27/08/2020

GUARANTCO TECHNICAL ADVISOR IN RELATION TO SOLAR PROJECTS IN AFGHANISTAN – REQUEST

FOR PROPOSALS

1. Overview of GuarantCo Ltd (“GuarantCo”)

GuarantCo was established to mobilise local currency credit solutions for infrastructure projects and
support the development of financial markets in lower income countries. GuarantCo is part of the
Private Infrastructure Development Group (PIDG).

GuarantCo is funded by the governments of the United Kingdom, The Netherlands, Switzerland,
Australia and Sweden, and is rated AA- by Fitch and A1 by Moody’s.

2. Introduction and background to the services

2.1 GuarantCo is working with Phelan Energy Group (the “Company” or “PEG”), a company
incorporated in the British Virgin Islands. PEG, a renewable energy developer and
operator, is seeking to raise USD 30 – 35 million of senior debt to refinance part of the
equity investment made for an operational 15MW solar power plant in Kandahar
(“Kandahar Project”) and finance the construction of three additional greenfield solar
power projects in Afghanistan (the “Greenfield Projects”). The Kandahar Project is
jointly owned by PEG (through a wholly owned subsidiary SPV) and Zularistan Limited a
leading solar solution provider in Afghanistan (together the “Sponsors”). As part of the
Sponsors strategic plan, they are looking to expand their generation capacity by
developing the Greenfield Projects (with capacity ranging from 10MW to 40MW) under
an ownership structure similar to the Kandahar Project. GuarantCo has been
approached to provide a 100% guarantee for the senior debt amount for the projects
(the “Transaction”). GuarantCo anticipates the financing for the Transaction to be
phased in two stages with an initial refinancing of the Kandahar Project, to happen
before December 2020 and the financing of the Greenfield Projects, to happen in Q2
2021.

2.2 GuarantCo is now looking to appoint a Technical as well as Health, Safety, and
Environmental Services (“HSES”) Advisor (the “LTA”) to perform the services as described
in Section 5 (the “Services”). GuarantCo is looking to obtain a fixed quote from the LTA
to provide services for the Kandahar Project and the opportunity to provide additional
fee quotes for the services required for the Greenfield Projects.
 2.3 Given the breadth of services required consortium bids are expected and indeed
encouraged. For instance, it is anticipated that no one firm will have the ability to conduct
on the ground site visits and stakeholder meetings as well as bring the international
experience required for assessing the technical and HSES aspects of the solar projects.
Therefore, the strongest bids are expected to come from collaborations where the best
local and international experience is combined in the most appropriate manner.

2.4 Terms of reference including a description of the scope of the commission is detailed in
Section 5 below.

2.5 The Services are expected to commence by 21st September 2020 with substantive work
for packages A,B and D completed by mid-November 2020, subject to the evolving nature
of the impact of COVID-19.

2.6 This is a formal REQUEST FOR PROPOSAL (“RFP”) subject to the terms and conditions set
out below. The purpose of this RFP and supporting documents is to explain in further
detail the requirements for the Services and the procurement process for submitting a
tender proposal.

3. Tender conditions and contractual requirements

3.1 This section of this RFP sets out GuarantCo’s contracting requirements, policy
requirements and the general tender conditions relating to this procurement process
(the “Procurement Process”).

3.2 Any information supplied to potential suppliers as part of this Procurement Process is
supplied in good faith. The information contained in this RFP and the supporting
documents and in any written or oral communication is believed to be correct at the
time of issue but GuarantCo will not accept any liability for its accuracy, adequacy or
completeness and no warranty is given as such. This exclusion does not extend to any
fraudulent misrepresentation made by or on behalf of GuarantCo.

3.3 You are responsible for analysing and reviewing all information provided to you as part
of this Procurement Process and for forming your own opinions and seeking advice as
you consider appropriate. You should notify GuarantCo promptly of any perceived
ambiguity, inconsistency or omission in the information provided to you as part of this
Procurement Process. Additionally, any suggested adaptations to the scope of works
based on your experience should be discussed with GuarantCo prior to submission of
your proposal.

3.4 At any time prior to the Response Deadline, GuarantCo may amend this RFP. Any such
amendment shall be issued to all potential suppliers, and if appropriate to ensure
potential suppliers have reasonable time in which to take such amendment into
account, the Response Deadline shall, at the discretion of GuarantCo, be extended.

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 3.5 Each potential supplier is responsible for obtaining all information necessary for
preparation of a tender response and for all costs and expenses incurred in preparation
of the tender response. You will not be entitled to claim from GuarantCo any costs,
expenses or liabilities that you may incur in tendering for this procurement irrespective
of whether or not your tender response is successful.

3.6 GuarantCo reserves the right to disclose all documents relating to this Procurement
Process, including without limitation your tender response, to any provider of
management services to GuarantCo, advisers or other third parties involved in the
procurement or support of the Services.

3.7 Your tender response must remain open for acceptance by GuarantCo for a period of 60
days from the Response Deadline. A tender response not valid for this period may be
rejected by GuarantCo.

4. General policy requirements

4.1 By submitting a tender response in connection with the Procurement Process, you
confirm that you will, and will ensure that any consortium members and/or
subcontractors will, comply with all applicable laws, codes of practice, statutory
guidance and applicable GuarantCo policies and procedures which can be found on
GuarantCo’s website (http://www.guarantco.com/policies-procedures/policies). The
list of relevant policies includes (but is not limited to): Anti-corruption and Integrity
Policy and Procedures, Disclosure Policy and Procedures and Travel and Expense
Reimbursement Policy and Procedures. In accordance with GuarantCo’s Disclosure
Policy and Procedures, a description of the Services, your identity, your jurisdiction, and
the duration and value of the Services will be disclosed on GuarantCo’s website.

4.2 Minimizing cost over runs is important to GuarantCo. If successful you must provide
regular (monthly as a minimum) updates of the amount of fees incurred to date. You
must provide individual team member timesheet narratives if requested.

4.3 Any fee proposal must be a genuine reflection of the cost you anticipate of delivering
the Services. You must inform GuarantCo as soon as possible if you consider the
assumptions upon which you based your fee proposal may change.

5. Terms of reference/scope of work

The scope of work follows four main areas:

• Package A: Context Assessment

• Package B: Scope of Work for the Kandahar Project
o Package B1: Technical Scope of Work
o Package B2: HSES Scope of Work
• Package C: Scope of Work for the Greenfield Projects
o Package C1: Technical Scope of Work (construction phase)
o Package C2: Technical Scope of Work (operations phase)

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 o Package C3: HSES Scope of Work
• Package D: Financial Due Diligence Assistance

As is customary for such transactions, the selected firms will be appointed by the Company/
Sponsors. Applicable due diligence costs will be to the account of the Company/ Sponsors and
selected firms will be required to send their invoices to the Company/ Sponsors for settlement.

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Package A: CONTEXT ASSSESSMENT

Pre-Financial Close: The LTA will perform a review of Project’s key stakeholders and provide an
overview of Afghanistan’s energy market.

1. Project stakeholders

• High level review of the project operator’s capabilities and track record, based on information
provided by the Sponsors and third-party sources, the focus will be on:
o Management capability assessment of the Operator
o O&M contractor
o Management services provider (including services provided by the local sponsor –
Zularistan)
o EPC contractor (highlighting track record of other solar plants built and any
outstanding liabilities/warranties etc)
o the offtaker - Da Afghanistan Breshna Sherkat (“DABS”)

2. Afghanistan’s energy market analysis

• The LTA will provide an analysis of Afghanistan’s energy sector, including:

o Relevant current and proposed regulation in the energy sector having an impact on
the project
o Details on merit of order in Afghanistan energy sector
o Details on relationship with the regulator and other regulatory bodies (frequency of
contacts, etc.)
o Review of the landscape of existing and upcoming fossil fuel and renewable energy
Independent Power Producer (“IPP”) in Afghanistan

Package B: SCOPE OF WORK FOR THE KANDAHAR PROJECT

This scope of work applies to each individual project.

Package B1: Technical Scope of Work

1. Project document review:

The LTA will review the project documentation package provided by the Sponsors, to highlight
potential technical risks and costs for the project and potential related mitigation measures. This will
be based on the following reviews:

2. Project permits review

• Review of related permits and authorisations required for the construction, operations of the
project (building permits, authorisation for the substation, road access) and operating licences
as requested in Afghanistan.

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 2.1. Project studies review

• Review of studies performed by the Sponsors including:

o Geological studies and containing information on topography, geology, hydrology of
the terrain
o Environmental and social impact study or any environment consents
o Health, social and environmental studies (including water, waste management, overall
human resources organisation study)

2.2. Procurement process and EPC and suppliers remaining liabilities review

• Review of the EPC and supply agreement to:

o understand the procurement process and to check remaining guarantees or
obligations
o check the contractual warrantees for PV modules, mounting structures, inverters,
main electrical equipment

2.3. PPA and grid connection agreement review

• Review of the provisions of the PPA with the offtaker including energy sale and purchase
provisions, pricing and conditions for operation.
• Review of the provision of the grid connection agreement with the grid operator including
technical requirements, scheduled maintenance allowances.
• Assess the contractual technical constraints required by the project contracts, having a
potential impact on the design, procurement or the operation of the project.
• Assess the technical aspects of the proposed contractual structure and the allocation of risks
to the principal parties and to what extend contract are on a back-to-back with the O&M
contract.

2.4. O&M contract review

While reviewing the O&M contract, the LTA will make sure to:

• Check that the PPA technical requirements and risks identified are addressed in the contract.
• Comment on proposed availability range, warranties, response times, damage compensation
/ liability limits, termination rights.
• Provide a gap analysis of the O&M contract pointing out any clauses missing and confirming
that the O&M contract terms are aligned with market standards, identified deviations from
market standards will be reported and mitigation factors can be proposed.
• Review and comment on the project company’s plan for spare parts and its adequacy to meet
the projected operating performance.

2.5. Land lease agreement

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• Review of the lease agreement to assess potential risks and costs to be taken into
consideration.

3. Technology and plant design assessment

3.1. Key project components (i.e. modules, inverters, structures, power transformers)

• the quality, the performance and suitability with the site conditions and international
standards. (optimal performance, degradation rate guaranteed by the manufacturer, lifetime
expectancy).
• Review of warranties and certifications.
• Equipment’s track record: worldwide and regions having similar environmental conditions or
climate.
• Manufacturer’s track record of operating in similar environmental conditions or climate.

3.2. Site characteristics

• Site suitability (including carrying out a site visit).

• Existing infrastructure at the site.
• Review of available site information including hydrology, geotechnical and topology.
• Subsurface investigations and geotechnical considerations.
• Climate and environmental conditions.
• Identified construction specifications or limitations consistent with the soil and rock
properties.
• Security risk.

3.3. Connection

• Grid connection status and studies

• Modelling undertaken and required by grid company
• Curtailment risks going forward
• The adequacy of the plant to meet grid connection standards or any technical performance
standard(s) required for connection
• Provide views on status of sub-station and evacuation infrastructure and any critical
maintenance requirements that may be pending

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 4. Energy yield assessment

• Review the solar analysis performed by the Sponsors’ technical advisor.

• If necessary, creating a new energy yield assessment.

5. Review of the technical parameters of the financial model, including:

• The LTA will review the following technical parameters in the financial model prepared by the
Sponsors:
o Capex inputs based on construction work costs from the EPC contract
o Opex inputs against O&M contract’s terms
o Projected revenues based on PPA tariff, PLF (P50, P75 and P90) assumptions, project
availability assumptions, module degradation rates

• The LTA will also provide recommendations to define the sensitivity cases to be run.

6. Plant inspection and performance verification

• The LTA will conduct an inspection to assess any factors that may impact the project’s
performance such as near shading obstacle, dust conditions or others.
• The technical inspection is based on the following activities:

o A detailed visual inspection of installation works quality and adequacy with as-built
documents.
o A detailed visual inspection of key components quality and adequacy with as-built
documents.

o Indirect measurement by means of performance ratio calculation for the period since
commercial operation date until the site visit date, based on yield data from the
energy meter readings and the actual radiation.

Post Financial Close:

The LTA will:

• Visit the plant and prepare a quarterly report on its technical and operational status and
annual site visits until the end of the Transaction.
• The review will include:
- Operational performance of the plant, including production, availability, efficiency,
details of major problems (if any), and review of any modifications proposed of the
plant.
- Technical and budgetary issues that would be considered critical to the plant's ability
to repay the debt of the project.
• Review annual budget prepared by the project company and recommend to GuarantCo
whether it is good for approval.

Package B2: HSES scope of work

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This scope of work applies to each individual project. The LTA will report on the HSES aspects as
indicated below:

• Review the adequacy of the Environmental and Social Impact Assessment (“ESIA”) process,
the EIA report, the Environmental and Social Monitoring Plan (“ESMP”) and Environmental and
Social Management System (“ESMS”) (if available), Resettlement Action Plan (“RAP”),
Livelihoods Restoration Plan, and any other relevant documents and judge it against the IFC
Performance Standards. Compliance with relevant national and international environmental
and social guidelines, laws and regulations should also be assessed. The independent review
must specifically address foreseeable risks and mitigation measures and should give an overall
opinion on the ability of the project to meet IFC Performance Standards. The LTA will need to
identify compliance gaps, necessary mitigation and follow-up actions / action plan, and outline
a managing/monitoring regime.
• Review the adequacy of the project’s E&S monitoring report. Suggest E&S reporting format for
the client to be used in monitoring reports for GuarantCo (if required).
• Review the adequacy of project staffing and expertise to properly execute and monitor the
E&S aspects of the operational activities.
• Review labour policies, labour law compliance, working conditions, gender policy and social
protection systems.
• Review the adequacy of the project’s security system including community health and safety
concerns.
• Review the implementation status and adequacy of the ESMS.
• Review the general site condition and cleanliness, and work execution.
• Provide photographical and video evidence where necessary.
• Identify and report any known E&S contractual problems or concerns with respect to sub-
contractors.
• Identify and report any changes in the original operational plan and their impact.
• Assess the implementation status of ESMP and the ESAP and all related processes and
documents, as well as any deviation.
• Confirm that the project will comply with the most recognized guidelines in the field of
international Health and Safety regulations.
• Identify the main areas of operational risk relating to environmental, social, health & safety
for such project with an emphasis on the security aspects of the project.
• Identify potential cumulative effects and whether these have been addressed or will be
addressed.
• Assess the implementation status of local community benefit sharing and community
development initiatives related to the project.
• Identify any indications for concerns with regard to the relation with local communities or
workers,
• Review any fatalities, the analysis of causes, actions taken by the Client, and the adequacy of
these measures.
• Review and monitor if the agreed safeguard requirements of the project is in place and are
being adequately implemented.
• Identify any item of concern that GuarantCo should be aware of.

Package C: SCOPE OF WORK FOR THE GREENFIELD PROJECTS

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The scope of work for this package is for the Greenfield Projects only. The timeline for services to be
rendered each individual greenfield project will be discussed at a later stage.

Package C1: Technical scope of work (construction phase)

1. Construction Review

1.1. Review the engineering and construction approach of the Sponsors

1.2. Assess the suitability of the technical specifications. Review their conformity to recognized
industry standards.

1.3. Review the proposed contractor guarantees and confirm their adequacy to demonstrate
the performances of the project. Review and comment on the basis upon which the
contractor guarantees will be evaluated. Review and comment on the penalties and
liquidated damages resulting from failure to meet guarantees.

1.4. Review the reporting requirements of the different construction contractors and the
project company and their adequacy for the purpose of providing GuarantCo with an
appropriate follow-up of the construction.

1.5. Review the key project documents including amendments, and check that such documents
are appropriately conformed to each other.

1.6. Review and comment on the warranties under the project documents.

2. Energy yield assessment:

2.1. Review the energy yield assessment performed by the Company’s technical advisor.
2.2. If necessary, generating a new energy yield assessment.

3. Contractors’ Qualifications

3.1. Assess the capability and experience of the contractors to implement the project as
specified.

4. Cost and Schedule

4.1. Review all costs/expenses associated with the project up to project completion (physical
and financial) including preliminary operating and start-up expenses. Determine if the cost
items are consistent with the best estimate that is available for such a facility and if they
are reasonable and competitive. In this analysis, a discussion of all the factors that affect
the project cost should be presented. For example, the market for power generation
equipment, the impact of a phased construction and others. A bench marking analysis
should be prepared too.

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4.2. Review the contingency amount as stipulated in the total project costs and comment on
its adequacy to deal with possible non-anticipated expenses.

4.3. Discuss whether the project's contingency and contractor guarantees are sufficient, from
a technical perspective, to protect against construction risks and, if not, suggest mitigating
measures.

4.4. Validate that the construction and testing schedule corresponds to a reasonable and
sound timetable in the context of the project.

4.5. Review the proposed payment schedule attached to the project milestones. Validate the
conformity of such payment instalments considering similar projects and of the
construction schedule.

5. Completion Testing

5.1. Review the adequacy of the project completion tests from GuarantCo’s perspective.
Determine if performance and acceptance tests in the PPA and/or the construction
contracts are sufficient to determine performance and reliable operation.

6. Project Implementation Status

6.1. Technical review:

a) to follow the construction progress, assess progress in engineering, procurement,

construction activities, review progress reports prepared by the Sponsor/Contractors
engineer;
b) to evaluate the quality of the completed work and review quality control reports;
c) to monitor the actual expenditures against budgeted expenditures;
d) to attend site construction progress meetings;
e) to ensure the work is performed in accordance with the approved design;
f) to review and verify all variation orders;

7. Change Orders:

7.1. Review and consider for approval any construction variation or change order in excess of
such threshold as may be specified in the financing documents and report these on a
cumulative basis in the site visit reports.

7.2. Assess the impact of proposed change on operational and maintenance costs, whether
change in cost is reasonable, and the impact on project completion.

8. Procurement:

8.1. Review the implementation of the overall procurement procedures, preparation of

procurement documents, procurement contracts and packages in accordance with the
Contracts and the overall project implementation schedule.

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9. Schedule and Cost Deviations:

9.1. Identify and report to GuarantCo any changes or events that could lead to deviations of
the project schedule and costs from the agreed targets, due to unforeseen events such as:
foundation conditions, accidents, disputes between contracting parties, design flaws,
political events, unusual weather, equipment failures, factory strikes, construction labour
disputes, and other similar events that might impact the project.

10. Certification of Disbursements and Certain Milestones:

10.1. Technical

a) A short certificate to validate each disbursement.

b) Monitor and report in the site visit report on the disbursement of project funds,
disbursement program, project implementation schedule, and contractor’s drawdown
schedule.

11. Preparation of Punch Lists:

11.1. Towards the end of the project construction period, participate in the final "punch"
lists and facility review to record all work requiring completion and defects needing
correction, and monitor the completion of all outstanding work to ensure the achievement
of a fully completed project of high quality.

11.2. Agree on the work items transferred from the Punch Lists to the Completion List.

12. Performance Tests:

12.1. Review testing methodology and schedule based on the performance testing
procedures specified in the construction contract, PPA and other documents.
12.2. Participate, as reasonably required, in such performance tests that relate directly to
plant performance and reliability, including; (i) the site performance tests of the major
equipment components; and (ii) testing of the complete plant upon completion.

13. Consultant Certificates and Construction Completion:

13.1. Technical

a) Facilities Construction Completion - Certification that the facilities have been

constructed in accordance with the original design criteria provided by the Company
and agreed to on behalf of GuarantCo prior to Financial Closing.
b) Operational Integrity of the project - Certification that the facilities have demonstrated
their operational integrity by satisfying the completion, performance and operational
tests, to be performed in the presence of GuarantCo’s Consultant. The tests’ definition
and testing protocol shall be developed concurrently between GuarantCo and
GuarantCo’s Consultant. Certification that the facilities, services and utilities will be
made available to enable the project to commence operations.

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 c) Guarantee / Warranty Issues - Advise GuarantCo’s on potential disputes related to
guarantees and warranties, which may arise, and oversee corrective actions.
d) Punch List Items - Review and sign-off on the punch list items as being acceptable for
the completion of the plant.

Package C2: Technical scope of work (operations phase)

Please see scope of work for package B1.

Package C3: HSES scope of work

Please see scope of work for package B2.

Package D: Financial Due Diligence Assistance

GuarantCo has full capabilities to conduct financial analysis in house. Therefore, the proposed scope
of work is to assist GuarantCo in collecting the quantitative and qualitative data required to conduct
detailed financial due diligence on the following parties:

• DABS / Ministry of Finance

• Project lender (beneficiary of GuarantCo Guarantee)
• Local project stakeholders (including O&M provider and Zularistan)

3. Timescale

Subject to any potential changes notified by GuarantCo in accordance with this RFP, the following
timescales shall apply to the Procurement Process:

Activity Date / time

RFP issued 27/8/2020

Deadline for clarification questions (Clarification deadline) 3/9/2020 (midnight UK time)

GuarantCo to respond to clarification questions 7/9/2020

Deadline for submission of RFP responses by potential suppliers 9/9/2020 (midnight UK time)
(Response deadline)

Final decision 16/9/2020

Contract concluded with winning supplier 18/9/2020

Contract start date 21/9/2020

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4. Format of the proposal

Taking account of the above, your tender response should provide but not exclusively the following
information:

a) Your profile detailing experience and track record on any assignments of a similar nature
and scope.

b) References from previous clients in which you have provided similar services including
brief description of the project, services provided and implementation dates.

c) Method Statement – setting out how you propose to carry out the required services and
indicative timelines.

d) Financial Proposal – detailing your fee proposal in a lump sum but broken down in the
format indicated in Appendix A.

5. Evaluation criteria

5.1 Upon receipt of your tender response meeting the requirements of this RFP, GuarantCo
will assess each response based on the following scoring:

Item Points
(a) Specific experience related to assignment 20

(b) Adequacy of the proposed work plan and methodology in

responding to Terms of reference/Scope of work and project 20
context.

(c) Qualification and competency of dedicated key staff for the 20

Assignment

(d) Financial proposal 40

TOTAL 100

5.2 Responses from suppliers will be assessed to determine the most economically
advantageous tender using the criteria and scoring above.

5.3 The winning tender shall be the tender response scoring the highest score out of 100.
GuarantCo may reject your tender response in full and disqualify you from the
Procurement Process if your tender response does not meet the requirements of this
RFP or if there is any attempt to inappropriately influence the Procurement Process.

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6. Instructions for responding

6.1 All documents required as part of your tender response should be submitted by the
Response Deadline, as set out in Section 5 to: nishant.kumar@guarantco.com,
phillip.skinner@guarantco.com, hugo.roger@guarantco.com,
bayo.akinwonmi@guarantco.com

6.2 All clarification requests should be submitted by the Clarification Deadline, as set out in
Section 5 to: nishant.kumar@guarantco.com, phillip.skinner@guarantco.com,
hugo.roger@guarantco.com, bayo.akinwonmi@guarantco.com . GuarantCo is under
no obligation to respond to clarifications requests received after the Clarification
Deadline.

6.3 GuarantCo reserves the right to issue any clarification request made by you, and the
response, to all potential suppliers unless you expressly require it to be kept confidential
at the time the request is made. If GuarantCo considers the contents of the request not
to be confidential, it will inform you and you will have the opportunity to withdraw the
clarification query prior to GuarantCo responding to all potential suppliers.

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FEE PROPOSAL SUBMISSION (please note that fee quotes are to be in USD)

Please provide fees exclusive of tax specifying hourly rates, percentage of any discount offered to
standard rates and whether you are offering a fixed fee or a cap. Please specify the basis on which any
disbursements will be charged.

LTA/CONSORTIUM/SUPPLIER NAME: ___________________________________________________

Service Amount (US$)

Package A: Context Assessment
Package B: Scope of Work for Kandahar Project
Package B1: Technical Scope of Work
Package B2: HSES Scope of Work
Package C: Scope of Work for the Greenfield Projects
Package C1: Technical Scope of Work (Construction phase monitoring)
Package C2: Technical Scope of Work
Package C3: HSES Scope of Work
Package D: Financial
TOTAL

SUPPLIER NAME: ___________________________________________________

Proposed Payment Terms

__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

Completed by: __________________________________________

On Behalf of: __________________________________________

__________________________________________

__________________________________________

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