Minimum Subsidy Tender

1. We would like to clarify Section 4 of the RFP regarding technical capacity. The definition of mini grid does not include the word “solar”. Do you literally mean any system generating between 10kW-10GW and connected to two or more customers, regardless of technology qualifies?

In Section III – Initial Selection Criteria and Requirements, the Applicant must use solar and solar hybrid mini grids, with generation capacity between 0kW and 1MW, and a network that distributes power to two or more customers, to show its experience in:

  • Developing mini grids (criterion 4.1 and rated criterion 1)
  • Operating mini grids (criterion 4.2 and rated criterion 2)

2. Are state-owned enterprises eligible?

  • State-owned enterprises are eligible as per clause 4.2 of the Instructions to Applicants (ITA).
  • Further, as per clause 4.9 of the ITA, Applicants that are state-owned enterprises or institutions in the Employer’s Country may be eligible to be initially selected, compete and be awarded a Contract(s) only if they can establish, in a manner acceptable to the Bank, that they (i) are legally and financially autonomous (ii) operate under commercial law, and (iii) are not under supervision of the Employer.

3. On page 33 of the attached, requirement, 3.3 states that applicants must have twice raised $5 million in debt for infrastructure projects. The requirement seems rather narrowly tailored, so we wanted to ask how strict it will be on the specifics. Do the raises have to be debt, or can they be equity? Does it really have to be $5M twice, or could it be, say, $4M thrice?

  • The Applications will be evaluated based on criterion 3.3.
  • The Applicant must have raised debt successfully for at least two (2) projects in infrastructure since January 2014, for an amount of at least USD5 million or its Nigeria Naira equivalent for each project.

4. On page 34, requirement 4.2 requires the operation of 2 minigrids since January 2014. Is this a continuous operation requirement- in other words, it is required that the applicant has been operating minigrids nonstop for the last 5 years straight- or is the requirement that the developer has spent some amount of time operating mini grids, and that operation wasn't all before 2014?

  • The requirement is for the Applicant to have operated at least two (2) mini grids in the past five (5) years (since January 2014).
  • There is no requirement of continuous operations of mini grids in the past 5 years. The Applicant may have operated the 2 mini grids during any period between January 2014 and the issuance of the initial selection document.
  • Further, for criterion 4.2, there is no restriction as to the commissioning date of the mini grids operated by the Applicant.

5. Page 59, Section A Overview of the Opportunity: “The REA, with support from the World Bank, will provide a subsidy to cover part of the capital expenditure to Successful Proposers. Proposers will compete on a minimum subsidy basis. This means that Proposers will propose the lowest amount of subsidy required to develop a portfolio of mini grids for a minimum number of connections." According to INVITATION LETTER, the subsidiary suggested by proposers will be highly considered who will be final competitive successor. Here to clarify based on what ground the subsidiary is calculated and compared, on the capacity of power plant or connector numbers? If different proposers bids for different lots, there is no comparability at all

  • We understand “subsidiary” to mean “subsidy” in this context, for this clarification and for clarifications number 7.
  • The financial proposal, i.e., the subsidy request, is expected to be on a per connection basis. In other words, in their financial proposal for a given lot, Proposers would indicate the $/connection that they require to build and operate all of the mini grids in that lot. Proposals for each lot will be compared to other proposals for that particular lot, not across lots. Finally, the financial proposal is only one part of the evaluation. The evaluation will also take into account the technical proposal.. The specifics regarding the evaluation criteria will be disclosed with the Request for Proposals

6. Page 63, Section A Overview of the Opportunity It is mentioned that “Applicants are encouraged to partner with local companies.” Page 23, ITA 4.2, “Any unincorporated single entity or Joint Venture will be required to be incorporated in the Federal Republic of Nigeria before signing the Grant Agreement with the REA” Does proposer have to register branch company in Nigeria for the implementation of proposed project according to regulations, is that a mandatory rules for bidding purpose?

