TERMS OF REFERENCE FOR CONSULTANCY SERVICES FOR THE DEVELOPMENT OF A TEN YEAR STRATEGIC PLAN AND ASSOCIATED DOCUMENTS FOR THE INDEPENDENT REGULATORY BOARD (IRB) OF EASTERN AFRICA

 IDA GRANT: EAPP-TA/P163752

Reference Number: ET-EAPP-79571-CS-QCBS 

June  2019 

1.    Background

On 20th January, 2012, the National Regulators/Energy Ministry Representatives of Burundi, Democratic Republic of Congo (DRC), Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania and Uganda held a meeting in Nairobi, Kenya to deliberate on regulatory issues of the Eastern Africa Power Pool (EAPP) and formed the Eastern Africa Regulatory Forum to lead and facilitate the establishment of the Independent Regulatory Board (IRB). In this meeting the forum elected Tanzania to be the chair and Ethiopia to be the secretary and agreed a temporary secretariat to be co-located along with the EAPP headquarters.

Furthermore, on the 30th of March, 2012 the 5th Council of Ministers (COM) meeting held in Addis Ababa, transformed the Eastern Africa Regulatory Forum to the Independent Regulatory Board (IRB) to be located at the Eastern Africa Power Pool (EAPP) General Secretariat in Addis Ababa, Ethiopia for the foreseeable future until conditions were deemed appropriate for its full establishment with a functional structure and staff complement.

It is recognized that consumer advocacy and protection, facilitating financial viability of industry participants, creating an equitable and non-discriminatory environment for all sector participants, and promoting competition are integral parts of any electricity regulatory function. Performing the same functions at a regional scale requires harmonization of various regulations, enforcement of approved regulations and oversight of industry performance, at a higher level. To this end, the IRB has developed its mission and vision statements to align with its mandate.

As IRB is a recent formation, a lot needs to be done in terms of preparing it for effective regulation of a regional power market in Eastern Africa. The institutional, policy and legal framework of the IRB is not developed to the level of regulating the anticipated regional market. Moreover, national energy regulators in the region need a skills development program to prepare them for regulatory harmonisation and functioning in a regional environment. The programme will need to focus on harmonization of regulation; technical, economic regulation; tariff management; and related policy & legal frameworks. Current IRB framework and its associated provisions need to be reviewed for validation and change to assure its fitness to the current and future functional role of the IRB. An intervention is needed to map a path for the full operationalization of the IRB as a well-equipped, effective and efficient regional power market regulator through formulation of its strategic direction, institutionalization complete with functional structures, systems and processes, legal framework, developed skills, and policies and capability to coordinate various initiatives in the region.

Functionally, IRB is limited as it is currently manned by a sole Lead Coordinator based at the EAPP Head Quarters in Addis Ababa. The IDA grant component for the strengthening of IRB is being administered through the EAPP Project Implementation Unit (PIU).

1.1 Mandate of IRB

The mandate of the IRB covers the following: 

  1. Issue operating licenses to qualified market participants in accordance with the approved Market Rules and Regional Grid Code,
  2. Regulate relevant activities of the signatories of the Inter – Utility Memorandum of Understanding,
  3. Approve formulae for calculating the EAPP Regional transmission and wheeling tariffs in the approved methodology or methodologies,
  4. Derive and propose any modifications to the financing formulae of regional institutions (Such as EAPP Permanent Secretariat, Coordination Centre),
  5. Approve modifications to subsequent versions of the EAPP regional market rules, EAPP interconnection code, standards, procedures and specification, and enforce standards procedures and specifications,
  6. Recommend changes to EAPP member country’s domestic legislations to facilitate the development of the EAPP Regional Power Trade and the continued progress of the EAPP towards a competitive electricity markets,
  7. Follow up and monitor the performance of the EAPP Regional Trade, propose modifications as necessary and present an annual performance report to the Conference of Ministers,
  8. Settle any electricity cross–border or trading dispute which may arise between the members in the EAPP regional Power Market,
  9. Ensure transparency and availability of information to all stakeholders,
  10. Coordinate, Monitor and enforce Environmental Guidelines for Regional Projects
  11. Impose penalties and sanctions on non-compliance with Market Rules, Grid Code and any other applicable Rules and Regulations

1.2 Members of IRB

Currently, eleven countries have membership in the IRB. These are Burundi Agency for Regulation and Control of Water and Electricity (ACR), Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egypt ERA), Ethiopian Energy Authority (EEA), Energy Regulatory Commission (ERC) of Kenya, Rwanda Utilities Regulatory Agency (RURA), Electricity Regulatory Authority (ERA) of Sudan, Energy and Water Utilities Regulatory Authority (EWURA) of Tanzania and the Electricity Regulatory Authority (ERA) of Uganda. The DRC, Libya and Djibouti are represented by their Ministries of Energy.

