A. Justification PROJECT PREPARATORY TECHNICAL ASSISTANCE 1. A project preparatory technical assistance (PPTA) is required to support the Ministry of New and Renewable Energy (MNRE) and Solar Energy Corporation of India Limited (SECI) to structure the proposed Concentrated Solar Power Project and carry out required project due diligence on technical, economic, financial, legal and safeguard aspects. The PPTA will also assess and review the capacity requirements of SECI to facilitate and monitor implementation of concentrated solar power (CSP) sub-projects. The PPTA is included in ADB s India Country Operations Business Plan (COBP) 2013-2015. 1 B. Major Outputs and Activities 2. The outputs of the PPTA will be the timely execution of bidding process for two CSP demonstration sub-projects and capacity development of SECI. The major outputs and activities are summarized in Table A4.1. Table A4.1: Summary of Major Outputs and Activities Major Activities Expected Completion Date Major Outputs Expected Completion Date Approval of PPTA September 2013 Recruitment of Individuals October 2013 Recruitment of a Firm November 2013 Project configuration and PPP December 2013 Review report on project January 2014 structuring preparation configurations Review of state support, NCEF January 2014 Preparation of initial project February 2014 fund flows documents and business model for GOI approval Assessment of SECI capacity February 2014 Capacity development report for March 2014 (financial, procurement, SECI governance, etc.) Business Plan review for SECI June 2014 Business Plan for SECI July 2014 GOI approval for bidding February 2014 EOI process initiated March 2014 documents including structure, concessional lending and NCEF Technical, financial, resource assessment, legal, contract review and inputs to tender documents Technical due diligence on responses received Financial due diligence of responses received Economic and financial analyses for GOI and ADB financing requirements Social and environmental due diligence March 2014 Final bidding documents with required technical, legal, contractual, PPP information for each sub-project March 2014 May 2014 Bid technical evaluation report May 2014 May 2014 Bid financial evaluation report Selection of private developers February 2014 Reports of financial and economic analyses June 2014 EARF, RF, IPDF and EIA/IEE, RP, IPP (as required) finalized and posted in ADB s website May 2014 June 2014 March 2014 July 2014 ADB = Asian Development Bank, EARF = environmental assessment and review framework, EIA = environmental impact assessment, EOI = expression of interest, GOI = Government of India, IEE = initial environmental examination, IPDF = indigenous peoples development framework; IPP = indigenous peoples plan, NCEF = National Clean Energy fund; RF = resettlement framework; RP = resettlement plan; PPP = public private partnership, PPTA = project preparatory technical assistance, SECI = Solar Energy Corporation of India Source: Asian Development Bank estimates 1 ADB. 2013. Country Operations Business Plan: India, 2013-2015. Manila
2 C. Cost Estimate and Proposed Financing Arrangement 3. The PPTA is estimated to cost $1,000,000 equivalent, which will be financed on a grant basis by the Multi-Donor Clean Energy Fund 2 under the Clean Energy Financing Partnership Facility and administered by ADB. The Government will provide in kind support. 4. The detailed cost estimate is presented in Table A4.2. Table A4.2: Cost Estimates and Financing Plan ($'000) Total Item Cost A. Clean Energy Fund a under Clean Energy Financing Partnership Facility 1. Consultants 880.0 a. Remuneration and per diem i. International consultants (32 person-months) 750.0 ii. National consultants (6 person-months) 24.0 b. International and local travel 100.0 c. Reports and communications 6.0 2. Workshops, training, seminars, and conferences b 30.0 3. Surveys 30.0 4. Contingencies 60.0 Subtotal (A) 1,000.0 Total 1,000.0 a b Contributors: the governments of Australia, Norway, Spain and Sweden. Administered by the Asian Development Bank. Workshops, training, seminars, and conferences includes two workshops prior to submission of bids and cost of training programs for staff of Solar Energy Corporation of India on procurement, legal, technology, and financial aspects. Source: Asian Development Bank estimates D. Consulting Services 5. A consulting firm will be recruited for the PPTA with total positions and person-months as indicated in Table A4.3. Taking into consideration the complexity of the investment program, the firm will be recruited using quality and cost based selection methodology with a 90:10 technical-cost weighting based on a simplified technical proposal. The consulting firm will conduct technical, economic, financial, and governance due diligence, prepare project cost estimates, procurement plan and implementation schedule. The international environmental and social development specialists will be recruited on an individual basis to ensure that that they start their field activities at the right time in the process. Consultants will be recruited following Guidelines on the Use of Consultants by ADB and Its Borrowers, March 2013. 2 Contributors: the governments of Australia, Norway, Spain and Sweden.
