Expression of Interest (EOI)

Subject: Expression of Interest (EOI)

Reference: USAID Urja Nepal, Deloitte Overseas LLP

Deloitte Overseas LLP (Deloitte), as the executing partner of the USAID Urja Nepal Program (Urja Nepal), is seeking Expressions of Interest (EOIs) for pioneering projects that employ Energy Service Company (ESCO) models for integrating energy-efficient technologies and methods in the sectors of Industry, Building, and Municipal services. This initiative welcomes EOIs from two distinct groups: first, private firms adept in implementing energy efficiency solutions and providing energy-related services; and second, organizations that are substantial energy users looking to adopt energy efficiency enhancements to reduce their consumption. We invite both groups to share comprehensive details about their business operations for evaluation.

Participants in both categories – those delivering energy efficiency measures or energy-related solutions, and those requiring such measures to lower their energy usage – are encouraged to provide thorough information about their business activities.

This Expression of Interest (EOI) is circulated to collect information and assist in planning. It should not be regarded as a Request for Proposal (RFP) or a guarantee of a future RFP. The release of this EOI does not commit Deloitte or Urja Nepal to any contract or procurement of any service or supply. At this stage, Deloitte is not accepting proposals and will disregard any unsolicited proposals received. It's important for respondents to understand that neither Deloitte nor Urja Nepal will bear any costs related to the submission of this EOI; all such costs must be borne by the respondents themselves. Non-response to this EOI does not exclude entities from participating in any future RFP, should one be issued.

All questions related to this EOI should be addressed to the undersigned at klamsal@urja-nepal.com

Sincerely,

USAID Urja Nepal

Deloitte Overseas LLP

Expression of Interest

Description

USAID Urja Nepal is seeking information on how an interested parties could support in execution of pilot projects on Energy Service Company (ESCO) based implementation of energy efficient technologies/measures in Industries, Buildings and Municipality sectors. 

This Expression of Interest (EOI) is issued solely for information and planning purposes – it does not constitute a Request for Proposal (RFP) or a promise to issue an RFP in the future.  This EOI does not commit Deloitte or Urja Nepal to contract for any supply or service whatsoever.  Further, Deloitte is not at this time seeking proposals and will not accept unsolicited proposals.  Responders are advised that the Deloitte or Urja Nepal will not pay for any information or administrative costs incurred in response to this EOI; all costs associated with responding to this EOI will be solely at the interested party’s expense. Not responding to this EOI does not preclude participation in any future RFP, if any is issued.

Background

Nepal’s Energy Outlook 2022 states that, modern energy, electricity, petroleum and renewables usage related to industry, commercial settings, and urban areas accounts for approximately 20% of Nepal’s total energy consumption. This share is increasing progressively owing to increase in purchasing power, standards of living, and urbanization. Nepal is committed to sustainable development goals, including improving access to affordable and reliable energy services. In line with this, they aim to achieve net zero emissions by 2045 and increase clean energy usage to 15% by 2030. Energy efficiency is crucial in this transition, offering quick and cost-effective ways to reduce greenhouse gas emissions while enhancing energy security and lowering bills. Together, efficiency, electrification, behavioral change and digitalization shape global energy intensity – the amount of energy required to produce a unit of GDP, a key measure of energy efficiency of the economy. However, advancing energy efficiency in the economy has certain barriers which includes high upfront investment costs, access to finance and lack of information. It is against these backgrounds that the energy service companies (ESCOs) are becoming more significant.

About the ESCO Model

An energy service company (ESCO) provides a range of energy solutions including designs and implementation of energy savings projects, retrofitting, energy conservation, energy infrastructure outsourcing, power generation, energy supply, and risk management. ESCOs operate by providing a savings guarantee, risk management, and measurement & verification (M&V) activities to quantify actual energy savings post implementation of energy efficiency projects etc.

ESCOs provide their services under the Energy Saving Performance Contracting (ESPC) model. “Energy Savings Performance Contract (ESPC)” means a contract entered by the beneficiary and the borrower under which payments to the borrower are based on meeting specified performance guarantees related to the implementation of energy efficiency project. It is basically a budget-neutral approach to make existing facilities energy efficient by partnering with an ESCO. The ESCO conducts a comprehensive energy audit for the Facility Owner and identifies improvements to save energy. In consultation with the Facility’s Owner, the ESCO designs and implements a project assuring guaranteed savings that meets the Facility’s Owner needs and arranges the necessary financing.

The ESCO guarantees that the improvements will generate energy cost savings sufficient to pay for the project over the term of the contract. After the contract ends, all additional cost savings accrue to the Facility Owner. 

Nepal faces an urgent need to transition to cost effective and impactful models and solutions to maintain the balance between energy demand and supply. The industrial, building (both residential and commercial establishments) and municipalities are key contributors to the country’s total energy consumption. In order to achieve sustainable development, it is important to accelerate adoption of energy efficiency in these sectors. One proven way to address the pressing energy challenges in Nepal is by fostering energy efficiency through the deployment of ESCO business models. 

The existing challenges can be addressed through a two-fold approach. First, to enhance energy efficiency in targeted sectors, leading to reduced energy consumption and a more sustainable energy future. Second, to catalyze the growth of the ESCO market in Nepal, creating a vibrant ecosystem of service providers capable of delivering innovative and cost-effective solutions. 

