1 Building Sector Energy Efficiency Project – Energy Efficiency Fund Instructions to Proposers DATA SHEET The following data for the services to be procured shall complement, supplement, or amend the provisions in the Instruction to Proposers. In the case of a conflict between the Instructions to Proposers, the Data Sheet, and other annexes or references attached to the Data Sheet, the provisions in the Data Sheet shall govern. DS No. Data Specific Instructions / Requirements 1 Project Title : Establishment & Management of an Investment Company (IC) to Administer an Energy Efficiency Fund (EEF) 2 Title of Services/Work: Financial Services 3 Country / Region of Work Location: Malaysia 4 Language of the Proposal: ☒ English ☐ French ☐ Spanish ☐ Others (pls. specify) ________________________ 5 Conditions for Submitting Proposals for Parts or sub-parts of the TOR ☐ Allowed [if yes, describe how, and ensure that requirements properly define the sub-parts] ☒ Not allowed 6 Conditions for Submitting Alternative Proposals ☒ Shall not be considered ☐ Shall be considered. A proposer may submit an alternative proposal, but only if it also submits a proposal that meets the base case. BSEEP shall only consider the alternative proposals offered by the Proposer whose proposal for the base case was determined to be the proposal with the highest evaluated score. 7 A pre-proposal conference will be held on: Time: 1.30 pm Date: 1/22/2016 Venue: Rafelsia meeting room, Level 22, Menara PJD, No 50
Transcript
1
Building Sector Energy Efficiency Project – Energy Efficiency Fund Instructions to Proposers
DATA SHEET
The following data for the services to be procured shall complement, supplement, or amend the provisions in the Instruction to Proposers. In the case of a conflict between the Instructions to Proposers, the Data Sheet, and other annexes or references attached to the Data Sheet, the provisions in the Data Sheet shall govern.
DS No.
Data
Specific Instructions / Requirements
1 Project Title :
Establishment & Management of an Investment Company (IC) to Administer an Energy Efficiency Fund (EEF)
2 Title of Services/Work: Financial Services
3 Country / Region of Work Location:
Malaysia
4 Language of the Proposal:
☒ English ☐ French ☐ Spanish
☐ Others (pls. specify) ________________________
5 Conditions for Submitting Proposals for Parts or sub-parts of the TOR
☐ Allowed [if yes, describe how, and ensure that requirements properly define the sub-parts]
☒ Not allowed
6 Conditions for Submitting Alternative Proposals
☒ Shall not be considered
☐ Shall be considered. A proposer may submit an alternative proposal, but only if it also submits a proposal that meets the base case. BSEEP shall only consider the alternative proposals offered by the Proposer whose proposal for the base case was determined to be the proposal with the highest evaluated score.
Jalan Tun Razak, 50400, Kuala Lumpur The BSEEP focal point for the arrangement is: Deep Kumar Address: Building Sector Energy Efficiency Project, Level 22, Menara PJD, No 50 Jalan Tun Razak, 50400, Kuala Lumpur Telephone: +603 4041 1924
8 Period of Proposal Validity commencing on the submission date
☐ 60 days
☐ 90 days
☒ 120 days
9 Proposal Security ☐ Required
Amount: Click here to enter text.
Form: Click here to enter text.
☒ Not Required
10 Deadline for submitting requests for clarifications/ questions
10 days before the submission date.
11 Contact Details for submitting clarifications/questions1
Focal Person in BSEEP: Deep Kumar Address:Building Sector Energy Efficiency Project, Level 22, Menara PJD, No 50 Jalan Tun Razak, 50400, Kuala Lumpur Facsimile: Fax No. : E-mail address dedicated for this purpose: [email protected]
12 Manner of Disseminating Supplemental Information to the RFP and responses/clarifications to queries
☐ Direct communication to prospective Proposers by email or fax
☒ Direct communication to prospective Proposers by email or fax, and Posting on the website2 [specify exact URL Address]
13 No. of copies of Proposal that must be submitted [if
Original : 1
1 This contact person and address is officially designated by BSEEP. If inquiries are sent to other person/s or
address/es, even if they are BSEEP staff, BSEEP shall have no obligation to respond nor can BSEEP confirm that the query was officially received.