2.    Objectives of the Assignment

The objective of the assignment is to develop a Ten-Year Strategic Plan, Three-Year Action Plan and self-sustaining funding mechanism for IRB covering the period 2020-2029. The Ten-Year Strategic Plan and a Three-Year Action Plan covering the period 2020 to 2029 and 2020 to 2022 respectively are expected to set IRB’s strategic direction, prioritize activities and map out the developmental trajectory to full operationalization of the IRB in the medium and short term periods respectively. The consultant will also review and update the IRB operation manual and carry out a training needs assessment.  

The funding mechanism to be developed is intended to ensure sustainability of the IRB whilst it retains its independence from political economy, regulated entities and consumers in order that it remains professional, impartial, fair, effective and efficient.

3.    Scope of Service

3.1      Review the vision, mission and mandate, legal/ regulatory framework, decisions of Council of Ministers (COM) in relation to IRB to gauge gaps in fitness for purpose in the current and future operating environment;

3.2      Benchmark with mature and functional regional regulators in various parts of the world including: Europe, Northern, Central and Southern American Countries and others to identify gaps in strategic fitness, functionality, practices, standards and application. The consultant will be required to show the benefits of regional regulatory bodies in the context of power pool operations and trade and recognize experiences and lessons learnt from among others; the ECOWAS Regional Electricity Regulatory Authority in West Africa and the Regional Electricity Regulatory Association in Southern Africa;

3.3      Formulate fit for purpose mandate and legal/regulatory framework for the IRB to perform at international best practice level;

3.4      Recommend enforcement mechanisms – of regulations, payment discipline, operating standards etc.;

3.5      Recommend functional organizational structure for IRB complete with designations of functional units; their roles and responsibilities, their inter-linkages and expected outputs;

3.6      Identify skills requirements; gaps; and mitigation strategies complete with position job profiles, staff establishment qualifications and a plan for filling positions at IRB Secretariat. Recommend key result areas and relevant key performance indicators to be used for performance management purposes;

3.7      Develop a high level Road Map and a detailed Implementation Plan of the Ten Year Strategic Plan and Three Year Action Plan for equipping of the IRB for its full operationalization together with estimated yearly budget for running the institution for the period of the strategic plan coverage;

3.8      Develop a Ten-Year Strategic Plan (2020 – 2029) and a Three Year Action Plan (2020 – 2022) for actualizing identified and approved activities for the full establishment of the IRB. The Strategic Plan, among other things must include IRB’s SWOT analysis as well as Stakeholders’ analysis;

3.9      Evaluate different options for a financing mechanism for meeting the budget under 3.7 above to ensure sustainability in order that the IRB maintains professional independence from political economy, regulated entities and consumers. Recommend the most feasible option for the region giving a clear justification for the choice;

3.10   Review and update the existing Operational Manual for IRB;

3.11   Carry out a training needs assessment and recommend training areas and a training programme for IRB member staff who are engaged with the regional board, working groups and the Secretariat in order to build and retain competencies;

3.12   Conduct three(3) stakeholder meeting(s) (approximately 30-40 participants) with the IRB Board members, IRB Secretariat, IRB Working Group members. The Workshops/meetings shall be held in different IRB member countries;

3.13   The consultant is expected to make available the project manager and its key staff, for the proper execution of activities in these ToRs and ensure the involvement of the IRB Secretariat in every step of the process and transfer knowledge to the extent possible;

3.14   Document all the processes and provide the same in soft copies.

3.15   The consultant shall undertake a risk analysis to determine the factors that may affect the preparation and implementation of the IRB mandate and recommend mitigation plans associated with:

i)        Each National Regulator and Regional Bodies/Associations associated with operationalization of IRB;

ii)      Implementation of the strategic plan and

iii)    Regulatory information processing/analysis, etc.

