Contract

Project

Energy Performance Contracting for Residential Retrofitting in Ulaanbaatar City

Expertise

Category

Advisory Support Level E

Location

Duty Station

Ulaanbaatar, Mongolia

Contract Length

Start Date

24 September 2018

End Date

31 December 2018

Part-time/Full-time

Full-time

Contract Value

Maximum Daily Rate

Deliverable based 

Days Estimated

70 days

Total Fees

Up to USD 15 000 (dependent on experience)

Introduction:

Based in Seoul, the Global Green Growth Institute (GGGI) is an intergovernmental organization founded to support and promote a model of economic growth known as "green growth", which targets key aspects of economic performance such as poverty reduction, job creation, social inclusion, and environmental sustainability. GGGI works with countries around the world, building their capacity and working collaboratively on green growth policies that can impact the lives of millions. The organization partners with multilateral institutions, government bodies, and the private sector to help build economies that grow strongly and are more efficient and sustainable in the use of natural resources, less carbon intensive, and more resilient to climate change to deliver comprehensive products designed to assist in developing, financing, and mainstreaming green growth in national economic development plans.

Background:

In September 2016, Mongolia ratified its Intended Nationally Determined Contributions (INDCs) to the Paris Agreement on Climate Change in accordance with key national mandates and sectoral policies such as the Green Development Policy (2014) and its Action Plan (2016). Mongolia’s overall commitment is to reduce 14% of greenhouse gas emissions (GHG) by 2030 compared to Business-As-Usual (BAU). One of the main drivers to achieve this goal is to improve energy efficiency (EE) in production, distribution, transmission, and usage.

The Government of Mongolia set out ambitious targets and goals to improve EE, conservation of energy and reduce energy losses. For instance, in Mongolia’s Green Development Policy and INDC document, it set out goal to reduce building heat loss by 20% by 2020 and 40% by 2030. Furthermore, Law on Energy Conservation (2015) has been adopted in order to implement these goals, and identified 99 high energy consumers, also known as designated entities, which are obliged to carry out EE measures every three years. Although, there has been a number of legal and regulatory improvements to avail from EE potential in Mongolia, there is a gap in terms of residential building EE potential (not included in the designated entities), in aggregate terms it consumes 40 per cent energy that is more than industry and transport sectors combined. It shows that residential building sector has greater potential to reduce energy demand, ultimately to reduce the CO2 emission.

Ulaanbaatar (UB) City has the highest number of building stock in Mongolia. According to Mayor’s Office, there are 1077 pre-fabricated buildings in UB city which has high building heat loss. Mayor’s office has developed sub-program to carry out thermal-technical retrofits for these buildings, starting with 88 buildings that has passed the earthquake resilience test.

GGGI is supporting the Mayor’s office to achieve its residential EE targets, as well as to contribute towards the national goals by carrying out investment-grade energy audits for model residential buildings to assess EE potential and its investment needs. As a second phase, in cooperation with the Mayor’s Office and ICLEI East Asia Secretariat, GGGI has developed an initial design for a business model that uses a Standard Offer Approach, that will introduce market-based energy performance contracting and innovative financing mechanisms for thermo-technical retrofitting (TTR) for residential buildings.

UB City is actively seeking to attract concessional financing to implement TTR projects in UB City. There are several studies and technical designs produced by various development and government organisations. There is a need to consolidate and update those documents into a single business-case to facilitate UB City’s effort to communicate with potential funding partners and financiers.

Objective:

The objective of this assignment is to critically analyse and update a proposed financial and commercial model for the delivery of TTR projects in UB City. A secondary objective is also to engage with relevant stakeholders to test market readiness and to support business case development.

Project Scope of Work:

The project will utilize the UK’s Five Cases Business Case model, which includes Strategic, Economic, Commercial, Financial and Management cases. The consultant under this assignment will be responsible for producing the Economic, Financial and Commercial Cases.

Consultant’s Detailed Tasks:

The Consultant will carry out below tasks, including, but not limited to:

1. 1.       Desk review existing studies, materials, and documentations

-          Complete background research of existing materials and documentations related to the assignment and local market (approximately 5 working days)

1. 2.       Assess financial and commercial viability of the TTR project

-          Assess and update existing financial and business models, incorporating various scenarios and sensitivity analysis

1. 3.       Conduct discussions with project stakeholders regarding commercial and financial viability

-          Conduct meetings with relevant project stakeholders, including financial institutions, government officials and international finance / development institutions

1. 4.       Draft Economic, Financial and Commercial Cases for the TTR Project

-          The Economic case include comparison of the various options to implement the project, such as household financed, government financed, ESCO financed etc.

-          The Financial Case will set out the affordability of the project and its impact on the national and sub-national budget, considering factors and financial issues such as price, tariff, contingent liabilities, existing and future fiscal commitments

-          The Commercial case will include potential transaction structure, required services, risk transfer and mitigation, payment mechanisms, terms of Public Private Partnership, procurement methods, accounting treatment, energy efficiency benefit sharing mechanism etc.

1. 5.       Conduct and lead market-sounding workshop among project stakeholders

-          Organise market sounding event for project stakeholders, to receive comments and validate (organisation cost will be covered by GGGI separately)

1. 6.       Incorporate comments from market sounding workshop to the business case and finalise 

-          Incorporate comments and finalise the draft report in line with GGGI’s reporting requirement

Methodology

The project will utilize UK’s Five Case Business Case Model. Full details of the, which its methodology and content requirements will be provided to the consultant.

Working Arrangement:

The consultant shall work closely with the Mayor’s Office of UB City as well as in close coordination with the project’s Stakeholder Engagement and Market Sounding Expert Consultant and will report directly to the GGGI’s Cities Program Officer. Claims and administrative queries will be dealt by GGGI’s Administrative Associate.

Deliverables:

Consultant shall produce following deliverables.

All reports and materials must be presented in professional English, including proper references and citations. All deliverables will be cleared by the GGGI and necessary comments and changes shall be incorporated in a timely manner. The payment shall be paid upon GGGI clearance for deliverables.

Qualifications/Experience/Expertise

The consultant will preferably have earned a postgraduate degree in economics, finance, international development, or closely related field, and at least 5 years of experience in bankable project development in energy and infrastructure sectors, stakeholder engagement, and reporting. Fluency in Mongolian and strong command of English are required. Previous experience working in building retrofitting project will be an asset.

The Consultant interested in this assignment should demonstrate:

-          Experience in developing financial models and business models for bankable projects, preferably energy efficiency and ESCO projects

-          Knowledge on energy systems, energy efficiency, green buildings

-          Experience and knowledge on ESCO business model will be an asset

-          Ability to produce high-quality, concise, clear and structured reports;

-          Experience working for/ with international institutions and familiarity with their policies and procedures; and

-          Solution-oriented, effective team player, communications (oral, written) such as communicating technical concepts to non-technical audience, and analytical competencies.

The Consultant interested in this assignment should submit:

-          Curriculum vitae and covering letter, writing and financial models samples.