Distributed Solar PV Generation Investment Tender in USA - 42718453

Procurement Summary

Country: USA

Summary: Distributed Solar PV Generation Investment Framework

Deadline: 13 May 2020

Posting Date: 08 May 2020

Other Information

Notice Type: Tender

TOT Ref.No.: 42718453

Document Ref. No.: 1268187

Financier: Other Funding Agencies

Purchaser Ownership: -

Tender Value: Refer Document

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Tender Details

Expression of Interest are invited for Distributed Solar PV Generation Investment Framework.

REQUEST FOR EXPRESSION OF INTEREST FOR SELECTION # 1268187

This Request for Expression of Interest is for a Firm Selection. Please log in as a valid Firm User if you wish to express interest in this selection.

Selection Information

Assignment Title

Distributed Solar PV Generation Investment Framework

Publication Date

06-May-2020

Expression of Interest Deadline

13-May-2020 at 11:59:59 PM (Eastern Time - Washington D.C.)

Language of Notice

English

Selection Notice

Assignment Country

· No Countries Assigned

Funding Sources

The World Bank Group intends to finance the assignment/services under:

· BB - BANK BUDGET

· TF0B1216 - Global Upstream-FMTAAS-INFRA

Individual/Firm

The consultant will be a firm.

Assignment Description

In recent years, IFC has seen growing interest in distributed generation (DG) using solar photovoltaic (PV) and battery storage technologies, owing to the fact that DG PV/PV + Battery Storage solutions offer a number of economic advantages over traditional power procurement, particularly for commercial and industrial (C&I) users. However, the lack of adequate frameworks for the risk assessment and evaluation of C&I focused DG business models and portfolios of DG assets, the creditworthiness of C&I off-takers, and the sustainability DG investments at large are hindering the scale up of DG, particularly in in emerging markets. IFC is seeking a Consultant to help develop a comprehensive investment framework in this space.Please refer to the attached TOR for details.

Qualification Criteria

· 1. Provide information showing that they are qualified in the field of the assignment. *

· 2. Provide information on the technical and managerial capabilities of the firm. *

· 3. Provide information on the qualifications of key staff. *


TERMS OF REFERENCE

Distributed Solar PV Generation Investment Framework

I. BACKGROUND

The mission of the IFC, the private sector arm of the World Bank Group, is to promote sustainable private sector investment in developing countries, helping to reduce poverty and to improve people`s lives, while ensuring environmental sustainability. In recent years, we have seen growing interest in distributed generation (DG) using solar photovoltaic (“PV”) and battery storage technologies, owing to the fact that DG PV/PV + Battery Storage solutions offer a number of economic advantages over traditional power procurement, particularly for commercial and industrial (C&I) users, and namely that they i) can be cheaper than the grid and significantly cheaper than diesel generators ii) can effectively hedge increasing electricity costs and reliability needs of energy supply iii) come with significant environmental benefits that allow companies to meet their corporate social responsibility (“CSR”) targets. Financing is thus becoming available to C&I users and project developers for on-balance sheet and off-balance sheet solutions that supply solar electricity to businesses.

However, the lack of adequate frameworks for the risk assessment and evaluation of C&I focused DG business models and portfolios of DG assets, the creditworthiness of C&I off-takers, and the sustainability DG investments at large, is hindering the scale up of DG, particularly in in emerging markets. Hence, there is a strong need for a standardized framework approach, which would help structure and streamline investments and alleviate barriers to C&I-focused DG market growth.

Such framework can partially leverage on parallels that may be drawn between C&I projects and mainstream utility scale renewable energy investments, for which a risk assessment framework has long been established and bankability parameters are well known. At the same time, investing in DG portfolios requires a separate and different analysis of:

• Business models

• Tariff Sustainability

• Deal size and aggregation strategies

• All-in project costs

• Offtake risk

• Performance risk

In this context, IFC has been working on the development of a specific, comprehensive investment framework for portfolios small to medium size PV/PV + Battery storage systems, to be employed at origination, structuring, and monitoring phases of C&I specific DG investment projects. By doing so, IFC intends to fill an important business need in the fast-growing C&I DG space when investment teams are ascertaining a new project lead, structuring a transaction, and supervising investments. Considering all of the above, IFC-s Global Energy Team is looking for qualified consultants (the “Consultants”) to work with the IFC Team in the following assignment:

