1 BACKGROUND. Page 1 of 9

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1 TERMS OF REFERENCE FOR APPOINTMENT OF A SERVICE PROVIDER TO EVALUATE THE PROPOSED INCENTIVE SCHEMES, DEVELOP AND DEFINE APPROPRIATE FUNDING FRAMEWORK (MODEL) AND INSTITUTIONAL ARRANGEMENT, AND PILOT THE PROPOSED MODEL FOR A PERIOD OF 16 weeks 1 BACKGROUND 1.1 The South African government through the Department of Energy in collaboration with the Department of Trade and Industry (the dti), is implementing the appliance energy efficiency Standards and Labelling (S&L) Programme. The programme is designed with the objective of removing inefficient appliances from the South African market and to encourage the adoption of new energy efficient appliances. The project will also contribute towards the reduction of the electricity demand in South Africa especially within the residential sector and also to introduce continuous energy efficiency improvements into the appliances and equipment industry. 1.2 This is a global trend in which many of the countries around the world have begun to outlaw certain types of inefficient appliances and equipment and encourage the widespread use of energy saving, efficient appliances and equipment. Also critical is the reduction in energy demand associated with the use of household appliances which will result in reduced carbon emissions. 1.3 The implementation of this programme will require a significant shift in the current policy frameworks including the introduction of new regulations and compulsory specification and improved communication on the benefits of using energy efficient appliances and equipment. 1.4 One of the measures identified as key in driving a change in consumer purchasing behaviour is the introduction of a well-structured and sustainable incentive scheme for efficient electrical appliances. In the past few months, the Department contracted a service provider to undertake a study on the Page 1 of 9

2 introduction of incentive schemes intended at accelerating the uptake of efficient electrical appliances. The incentives study identified the following four incentives which require cost-benefit analysis and evaluation of their feasibility for implementation as part of the deliverables for this assignment: Lighting incentive: The intention of this incentive scheme is to replace CFL and incandescent products that have come to the end of their operational life with more efficient LED lights through collaboration with supermarkets and manufacturers. Electric geyser incentive: This manufacturer incentive is aimed at reducing the cost of manufacturing energy efficient electric geysers. Lower Living Standard Measure (LSM) refrigerator swap: A discount system to assist low income households to swap inefficient appliances for efficient appliances. End-user rebate: A standard product approach where end-users would claim a rebate for the purchase of appliances above a prescribed energy efficiency (EE) standard. In addition to the above four incentives, it is required that the procurement of energy efficient appliances by government departments should also be evaluated by this assignment. 2 OBJECTIVES 2.1 The objective of this project is to conduct a cost-benefit analysis and evaluate the feasibility of implementing the proposed incentive schemes for energy efficient electrical appliances, define and develop an appropriate business case in support of a well-defined funding framework, assess and develop a workable project plan to pilot the preferred incentive scheme/s. 3 PROJECT SUPERVISION 3.1 The service provider will be under the overall supervision of S&L Project management team and their daily work will be coordinated with the Project Manager. The service provider will have to ensure that the expected outputs Page 2 of 9

3 are completed on time and that they comply with the specific project criteria and requirements. 4 SCOPE OF WORK 4.1 The scope of work will include the following tasks and expected deliverables: Activities and Tasks 1. Review the incentives report Evaluate the feasibility of implementing or adopting the proposed incentive schemes including a possible integration of two or more of the incentive schemes Conduct a cost-benefit and impact analysis 2. Develop of a business case including the institutional arrangement and a sustainable funding model: - Assess the institutional capacity required to implement the proposed preferred incentive scheme. - Determine resource needs and research on potential barriers - Discuss proposed business case with key role players 3. Prepare an implementation plan for a pilot project on the preferred incentive scheme/s to test the market: - Define the scope/sample size of the pilot including product types, costs, targeted beneficiaries and timelines. - Identify and get in-principle agreements with implementing agencies on their roles and responsibilities in running the pilot project. Means of Verification Cost-benefit analysis report Evaluation report on the feasibility of the proposed incentives Draft business case with proposed institutional capacity, resource plan, and identified potential barriers Comments on the business case from role players Finalised business case with comments incorporated. A project plan for the implementation of a pilot. 4.2 The success of this project will be determined by the findings of the cost-benefit analysis and the feasibility study as well as the acceptability of the business case proposed for the preferred incentive schemes and successful engagements with potential pilot implementing agencies leading to in-principle agreement to assist in running a pilot project for selected incentive scheme/s. 4.3 Outputs and Schedule: Page 3 of 9