2 Posting on the website shall be supplemented by directly transmitting the communication to the prospective offerors.
3
transmitted by courier]
14 Proposal Submission Address Building Sector Energy Efficiency Project Level 22, Menara PJD, No 50 Jalan Tun Razak, 50400, Kuala Lumpur
15 Deadline of Submission Date and Time : (Malaysia time) February 22, 2016 12:00 PM
16 Allowable Manner of Submitting Proposals
☒ Courier/Hand Delivery
☒ Electronic submission of Bid For courier and electronic submissions, the email subject must contain the following: “Request for Proposal for BSEEP’s Establishment & Management of an Investment Company (IC) to Administer an Energy Efficiency Fund (EEF)” For electronic submissions, the technical and financial bids are to be saved under two separate files. A password must be used to protect the financial bid. BSEEP will only request for the password only if the bidder passes the technical evaluation.
17 Date, time and venue for opening of Proposals
Date and Time: February 22, 2016 2:00 PM Venue : BSEEP office, Level 22, Menara PJD, No 50 Jalan Tun Razak, 50400, Kuala Lumpur
18 Evaluation method to be used in selecting the most responsive Proposal
☒ Combined Scoring Method, using the 70%-30% distribution for technical and fund raising proposals, respectively, where the minimum passing score of technical proposal is 70%
19 Required Documents that must be Submitted to Establish Qualification of Proposers (In “Certified True Copy” form only)
☒ Company Profile, which should not exceed fifteen (15) pages, including printed brochures and product catalogues relevant to the goods/services being procured
☒ Members of the Governing Board and their Designations duly certified by the Corporate Secretary, or its equivalent document if Bidder is not a corporation
4
☒ List of Shareholders and Other Entities Financially Interested in the Firm owning 5% or more of the stocks and other interests, or its equivalent if Bidder is not a corporation
☐ Tax Registration/Payment Certificate issued by the Internal Revenue Authority evidencing that the Bidder is updated with its tax payment obligations, or Certificate of Tax exemption, if any such privilege is enjoyed by the Bidder
☒ Certificate of Registration of the business, including Articles of Incorporation, or equivalent document if Bidder is not a corporation
☐ Trade name registration papers, if applicable
☐ Local Government permit to locate and operate in the current location of office or factory
☐ Official Letter of Appointment as local representative, if Bidder is submitting a Bid in behalf of an entity located outside the country
☐ Quality Certificate (e.g., ISO, etc.) and/or other similar certificates, accreditations, awards and citations received by the Bidder, if any
☐Environmental Compliance Certificates, Accreditations, Markings/Labels, and other evidences of the Bidder’s practices which contributes to the ecological sustainability and reduction of adverse environmental impact (e.g., use of non-toxic substances, recycled raw materials, energy-efficient equipment, reduced carbon emission, etc.), either in its business practices or in the goods it manufactures
☐ Patent Registration Certificates, if any of technologies submitted in the Bid is patented by the Bidder
☐ Plan and details of manufacturing capacity, if Bidder is a manufacturer of the goods to be supplied
☐ Certification or authorization to act as Agent in behalf of the Manufacturer, or Power of Attorney, if bidder is not a manufacturer
☒ Latest Audited Financial Statement (Income Statement and Balance Sheet) including Auditor’s Report for the past [1 year]
☐ Statement of Satisfactory Performance from the Top [indicate number] Clients in terms of Contract Value the past [indicate number of years of reference]
☒ List of Bank References (Name of Bank, Location, Contact Person and Contact Details)
☒ All information regarding any past and current litigation during the last five (5) years, in which the bidder is involved, indicating the parties concerned, the subject of the litigation, the amounts involved, and the final resolution if already concluded.