  • Any single entity or Joint Venture may submit proposals, so incorporation in Nigeria is not required in order to bid. However, if selected, it would need to have been incorporated in Nigeria before REA will enter into a Grant Agreement with it. It is mandatory for the company entering into a contract with the REA to register with the Corporate Affairs Commission (CAC) in Nigeria for the purpose of tax remittances under the project to the Federal Government of Nigeria. It is a statutory requirement of the Federal Republic of Nigeria

7. Page 71, Section A.3 Arrival of Main Grid Assets financed by grants are not eligible for compensation (these assets become ownership of the community) Question: What does “GRANTS” refer to here, is it equivalent to the subsidiary granted in compliance with grant agreement?

  • Details on the regulatory treatment of subsidies for asset compensation in case of grid arrival will be provided at RFP stage

8. Commercial operation of mini-grid: whose responsibility to collect electrical bill charge, by proposers or NERC? And what currency will be paid to proposers, USD or Nigerian Naira? how many years?

  • It is the responsibility of the developer to collect payments from the customers for electricity provided.
  • As these communities are in Nigeria, it is expected that subscribers will pay in Nigerian Naira.
  • There is no time limit for the operations of the mini grids.

9. If the distribution grid will be included in the construction? If it is, will the customers pay for the fee for the connection to the main grid?

  • It is up to the developer to design its financial model and incorporate any charges it expects its customers to make prior to determining its cost per connection

10. Component: Minimum Subsidy Tender Reference: Invitation for initial selection - ITA 1.1, Page 23 + P. 60 The Invitation for Initial selection refers to lots, awarded to applicants. Can you confirm there will be 4 different lots, 1 for each region, as detailed p.60?

  • Yes this is confirmed. There will be four (4) different lots, one per state (not region)

11. Component: Minimum Subsidy Tender Reference: Invitation for initial selection - 25.3 – 25.4, P.16-18 + ITA 25.3 P. 27 According to the Invitation for Initial selection applicants may submit proposals for multiple lots, requiring that they fulfill the aggregated financing requirements: • Could you please detail the requirements to bid for multiple lots, compared with 1 lot? Should applicants indicate which lots they are sub-mitting for at the pre-qualification stage or only at the RFP stage?

  • Details of how application for multiple lots should be submitted will be provided at RFP stage. Applicants are not required to indicate which lots they wish to bid for at the initial selection stage.

12. Component: Minimum Subsidy Tender & Performance based-grant Reference: General Could you please confirm that: • Minimum Subsidy Tender sites will be located only in Niger, Ogun, Sokoto and Cross River State, both during phase I (57 sites) and phase II (250 sites)? Performance based-grant can be delivered for sites in any state in Nigeria?

  • The Minimum Subsidy Tender (Phase I) will be for sites located in Niger, Ogun, Sokoto and Cross River. The geographic scope for Phase II will be announced when Phase II is launched.
  • Applications for Performance Based Grants can be submitted for any of the developer’s site located in Nigeria

13. Component: Minimum Subsidy Tender Reference: Invitation for initial selection - 24.1 Page 16. The Invitation for Initial selection refers to Nominated sub-contractors. It is not clear whether or not, nominated sub-contractors will be selected to perform part of the works (example: construction). Will there be any nominated sub-contractors participating in the Minimum Subsidy Tender? If yes, for which scope and in which case? If not, can you confirm applicants may select independently their own sub-contractors?

  • `As stated in the Initial Selection Data Sheet (ISDS), “The REA does not intend to execute certain specific parts of the contract by Subcontractors selected in advance.”
  • Applicants may select their own subcontractors so long as they comply with Instructions to Applicants (ITA) 24.2:
  • “The Applicant shall not propose to subcontract the whole of the contract. The Applicant may propose subcontractors for certain specialized parts of the contract. Applicants planning to use such specialized subcontractors shall specify, in the Application Submission Letter, the parts of the contract proposed to be subcontracted along with details of the proposed subcontractors including their qualification and experience.”