3.16   The total duration of the assignment is 12 calendar months.

4.    Deliverables

The consultant is expected to deliverthe following:

          I.                   Monthly Progress Reports: the reports are in a write-up format, which may include presentations of the report to the Client Staff;

          II.                  Inception Report: detailing the consultant’s interpretation of the TORs, defining the methodology to be applied in meeting the requirements of the TORs, preliminary review of pertinent documentation and highlighting the support required to facilitate expeditious achievement of the TORs;

        III.                 Draft final Reports: after collecting comments from the review and validation of draft reports, the consultant will submit the draft final reports of each component to the IRB Secretariat for review and comments;

        IV.                  Final Reports: at the end of the assignment, a final report for all the studies shall be prepared to include the full results of the service carried out by the consultants for the assignment. The reports, which shall be submitted to IRB, shall include all the agreed relevant comments and suggestions by stakeholders. The final reports include the following deliverables:

§   Recommended IRB Ten-Year Strategic Plan;

§   Three Year Action Plan;

§   Self-sustaining Funding Mechanism Report

§   Updated Operational Manual for IRB;

§   Capacity Building Recommendation and

§   A high level Road Map and detailed Implementation Plan for the full operationalization of the IRB.

For all final reports, quality 20 English and 5 French hard copies with their respective soft copies either in flash disks or CDs are required.

      V.       Workshops

The number of workshops and the expected number of participants are shown in the table 1 below. The consultant will be expected to cover the costs of their own travel, hotels and other costs for the participation in the workshop. All other costs to the IRB participants related to the workshops will be covered by EAPP. The workshops will be held in the  region.

 

IRB is expecting to have meetings/workshops as indicated below. The consultant is expected to have in the beginning of the assignment, a kick-off meeting with IRB Scretariat, EAPP GS, in Addis Ababa, Ethiopia. Furthermore, the consultant is also expected to present a high level summary of all the agreed findings to the Council of Ministers (COM) at the end of the assignment (within the 12 month project period). The dates of the two meetings will be agreed as appropriate.  

 

 

 

 

 

 

 

 

 

Table 1: List of Workshops and Meetings

Workshop/Meeting

Number of days

Expected number of participants

Participants

Kick-off Meeting

1

15

IRB & EAPP GS

Workshop 1: Inception Workshop, and seminar1, review and validation of Inception Report and participatory formulation of strategic plan

5

30-40

IRB Board Members, IRB Secretariat, IRB Working Group Members, EAPP GS

Workshop 2: 

Review and validation of Draft Reports

 

3

30-40

IRB Secretariat, IRB Working Group Members, EAPP GS

Workshop/Meeting

Number of days

Expected number of participants

Participants

Workshop 3:

Presentation of the Final Report to IRB Board Members and meeting with Development Partners’

2

30-40

IRB Board Members, IRB Secretariat, EAPP GS and Development Partners’

 

Presentation of the final reports to the COM

1

20

COM, IRB Board Members, EAPP GS and Development Partners’

1Seminar: the consultant is expected to make a presentation on the importance of Regional Regulation in relation to power trade and the experience of other matured power pools and regional regulatory bodies

 

5.    Reporting and Workshops Schedule     

The total duration of the assignment is 12 months. The schedule for the execution of the study is shown in table 2 below:

Table 2: Schedule for Reporting and Workshops

Item

Month

Monthly Reports

Every month

Inception Report                                                        

Draft Capacity Building Recommendation              

Month 3

Workshop 1: Inception Workshop

Month 4

Draft final Reports

Draft Ten-Year Strategic Plan                                  

 

 

Month 6

Draft Three Year Action Plan                                               

Draft Self-sustaining Funding Mechanism Report

Draft Updated Operational Manual for IRB             

Draft Capacity Building Recommendation

Draft high level Road Map and Implementation Plan

Workshop 2: Review and validation of Draft Reports

Month 7

Workshop 3: Presentation of the Final Reports

Month 10

Final Reports 

Recommended IRB Ten-Year Strategic Plan

 

 