About the USAID Urja Nepal

USAID’s Urja Nepal Project, supported by the American people through the United States Agency for International Development (USAID) and implemented by Deloitte Consulting LLP, aims to create a financially viable electricity sector that provides affordable, reliable, and secure power and enables the entry of private sector investment into the Nepal market through four objectives:

• Objective 1: Utility Performance and Relevant Sector Policies are Improved
• Objective 2: Advanced Energy Systems Deployment
• Objective 3: Increased Private Sector Engagement
• Objective 4: Cross Border Electricity Trade between Nepal and its Neighbors Advanced

Under objective 2 of the project, Urja Nepal has been supporting the government and the private sectors of Nepal to identify and implement various market transformation strategies such as Standards & Labeling and ESCO based business models for upscaling low-carbon energy transition in the country. The 'Roadmap for Energy Service Company Based Financing Models' prepared by Urja Nepal highlights the roadmap for advancing ESCO based business models in Nepal. To further support this, Urja Nepal intends to launch pilots across demand sectors namely Industry, Building & Municipalities to demonstrate implementation of energy efficient technologies using ESCO based business models. 

Objectives

• To implement energy efficiency interventions in targeted sectors of the economy namely, industries, buildings and commercial water pumping facilities through an Energy Service Company (ESCO) based business model.
• To develop a robust energy service performance contract between the beneficiary and the borrower (i.e. ESCO) under which payments to the borrower are based on meeting specified performance guarantees related to the implementation of energy efficiency project.

Scope of the Program

The program will focus on implementing energy efficiency measures in industries, buildings, and municipal pumps. This will include conducting energy audits, identifying potential areas for improvement, and implementing customized solutions provided by ESCOs.

There are two major sections in this program, one on ESCOs and another on beneficiaries.

In ESCOs front, their role encompasses in identifying energy-saving opportunities, conducting detailed energy audits, proposing customized solutions, and overseeing the implementation of energy-efficient measures. Additionally, ESCOs will collaborate with beneficiaries to ensure the successful execution of Energy Service Performance Contracts (ESPCs). These contracts will serve as a cornerstone in guaranteeing energy savings and performance improvements, aligning the interests of ESCOs with the beneficiaries.

On the beneficiary’s side, the program’s scope is comprehensive, covering three critical sectors—industries, buildings, and community water pumping facilities. Each sector poses unique challenges and opportunities, necessitating tailored approaches for maximum impact. The Urja Nepal project intends to support one pilot each in the three demand sectors:

1. Industries: Energy-intensive industries often have significant potential for energy savings. The program will identify areas for improvement and implement customized solutions mainly focusing on technology upgrades. Industries including but not limited to cement, steel, dairy, textile, food processing etc. are encouraged.
2. Buildings: The building sector, encompassing residential, commercial, and institutional structures, is a major consumer of energy. The program will focus on implementing energy-efficient technologies and practices, including efficient lighting and heating, ventilation, and air conditioning (HVAC) systems.
3. Community Water Pumping Facilities: Community owned water pumping facilities play a crucial role in providing essential services. The program will target energy-efficient appliances such as pumps for facilities, ensuring optimized water supply systems that reduce energy consumption and operational costs.

Parties Invited to Express Interest

Private Companies: Private companies with expertise in energy efficiency measures or energy-related solutions are invited to express their interest in implementing energy efficiency projects. Such companies selected for participation in energy efficiency projects will have the opportunity to receive technical and financial assistance if required, from Urja Nepal to support project implementation.

Beneficiaries: Different entities requiring/needing energy efficiency measures are eligible to show their interest in this call. Entities such as buildings (commercial/office or hotels), industries, and municipal water pump associations are encouraged.

Expression of Interest Requirements

Interested parties are requested to submit the following information as part of their expression of interest:

For ESCOs

• Company overview and type of services offered.
• Case of ESCO based implementation (if any)
• Details of focal person for the company (email id and contact number).
• Management/technical competency.
• Company registration and VAT registration document.
• Latest tax clearance certificate.
• List of beneficiaries identified. (Optional)
• A 2-pager document showing the interest in this EOI which could answer:
  • What are the beneficiaries that the ESCO wants to serve?
  • What model are ESCOs planning to implement?
  • What support is required to implement the ESCO model?
  • What benefits does the company seek by implementing the ESCO model?

For Beneficiaries

• In the case of industries, company overview and type of services offered. In the case of buildings/hotels, type and usage of the building/hotel. In the case of municipal water pump associations, association structure and working modality.
• Details of focal person for the entity (email id and contact number).
• Management/technical competency of the entity.
• In the case of industry, company registration and VAT registration document. In the case of building/hotel and municipal water pump associations, legal registration document.
• Latest tax clearance certificate of the entity.
• List of ESCOs identified. (Optional)
• A brief energy consumption scenario based on historic data:
  • Total Connected Load (Electricity)
  • Monthly Electrical Energy Consumption
  • Monthly Thermal Energy Consumption (Furnace Oil, Coal, Diesel etc.)
  • List of energy intensive equipment/appliances
  • Total monthly energy bills (in NPR)
• A 2-pager document showing the interest in this EOI which could answer:
  • Which ESCO model is preferred?
  • What is the need in terms of energy efficiency?
  • What type of support does the entity seek from the ESCO?

Questions and Clarifications

Method: Only written questions and requests for clarification will receive a response. Send questions about this EOI by email address mentioned below.

Date for receipt: All questions and requests for clarification must be received by close of business (COB) March 22, 2024, to the email address mentioned below. Only questions received by this date will receive a response.

Responses: By March 25, 2024, we anticipate providing responses to the requests for questions and clarifications.

Submission Process

Expressions of interest should be submitted to USAID Urja Nepal electronically through email by COB 29, March 2024 at klamsal@urja-nepal.com

Confidentiality

All information provided in response to this EOI will be treated as confidential by Urja Nepal.

Note: This EOI does not constitute a commitment on the part of USAID Urja Nepal to fund any proposed project.