5
20 Latest Expected date for commencement of Contract
March 31, 2016
21 Expected duration of contract (Target Commencement Date and Completion Date)
December 31, 2016
22 BSEEP will award the contract to:
☒ One Proposer only
☐ One or more Proposers, depending on the following factors : [clarify fully how and why will this be achieved. Please do not choose this option without indicating the parameters for awarding to multiple Proposers]
23 Post-Qualification Actions ☒ Verification of accuracy, correctness and authenticity
of the information provided by the bidder on the legal, technical and financial documents submitted; ☒ Validation of extent of compliance to the terms of
reference requirements and evaluation criteria based on what has so far been found by the evaluation team; ☐ Inquiry and reference checking with Government
entities with jurisdiction on the bidder, or any other entity that may have done business with the bidder; ☒ Inquiry and reference checking with other previous
clients on the quality of performance on ongoing or previous contracts completed; ☐ Physical inspection of the bidder’s plant, factory,
branches or other places where business transpires, with or without notice to the bidder; ☐ Testing and sampling of completed goods similar to
the requirements of BSEEP, where available; and ☐ Others
Summary of Technical Proposal Evaluation Forms
Score Weight
Points Obtainable
1.
Expertise of Firm / Organization / Consortium
25%
250
2.
Methodology, Approach and Implementation Plan
25%
250
3.
Management Structure and Key Personnel
25%
250
4.
Pipeline of initial EEPs
25%
250
Total
1000
6
Technical Proposal Evaluation Form 1
Points obtainable
Expertise of the Firm/Organization
1.1 Reputation of Organization and Staff / Credibility / Reliability / Industry Standing 50
1.2 General Organizational Capability which is likely to affect implementation - Financial stability - loose consortium, holding company or one firm - age/size of the firm - strength of project management support - project financing capacity - project management controls
60
1.3 Extent to which any work would be subcontracted (subcontracting carries additional risks which may affect project implementation, but properly done it offers a chance to access specialised skills.)
15
1.4 Quality assurance procedures, warranty 25
1.5 Relevance of: - Specialised Knowledge - Experience on Similar Programme / Projects - Experience on Projects in the Region
100
250
Technical Proposal Evaluation Form 2
Points Obtainable
Proposed Methodology, Approach and Implementation Plan
2.1 To what degree does the Proposer understand the task/requirement? 15
2.2 Have the important aspects of the task been addressed in sufficient detail? 15
2.3 Are the different components of the project adequately weighted relative to one another?
10
2.4 Is the proposal based on a survey of the project environment and was this data input properly used in the preparation of the proposal?
40
2.5 Is the conceptual framework adopted appropriate for the task? 40
2.6 Is the scope of task well defined and does it correspond to the TOR? 75
2.7 Is the presentation clear and is the sequence of activities and the planning logical, realistic and promise efficient implementation to the project?