Month 11

Final Three Year Action Plan

Final Funding Mechanism Report

Updated Operational Manual for IRB

Capacity Building Recommendation

A high level Road Map and a detailed Implementation Plan

 

6.    Required Expertise of the Consultant

The Consultant shall be an experienced firm or a consortium of firms with no less than ten years’ experience in similar projects in various regions. Experience in the African environment will be an added advantage. The consultant must demonstrate extensive and in-depth experience in the fields of:

§  Regional Electricity Market design, its regulation, governance structures and practices;

§  Development of methodologies for determination of transmission pricing, access, wheeling, loss factors and imbalance management. The consultant should also have experience in market charging methodologies for the above components and their management processes;

§  Sound knowledge of system operations, grid codes, tariff setting, power purchase agreements, stakeholder consultations, legal and regulatory frameworks is essential;

§  Firms are allowed to consort where relevant skills are not fully available in-house.

6.1 Key Experts Required

 (I)         Team Leader/Project Manager:

The team leader shall be a seasoned regulatory professional with a traceable record demonstrated in similar projects undertaken. He/she shall hold at least a Master’s degree in economics, engineering, law or related field with not less than ten years post qualification experience. He shall demonstrate in-depth knowledge and experience in regional power market design, operation and regulation. In addition the team leader must demonstrate strong team management skills that are required in a cross functional project like this one.

Other team members should cover but not limited to the following skills:

(II)         Power System Operations Expert

He/she shall hold at least a Bachelor’s degree in Electrical Engineering with no less than 10 years’ experience in Technical Regulation or Power Systems Operation, out of which not less than 5 years’ must have been spent at senior management level with power pool operations or regional regulation.

(III)         Legal/ Regulatory Expert:

He/she shall hold at least a Bachelor’s degree in Law or related field with no less than 10 years’ experience in the development of legal and regulatory frameworks, dispute resolution mechanisms or related legal issues in the power sector, out of which not less than 5 years’ experience must have been in a power pool and regional market environment dealing with formulation of market rules, dispute resolution matters, regulation formulation, power purchase agreements and trading issues.

(IV)         Power Trading Expert:

He/she shall hold at least a Bachelor’s degree in Economics, Electrical Engineering or related field with no less than 10 years’ experience and traceable records in power trade dealing with supply procurement, market operations, market designs, market monitoring and surveillance, power trading methodologies, systems and practices in a mature power pool environment or regional regulator.

(V)         Strategic Planning Expert:

He/she shall hold at least a Bachelor’s degree in Management/Economics/ Engineering or related field with not less than 10 years’ experience in the preparation of strategic plans and training needs assessments, out of which not less than 5 years in the preparation of strategic plans for regional institutions/regional regulatory bodies/power pools/electric utilities.

(VI)         Human Resources Expert:

He/she shall hold at least a Master’s degree in Management/Buseness Administration or related field with not less than 10 years’ experience in human resources development; institutional building and establishing new regulatory bodies; organizational structures, designations of functional units with their roles and responsibilities, and human capacity development, out of which not less than 5 years must be in senior position in Human Resource Development in a reputable organization.

7.    Roles and Responsibilities

The responsibilities of the client,“IRB represented by EAPP General Secretariat’ will include:

7.1       Following up on the administrative and logistical part of the consultant’s activities as per these ToR and

7.2       Processing payment to the consultant after getting the necessary approvals from and IRB.

The responsibilities of the IRB will include;

7.3       Following up on the consultant’s technical activities as per these ToR;

7.4       Providing available data and documents relevant to the assignment;

7.5       Liaising with and facilitating the consultant’s access to the facilities of the IRB, member regulators, other relevant institutions and stakeholders in different countries for purposes of the assignment; and

7.6       Reviewing and providing comments/feedback to the consultant on the output of the assignment at various stages;

7.7       Discussing the output internally and following up as appropriate on recommendations made by the consultant.

7.8       Facilitating the engagement and support of IRB, Partners and member regulators

The responsibilities of the Consultant will include:

7.9       To deliver all the deliverables indicated in the terms of reference with the acceptable quality within the given time.

7.10    To make available the project manager and the key staff in the IRB Secretariat during the execution of different activities and ensure proper knowledge transfer to the Secretariat.