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REQUEST FOR PROPOSALS

Background:

The Pacific Islands Greenhouse Gas Abatement through Renewable Energy Project (PIGGAREP) is a continuation of the close collaboration between the Secretariat of the Pacific Regional Environment Programme (SPREP), UNDP and the Global Environment Facility (GEF) to build the capacity of the PICs to deal with the challenges of Climate Change

The global environment and development goal of PIGGAREP is the reduction of the growth rate of GHG emission from fossil fuel use in the Pacific Island Countries (PICs) through the removal of the barriers to the widespread and cost effective use of feasible renewable energy (RE) technologies. The specific objective of the project is the promotion of the productive use of RE to reduce GHG emission by removing the major barriers to the widespread and cost-effective use of commercially viable RE technologies (RETs). PIGGAREP consists of various activities whose outputs will contribute to the removal of the major barriers to the widespread utilization of RE technologies (RETs). The project is expected to bring about in the PICs: (1) Increased number of successful commercial RE applications; (2) Expanded market for RET applications; (3) Enhanced institutional capacity to design, implement and monitor RE projects; (4) Availability and accessibility of financing to existing and new RE projects; (5) Strengthened legal and regulatory structures in the energy and environmental sectors; and, (6) Increased awareness and knowledge on RE and RETs among key stakeholders.

The Solomon Islands Government (SIG) is one of the participating PICs in the PIGGAREP and one of the activities in its 2009 Work Plan and Budget is a – Bio-fuel Development and Expansion project.

The SIG through the Energy Division of the Ministry of Mines, Energy and Rural Electrification, in its Policy statement has outlined that it would venture into developing and expanding the bio-fuel sector as an alternative to providing electricity to the population of the Solomon Islands .

Coconut Oil (CNO) is the bio-fuel that would be dealt with in this activity. The goal of the project is to establish that CNO is technically and economically viable to be used for power generation in the Solomon Islands (both in rural and urban areas).

It is the SIG’s Government’s plan to look for alternative, cheaper and environmentally friendly form of fuel to be use as partial substitute for imported fossil fuel.

The SIG through the Energy Division of the Ministry of Mines, Energy and Rural Electrification is hereby putting out a Request for Proposal (RFP) to qualified and experience registered consultancy firms and individuals to undertake a Feasibility Study for the future Development and Expansion of Bio-fuel in the Solomon Islands

Instructions to Offerors:

•  The Proposal must cover all the objectives, outputs and activities as specified in the ToR

•  The Proposal must include costs for professional fees, logistics

•  US$ only must be used in the Proposal

•  The Proposal must include:

i)   An updated CV of the individual/s who will undertake the market and supply feasibility study

ii)   A summary of recent work in the areas to be covered in this consultancy (including client and work produced);

iii)   Information on availability;

iv)   Total person days proposed for the work on the consultancy and daily rate in US$ and

iv)   A methodology and work plan (maximum 10 pages)

•  As this task will involve specialized skills, experience and qualification, the proposals must specify such experience and qualification of the individual(s) who will undertake the assigned task(s);

•  The consultancy preferably should commence after the end of June 2009;

•  The offer must be in the English language only;

•  The above-mentioned documents, information and requirements are mandatory and as such are required to form a complete tender. An offer will be rejected unless it is substantially responsive;

•  If the Proposal is received prior to the formal submission date corrections/modifications can be made up to that date;

•  The Proposal must be submitted in electronic format only (Word and PDF format, 1 MB max) by email to the e-mail address specified below and

The task will be undertaken at the following sites:

The exact number of working days will be determined subsequently between the successful Contractor, the Solomon Islands Government and PIGGAREP Project Management Office (PMO).

The final working plan will be determined subsequently between the successful Contractor, the SIG and the PIGGAREP PMO. Acknowledgements of the receipt of quotations will be provided by e-mail. Successful as well as unsuccessful offerors will be informed by e-mail once the evaluation and selection process are completed.

Award of Contract and Evaluation Criteria:

Quotations will be evaluated according to the following criteria:

1.   Price (20%)

2.   Specific Experiences in Biofuel for power generation in both urban and rural areas (30%)

3.   Experience in the Solomon Islands or SIDS, Qualifications & Experiences of the Team who will be directly involved in conducting the consultancy (20%)

4.   Methodology/Work Plan (30%)

All quotations must be addressed to:

Solomon Islands Energy Division and copied to the PIGGAREP PMO. Note that the contract will be between SPREP and the winning bidder.

For project supervision purposes, the PIGGAREP PMO will make sure that an open, competitive and transparent process is used. Proposals must therefore be copied electronically to the PIGGAREP PMO.

Deadline for the submission of quotations is on the 10th June 2009

Contact Information:

Nixon Kua

Deputy Director of Energy

Ministry of Mines, Energy and Rural Electrification

P.O.Box G37

Honiara , Solomon Islands

Telephone: (677) 21522 ext 206

Facsmile: (677) 25811

Email: n_kua@mines.gov.sb

Terms of Reference

Bio-Fuel Development and Expansion in the Solomon Islands

The Solomon Islands Government (SIG) through the Energy Division of the Ministry of Mines, Energy and Rural Electrification, in its Policy statement has outlined that it would venture into developing and expanding the bio-fuel sector as an alternative to providing electricity to the population of the Solomon Islands . It is the SIG’s plan to look for alternative, cheaper and environmentally friendly form of fuel to be used as partial substitute for imported fossil fuel.