55
250
Technical Proposal Evaluation Form 3
Points Obtainable
Management Structure and Key Personnel
Organization chart and structure 150
Subscore
Skills, experience, work scope, job titles and responsibilities of full-time personnel allocated to IC
110
7
Number of staff 40
3.1
Team Leader / Key personnel #1 (Director)
60
Sub-Score
General Qualification
58
Suitability for the Project - International Experience 8
- Professional Experience in energy efficiency 20
- Professional Experience in finance, private equity 20
- Knowledge of the region (South East Asia) 10
- Language Qualifications 2
60
3.2
Key Personnel #2
40
Sub-Score
General Qualification
38
Suitability for the Project
- International Experience 4
- Professional Experience in energy efficiency 15
- Professional Experience in finance, private equity 15
- Knowledge of the region (South East Asia) 4 - Language Qualifications 2
40
Total Part 3 250
Technical Proposal Evaluation Form 4
Points Obtainable
Pipeline of Initial Energy Efficiency Projects (EEP)
4.1 Number of projects ready for implementation 70
4.2 Project implementation timeline 150
4.3 Variation of project types (HVAC, lighting, energy management etc) 30
250
Financial Evaluation Form 5
Points Obtainable
5.1 Quantum of investment proposed by bidder Maximum of 300 which will be determined based
on the difference between the bidder’s
investment amount and the lowest investment amount by bidder or
other competitors
8
300
9
Terms of Reference (TOR)
Establishment & Management of an Investment Company (IC) to Administer an Energy Efficiency Fund (EEF)
ACRONYMS:
BSEEP = Building Sector Energy Efficiency Project
EE - Energy Efficiency EEIA = Energy Efficiency Investment Agreement
EEP = Energy Efficiency project
ESCO = Energy Services Company EPC = Energy Performance Contract
GHG = Green House Gas
IC = Investment Company EEF = Energy Efficiency Fund
RFP = Request For Proposal
BSEEP = United Nations Development Programme
INTRODUCTION:
1. The Building Sector Energy Efficiency Project (“BSEEP”) is pleased to invite tenders for the
establishment and management of an Investment Company (“IC”) to administer the Energy
Efficiency Fund (EEF) with a mandate to invest in energy efficiency retrofits for existing
Commercial & Public Buildings located in Malaysia.
2. The goal of this invitation to tender3 is to select a private-sector entity (or consortium) that will own
and manage the IC. Joint bids are welcome.
3. The selected Tenderer shall commit to co-invest a minimum of USD 5 million, which shall be
potentially matched with the USD 900,000 fund to be provided by BSEEP for the EEF, which will be managed by the IC. It is expected that the Tenderer strives to contribute more than the minimum
co-investment amount of USD 5 million.
4. BSEEP is seeking proposals from finance professionals for this new investment company offering off-balance sheet solution to Building Owners. The core concept is that IC provides all upfront
capital for the EE projects which are implemented by Energy Services Companies (“ESCOs”)
under an Energy Performance Contract (“EPC”), and Building Owners are only responsible to pay
IC every month a share of the savings if realized (Shared Savings Business Model).
3 In this document, the terms “Invitation to Tender”, “Request for Proposal” and “RFP” are used interchangeably.
10
BACKGROUND:
5. The Building Sector Energy Efficiency Project (“BSEEP”) has the objective to reduce the annual
growth rate of Green House Gas (“GHG”) emissions in the Malaysia building sector. The project
is implemented by the Malaysia Public Works Department, Jabatan Kerja Raya (“JKR”) in partnership with United Nations Development Programme (UNDP)
6. BSEEP has been discussing with a number of Policy-Makers, Building Owners and Energy
Services Companies (“ESCOs”), about the barriers faced today in Malaysia by End-Users of Energy Efficiency improvement Projects (“EEPs”). These different parties have all unanimously
expressed:
their concerns that financing options to implement EEPs are too limited in Malaysia as
commercial banks are often not interested in providing loans, and
a desire to explore and adopt new ways such as Shared Savings & Energy Performance
Contracting (“EPC”) mechanisms to accelerate market implementation of Energy Efficiency
(“EE”) beyond the current practices and policies in place.
MARKET OPPORTUNITY:
7. The current market potential for end-use energy efficiency retrofits in existing Commercial,
Residential and Government Buildings is estimated to represent a RM 11.6 – 23.2 Billion
investment opportunity with energy savings potential of 5,818 GWh / year and GHG abatement
potential of 4.3 Million tCO2 / year.
8. Malaysia is a prime location for energy efficiency investments due to:
Rapid development & strong economic growth
Increasing inefficiency levels (in 2012 building sector electricity consumption intensity was 49% higher per unit of GDP than in 1997)
Supportive governmental policy to promote energy performance contracting as means to
facilitate the adoption of energy efficiency initiatives
Strong electricity demand and increasing utility costs provide a good market for increased
penetration of EEPs.