14. Component: Minimum Subsidy Tender Reference: Invitation for initial selection - 24.2 Page 16. The Invitation for Initial selection refers to sub-contractors that may be proposed by the applicants. Shall the applicants define their sub-contractors before signature of the Grant Agreement? If yes, at which stage shall sub-contract be determined (Pre-qualification, RFP, Grant agreement)?

  • `As stated in the Instructions to Applicants 24.2:
    The Applicant shall not propose to subcontract the whole of the contract. The Applicant may propose subcontractors for certain specialized parts of the contract.
    Applicants planning to use such specialized subcontractors shall specify, in the Application Submission Letter, the parts of the contract proposed to be subcontracted along with details of the proposed subcontractors including their qualification and experience.
    Instructions regarding the Application Submission Letter are provided in Section C of the Instructions to Applicants (pp. 12-14):
  • 12.1 The Applicant shall complete an Application Submission Letter as provided in Section IV, Application Forms. This Letter must be completed without any alteration to its format.
    The Application Submission Letter template in Section IV includes the following paragraph:
  • (h) Subcontractors and Specialized Subcontractors: We, in accordance with ITA 24.2 and 25.2, plan to subcontract the following parts of the contract:
  • [Insert any part of the contract which the Applicant intends to subcontract along with complete details of the Specialized Subcontractors, their qualification, and experience]
  • This is where Applicants would need to define their subcontractors as part of their Initial Selection submission.

15. Sub-topic 3.1: Tenders & Performance based-grand exclusivity Reference: Invitation for initial selection – 4.4 P. 8 According to, “A firm and any of its affiliates (that directly or indirectly controls, are controlled by or are under common control with that firm) are not permitted to submit more than one application for initial selection for the same contract, either individually, as joint venture or as a subcontractor among them.” Can a firm still submit an application to the Minimum Tender Subsidy, and another application, in any form (similar or different) to the Performance Based Grant, with different partners, alone or in consortium?

Yes, a firm can submit an application for the Minimum Subsidy Tender and also submit another for the Performance Based Grant since these are different programs with different eligibility, qualification and technical capability requirements under the NEP

16. Sub-topic 4.1: Minimum Subsidy Tender Incorporation Reference: Invitation for initial selection - ITA 4.2 P. 23 “Any unincorporated single entity or Joint Venture will be required to be incorporated in the Federal Republic of Nigeria before signing the Grant Agreement with the REA.” Does this mean an unincorporated single entity can still answer at the RFP level? Can you please confirm the exact stage at which incorporation will be needed? What is the actual definition of “incorporation”: - A Certificate of Incorporation? - A business permit? A tax clearance certificate?

  • Incorporation in Nigeria is not a requirement to bid for single entities and consortia.
  • Any single entity (pursuant to clause 4.2 of the Instructions to Applicants), either incorporated in Nigeria, or registered or incorporated in another country may bid. However, if selected in the tender process, such single entity will be required to be incorporated in Nigeria once the Grant Agreement is signed, in order for the Grant Agreement to be effective. Further details will be provided at RFP stage.
  • Any unincorporated Joint Venture selected in the tender process will be required to be incorporated in Nigeria prior to entering into a Grant Agreement with the REA.
  • It is mandatory for the company entering into transactions with the REA to register with the Corporate Affairs Commission (CAC) in Nigeria for the purpose of tax remittances under the project to the Federal Government of Nigeria. It is a statutory requirement of the Federal Republic of Nigeria.
  • The definition of incorporation is for the successful Proposer to register with the Corporate Affairs Commission and obtain the certificate of incorporation in Nigeria. In addition, the successful Proposer shall also register with the appropriate tax office (i.e Federal Inland Revenue Service) and obtain a Tax Identification Number (TIN) through which deductibles taxes shall be remitted to the Federal Government of Nigeria

17. Sub-topic 4.3: “members of an unincorporated joint venture” Reference: Invitation for initial selection - ITA 4.2 P. 16, 33, 48, + https://rea.gov.ng/mini-grid-pbg/ Shall members of an incorporated joint venture be incorporated in Nigeria?

