electronically through eSelection, to reach the Bank not later than the closing date. No copies need to be sent to the Client. 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.

EBRD Contact person:
Elena Kolodiy
One Exchange Square
London EC2A 2JN, United Kingdom
Tel: + 44 20 7338 6765
E-mail: [email protected]
Important Notes:

1. Selection and contracting will normally be made from responses to this notification. No financial proposals shall be submitted at this stage. .
   
   
2. This is a relaunch from the procurement notice with reference 9005-EOI-45690 which was published on EBRD website on 1 March 2018 and cancelled on 26 March 2018.
3. Any updates and clarifications to this procurement notice will be recorded as revisions to this notice. Consultants are therefore requested to periodically check the notice for updates. Failure to take the updates into account when submitting Expression of Interest may result in disqualification of the Expression of Interest.
   
   
4. The evaluation criteria are as follows:

(a) The Consultant’s previous project experience in similar tasks as described in section Consultant Profile above (40%);

(b) CVs of the key experts as described in section Consultant Profile above (40%);

(c) Quality of the technical proposal outlining the approach and methodology for implementing the tasks, as well as addressing the key challenges and team input (20%).