9. The market opportunity consists of retrofitting the facilities of end-use energy consumers with long-standing and proven energy efficiency technologies that include:
High efficiency lighting
Heating Ventilation Air Conditioning (“HVAC”) upgrades
New automated building and HVAC controls
Variable Speed Drive (“VSD”) on motors, fans and pumps
High efficiency chillers
High efficiency boilers
Combustion and burner upgrades
11
Fuel switching
Building Water conservation; i.e., toilets, showers, faucets
Heat recovery and steam traps
Power factor correction
INVESTMENT COMPANY (IC):
10. This RFP seeks to solicit proposals from the private sector for the Establishment & Management
of an Investment Company (IC) to Administer the Energy Efficiency Fund (EEF)
11. The established IC shall have a lean structure to exclusively manage the EEF with a dedicated &
independent team having both EE technical and financial expertise, established network in the
Malaysia Building sector, project origination capabilities, access to an initial pipeline of investable EEPs and a successful private equity and/or fixed-income investment track record.
12. The IC shall be owned by an entity that is independent from ESCOs4 and Equipment Suppliers. In
managing the EEF, the IC should not enter into exclusive relationships with Equipment Suppliers
and ESCOs for the purpose of business development and project origination. It is critical to ensure
that there are no conflict of interest in any line of the EEF transactions among the IC, ESCOs and the End-users
ENERGY EFFICIENCY FUND (EEF):
13. The objectives of EEF is to (i) catalyze the adoption of EE financing through testing and
demonstrating its viability in Malaysia; (ii) fill up the financing gap by overcoming current EE financing market barriers; and (iii) support the roll-out of the ESCO EPC business model.
14. EEF’s primary target market segments would be existing Buildings in the commercial and public
15. The proposal may include other secondary target segments that are deemed to be aligned with the
objectives.
16. EEF initial capitalization should be a minimum of USD 5 million. Each transaction is expected to
range from USD 0.3 to 1.5 million.
17. The capital needed for EEF should primarily be sourced from the private sector capital market.
18. EEF should provide an off-balance sheet financing solution to Building Owners and employ an
Energy Performance Contracting model, where the EE investment is repaid from a share of energy
savings when a guaranteed threshold of energy savings is obtained.
4 An ESCO is broadly defined here as a commercial business providing all or part of the following solutions & services: design and
implementation of EEPs, energy conservation; power generation and energy supply.
12
19. EEF should invest in end-use EEPs developed and installed by local developers, vendors and
ESCOs at existing Building facilities in Malaysia with reputable and credit-worthy owners. No investment should be required by the End-Users. 100% of the upfront capital should be provided
by EEF.
20. The EEPs should utilize technologies that have been in the market for at least 1 year to reduce
existing energy and operating costs of the End-User. The EEPs should be implemented by reputable & competent ESCOs registered with the energy commission of Malaysia offering meaningful
performance guarantees to EEF.
21. EEF is not competing with commercial banks and it doesn’t offer loans to End-Users. EEF should invest in EEPs, own the new assets (chillers, pumps, etc) for a certain duration and deliver EE as a
Service in the form of energy cost savings – in other words selling “negawatts” or avoided energy.
22. EEF should target exiting Commercial & Government Buildings
23. Direct benefits, which Building Owners receive from EEF, include: i) improved energy services from the equipment installed; ii) a portion of net savings generated from the EEPs during the term
of their Agreement with EEF and 100% of savings at the end of its term; and iii) ultimate ownership
of the equipment installed for limited or no capital cost at end of the Agreement.
24. During a typical 3-8 year contract, energy cost savings will be shared between:
- IC (therefore obtaining a return on its investment); - ESCO (providing an incentive to perform better than guaranteed savings amount); and
- End-User.
End-User Pays agreed share of Savings &
keeps the rest Owns assets after EEIA term
ESCO Assumes Performance Risk
IC Assumes Credit Risk of End-User
Owns 100% of Assets till EEIA ends
ESCO implements EEPs, monitors savings, and provides
operation & maintenance
Agreed % of Shared Savings above
Guaranteed Amount
Payment of
Shared Savings Transfer Assets to
End-User at the end of
contract
Performance Guarantee of EEP
Payment of energy savings
“shortfall” if any
13
ROLE & RESPONSIBILITIES OF SELECTED TENDERER:
25. Upon confirmation of selection, an agreement will be signed between the selected Tenderer and
JKR, the selected Tenderer shall:
a. Incorporate and establish a new legal entity (the IC) in Malaysia, , for the sole purpose of managing EEF
b. Invest in cash a minimum of USD 5 million paid-up capital in EEF, to be used to cover set-
up costs, operation costs and EEPs capex requirements c. Hire IC’s management team who shall be responsible for (non-exhaustive list):
i. Identifying project investment opportunities
ii. Engaging ESCOs for preliminary & detailed assessment
iii. Conducting project structuring, due diligence and financial modeling iv. Entering into contract with Building Owners & ESCOs for EPC
v. Incorporating an SPV for each EEP, 100% owned by EEF-Corp
vi. Financing EEPs capex and overseeing construction/installation vii. Engaging third-party M&V firm for shared saving billing scheme
viii. Managing EEPs and stakeholder relationships over project lifetime
ix. Collecting energy savings payments from Building Owners x. Exiting investment
d. Establish the IC’s operation described in the above paragraphs a., b. and c. within 3
calendar months from the time of agreement between the selected Tenderer and JKR
e. Select, invest in and construct a minimum of 3 EEPs before December 2016 f. Report performance to BSEEP on a quarterly basis until December 2016
BSEEP GRANT PAYMENTS:
26. The selected Tenderer shall receive up to USD 900,000 grant from BSEEP according to the
following payment plan: a. USD 300,000 paid per EEPs for the first 3 EEPs signed and implemented before December
2016 and upon submission of the final & binding contract(s) between IC, Building Owner
(End-Users) and ESCO.
14
b. Eligibility of grant payments are dependent on the following:
i. Building which undertook the energy performance contract agrees to be a
demonstration project with BSEEP where the building owner agrees to allow
BSEEP to publish aggregated details of the energy efficiency measures
undertaken by the IC and building owner.
ii. Building owner and IC agrees not sell the accrued carbon dioxide abated
iii. Submission of the investment grade audit report for the agreed energy
performance contract
iv. Submission of calculations to demonstrate the effectiveness of the grant where a
minimum of one kilogram of CO2 abated for every one ringgit of grant provided
has to be achieved by the energy performance contract
v. Projects which receive the grant must provide the building energy consumption
information automatically to the energy management information system that
will be established by the Energy Commission on a monthly basis
PROPOSAL REQUIREMENTS:
27. The proposal should address at the minimum the following information:
15
a. Outline of the proposed EEF scheme, service offering, business/revenue model, parties
involved and their respective roles / responsibilities as well as relevant experience & track record
b. Size, capitalization plan and financial structure of EEF. Minimum USD 5 million
investment commitment from the Tenderer’s Board of Directors and certified proof of
funds to be allocated to EEF. Total capital distribution between set-up costs, operating costs and EE project funding
c. Proposal on how BSEEP can provide oversight mechanism, inputs to share savings
percentage and reporting system
d. IC establishment plan, incorporation, relevant permitting / licences requirement for
operating in Malaysia, set-up costs (will not be covered by BSEEP Grant), estimated timeline, conditions precedents if any
e. EEF investment lifetime, investment / divestment cycle
f. Customer acquisition strategy and profile of target Buildings
g. Project selection criteria and proposed due diligence framework
h. Projection of annual number of EEPs (invested/divested); average project size, cumulated
energy savings and carbon abatement till end of EEF
i. Pipeline of potential initial transactions (project description, client, timeline, probability of
closing, investment size, project economics, etc)
j. Operating model, including details on how EEPs are originated, evaluated, structured, financed, managed and exited, and the handling of situations where EE investments fail to
