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MARKET SOUNDING FOR PNR SOLAR POWER

CONSULTING ADVISORY SERVICES

 

The Philippine National Railways (PNR) is embarking on a pathfinder initiative to develop a Utility-scale Solar Power Generation Project (the “Project”) to power the upcoming North-South Commuter Railway Project (NSCR), a 147km mass transit line connecting Clark to Calamba.

The Project is proposed to be developed as a floating solar project with an estimated installed capacity of at least 120MW to be augmented along with the addition of battery energy storage systems, subject to detailed technical assessment and studies.

Requesting please for a certification whether COFILCO or any of its member organizations has experience in providing, and can provide Transaction Advisory Consultancy Services for the attached Scope of Work (Annex “A”), with the following additional concessional services offered by the Asian Development Bank-Office of Public-Private Partnership (ADB-OPPP):

  1. provision of ancillary support and resources free-of-charge to concerned implementing units such as other project sustainability measures, development of contract implementation;
  2. project monitoring capabilities; and
  3. capacity-building activities for the PNR team.

Copy of the TOR is attached to this publication as Annex “B”.

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Thank you.

 

Annex A

 

 

Scope of Services

 

Phase I: Project Preparation

  • Undertake feasibility study for site suitability assessment
  • Evaluate projected power demand pattern of PNR for plant and battery storage sizing
  • Technical evaluation on connecting the generation asset to the rail system and control and supply mechanism for powering of rail operations
  • Financial modelling to estimate likely cost of generation; cost benefit analysis
  • Suggest project structuring options inline with client requirements, prevalent regulations and international best practices for projects of this scale
  • Carry out preliminary environmental, social and gender impact assessment of the project and suggest mitigation measures for identified risks
  • Draft documents for tender process after taking into consideration the Project’s distinct infrastructure, operational features, requirements, and drawing from all relevant and applicable international best practices; anticipated environmental and social impacts as well as project finance requirements of both local & international lenders and multilateral institutions.
  • Conduct market sounding with relevant experienced local and international players
  • Assist the Client to secure approval from necessary authorities

Phase 2: Tendering and Close in relation to selection of the private sector partner

  • Prepare and draft the bid documents
  • Support Client to run the tendering process, including preparing for and managing the bid conference, responding to bidder queries and making necessary revisions
  • Assist the Client in technical and financial evaluation of the bid
  • Assist the Client in negotiations with the selected bidder
  • Support the Client in the preparation and signing of the award documentation
  • Assist the Client from post award to pre-Contract signing

 

ANNEX B

 

Procurement of Consulting Advisory Services for the Procurement of a Solar Power Developer for the PNR Floating Solar Power Project

 

TERMS OF REFERENCE

  1. Background and Project Description

 

  • PNR is developing the North-South Commuter Railway (NSCR) project, jointly with the Department of Transportation (DOTr), consisting of a 147-km railway with 36 stations from New Clark City, Tarlac to Calamba, Laguna, in the Philippines. NSCR’s annual power demand is expected to exceed 730GWh per year, which exposes the NSCR project to high power costs and related price volatility linked to movement in fuel prices.
  • To meet NSCR’s partial power demand through cost efficient, green, renewable, and indigenous means, PNR proposes to develop a dedicated utility scale solar power project (with a likely implementation of the project as a floating solar facility with battery storage)of up to 230MW, to be located in the Luzon region (‘PNR Solar Power Project or the Project’) and where the project is expected to be implemented on a public-private partnership basis.
  • To develop the Project, PNR will procure the services of a transaction advisor in relation to (i) conducting the feasibility assessment for this first of a kind project that will power the operations of NSCR with renewable energy including battery storage; (ii) preparing and structuring the tender documents for the procurement of a solar power developer for the Project that will be responsible for the development, construction, financing and operations of the Project, via a competitive tendering process; (iii) supporting PNR to prepare all necessary documentation required by the various agencies as part of their respective approval processes; and (iv) preparing and delivering training & capacity building programs for PNR’s team to equip them with essential skills for developing, implementing and delivering the rail-solar initiative..
  1. Objective

 

  • The objective of these consulting services is to ensure that the project developer for this pioneer floating solar project shall be procured through the assistance of an internationally experienced-world-class transaction advisor who can (a) undertake a feasibility study that covers all critical aspects in respect of the interconnection between the power generation facility and the railway line to ensure nil disruption to the public transport network; and (b) bring the project to world market and assure quality services by the private sector partner.