  • Members do not necessarily have to be incorporated in Nigeria but the joint venture (i.e. the contracting party) must be.

18. Sub-topic 6.1: Minimum Subsidy Tender Ranking & Consortiums Reference: Invitation for initial selection P36-39 According to the Invitation for initial selection “In case of a Joint Venture, all members combined will be evaluated.” What exactly is the implication on criteria 3 if for instance: - 1 consortium member has 2.5 M$ equivalent in Liquid asset, - 1 other consortium member has 1 M$ equivalent in Liquid asset: Does the consortium earn: - 100 points as members have combined more than 3.5M$ in liquid asset? 10 points because each applicant has 1,75M$ in liquid asset in average?

  • Since all members of a Joint Venture are evaluated combined, this means that the Joint Venture in the scenario described would have $3.5 equivalent in liquid assets and could therefore obtain the maximum weighting of 100 for this rated criterion.

19. Sub-topic 6.2: Minimum Subsidy Tender Ranking Applicant & Affiliates Reference: Invitation for initial selection – 25.5 P. 19 According to the Invitation for initial selection: “Only the qualifications of the Applicant shall be considered. The qualifications of other firms, including the Applicant’s subsidiaries, parent entities, affiliates, subcontractors (other than specialized subcontractors in accordance with ITA 25.2 above) or any other firm(s) different from the Applicant shall not be considered.” Given the nature of mini-grid financing: In case of a group, that for instance has developed and operated more than 6 mini-grids in multiple countries, through multiple fully-owned subsidiaries - Can the mother company apply, and qualify as a company that has developed and operated more than 6 mini-grids, and gain 2 x 100 points?

  • No, as stipulated in paragraph 25.5, only the qualifications of the Applicant shall be considered and not that of its parent company, or of its subsidiaries.
  • In the case of a group, the qualifications of several subsidiaries (and/or parent entity) can be used only if the different subsidiaries (and/or parent entity) form part of the joint venture as separate Joint Venture members

20. Sub-topic 6.3: Minimum Subsidy Tender Ranking - Focus Reference: Invitation for initial selection – P. 36 - 39 What is actually meant by “Number of mini grids of at least 10kW in generation capacity operated since January 2014”. Does this mean mini-grids should have started being operated before or after January 2014?`

  • This is not a continuous operation requirement, but rather seeks demonstration of recent experience in operating mini grids, i.e., the Applicant’s experience in operating mini grids used to meet this requirement has to be from January 2014 or after

21. Sub-topic 6.4: Minimum Subsidy Tender Ranking – Employer Reference: Invitation for initial selection Concerning the litigation track-record, who is exactly the Employer: REA, World Bank, or both?

  • The Employer is the Rural Electrification Agency of Nigeria.

22. Sub-topic 6.6: Minimum Subsidy Tender Ranking – Application Submission letter Reference: Invitation for initial selection The application submission letter template (p.41-42) requires applicants to confirm that “We declare that the following commissions, gratuities, or fees have been paid or are to be paid with respect to the Initial Selection process, the corresponding RFP process or execution of the Contract, in accordance with ITA 11.2”. - Does this mean that Application Submission Letter is a deliverable only at the RFP stage? Could you provide with a clear list of required deliverables for the pre-qualification stage?

  • The Application Submission Letter must be submitted as part of the initial selection application.
    The list of forms and associated documents that must be submitted as part of the initial selection application are listed in “Section III – Initial Selection Criteria and Requirements” and “Section IV – Application Forms” of the Invitation for Initial Selection.

23. Sub-topic 7.1: Minimum Subsidy Tender RFP timeline Reference: Invitation for initial selection Could you please provide more information on: - The RFP issue date? The RFP duration?

