Somalia: Commercial Feasibility Study, Business Plan Development and Establishment of public-private-partnership (PPP)

Organization: Adeso
Country: Somalia
Closing date: 25 Sep 2013

ORGANIZATIONAL BACKGROUND

Adeso is a humanitarian and development organization that is changing the way people think about and deliver aid in Africa. We are an NGO in Africa working in a very different way than most. We believe that development must come from within, not outside African communities. That it is Africans themselves who must determine Africa’s future, and that while international aid has provided much-needed support, it often falls short of enabling lasting change at grassroots level. We want to change this, and our strong bonds with African communities mean we are uniquely placed to do so.

PROJECT SUMMARY

Natural Resource Management (NRM) is a four year EU funded intervention that seeks to reduce hunger and food insecurity by improving rangeland conditions in Puntland regions of Somalia. The project will improve the state of natural resource management through the implementation of land rehabilitation and restoration work on degraded rangelands, improving sustainable use of natural resources through community based range management programs, integration of environmental considerations into all economic planning and programming activities in the region and galvanizing community support for environmental protection and sustainable use of resources. The intervention will also improve the capacity of the communities to avert resource-based conflicts and to protect their rangeland resources through implementation of local customary laws, establishment of community based environmental courts and building the capacity of communities to prevent misuse of natural resources at local level. Furthermore, the NRM will support development of alternative source of energy that can create jobs and reduce the current dependency on firewood and charcoal. An awareness raising campaign branded as “Stewardship Puntland” will also be launched to sensitize both rural and urban communities on environmental issues and to instill a general public sense of environmental ownership and stewardship.

BACKGROUND TO THE CONSULTANCY ASSIGNMENT

The environmental conditions in Puntland are catastrophic and deteriorating at a rapid pace. Deforestation by charcoal production has caused massive and nearly irreversible degradation of grazing lands of the country where majority of the population depends on sheep, goats and camels for their livelihood. Charcoal production also causes resource-based conflicts over diminishing forests; thus many charcoal producers have lost their lives triggering clan clashes. The sequence of violence charcoal production, coupled with prolonged droughts is not only permanent threat to the environment but it also endangers the sustainability of the livelihoods of the rural communities and hence leads to abject poverty. To address the problem of deforestation due to charcoal production, the Somali Federal government has recently banned charcoal export and has encouraged solar cooking projects funded by UN agencies and international and local NGOs. There have been also other initiatives to improve the charcoal stoves and raise the energy efficiency of charcoal production methods with the view to reducing the rate of the damage to the rangelands.

The current Administration in Puntland is committed to protect the environment in general and combat deforestation in particular. Therefore, for the first time in the history of Puntland, in 2009 the government established the Ministry of Environment, Tourism and Wildlife (MoEWT). The MoEWT is responsible for all activities relating to the environment and regulates all the private organizations and NGOs working in this sector. MoEWT, with the assistance of Consultants from CARE, has developed a detailed National Resource Management Policy, and in 2010 with the assistance of UNDP, the MoEWT commissioned a study (project plan) for establishing alternative energies in Puntland. The MoEWT of Puntland carried out a 4 alternative energy systems feasibility study in 2010 funded by Adeso which also considered and recommended options for strengthening the supply chain. The MoEWT as well as the major private sector players in Puntland (e.g. Puntland Petroleum Corporation (PPC), Nugal Electric Company, Golis Telecom) have expressed their interest to invest in creating a more robust supply chain LPG bottling unit/s in Puntland.

One very important project was the feasibility study funded by the UNDP in 2006 for the introduction of LPG in Somalia. It has shed light on the viability and urgency to establish LPG bottling facilities in Somalia, at the ports of Mogadishu, Bosaso and Berbera. It is necessary, therefore, to conduct afresh a detailed Commercial Feasibility Study, Business plan Development and Establishment of PPP to scale-up LPG Gas as an Alternative Energy System in Puntland, based on the recommendations of the UNDP Study.