II. OBJECTIVES OF THE ASSIGNMENT
This assignment aims to:
(i) Carry out a high-level assessment of the performance of C&I related DG investments globally,
identify critical success and failure factors, derive key lessons learned and general guidance(s).
(ii) Classify prevailing business models and lay out a framework for the evaluation of their
sustainability, economic competitiveness, and resilience to tariff and regulatory risks;
(iii) Lay out the basis for a financial/credit risk analysis and a risk assessment framework;
(iv) Identify related risk mitigation strategies, including protective contractual provisions.
(v) Draft proposed deal structuring guidelines; and
(vi) Developing creditworthiness evaluation guidelines / rating system of the off-takers and/or DG
client portfolio and produce guidelines that will form the basis for credit scoring systems that
can be tailored for different regulatory contexts.
III. SCOPE OF WORK
• Task 1 - Carry out a high-level review of no less than eight DG transactions globally, agreed upon
with the IFC team, deemed to be statistically representative of which at least six carried out in
emerging markets with a minimum total project cost of US$50 million financed by both debt and
equity. The Consultants should briefly address, for each transaction: C&I market environment and
competitive landscape, business model, client portfolio, transaction volume and main terms and
conditions, considerations on local financial market liquidity and profile of investors, to derive i)
structuring terms; ii) investment performance, iii) critical success and failure factors iv) key lessons
learned. Each case study may be based on desktop reviews and/or interviews.
• Task 2 - Under the guidance of IFC-s team, develop a framework to evaluate economic
competitiveness / sustainability / scalability of the various C&I related DG business models in
relations to contracted tariffs, payback times, direct and indirect competitive environment (DG,
utilities, services and producers), regulatory environment. This will necessitate a broad
classification and comparative assessment of different electricity markets and regulatory
frameworks applied around the world. However, the ultimate aim should be to develop a framework
flexible enough to be applicable to different regulatory environments.
• Task 3- Develop underwriting criteria to provide guidance to IFC Infrastructure Teams when
structuring prospective deals. This task will consider in detail, among other things, technical,
management, company / project size, PPA characteristics, value of assets and ability to establish
collaterals over, collateral requirements, financial aspects (eg. debt service coverage ratios, debt to
equity ratios, capex funding models etc.). This task will require consultations with DG companies
in respect to their investment/screening criteria when they undertake new projects and will be
coordinated with internal stakeholders, including IFC-s Credit and other investment departments.
This task should ultimately aim to produce a toolkit, in the form of a structured document, providing
organized guidelines for the investments in DG companies and DG portfolios comprising but not
limited to: i) a framework for the assessment of tariff risks, business risks (including contractual,
technical and operational risks), off-taker risks ii) structuring guidelines for the allocation of such
risks.
• Task 4 - Develop credit evaluation guidelines of private DG off-takers (considering industry
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specifics) and DG portfolios. Such guidelines should be sufficiently detailed to provide IFC with
the foundation to develop a tool for the analysis and risk assessment of different typology of
business (commercial or industry verticals), and a shadow rating system of single off-takers. In
addition to providing evaluation guidelines for assessing individual DG off-takers, this task should
provide a framework with respect to evaluate credit risk of off-taker portfolio especially with
respect to risk mitigation through portfolio design. This task will require consultations with DG
companies, rating agencies, and financial investors in respect to their investment/screening criteria
when they undertake new projects.
IV. IMPLEMENTATION ARRANGEMENTS & DELIVERABLES
Throughout the course of the assignment, the Consultants will have reporting lines to IFC`s project manager
(Tunc Alyanak). IFC will be updated on progress through regular reports.
Should the Consultants require the purchase of standards, handbooks or other technical material for the
purpose of these assignment the cost can be charged to IFC provided that it is agreed in advance, that the
property of such material remains of IFC and that the material is returned to IFC at the end of the
assignment.
Travel Arrangements: The assignment can be conducted remotely. The consultant may be required to travel
one to two times to IFCs headquarters in Washington DC, USA during the assignment, to present interim
and/or final results of the project. Travel will be reimbursed on a cost basis, according to WBG poli

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