  • The RFP is expected to be issued towards August 2019. The deadline for submission of proposals will be defined in the RFP document

24. Sub-topic 7.2: Minimum Subsidy Tender sites information Reference: Invitation for initial selection – Invitation for initial selection (P.59) The Invitation for Initial selection refers to information on site (“such as” GPS coordinates, estimated load profiles, and estimated number of customers for each site): - Which information will be available exactly? When will this information be available exactly?

  • The location of each community, estimated number of customers by category of customer, and load profile will be provided at RFP stage on the Odyssey platform to initially selected applicants.

25. Sub-topic 7.3: Minimum Subsidy Tender RFP selection Reference: Invitation for initial selection Will the RFP selection criteria based: - On the minimum level of subsidies required? Yes/No? - The tariffs? Yes/No? - The mini-grid size? Yes/No? - The number of connections targeted? Yes/No? - The invested amount? Yes/No? - The community engagement plan? Yes/No? - The social and economic impact generated? Yes/No? Which will be priority criteria? Which will be secondary?

  • The evaluation criteria for technical and financial proposals will be disclosed at RFP stage

26. Sub-topic 7.4: Minimum Subsidy Tender RFP – process with communities Reference: Invitation for initial selection – Invitation for initial selection (P.59) The Invitation for Initial selection refers to information on site (“such as” GPS coordinates, estimated load profiles, and estimated number of customers for each site). In order to define capital expenditures, and subsidies required, applicants may require to define tariffs. In order to define tariffs, applicants may need to reach agreements with communities. How does the employer intend to manage multiple applicants reaching multiple agreements with the same communities regarding tariffs? Will the applicants define themselves, or the Employer: - Tariffs? - Assets size? Number of connections?

  • Applicants are not expected to reach tariff agreements with communities prior to submission of proposals. Applicants will be required to negotiate the tariff after the contract award. Further details and requirements on tariff setting will be provided at RFP stage.
  • The asset size will be defined by applicants.
    However, the number of connections to be made will be defined by the REA and indicated in the RFP package.
  • Further details on technical requirements and connections requirements will be made available in the RFP document.

27. Sub-topic 8.1: ESIA requirements Reference: Invitation for initial selection, Slides presented mention 2 types of sites: - Category I sites which require a ESIA as well as RAPs and Livelihood Restoration Plans (LRPs), if applicable - Category II sites, which require Proof of payment from Ministry of Environment as evidence that the Applicant has submitted its Environmental and Social Management Plan (ESMP) to the Ministry of Environment for approval Could you please explain: - What is the difference between Category I and Category II sites? Will sites part of the Minimum Subsidy Tender be part of Category I or Category II

  • Category I and Category II refer to environmental and social (E&S) impact categories.
  • Category I: with significant E&S impacts. High risk sites such as those in sensitive habitats, with potential physical and/or economic displacement, substantive number of migrant workers stationed in communities
  • Category II: No high risk activities expected, overall medium or low E&S impacts.
  • While every precaution has been taken by the Employer to include only Category II sites in this tender, the winning developer will be responsible for ensuring that each site is correctly categorized, including into Category I if applicable.

28. Sub-topic 9.1: Employer’s funds allocation and types Reference: Project Appraisal Document (World Bank Report No: PAD2524), page 21, Invitation for initial selection, p. 60 The Project Appraisal Document (World Bank Report No: PAD2524), published 31 May 2018 mentions an IDA of US70 million equivalent for the Minimum Subsidy Tender sub-component. The World Bank will propose lots of sites in 2 phases, and allocate funds to the most relevant bidders (according to criteria to be determined, including the lowest subsidies requirements). Given the size of the lot (70M$), the targeted number of sites (300+) and expected average number of potential connection per site in the first phase (375), it would mean that a maximum of 622$ / connection will be subsidized by the employer. It also seems that lot are of very different sizes (example Sokoto: 9,835, Ogun: 3,083). - Will the employer set a maximum subsidy / connection? - Will the employer set a maximum subsidy / regions and/or lot? - Will the employer allocate the same amount of subsidies to the different regions and/or lots? - Will all the funds be used for the purpose of the subsidy, or other structure or technical assistance items?