Under the current NRM program, Adeso is implementing a program for reduction and displacement of Charcoal in Somalia and LPG bottling unit/s are being developed as an option for displacing charcoal in Puntland. However, the current supply infrastructure for LPG bottling unit/s in Puntland into Somalia, particularly Puntland is not robust and there have been instances of supply disruptions and price fluctuations which have seriously constrained efforts to develop the LPG bottling unit/s market in Puntland. Considering the continued problems with the supply chain and LPG bottling unit/s in Puntland availability, the government of Puntland considers a Commercial Feasibility Study, Business plan Development and Establishment of PPP to scale-up LPG Gas as an Alternative Energy System in Puntland. The supply infrastructure is a top priority of the public-private-partnership (PPP) to attract private sector investment. This includes knowledge, attitude and practices. In addition to that, the study will consider the necessary training of human resources and business plan development in order to scale-up LPG Gas as an Alternative Energy System. The study will also look into different important areas including: identification of current local consumption and price ranges, market assessment of proposed LPG, and identification of viable financing mechanisms for the project implementation. This evaluation and design study is being supported by Adeso to respond to the government’s priority to scale-up LPG Gas as an Alternative Energy System to reduce charcoal consumption and to catalyze private sector investment in LPG bottling unit/s in Puntland’s infrastructure.The large scale adoption of alternatives to charcoal to reduce its prevalence and dependency is in a stalemate in which the private sector is not investing because there is no valid proof of demand and consumers are not investing in new equipment because there is an unreliable supply. Privatization is defined broadly to include, divestiture, outsourcing, service contracts and Public Private Partnerships (PPP). The MoEWT and government of Puntland are committed to increasing the role of the private sector in the economy. An enhanced degree of involvement by the private sector in the provision of public infrastructure, through a PPP initiative, is seen as a way of augmenting public resources and capacities. Puntland has very few viable private investment opportunities. The introduction of PPPs would provide investment opportunities for this excess liquidity, and help to deepen capital markets in the region. The establishment of a PPP is a priority for EU, Adeso and MoEWT / and the scaling up of LPG bottling unit/s in Puntland via a PPP is therefore designed to provide the initial investment required to catalyze both private sector and consumer investments.

Over the past two decades more than 1,400 PPP deals were signed in the European Union, representing a capital value of approximately €260 billion . Investments in public sector infrastructure are seen as an important means of maintaining economic activity. As a result, PPPs have a significant role in the development of public sector infrastructure. The PPP will be funded and operated through a partnership between government and private sector companies. The PPP will involve a contract between a public sector authority and a private party, in which the private party will provide a public service and assume substantial financial, technical and operational risk in the project. PPPs provide a unique opportunity for collaboration in public management. A key motivation for the government of Puntland is bringing in new sources of financing for funding public infrastructure and service needs.

METHODOLOGY

The assignment will start with market survey using customer panels and one-on-one interviews. It will also involve visits to and contacts with the neighboring countries as well as material and equipment supplying companies to collect relevant information, see facilities in operation and obtain quotations.

SCOPE OF WORK

Adeso is seeking the services of a consultant or firm to carry out a detailed Commercial Feasibility Study, Business Plan Development and Establishment of public-private-partnership (PPP) to scale-up LPG Gas as an Alternative Energy System in Puntland that has the potential to reduce urban demand for charcoal. The evaluation will measure Liquefied Petroleum Gas (LPG) bottling unit/s in Puntland and recommend the most viable options. The consultant or firm will advise and prepare a project plan to establish a cost effective and locally adaptable alternative energy system LPG bottling unit/s) in Puntland and give recommendations on the best ways of promoting use of LPG and its sale at affordable prices within the local market.

The consultant or firm is responsible for the preparation of a project plan as follows:• Carry out market survey of LPG bottling unit/s in Puntland looking into the community consumption capacity - demand and supply. Knowledge, aptitude and practice assessment for kerosene will also be included;• Identify possible project implementation options including public private partnership;• Identify potential equipment and material suppliers and obtain price quotations;• Prepare resource (equipment and materials) plan;• Prepare work and organisational breakdown structure;• Estimate project cost and time to execute it;• Suggest possible project site/s.

For the establishment of a public-private-partnership (PPP) for LPG bottling unit/s in Puntland, the consultant or firm is required to:

• Design the operating model of the PPP– its organization and management structure, staffing requirements, skill requirements, job descriptions, training requirements, key processes, information requirements, and systems requirements;• Advise on the most efficient relationship between the PPP and the PPP agencies at Line Ministries and Local Authorities; • Prepare the documents necessary to guide the implementation of the PPP, including draft policies, procedures and operating manuals;• Develop an indicative budget for the PPP, and recommendations on how this budget is to be funded;• Develop pro forma initial Standard PPP Bidding Documents;• Support the PPP in hosting a ‘Government Stakeholders Awareness Seminar’, whereby the PPP is introduced to the relevant Line Ministries and Local Authorities; and other concerned agencies of the Puntland Government;• Support the PPP in hosting a ‘Public Awareness Seminar’, to increase public awareness of the benefits of PPP initiatives.