 

  1. Scope of Consulting Services

 

 

Scope of Work

Deliverable

 

Milestone 1: Project Definition and Project Preparation (indicative timeline: 6 months after issuance of Notice to Proceed)

1.1.

Completion of Feasibility Study including:  

· site suitability assessment, site selection and evaluating the feasibility of the proposed site to connect to NSCR;

· sizing of the plant and storage system, energy yield prediction, options for connection to NSCR, plant basic design keeping in view NSCR’s requirements;

· Detailed risk analysis in respect of the interconnection between the railway line and the power generation asset as well as proposed mitigants.

· Benchmarking of the project concept and design to comparable projects in the region and globally.

· financial modelling to estimate the likely cost of generation and tariff;

· project structuring options and requirements for setting up of the JV;

· due diligence on the Project including legal, technical, financial and environmental & social due diligence;

· discussions, facilitated by the Clients, with other government agencies for necessary approvals, permits and JV formation;

Milestone 1(A)

Interim Feasibility Study Report

Milestone 1(B)

Final Feasibility Study Report

Milestone 2: Preparing the documentation required to secure the approval by the government approving authority for the tender for the Developer, in accordance with the relevant JV guidelines, as may be necessary for the launch of the tender process

(indicative timeline: 10 months after issuance of Notice to Proceed)

2.1

Prepare and conduct market sounding / market study with all relevant, qualified, and experienced solar developers, to sufficiently create interest in the Project, identify such market players’ concerns with regard to participation in the tender for the Project, and advise PNR in evaluating how to address identified concerns, to realize optimal value and risk allocation for PNR, and realizing an optimal level of competition.

Market Sounding Report

NEDA Submissions

(i.e., Business Case, PE forms, Financial and Economic Models, VfM Analysis)

NEDA Board Approval

2.2

Assist PNR in the appropriate structuring of the   Contracts, taking into consideration the Project’s distinct infrastructure, operational features and requirements, and drawing from all relevant and applicable international best practices.

2.3

Assist  PNR in preparing submissions to obtain NEDA Board Approval for the Project, including business case, project evaluation forms, financial and economic models, risk allocation and mitigation matrix, joint venture agreement and addressing all queries and requests for additional information, as may be necessary or desirable to obtaining approval

Milestone 3: Publication of Tender Documents (indicative timeline: within 2 month after NEDA approval)

3.1

Drafting of tender documents including instructions to bidders, JV agreement, and/or other bidding / tender documents necessary and appropriate to the eventual procurement strategy adopted for the solar contract.

 Publication of tender documents, which includes:

- ITPB, ITPQB, ITB, JV, and/or Other Bidding/Tender Documents

3.2

Drafting of power sale agreement (PSA) and other project agreements, as necessary which would include minimum performance standards and specifications (“MPSS”), key performance indicators (“KPI”) as applicable drawing from all relevant and applicable international best practices.

Milestone 4: Procurement to Award of Contract to solar developer (indicative timeline: 20 months after issuance of Notice to Proceed)

4.1.

Assist PNR in managing the bidding / tender process, including conducting pre-bid and bid conferences, setting up and maintaining virtual and/or physical data rooms, preparing answers to bidders’ queries and other bid bulletins, and conducting one-on-one bidder conferences.

Actual conduct of Bid Conference

Bid Bulletins, including Answers to Bidders’ Queries

4.2.

Assist PNR in bid submission opening, evaluation, selection of winning bidder, and negotiations, as applicable, including detailed legal, technical, and financial evaluation of bids, and preparation of detailed Bid Evaluation Report.

Bid Evaluation Report

4.3.

Preparation of Award documentation.

Notice of Award signed by the Winning Bidder

Milestone 5: Signing of Contract documents, in particular the Power Sale Agreement

5.1.

Finalization of Power Sale Agreement

Execution Copy of PSA and other contract documents

5.2.

Assist PNR in post-Award to pre-Contract signing by providing list of required post-award conditions, assisting DOTr and PNR in explaining to relevant offices and agencies the project structure and contract documents for other required approvals, and answering questions that may arise in relation to the project or contract documents, or provide any other similar assistance to PNR.

Signed PSA

5.3.

Assist PNR in Contract documents’ signing

  1. Contract Duration
    • The consulting services shall take effect from the signing of the consulting services agreement between the consultant and PNR and shall continue until thirty-six (36) months from the Start Date (or such later date and subject to the terms and conditions as may be agreed among the consultant and PNR in writing).