  • The generic budget allocation from the Project Appraisal Document should not be used to calculate backwards the maximum number of connections or subsidy in $/connection that may be supported by the program; the overall budget allocation, number of mini grids, and number of connections are all subject to change based on market conditions.
  • The terms and conditions for this particular tender will be clearly communicated in the RFP documents. The subsidy requirement for each lot will be competitively determined, and is not allocated per state in advance, but the Employer reserves the right to set a reserve price. The competitive process may result in different subsidy requirements for the different lots/states.
  • The total number of mini grid projects expected to be supported through minimum subsidy tenders, in multiple phases, is about 250. The minimum subsidy tender involves only the award of subsidies and does not involve technical assistance or any other type of funding.

29. What’s the exactly “Minimum Subsidy” meaning? It refers to the Minimum Subsidy of the EPC Cost of this project or the Minimum Subsidy of FIT (Electricity Tariff per kW·h)?

  • “Minimum subsidy” tender refers to a tendering process where, in their financial proposals, bidders would compete to request the lowest amount of subsidy they require to build and operate the mini grid projects. Developers requesting lower subsidy would be scored higher during evaluation of financial proposals
  • However, please note that the evaluation of proposals will be based on the quality of the technical proposal and the financial proposal (amount of subsidy requested).
  • Feed-in-tariffs are not applicable in this tender because the mini grid operator sells electricity to customers (domestic and commercial customers), and not to a utility

30. What’s the business structure before the Main Grid comes on site?

  • This program does not prescribe the business structure for the mini grids to be built and operated. It is the developer’s responsibility to determine which business model would be suitable to ensure the continued operation of the mini grids it intends to develop under this sub component

31. What’s the business structure after the Main Grid comes on site?

  • Please refer to the NERC Mini Grid Regulations 2016 on options available to mini grid developers in the event that the main grid comes to their site(s).

32. For the operator, how it collects the payment for the power generated from hybrid plant? From the DisCo or from the individual population of village? Can it be paid in US Dollars

  • “It is up to the developer to determine the most suitable means of collecting payment for power generated from the mini grids. The communities that have been selected under this tender are all completely off grid and are not being served by any DisCo. The customers that will use the power generated from the mini grids are resident in these communities and so it is expected that the developer will charge in local currency, as payment to be collected from these customers will be in local currency

33. After the COD (Commercial operation date), can the operator transfer to a third party or within a limited period?

  • Restrictions (if any) on the sale or transfer of projects will be described at the RFP stage.

34. Applicant must provide evidence of having experience in raising the debt; The question is, what if you have been funding your project by yourself, what do you now tender as evidence to raise debt?

  • If you have been financing projects only with your own resources, then you would not have experience raising debt. Having raised debt for any infrastructure project, not necessarily for mini grid projects, would satisfy this requirement.

35. How many companies can form a Joint Venture (JV)

  • Two (2) or more companies can form a joint venture depending on the parties involved. There is no restriction on the number of companies forming a joint venture. Joint ventures are encouraged in World Bank financed projects particularly if it will enhance their qualifications and capabilities. A joint venture may be for the long term (independent of any particular procurement), or for a specific procurement.
    All the partners in a joint venture shall be jointly and severally liable for the entire contract.

36. Are all the joint Venture submitting various requirement separately or one of the joint venture should have all the necessary requirement?

  • The submission requirements of the entities within a JV are clearly stated in the Initial Selection Document (ISD) (section III) Some criteria should be met by each member of the joint venture, some should by all the members, and some criteria should be met by one member of the joint venture only
    All the partners in a joint venture shall be jointly and severally liable for the entire contrac

37. The 3 years financial document stated in the document is it the provision of bank statement or provision of Audited accounts?