CONSULTANCY PERIOD

The consultancy will be for a maximum duration of 90 days. Days required for preparation, reporting, and editing should be included in the quote. All travel, accommodation and meal expenses will be covered by Adeso. Note that travel days to and from Somalia will not be remunerated, travel might be required over the weekend and dates might change based on flight schedules.

DELIVERABLES

  1. Analyze the existing demand for LPG bottling unit/s in Puntland and consider the plans for supply infrastructure by private sector energy companies in south-central Somalia and Somaliland.
  2. Assess the availability of LPG bottling unit/s in Puntland in the regional and international markets to meet the demand in Puntland and rest of Somalia.
  3. Review the shipping routes for LPG bottling unit/s in Puntland tankers, and evaluate possibilities of berthing at Bosasso. Based on these analysis determine the shipment volumes to meet the LPG bottling unit/s in Puntland and the rest of Somalia. Based on these factors assess the feasibility of shipping the required LPG bottling unit/s and or volumes by tanker ships to Bosasso;
  4. Once the feasibility of LPG bottling unit/s shipping by tankers is established, a detailed techno-economic design study for the LPG bottling unit/s jetty and pumping infrastructure at Bosasso should be carried out.
  5. The proposed infrastructure should also include storage facilities to cover the current and projected demand. All international norms in terms of safety and environmental management should be kept in mind during the design.
  6. The study should develop detailed specifications and tender documents as well as design drawings and cost estimates;
  7. Carry out development of a public-private-partnership arrangement for the private sector to collaborate in establishing the supply infrastructure at Bosasso, clearly specifying the obligations and benefits of each party. Successful public-private-partnership (PPP) models from the region and beyond could be used for this purpose.
  8. A report containing the design specifications, drawings and cost estimates for LPG bottling unit/s jetty, pumping infrastructure and storage facilities at Bosasso.
  9. Determine guidelines for structuring and operating the PPP, including cross-sectoral liaising.
  10. Prepare of activity plan and operation model report on draft procedures, operating manuals and budget to implement the PPP.
  11. After the establishment of the PPP, the Consultant/firm shall also provide initial training sessions, in respect of the above-noted materials, for the staff of the PPP.
  12. After the establishment of the PPP, the Consultants/firm shall also provide information packets for, and participate in, at least one ‘Government Stakeholders Awareness Seminar’ and ‘Public.

QUALIFICATIONS:

It is expected that the consultant will have good understanding of Alternative Energy Systems, especially LPG bottling unit/s in Puntland, the markets, shipping lines and have prior PPP experience in designing LPG bottling unit/s jetty, pumping infrastructure and storage facilities. Experiences LPG bottling unit/s infrastructure design and/or operation as well as regional experience in east Africa is desirable.

In addition, The consultant or firm will be a multidisciplinary consulting firm with the expertise in marketing, project planning and plant engineering, therefore, will:• Have a team of experts in the management functions particularly marketing and project planning as well as plant engineering;• Have a proven experience in the energy sector (promotion of alternative cost-effective sources of energy, etc.); • Have at least five years experience in project planning and plant operation and engineering;• Have relevant previous work experience with the Puntland institutions, government and business community;• Have experts willing to travel to collect relevant data for the project;• Have an understanding of operating in an environment that is not very secure with a history of conflict;• Have completed a recent consultancy or project concerning the development of a PPP, ideally in Somalia, including recent experience in the development of standard bidding documents for PPP transactions;• Local knowledge of the principles applicable to Somali context.

COPYRIGHT AND INTELLECTUAL PROPERTY RIGHTS

In consideration of the fees paid, the Consultant/firm expressly assigns to Adeso any copyright arising from the works the consultant produces while executing this contract. All images (whether used for online or print purposes) must however bear the consultant’s photo credit, as specified by international intellectual property rights. The consultant may not use, reproduce or otherwise disseminate or authorize others to use, reproduce or disseminate such works without prior consent from Adeso.


How to apply:

Applications should be submitted by 25th September 2013. The selection committee will review all applications as they arrive. All applicants must meet the minimum requirements described above, and those unable to meet these requirements will not be considered. Adeso is an equal opportunity employer.

Each application package should include the following:• An application letter (maximum 2 pages) addressing the selection criteria including how the consultant’s previous experience matches the consultancy objectives, the interest in the position, availability and consultancy rates. • A sample of recent work.• Updated CV (maximum 3 pages) including relevant work experience and qualifications.• Contact details of 2 referees.

Applications not including all of the above information will not be reviewed.

All applications should be sent to Adeso at consultancy@adesoafrica.org with the subject line:Commercial Feasibility Study, Business plan Development and Establishment of PPP to scale-up LPG Gas as an Alternative Energy System in Puntland.

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