SARI E bidders conf

South Asia Regional Initiative for Energy(SARI/Energy): 

South Asia Regional Initiative for Energy (SARI/Energy) Pre-Solicitation Conference January 27, 2006

Overview: 

Overview Context About SARI/E Objectives of this Solicitation Tips About the Operating Conditions

Context: 

Context Energy Security in South Asia

South Asia as a key U.S. Partner: 

South Asia as a key U.S. Partner South Asia is one of the most promising U.S. trade partners and global allies India is one of the top FDI destinations in the world; and is opening the FDI environment South Asia is also one of the least stable regions in the world CIA data indicates that in 2004 greater than 40% of global terrorist acts took place in India Stability requires a successful economy with stable growth GDP growth andgt;6% andamp; increasing Stable, growing economies require energy security Energy intensity is high, approx 3x the U.S. Diversification is low, and exposure to volatility in supply andamp; pricing is high Regional drive for Energy Security is high; but is predominantly outward looking Relies as much on sound indigenous solutions as it does import strategy

Regional Energy Trends¡: 

Regional Energy Trends¡ Energy access is andlt;50% Growing gap for commercial energy needs Resulting in high cost, often petroleum fueled, captive power Import dependency is high Regionally, an average 50% of commercial energy needs are met through imports, and are petroleum dependent Indigenous conventional andamp; renewable resources in South Asia are significant but unequally distributed and inefficiently utilized Estimates at ~47,000 mtoe, with ~800 mtoe in renewables Plant load factors average ~50% Hydro development at ~10% of potential, Wind at andlt; 15% Intra-regional trade is low andlt;4% of imports of any sort are internal to the region andlt;1% of energy imports are internal to the regions

Energy Security Challenge: 

Energy Security Challenge COMPETITIVE RISKY

Approaches to & Benefits of Energy Security: 

Approaches to andamp; Benefits of Energy Security Access andamp; Sustainability: Increasing sustainable energy access can result in: 50-70% increase in rural incomes Employment increases of 51% on average, with skilled employment increases of 78% Health andamp; Education rates also increase measurably Availability, Reliability andamp; Affordability Increased trade andamp; investment, and grid interconnections can result in: Strengthened andamp; accelerated overall levels of, and affordability of, resource development Captures complimentarity of load profiles, reducing peaking needs andamp; system costs Strengthen political andamp; economic linkages in the region

How We Operate: 

How We Operate

Eight SARI/Energy Member Countries: 

Eight SARI/Energy Member Countries . . . MALDIVES SRI LANKA INDIA NEPAL BANGLADESH BHUTAN PAKISTAN AFGHANISTAN

SARI/E Management Structure: 

SARI/E Management Structure Advisory Board is composed of the South Asian Mission Directors, the RDM/A Director, the ANE/TS Office Director, and the South Asia Office Director Program Management Team is based in India SARI/E Country Coordinators (CCOs) in all 6 presence countries Meetings SARI/E Champions Meeting – 1/year Implementing Partners Planning Meeting – 1/year CCO’s andamp; PMT – 1/quarter

SARI/E Implementing Partners: 

SARI/E Implementing Partners Nexant: Technical assistance and training U.S. Energy Association: Regional partnerships Winrock: Small grants U.S. Chamber of Commerce: Business advocacy U.S. DOE National Renewable Energy Laboratory: Renewable energy technology mapping andamp; support

A Sample of our Partner Activities: 

A Sample of our Partner Activities Nexant: Analysis andamp; assistance for regional energy trade andamp; investment Training on rural energy, distribution, regulatory reforms Reports on energy security and regional energy trade NREL: Wind andamp; Solar Mapping in Sri Lanka, Maldives, Afghanistan, Pakistan Winrock: Cross-border Grants 31 grants totaling andgt;$750,000 made to 54 institutions in 5 countries USEA: Regional Partnerships 5 Partnerships: Regulation, Transmission, Media, Distribution Utilities, Parliamentarians USCoC: Advocacy in Business Sector South Asia Regional Energy Coalition (SAREC) roundtables

SARI/Energy Results in partnership with USAID bilateral Missions: 

SARI/Energy Results in partnership with USAID bilateral Missions Legal framework for cross-border energy trade Assisted on energy legislation in the four historic presence countries, Regulatory strengthening TA to Regional energy trades under negotiation E.g. Nepal West-Seti, NOC-IOC, etc Focused advocacy and outreach campaign for cooperation SAREC media roundtable events Spread best practices for utility operations, and on energy efficiency Energy efficiency standards andamp; Sustainable Guarantee Fund in Sri Lanka, Regional Rural Energy Training Network (RETN)

Objectives of this Solicitation: 

Objectives of this Solicitation

Results Framework: 

Results Framework SO: Promote energy security in South Asia IR1: Increased access to diversified clean energy supply IR2: Harmonize markets to enable regional energy trade

Task 1: Energy Security : 

Task 1: Energy Security OBJECTIVE andamp; EXAMPLE ACTIVITIES Foster Regional Cooperation on Energy Security Analysis of energy security status in South Asia Sharing of data between countries on their energy sectors Regional study on capturing complimentarity of National Grid Interconnections Promotion of the advantages of cooperative approaches to meeting energy security needs Facilitate development of the SAARC Energy Center Strengthen SAARC Energy Working Group processes if and where appropriate

Task 2: Clean Energy Access in South Asia: 

Task 2: Clean Energy Access in South Asia OBJECTIVES: Technical Assistance Strategic diversification of clean energy Reduced exposure to fuel/supply volatility Project Development Spreading use of clean energy; sustainable technologies/fuels Spreading models for energy access, improved operational efficiencies, andamp;c Training Renewable andamp; distributed sources Distribution reform andamp; energy efficiency

Task 2: Clean Energy Access in South Asia: 

Task 2: Clean Energy Access in South Asia EXAMPLES: Technical Assistance Analysis of optimal models to facilitate clean energy access for communities with given socio-economic conditions Develop bankable documents for a large grid-scale renewable projects, or smaller scale community projects Project Development Pilot projects in unproven regions using proven models Public-private partnerships for projects to increase clean energy access Sustainable Guarantee Funds for ESCO’s Facilitate use of DCA or GDA mechanisms for financing energy projects Training Increased Efficiency andamp;/or Reliability of energy to industrial sources Best practices for distribution systems, rural electrification andamp;c

Task 3: Market Models that Foster Trade & Investment: 

Task 3: Market Models that Foster Trade andamp; Investment OBJECTIVES: Training Educate regulators, grid operators, policy makers andamp; private sector on how successful deals and successful markets are formed Executive Level Policy andamp; Investment Forum Allow investors andamp; developers to dialogue with senior policy makers on what is needed to open investment Bring together key deal makers from around the region Legal, Regulatory andamp; Institutional Reforms Harmonize practices to facilitate cross-border trade Facilitating Trade and Investment ID sponsors, ID deal structures andamp; financing mechanisms Create the potential for trade

Task 3: Market Models that Foster Trade & Investment: 

Task 3: Market Models that Foster Trade andamp; Investment EXAMPLES: Training Market Structures that Enable Trade andamp; Investment Case studies on successful cross-border Tandamp;I Executive Level Policy andamp; Investment Forum Regional Public and Private Sector Participation Topical on mechanisms needed to facilitate Tandamp;I Legal, Regulatory andamp; Institutional reforms Harmonize tariff structures, grid codes andamp; standards, regulatory structures Facilitating Trade and Investment Innovative approaches to facilitate financing andamp; successful projects: DCA, GDA, Guarantee Funds andamp; Risk Guarantees working with gov’s, MLBS, donors, Public-Private Partnerships, andamp;c Technical Assistance for specific deals

Task 4: Program Management: 

Task 4: Program Management Headquarters Location in New Delhi Key Staff located in New Delhi Regional offices with dedicated country staff as needed Meetings: One annual meeting in region with stakeholders (70-150 ppl) state of the art conference organization requirements One annual meeting for integrated implementing partner planning with select stakeholder involvement (15-30 ppl) Additional program meetings as often as quarterly (10-15 ppl) Annual Work Plan, Reporting andamp;c as normal

Tips on the Operating Environment: 

Tips on the Operating Environment

Challenges & Political Sensitivities: 

Challenges andamp; Political Sensitivities Intergovernmental relationships lack a high degree of trust andamp; confidence in region; SAARC process is slow; Political risks are high Many countries feel at a competitive disadvantage and would rather wait than under-sell their resources There is virtually no cross-border infrastructure of any kind The reform process stumbles along; Regulations andamp; tariff structures tend to be somewhat volatile, Contract enforceability remains a challenge There is a significant portion of the population and the politicians that lack a willingness to pay for services, resist private sector involvement/ownership

Operating Environment: 

Operating Environment Extremely sophisticated commercial base in India and the region IMPLICATION: Work must be of extremely high commercial quality in order to accomplish targets IMPLICATION: Regional capability to conduct this work is very high and should be utilized to the greatest degree possible A wide disparity of capability in the region; e.g. Afghanistan vs. India education andamp; development levels IMPLICATION: Leveraging experiences andamp; resources of one country for the benefit of another is key IMPLICATION: Flexibility andamp; adaptability in approach are key! Security risks in this region are high IMPLICATIONS: Contractor must be willing to operate in these environments

Programmatic Considerations: 

Programmatic Considerations Huge scope. Small budget. IMPLICATION: Close collaborate andamp; joint planning with SARI/E implementing partners will be a requirement IMPLICATION: Ability to focus on 2-3 key annual objectives through paths of least resistance is key IMPLICATION: Priority on leveraging resources andamp; innovative partnerships with private sector, GDA, DCA, donors andamp; others USAID bilateral Missions in many countries do not have energy programs, and/or have significant competing priorities: e.g. Pakistan and Afghanistan IMPLICATION: Critical to work closely with bilateral Missions; ALL SARI/E SUCCESSES HINGE ON THIS COOPERATION IMPLICATION: Important to distinguish between activities that are regional in nature vs. those that are country-specific

The SARI/E Network: 

The SARI/E Network Extremely supportive network of senior champions has been built over the past 5 years. They are absolutely central to success. IMPLICATION: Network must be preserved and strengthened Political Will varies considerably IMPLICATION: Ensure direction is correct/synchronized, early buy-in and close coordination with relevant decision makers IMPLICATION: Working with sector/projects that has greatest gain will be critical for success (e.g. regional leading private sector firms)

Operational Leveraging: 

Operational Leveraging There are a number of donors and ILI/MLBs operating in this environment with significant resources IMPLICATION: for success to occur coordination and leveraging of resources will be critical There is a large and growing, globally competitive, extremely sophisticated private sector presence in the region. All are looking for good investments. IMPLICATION: must look to these entities as facilitators and partners for opening trade and investment across borders and at the community level

For more info:www.sari-energy.org: 

For more info: www.sari-energy.org