3 Table A4.3: Summary of Consulting Services Requirement Name of Positions Person-months Name of Positions Person-months International consulting firm: International individual consultants: CSP Technology /Team Leader 5.0 Environmental 2.0 Resource Assessment 3.0 Social Safeguard 2.0 Power Engineer 3.0 Solar Business Plan 4.0 PPP and Finance 5.0 Total: 8.0 Economist 2.0 Institutional 2.0 National Consultant (through a firm): Legal 4.0 Bid Process Analyst 6.0 Total: 24.0 Total: 6.0 CSP = Concentrated Solar Power. PPP = public private partnership. Source: Asian Development Bank Estimates 6. The outline terms of references for the PPTA consultants are described below: Position Summary Tasks Qualification Manage consulting team and ensure quality output. Prepare sector assessment. Overall coordination of the bid process including preparation of bidding documents, qualification requirements and evaluation criteria. Assess planning, procurement and implementation capabilities of SECI. Based on these assessments, prepare capacity development program of SECI, arrange workshops between private sector and SECI. Conduct technical and financial due diligence on CSP sub-projects, examine alternative project configuration solutions. Monitor contract award to commissioning. Assess the project cost estimate including operation and maintenance cost, and implementation schedule. Identify technical risks and countermeasures. CSP Technology /Team Leader Resource Assessment Prepare procurement plan and implementation schedule. Conduct/review route surveys. Assess the status of preparation and readiness of the sub-projects sites. Prepare guidelines and specifications for contracts on the CSP sub-projects. Estimate Green House Gas Reduction. Review feasibility study report and other relevant documents to (a) assess reliability of solar resource assessment data, (b) assess preliminary energy yield forecasting of the project, (c) conduct energy yield simulation, (d) recommend for improvement in solar resource assessment and energy yield forecasting. Develop (a) initial technical due diligence report on solar resource assessment and energy yield forecasting, including energy yield re-forecasting, (b) brief technical guidance notes for capacity improvement in solar resource assessment and output yield forecasting of the project. In coordination with the team leader prepare notes for Engineer with at least a master degree or equivalent and 10 years of working experience in utility scale CSP technologies with thermal storage design, construction supervision, and operation and maintenance, including engineering experience in one or more commercial CSP plants preferably in operation. Should be familiar with multilateral agency/bilateral loan processing requirements. Engineer with at least a bachelor degree or equivalent and 10 years of working experience in utility scale CSP technologies, specifically in solar resource assessment and energy yield calculations, with engineering experience on one or more commercial CSP plants preferably in operation. Should be familiar with multilateral agency/bilateral loan
4 Power Engineer PPP and Finance Economist Institutional Legal solar resource assessment and energy yield forecasting, which is a part of technical due diligence report. Work with the team leader on the review of the proposed sub-project configurations including on the energy yield and provide bid process and due diligence support on complementary aspects of the project (power block and cooling system). Validate the proposed project structure including provision of concessional loans from the Government and National Clean Energy Fund from MNRE to the selected project developers. Conduct with the Team Leader the bid process, including preparation of bidding documents, shortlisting of developers and required due diligence support on behalf of MNRE and SECI including the evaluation of proposals. Support negotiations with the private sector and assist the Team Leader in reviewing the business plans. Design project funds flow and disbursement mechanisms as well as the detailed financing plan/cost estimates. Evaluate different PPP structures to improve the bankability of the underlying projects and enhance private sector investment into the projects. Undertake project financial analysis. Provide due diligence support including on the cost benefit analysis for the proposed configurations to be taken up under the project. Undertake economic analysis following ADB s Guidelines on Economic Analysis of Projects. Review institutional requirements of SECI to implement the CSP projects. Undertake due diligence of CSP projects. Support the Team Leader and PPP and Finance on preparation of the bidding documents, Engineer with at least a bachelor s degree or equivalent with 10 years of working experience in utility scale power plants, with engineering experience on one or more commercial CSP plants preferably in operation. The consultant will have a degree in economics, finance or equivalent with at least 10 years of experience, preferably with a recognized accountancy qualification such as Chartered Accountant, Certified Public Accountant or equivalent, and should be familiar with multilateral agency/bilateral loan processing requirements. The consultant should have experience on ADB s Guidelines on Financial Management and Analysis of Projects (2005), prior experience in developing/designing/ working on PPP structures and contract documents in India involving NCEF or VGF, and knowledge of ADB loan processing modalities and ADB Procurement Guidelines. a degree in economics or equivalent with at least 10 years of experience and prior experience of economic modeling and be familiar with multilateral/bilateral loan and 10 years of working on institutional development review and be familiar with multilateral/bilateral agency The consultant will have a degree in law with at least 10 years of experience,
5 Environmental Social Development Solar Business Plan Bid Process Analyst project structuring and will also support due diligence during the bid process for MNRE and SECI. Prepare Environmental Assessment and Review Framework (EARF), Initial Environmental Examination (IEE) reports or Environmental Impact Assessment (EIA), as necessary, for the project in accordance with ADB's Safeguard Policy Statement (2009), Operations Manual, relevant local laws, policies and regulations. Ensure public consultation. Review national legal policies on environment to verify adequacy and consistency with ADB's Safeguard Policy Statement (2009) and bridging the gaps in environmental assessments if found. Prepare Environmental Management Plans (EMPs). Conduct social and gender analysis. Prepare Resettlement Framework and Resettlement Plans for project components, as necessary, for the project. Identify appropriate compensation methodologies where required. Ensure public consultation. Review national legal policies on land acquisition and involuntary resettlement to verify adequacy and consistency with ADB's Safeguard Policy Statement (2009) and bridging the gaps in assessments if found. Prepare the Indigenous People s Development Framework (IPDF) and Indigenous People s Plan (IPP) in consultation with the stakeholders and in accordance with ADB's Safeguard Policy Statement (2009), Operations Manual, relevant local laws, policies and regulations. Support the management of SECI to review the long term vision and provide inputs regarding the business planning process for SECI based on, among other aspects, assessment of the landscape of activities being undertaken by the solar power industry in India and assessment of the services provided by similarly placed international agencies. Work with the PPP and Finance and Team Leader on financial review of the proposed subprojects, and provide bid process and due diligence support on behalf of MNRE and SECI, including support for organizing stakeholder meetings and workshops. familiarity with the Indian law, structuring of PPP transactions and power purchase agreements, as well as knowledge of ADB loan processing and relevant requirements. in environmental development or related fields and at least 10 years of relevant experience. in social development or related fields and at least 10 years of relevant experience. The consultant will have a master s degree in engineering, business or economics with at least 15 years of relevant experience and prior experience in developing the solar industry in countries with large solar programs. and five years of experience in bid process analysis. He should also have prior experience of financial modeling and be familiar with multilateral/bilateral loan
6 E. Implementation Arrangements 7. MNRE will be the project's executing agency and provide key inputs and in-kind contributions in the form of office accommodation, support facilities, counterpart staff, maps, reports, and other logistical support. SECI will be the implementing agency of the project. Disbursements under the TA would be in accordance with ADB s Technical Assistance Handbook (May 2010, as amended). 8. The proposed TA processing and implementation schedule is listed in Table A4.4. Table A4.4: Proposed Technical Assistance Processing and Implementation Schedule Major Milestones Expected Completion Date TA commencement October 2013 Recruitment of consultants (individual) Recruitment of consultants (firm) September 2013 October- November 2013 Inception report from individual consultant Inception report from firm consultants October 2013 November 2013 Mid-term report March 2014 Submission of a draft final report June 2014 Submission of a final report September 2014 Physical completion of TA October 2014 Financial closure of TA December 2014 TA = Technical Assistance Source: Asian Development Bank estimates.