The Energy Division of the SIG will venture into investigating the economic and technical viability of the production and use of coconut oil (CNO) for power generation. This will involve data collection (village surveys) and compilation and analysis of the qualitative and quantitative data. Surveys will be done in:

Solomon Islands imports, on average, 4,150 kiloliters of fossil fuel in a month. Of this capacity, SIEA consumes 2,126 kilolitres per month, which is 51% of the total oil import. 6.5% of this is used by SIEA outstations in the provinces. Individual communities with stand-alone generators and other end uses like kerosene for cooking and lightings have an average consumption of 390,000 liters per month (this includes petrol, diesel and kerosene). This figure accounts for 18.4% of the total fuel import per month. The balance of more than 32.6% of the import per month is used for private commercial; standby generators; land, sea and air transport. From this, 9% is for private and government standby power generation. The other 21.6% is for transportation.

The percentage of people electrified in the Solomon Islands is close to 20%. That is 15% in the urban areas and 5 % from stand-alone power generators. The rest of the population (majority in the rural and remote areas) use kerosene for lighting

The average copra production in the Solomon Islands is 30,000 tons per annum. There is a potential of 45,000 tons, but due to lack of reliable infrastructures like transportation and wharfs, that potential cannot be met. Records for 2008 showed that 39,000 tons of copra was produced. This is due mainly to the increase in the domestic market price, of SBD$2.80 per kilogram.

Coconut Oil production stopped due to break down of CNO mills in most Commodity Export Marketing Authority (CEMA) Milling Centre. Only a couple of private entrepreneurs are operating but the production can only reach a maximum of 1000 liters per day.

Coconut oil at the retail price in Honiara is SBD$5.00 per 330ml, following a wholesale price of SBD$3.50 per 330ml. To attract the CNO market to be used for power generation, production capacity must be increased so that the domestic retail price can drop down as far as SBD$2.27 per 330ml or SBD$6.88 per liter. This will then be attractive to the consumers, as the current diesel retail (pump) price is at SBD7.08 per liter

Trials were done by SIEA in Lata SIEA Power station. It failed because of technical problems which roots from mismanagement. CNO mills were established in the following rural communities in the Solomon Islands by CEMA: Kaonasugu ( Makira Province ); Gojaruru ( Isabel Province ); Lata ( Temotu Province ); Malu’u ( Malaita Province ); Choisuel Bay ( Choisuel Province ) and Noro ( Western Province ). The largest mills was established in Tenaru ( Guadalcanal Province ), but was not completed due to the recent ethnic crisis in the country. These mills did operate which sells the oil to Russell Islands Plantation Estate Limited (RIPEL), who was also producing larger quantities of CNO at that time. Drop in price of the copra in the domestic market and the escalation of the ethnic crisis in 1999, forced the farmers to produce less and eventual non-operation of the mills.

Also in Lata ( Temotu Province ), the Temotu Development Authority is currently crushing copra to extract CNO. In Nangu village (Santa Cruz Islands, Temotu Province ), there was and European Union mini-copra crushing mill for CNO. This seized operation and this warrants the study to find out reasons why the operation stopped.

•  Objectives

The objective of the assignment is to determine the technical, economic, institutional and market feasibility of utilizing copra oil for power generation in the SI.

3.   Detailed Activities

The tasks/activities and outputs required of the contractor must address, but not restricted, to the following areas:

A. Technical

•  Assess the current and future demand for electricity at the target communities

•  Assess the current and future supply of copra oil (including palm oil) at the target communities, giving due consideration to the capacities of existing and planned oil mills

•  Assess the quality of the SI copra oil (or a blend of) and its suitability for power generation

•  Assess Capacities of Oil Mills that can cater for demands

B. Economics

•  Assess the production costs of copra oil or a blended product for power generation

•  Conduct a comparative economic and financial analysis of the cost of electricity generated from diesel and from a copra oil-based fuel

•  Identify fiscal and financial policy measures that would support a sustainable supply of copra oil to substitute fossil fuel in power generation at the target communities

C. Institutional

•  Assess and identify suitable institutional set up that would enhance a sustainable supply of copra oil and a cost effective and a sustainable supply of copra-oil based electricity

•  How and who will manage any proposed coconut crushing mills or a community-based CNO-power generation plant

 

D. Market

•  Assess and identify market barriers to the use of copra oil for power generation

•  Assess and identify a market set up that would promote the marketing of copra and the production of copra oil for power generation within the studied communities

3.1 Output/Deliverables

The contractor will produce the following deliverables during the assignment: 

1.   An Inception Report to include: a) understanding of the consultancy and associated tasks; b) the actual detailed technical approach to the study; c) the actual detailed work plan/timeline; d) identification of issues crucial to the viability of the consultancy; and e) a draft report structure and its major sub-headings.

2.   A draft report to be commented on by CEMA, SIEA, Energy Division, the Provincial Authorities and rural communities) and the PIGGAREP PMO. 

3.     A final Detailed Feasibility Study Report.

4. Duration and Phasing The survey or study s hall be conducted after the end of June 2009. Delivery of final reports shall be not later than end of 31 st October 2009.

5.   Reporting Requirements

Concerning reporting requirements it should be noted:

a) Structure/format of the Feasibility Study Report and Program Document must be in line with

internationally recognized standards. Suggested draft structure/format to be approved by SIEA, Energy Division and PIGGAREP,

b) All draft documents should be in Microsoft Word and

c) All documents must have no restriction in access.

6. Inputs

The following are the required inputs from the Energy Division, SIEA, CEMA, Provincial Government Authorities and rural Communities specified in this ToR: