The document discusses mechanisms for implementing wind energy projects in Egypt using tenders and auctions. It describes the tender process and key components of tender documentation, including the invitation for bids, instructions to bidders, contract form, general conditions, special conditions and technical specifications. It also outlines the auction process and considerations for selecting independent power producers through competitive bidding. The document provides guidance on project implementation schedules and ways to reduce risks for developers, such as structuring tenders into different lots based on project components.

1. ‫الريبح‬ ‫طبقت‬ ‫مشروعـبث‬ ‫إوشــبء‬ ‫آليــبث‬
“‫املصريت‬ ‫التجربت‬“
Mechanisms to Implement Wind Energy Project
“Egyptian Experience”
‫اخليـبط‬ ‫مصطفى‬ ‫حممد‬
‫واملتجددة‬ ‫اجلديدة‬ ‫الطبقت‬ ‫هيئت‬
mohamed.elkhayat@yahoo.com
www.energyandeconomy.com
RCREEE - Beirut, May 8-9, 2013

2. Contents
-(A) : TENDERS
- Introduction
- Contents of Tender Documents
- Part I: Invitation for Bids
- part II: I ) Instructions to Bidders
II ) Contract Form
III) General Conditions
IV) Special Conditions
V ) Technical Specifications
VI) Annexes
- (B) : AUCTIONS
- Auction Procedures
- Applicant/Bidder Methodology
- How could Risks be Reduced?
-(C) : PRODUCTION COST

3. Introduction
Wind Farm Projects
Public Utility
Competitive Tenders
“BOO”
Auctions
IPP
Tenders
(International / Tied)
Owner Private Sector Private Sector Public Utility
Operator Private Sector Private Sector Public Utility
Off-taker Grid Private Sector Grid

4. (A): Tenders

5. ‫األخرى‬ ‫المجاالت‬ ‫مع‬ ‫المتجددة‬ ‫الطاقة‬ ‫مشروعات‬ ‫فى‬ ‫االستثمار‬ ‫يتشابه‬
Investment in renewable energy is similar to others
‫األخرى‬ ‫للمشروعـات‬ ‫نظيرتها‬ ‫مع‬ ‫المتجددة‬ ‫الطاقة‬ ‫مشروعـات‬ ‫مناقصــات‬ ‫تتشابه‬
Introduction
Tendering is the process of making an offer,
bid or proposal,
or expressing interest in response to
an invitation or request for tender

6. Introduction
Tender Means Relation Between Two Parties
First Party
- Employer/Owner
Second Party
Supplier/Contractor/
Consultant/..etc

7. Step (1)
• Tender Process Is Determined: the organization requesting the tender will determine
the type of tender that will be used, as well as what will be involved in the tender
process.
Step (2)
• Request For Tender Is Prepared: the request for tender outlines what is required, the
contractual requirements and how Applicant/Tenderer should respond.
Step (3)
• Tenders are Launched: the value, complexity and business category determine how
tenders are invited.
Step (4)
• Applicants Respond: you should first offer all relevant documentation. Then invite
them to:
•Clarify any uncertainties
•Visit site location
•Attend pre tender briefing sessions
•Submit their response in the right format, on time and at the right location
The Seven Main Steps in the Tender Process :
Introduction

8. Step (1)
• Tender Process Is Determined: the organization requesting the tender will determine the type
of tender that will be used, as well as what will be involved in the tender process.
Step (2)
• Request For Tender Is Prepared: the request for tender outlines what is required, the
contractual requirements and how Applicant/Tenderer should respond.
Step (3)
• Tenders are Launched: the value, complexity and business category determine how tenders
are invited.
Step (4)
• Applicants Respond: you should first offer all relevant documentation. Then invite them to
(Clarify , Visit , Attend , and Submit).
Step (5)
• Evaluation And Selection: each tender will be checked for compliance through evaluation
processes against the criteria specified in the tender documentation. The tender that offers
accepted quality and best value for money will win the business.
Step (6)
• Notification And Debriefing: when a contract has been awarded, the successful Tenderer will
be advised in writing of the outcome. Unsuccessful Tenderers are also advised.
Step (7)
• Contracts Established And Managed: generally a formal agreement will be required between
the successful Tenderer and the your Agency.
The Seven Main Steps in the Tender Process :

9. Contents of a Tender Document

10. Contents of Tender Documents
Invitation for Bids
I ) Instructions to Bidders
II ) Contract Form
III) General Conditions
IV) Special Conditions
V ) Technical Specifications
VI) Annexes
a.The Bid Form
b.Price Schedule
c.The Delivery Schedule
d.The Bid Security
e.Performance Security Form
f. Declaration of Local Agent (s)
g.Warranty Form
PART I
PART II

11. PART I: Invitation for Bids

12. Invitation for Bids
Tender No. : EL ZAYT – 200 MW WIND FARM PROJECT BMZ No: 200666016
Bid Submission :
- Last Date : Aug. 12, 2013
- Place : NREA Headquarter, Address.
- Time : @ 12:00 CMT
Cost of Bid Document (EGP/US$/Euro) : ??,???
Bid Bond:
- Amount (EGP/US$/Euro) : ???,???
- Validity Period : 180 days from the date of bid submission

13. Invitation for Bids
•NREA reserves the right to carry out the following without becoming liable
to any Bidder or giving rise to any obligation to inform any Bidder of the
ground for its conduct;
a- Reject or accept any application; and
b- Cancel the qualification process and reject all applications
c- Not return the submitted qualification documentation
d- To amend the qualification terms and conditions in the tender
documentation and extend the deadline for the submission of the
applications accordingly; such amendment to be carried out prior
to the deadline for submission of the applications.
•Each Bidder shall bear the costs associated with its application for
participation in the tender process and with preparation of his bid.

14. PART II: Instructions to Bidders

15. PART II: Instructions to Bidders
A: INTRODUCTION
General Source of Funds : Loan (Source, Currency, date of signing Loan Agreement), or
Own resources
Corruption : ----
Definitions “APPROVED / APPROVAL” shall mean approval in writing by the “NREA”.
“NREA” shall mean New and Renewable Energy Authority (hereinafter referred to
as “the Employer”) .
Day, Week, …. etc.
Scope NREA wishes to receive Bids for a full turn-key wind farm with rated capacity of
220MW, consisting of the following lots, all of which shall be combined together
as a complete package:
・ Lot 1: Wind Turbines
・ Lot 2: Electrical Works
・ Lot 3: Civil Works
Eligible
Bidders
- An Applicant may be a single entity or any combination of entities in the form of
joint venture or association (JVA) with the formal intent, as evidenced by a letter
of intent, to enter into an agreement or under an existing agreement.
- Qualifications (Manufacturing, Financial, Legal)
Cost of
Bidding
The Applicant shall bear all costs associated with the preparation and submission
of its application. The Employer shall in no case be responsible or liable for those
costs.

16. B : BIDDING DOCUMENTS
Bidding
Documents
NREA shall provide one electronic copy of Bid Document. The Bidding
Documents include:
I. Instructions to Bidders
II. Contract Form
III. General Conditions of Contract
IV. Special Conditions of Contract
V. Technical Specifications
VI. Annexes
Classification
of Bidding
Documents
Interested eligible Applicants may obtain further information from and
inspect the Prequalification Documents at the address given below from
8:00 a.m. to 3:00 p.m.
Amendment
of Bidding
Documents
- At any time prior to the deadline for submission of applications, the
Employer may amend the Prequalification Documents by issuing
addenda.
- Any addendum issued shall be part of the Prequalification Documents.
Language of
Bid
The application as well as all correspondence and documents relating to
the prequalification exchanged by the Applicant and the Employer, shall be
in English.
PART II: Instructions to Bidders

17. C : PREPARATION OF BIDS
Documents
Comprising
the Bid
The application shall comprise the following:
(a) The Goods are substantially in compliance with the governing
standards and specifications of the Goods given in Section V of Bid
Documents.
(b) The documentary evidence to demonstrate that the bidder or his
manufacturer has the technical and production capacities to
perform the contract.
(c) The delivery schedule duly filled up.
(d) Any other document required.
Bid Price
Bid Form The Applicant shall prepare One original of the documents comprising the
application and clearly mark it “ORIGINAL”.
The Applicant shall submit Three copies of the signed original application
and clearly mark them “COPY”.
Bid Security
PART II: Instructions to Bidders

18. D : SUBMISSION OF BIDS
Deadline for
Submission of
Bids
Applicants may always submit their applications by mail or by hand.
Applications shall be received by the Employer at the address and no later
than the deadline.
Sealing of Bid The Applicant shall enclose the original and the copies of the application
in two/three sealed envelopes
Late Bids The Employer reserves the right to accept or reject late applications. The
Employer shall prepare a record of the opening of applications that shall
include, as a minimum, the name of the Applicant. A copy of the record
shall be distributed to all Applicants.
PART II: Instructions to Bidders

19. E : BID OPENING AND EVALUATION
Opening of Bids Date, Place, and Time.
Clarifications To assist in the evaluation of applications, the Employer may, at
its discretion, ask any Applicant for a clarification of its
application which shall be submitted within a stated reasonable
period of time.
Evaluation
(Prequalificatio
n/ Technical/
Financial)
The Employer shall use the factors, methods, criteria, and
requirements defined in Section III.
-Prequalification (PASS or FAIL)
-Technical (Score) 60%, 70%, 80%
-Financial (Score) 40%, 30%, 20%
-Bid Final Score (weighted
PART II: Instructions to Bidders

20. F :AWARD OF CONTRACT
Notification of
Award
The LETTER OF ACCEPTANCE will constitute the formation of a
CONTRACT, until the CONTRACT has been effected.
Signing of
Contract
At the time of LETTER OF ACCEPTANCE, NREA will send the successful Bidder
the Contract Form provided in these Bidding Documents, incorporating all
agreement between the parties.
Within fifteen (15) calendar days of receipt of such LETTER OF
ACCEPTANCE, the successful BIDDER shall execute the signing of the
CONTRACT at the office of NREA at Office of the Executive Chairman,
[Address].
Performance
Security
Within fifteen (15) calendar days of the receipt of the LETTER OF
ACCEPTANCE from NREA, the successful BIDDER shall furnish unconditional
Performance Security acceptable to NREA in accordance with the Conditions
of CONTRACT in the form of a cash deposit or a Bank guarantee according to
Performance Security Form provided in the Bidding Documents.
PART II: Instructions to Bidders

21. PART II: Contract Form

22. PART II: Contract Form
The Employer/Owner Name
The Bidder/Applicant Name
Purpose of the Contract
Brief regarding Scope of works
Contact Value
Source of Financing
Documents Priority
This Contract Form
Schedules of Quantities and Prices
The Addendum of the Tender Document
Special Conditions
General Conditions
Technical Specs including Attachments
Drawings
Commencement Date (Date of payment of the Advance
Payment)
Applicable law
Signature

23. PART II: General Conditions

24. PART II: General Conditions

25. PART II: General Conditions

26. PART II: General Conditions

27. PART II: General Conditions

28. PART II: General Conditions

29. PART II: Special Conditions

30. PART II: Special Conditions

31. PART II: Special Conditions

32. PART II: Special Conditions

33. PART II: Special Conditions

34. PART II: Special Conditions

35. PART II: Special Conditions

36. PART II: Technical Specifications

37. PART II: Technical Specifications

38. PART II: Technical Specifications

39. PART II: Technical Specifications

40. (B) : AUCTIONS

41. ‫الطــبقت‬ ‫عقــىد‬Energy Contracts

42. ‫استخدام‬ ‫اتفاقية‬
‫أرض‬
LUA
‫الطــبقت‬ ‫عقــىد‬Energy Contracts

43. ‫استخدام‬ ‫اتفاقية‬
‫أرض‬
LUA
‫الطاقة‬ ‫نقل‬ ‫اتفاقية‬
Interconnection
Contract
‫الطــبقت‬ ‫عقــىد‬Energy Contracts

44. ‫استخدام‬ ‫اتفاقية‬
‫أرض‬
LUA
‫الطاقة‬ ‫نقل‬ ‫اتفاقية‬
Interconnection
Contract
‫شراء‬ ‫اتفاقية‬
‫الطاقة‬
PPA
‫الطــبقت‬ ‫عقــىد‬Energy Contracts

45. Responsibilities for Auctions

46. ‫ر‬
Auction
for
What?

47. Criteria for Selecting an IPP

48. Criteria for Selecting an IPP

49. Criteria for Selecting an IPP

50. ‫حنه‬
‫هىب‬
‫بدء‬
‫خمبطبت‬
‫البىىك‬
‫ضمبن‬
1%
‫التعبقد‬
‫شركت‬ ‫مع‬
‫الىقل‬
‫الرتخيص‬
‫املرفق‬ ‫مه‬
‫بدء‬
‫الرتكيببث‬
‫بدء‬
‫اإلوتبج‬
‫اجلزئى‬
‫ضمبن‬
2%
‫بدء‬
‫اإلوتبج‬
‫الكلى‬
‫تىقيع‬
‫القرض‬
‫ضمبن‬
0,5%
Project Implementation Schedule

51. (Applicant/Bidder) Methodology

52. (Applicant/Bidder) Methodology to deal with a Tender

53. How could Risks be Reduced?

54. • Tendering
• Turn Key or Lots ?
• Lot 1: Wind Turbines and Foundations
• Lot 2: Electrical Works
• Lot 3: Civil Works
• Currency (Local, Int. “Euro, US$, DK, Yen, ..”)
• One Stage Three Envelops (PQ, T, & F)?
Or
Two Stages One Envelope (PQ) then Two Envelops (T&F)?
• Local Manufacturing (Obligation or Option)?
How to Reduce Risk?

55. • Wind Turbine
• At least two wind farm projects (including roads, platforms and electrical
MV network works) each with a capacity of at least 50 MW
• More than 1,000 wind turbines of all types combined in service on
September 1st, 2012
• Bidder offers a wind turbine as per IEC Class [to be defined], type certified,
min. tip height 20 m, max. tip height 100 m, minimum capacity 800 kW,
that can be made fit for operation under the site desert conditions and
fulfills further conditions as specified
• The Bidder has more than 100 WTGs of the type to be prequalified put
into service as of September 1st, 2012
• More than 50 wind turbines, of the type to be prequalified, erected since
September 1st, 2010 (refer to Section VI for details of the prequalification
requirements)
• Bidder has a market presence of more than five (5) years outside his home
market before September 1st, 2012
• Bidder has an overall annual production capacity for the type of WTG to be
prequalified of more than 220 MW as of September 1st, 2012
How to Reduce Risk?

56. • Financial Performance
• Submission of Audited Balance sheets or if not required by the law of the
Applicant’s country, other financial statements acceptable to the Employer,
for the last three (3) years to demonstrate the current soundness of the
Applicant’s financial position and its prospective long term profitability.
• As a minimum, the Applicant’s net worth calculated as the difference
between total assets and total liabilities shall be positive for the last three
years.
• Moreover, as a minimum requirement, the current ratio, i.e. the ratio of
the current assets divided by the current liabilities at the end of the last
year shall be >= 1.05.
• Minimum Average Annual Turnover of five hundred million (500,000,000)
euros, calculated as total certified payments received for contracts in
progress or completed, within the last three (3) years.
How to Reduce Risk?

57. (C) : PRODUCTION COST

58. Site Area One square kilometer could host from 6 to 8 MW
Capacity Factor (i.e. Zafarana - about 35% and Gulf of El-Zayt - about 45%)
O&M Ranging between 1 – 2 % per annum of the investment cost.
Overhaul Maintenance Ranging from 15-25% of the investment cost. Once per lifetime @
year 10.
Inflation Rate According to each country
Discount Rate For energy projects it ranges between 7-10%
Lifetime 20 Years
Construction Period Around 2 Years
Warranty Period From 1 – 5 years (it will be reflected in the contract price)
Revenues of the Project Energy Revenues,
CERs, and
Fuel Savings.
Parameters

59.  Turbines (With foundations) 70 - 75%
 Civil Works 12 - 15%
 Electrical work 10 - 12%
 Control System 1 – 2%
 Transportation of 2 - 3%
 Customs (acc. to local laws)
 Sales tax of (acc. to local laws)
 Consultant 0.5 - 1%
 Insurance, ….etc.
Share of Project Parameters

60. Cash Flow: Most important and most difficult step in the
analysis of a capital project.
Financial staff’s role includes:
• Coordinating other departments’ efforts
• Ensuring that everyone uses the same set of economic
assumptions
• Making sure that no biases are inherent in forecasts
Uncertainty (wind speed, equipment cost, … etc).
Calculation of Production Cost

61. The Cash Flow Cycle

62. ‫فـى‬ ‫املتجددة‬ ‫املصبدر‬ ‫تتىافر‬ ‫أن‬ ‫جيب‬ ‫ال‬
‫املىاطىني‬ ‫لكل‬ ‫الكهرببء‬ ‫تتىافر‬ ‫وال‬ ‫دولت‬
Thank you
‫ا‬‫ر‬‫ـك‬‫ش‬