  • The document referred to, is the three (3) years audited financial statements of the company, duly signed and stamped by certified financial auditing firm.
  • All the partners in a joint venture shall be jointly and severally liable for the entire contract

38. For the “Minimum subsidy” from world bank, it will be in USD or Nigerian Naira? Will it be paid to the account of selected proposers directly? If the selected proposer prefers to receive in overseas region which is in USD/RMB, is it possible?

  • The CBN restricts disbursement of the grants in Naira for companies registered in Nigeria. All the details of how the grant will be disbursed will be described at the RFP stage
  • All the partners in a joint venture shall be jointly and severally liable for the entire contract

39. For the electric bill charge from the customer, the developer collects payment from customer directly or from “community”? We understand the “community” will collect the payment from customer directly and then transfer to developer

  • The developer is expected to collect payment from customers directly.
  • All the partners in a joint venture shall be jointly and severally liable for the entire contract.

40. On the eligibility for several REA programmes, NEP and NESP IMAS: can we enter into different JVs to submit for distinct programmes for instance JV1 submitting for NEP programme and JV2 submitting for IMAS programme?

  • Our focus for this REA-World Bank supported programme is the Nigeria Electrification Project (NEP). Kindly ensure that you review the qualification criteria as stated in the Initial Selection Document for the NEP to ensure that you meet the eligibility requirements.
  • Eligibility for the NEP has nothing to do with IMAS, so being in a particular JV for IMAS should not prevent a developer from being part of a different JV for NEP.
  • All the partners in a joint venture shall be jointly and severally liable for the entire contract.

41. On the expected return: are there any threshold on the IRR that can be gained by the minigrid operators in the context of the tender Phase 1? Or any commitment to provide a minimum guaranteed grant in order for the mini grid operators to secure a decent IRR while providing customers with affordable electricity?

  • The subsidy that is competitively determined through the tender is provided to the winning developers as viability gap funding.
  • Therefore, it is incumbent on the developer to specify the level of subsidy they require to make the projects viable when they bid. NEP cannot provide any guarantee that the developer will be able to achieve any specific level of returns.

42. On the eligibility within 1 single programme: can we enter into different JVs with distinct local partners as long as the contracts we apply for are different lots? That raised the question of the definition of a contract: a distinct lot or the tender Phase 1? • For instance can one company do a JV1 with Partner 1 and JV2 with Partner 2 where • JV1 would submit for lot 1 and JV2 for lot 2 for the Phase 1 Tender, lot1 and lot2 being different?

  • There will be a separate contract for each lot, so yes, a company may form separate joint ventures with different partners to apply for different lots.
  • However, a company may not apply for the same contract multiple times as part of different joint ventures.

43. On the expected return: are there any threshold on the IRR that can be gained by the mini grid operators in the context of the tender Phase 1? Or any commitment to provide a minimum guaranteed grant in order for the mini grid operators to secure a decent IRR while providing customers with affordable electricity?

  • The subsidy that is competitively determined through the tender is provided to the winning developers as viability gap funding.
  • Therefore, it is incumbent on the developer to specify the level of subsidy they require to make the projects viable when they bid. NEP cannot provide any guarantee that the developer will be able to achieve any specific level of returns

44. On the financing: are there any guarantees or security against payment default provided by any DFI such as the WB?

  • There will be no guarantees provided to developers under this program

45. ITA 4.2.: Do the "Members of a Joint Venture" need to have an equity stake, or can the JV be based on joint governance or other contractual relationship? If there is an equity requirement, please specify if there are any thresholds or other considerations we should be aware of.

  • There is no specific equity requirement or particular governance or contractual relationship required to qualify as a joint venture; indeed, for an intended JV a simple letter of intent is sufficient.
  • However, all members of a joint venture shall be jointly and severally liable for the execution of the entire Contract in accordance with the Contract terms.

46. ITA 4.2.: Please clarify at which point the applicant needs to be a registered Nigerian entity?

  • An applicant does not have to be registered in Nigeria at the stage of Initial Selection. Please refer to ITA 4.5 and ITA 5.1

47. With reference to the Section III of the Initial selection document related to the development of solar hybrid mini grids for rural economic development, mini grids are defined as systems with both: • A generation capacity between 10kW and 10MW • A network that distributes power to two or more customers. Would projects developed with net metering methodology qualify as mini grids? Net-metering defined as a billing mechanism that allows customers to feed Solar PV electricity to the local distribution system and credits solar PV system owners for the electricity they add to the distribution network. Meaning that we have two customers (the main private off taker and the national grid operator). Would this be accepted?

  • No. The national grid operator would not be considered a customer to which power is distributed, but rather the entity buying power from eligible net metering systems.
  • This arrangement would therefore not be considered a mini grid for the purpose of establishing the Applicant’s experience under Technical Capacity criteria 4.1 and 4.2

48. « According to 4.2: « An Applicant maybe a firm that is a private entity , a state-owned enterprise or institution subject to ITA 4.9 - or any combination of such entities in the form of a joint venture (“JV”) under an existing agreement or with the intent to enter into such an agreement supported by a letter of intent. » If applicants, pre-qualify together as an unincorporated joint venture and: ● Case 1: one applicant leaves the joint venture before the end of the RFP stage o Can the remaining joint venture applicants continue with the tender on its own? If yes under which conditions? ● Case 2: the applicants do not reach an understanding on continuing the consortium before end of the RFP stage, Can each joint venture applicant continue with the tender on their own? If yes under which conditions?

  • Changes in qualifications of Applicants is addressed in paragraph 30.1 on page 21 of the Invitation for Initial Selection. As described in paragraph 30.1, changes in the composition of the consortium are subject to written approval from the Employer. One or more members of a joint venture may be permitted by the Employer to submit proposals separately if, as separate Applicants, they do not violate conditions (i)-(iv).
  • “30.1 Any change in the structure or formation of an Applicant after being initially selected in accordance with ITA 27 and invited to submit Proposal (including, in the case of a JV, any change in the structure or formation of any member and also including any change in any specialized subcontractor) shall be subject to the written approval of the Employer prior to the deadline for submission of Proposals. Such approval shall be denied if (i) an initially selected applicant proposes to associate with a disqualified applicant or in case of a disqualified joint venture, any of its members; (ii) as a consequence of the change, the Applicant no longer substantially meets the qualification criteria set forth in Section III – Initial Selection Criteria and Requirements
  • Table 1- Qualification Criteria, and Requirements; or (iii) no longer continues to be in the list of Initially Selected Applicants as a result of the Employer’s re-evaluation of the Application in accordance with ITA 27; or (iv) in the opinion of the Employer, the change may result in a substantial reduction in competition.
  • Any such change should be submitted to the Employer not later than fourteen (14) days after the date of the Request for Proposals.”

49. If 2018 accounts are still in the process of being audited, is it possible to provide an interim financial statement signed by a company Director along with evidence that the audit process is underway, with fully audited accounts to be provided at RfP stage?

  • Yes, but the Applicant will be disqualified from further consideration at RFP stage if the audited accounts for 2018 are not furnished by then

50. What's the application procedure for mini-grid above 1MW?

  • Kindly refer to the Nigeria Electricity Regulatory Commission (NERC) website for more details.
  • https://www.nercng.org/index.php/home/operators/mini-grid

51. In Appendix A, it was said that "A tripartite contract approved by NERC for interconnected mini grids in "underserved areas" is needed for certain size of distribution system. Which three parties was referred to by the tripartite contract?

  • The three parties in a tripartite agreement are the Developer, the Distribution company operating in that area and the Community that will be receiving power from the mini grid.
  • For more details on Mini grid regulation please visit the link provided above

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