4 4.3.1 The project will commence following the signing of a contract with the successful bidder The project is expected to have duration of no longer than 16 weeks and the following table provide some guidance in this regard. Output Cost-benefit analysis report Evaluation report on the feasibility of the proposed incentives Draft business case with proposed institutional capacity, resource plan, and identified potential barriers Comments on the business case from role players Finalised business case with comments incorporated. Estimated Duration to Complete 3 Weeks 5 Weeks A project plan for the implementation of a pilot. 8 weeks 5 PAYMENTS 5.1 The UNDP will not make an upfront payment to a successful service provider. Payment will only be made in accordance to the delivery of service that will be agreed upon by both parties and upon receipt of an original invoice. 5.2 The contract price will be all inclusive; all costs (professional fees, travel costs, living allowances, communications, consumables, etc.) that could possibly be incurred by the service provider must be factored into the final amount submitted in the proposal. 5.3 The contract price will be fixed regardless of changes in the cost components. 6 REPORTING REQUIREMENT AND PROGRESS MEETINGS 6.1 It is envisaged that an initial meeting with the successful bidder will be held to agree on the project process and project work plan. 6.2 Progress meeting feedback will be held twice a month: a brief update in the first two weeks of the month and a detailed meeting at the end of each month. The venue for these meetings will be at the Department of Energy in Pretoria. All Page 4 of 9

5 relevant project team members shall be obliged to attend. Where applicable, conference calls shall be held to facilitate such meetings. 7 COMPLETION DATE 7.1 The duration of the project is 16 weeks after signing of the contract with the successful service provider. 8 COMPULSORY INFORMATION SESSION 8.1 Briefing session will be held at the 351 Francis Baard Street, Metropark Bld, Pretoria, TAX CLEARANCE CERTIFICATE 9.1 The bidder is required to submit an original and valid Tax Clearance Certificate issued by the South African Revenue Services together with the bid documents before the closing date and time of the bid. Failure to comply with this condition will invalidate the bid. Copyright and Intellectual Property.1 The Department of Energy will become the owner of the information, tools, methodologies, documents, programmes, advice, recommendations and reports collected, furnished and/or compiled by the service provider during the course of, and for the purposes of executing deliverables in this terms of reference..2 The copyright and intellectual property of all information, tools, methodologies, documents, programmes, advice, recommendations and reports compiled by the service provider during the course and for the purposes of executing these terms of reference will vest in the Department of Energy. Page 5 of 9

6 11 EVALUATION METHODOLOGY 11.1 Cost The service provider must provide a quote regarding the work to be undertaken for this project. The financial proposal should indicate an allinclusive fixed total contract price, supported by a breakdown of costs as per template provided The total contract price must be VAT inclusive and should be quoted in South African currency Company Experience The company should at least have the following: a) At least years proven experience in the economics and finance field. b) Experience in successfully running socio economic studies as well as development and administration of financing models c) Experience in preparation and writing of reports and articles The company must include at least 3 contactable references as proof of experience in related projects Team leader and team members experience Team Leader must have at least seven (7) years experience in the finance and economic field individual team members must have at least two (2) years experience in finance and economics fields; CV s of the team leader and team members must be attached to the technical proposal as proof Qualification Team leader and team members must at least have the following: a) Advanced degree in economics or finance. Page 6 of 9

7 b) Relevant technical area of specialisation in incentive developments and socio economic analysis CV s of the team leader and team members must be attached to the technical proposal as proof Project Plan Project plan should include key milestones, final outputs and timeframes Proposed Methodology Management of the project The successful service provider may be required to present their Project Execution Plan. 12 EVALUATION CRITERIA 12.1 The proposals will be evaluated in phases outlined below: Phase 1: Bidders will be evaluated based on functionality/technical capability. The minimum threshold for functionality is 70 out of 0 points. Bidders who fail to meet minimum threshold will be disqualified and will not be evaluated further for price points. No Criteria Weights 1 Company Experience At least years proven experience in the economics and finance field. Experience in successfully running socio economic studies as well as development and administration of financing models Experience in preparation and writing of reports and articles. - 2 Experience of Team leader and team members Page 7 of 9

8 Team Leader must have at least seven (7) years experience in the development of socio economic studies, development and administration of financing models. Individual team members must have at least two (2) years experience in finance and economics fields; CV s of the team leader and team members must be attached to the technical proposal as proof Qualifications 20 Team leader and team members must at least have the following: - Master s degree in economics or finance. - Relevant technical area of specialisation in cost-benefit analysis, incentive developments and socio economic analysis - Certified copies of all qualifications must be attached 4 Project Plan Project plan should include intermediate and final outputs and identified timeframes/milestones. Proposed Methodology. Management of the project Total 0 Phase 2: Price 30 Page 8 of 9

9 Phase 3: Interviews may be conducted with the top three (03) shortlisted service providers 13 FORMAT AND SUBMISSION OF THE PROPOSAL 13.1 Interested service providers must submit a letter of confirmation of interest and availability using the template provided Annex B 13.2 All the official tender forms must be completed in all respects by bidders. Failure to comply will invalidate a bid. Forms are provided in Annex C Bidders are requested to submit two (2) copies: 1 original plus copy of the proposal and bid documents. 14 CLOSING DATE 14.1 Proposals must be submitted on or before 09 th October 2015 at UN House, Metropark Building, 351 Francis Baard Street, Pretoria.No late bids will be accepted. 15 ENQUIRIES 15.1 All enquiries to be directed in writing to: procurement.za@undp.org 16 Annexes to the ToR 16.1 ANNEX 1 Description of Requirements form 16.2 ANNEX 2 - FORM FOR SUBMITTING SERVICE PROVIDER 16.3 ANNEX 3 - General Terms and Conditions for Services Page 9 of 9