salalah 2 rfq - final

7/29/2019 Salalah 2 RfQ - Final

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RFQ Salalah 2 IPP December 2012 1

Request for Qualifications for thedevelopment of an Independent Power

Project at Raysut, Salalah (Salalah 2IPP)

Oman Power and Water Procurement Company SAOC

December 2012


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Notice

All information contained in this RFQ, including financial, geographic, commercial, legal and

technical information, has been included in this RFQ for illustrative and information purposes

only. Each Applicant shall be solely and fully responsible for satisfying itself as to the

information required to submit an application to qualify, and to undertake the Project in

accordance with the terms of its application if the application is successful and the Applicant

subsequently submits a bid to perform the Project.

Whilst the information contained in this RFQ has been prepared in good faith, it does not purport

to be comprehensive nor to have been independently verified. Neither the Tender Board, OPWP

nor its employees, agents or advisers makes any representation or warranty, express or

implied, with respect to the veracity, adequacy, accuracy, reasonableness or completeness of

the information contained in this RFQ or with respect to the information on which it is based or in

respect to any written or oral information or representation given or made or to be given or

made by the Tender Board or OPWP or any of its advisers to any Applicant or its professionaladvisers, whether given or made prior to or after the issue of this RFQ (collectively, the

"Information").

The Tender Board, OPWP and its advisers hereby expressly disclaim any and all liability (other

than in respect of fraudulent misrepresentation) arising out of or in relation to the Information

(including in relation to any omissions there from) and in respect of the use of and/or reliance on

such Information by Applicants and/or their advisers.


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CONTENTS

1 INTRODUCTION ...................................................................................................................................... 7

2 COMPETITION PROCESS OUTLINE ................................................................................................... 10

3 PROJECT TECHNICAL SPECIFICATIONS ......................................................................................... 10

4 PROJECT STRUCTURE AND CONTRACTUAL FRAMEWORK ........................................................ 11

5 RELEVANT REGULATORY FRAMEWORK ........................................................................................ 15

6 ELIGIBILITY REQUIREMENTS AND SELECTION PROCESS ........................................................... 16

7 INSTRUCTIONS TO APPLICANTS ...................................................................................................... 20

APPENDIX A: FORM OF SUBMISSION LETTER .................................................................................... 26

APPENDIX B: EXECUTIVE SUMMARY BASIC INFORMATION ON APPLICANT .............................. 27

APPENDIX C: FINANCIAL INFORMATION .............................................................................................. 29

APPENDIX D: SUMMARY OF IPP/IWPP DEVELOPMENT EXPERIENCE ............................................. 30APPENDIX E: SUMMARY OF PROJECT OWNERSHIP EXPERIENCE FOR IPPS/ IWPPS .................. 31

APPENDIX F: O&M EXPERIENCE AS REQUIRED BY MER 4 ............................................................... 32

APPENDIX G: SCAN OF AER LETTER REGARDING APPROPRIATE PERSON CRITERIA ............... 33

APPENDIX H: FORM OF REQUEST FOR CLARIFICATION ................................................................... 34


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GLOSSARY OF TERMS

Applicant A single entity responding individually or a consortium or othercombination of entities responding jointly to this RFQ

Appropriate Person Criteria The criteria issued by the Authority and used by the Authority todetermine whether or not to grant a licence or exemption to aperson seeking to undertake one or more of the regulatedactivities stipulated in Article 3 of the Sector Law

Authority or AER The Electricity and Related Water sector Authority establishedpursuant to Article (19) of the Sector Law

Bidder or Bidders An interested party who submits a bid proposal

Bidding Group Collectively all the Bidding Group Members of a Bidder wheresuch Bidder takes the form of a consortium, joint venture orgeneral partnership

Bidding Group Member A member or participant in a Bidding Group

BOO Build, Own, Operate

BOOT Build, Own, Operate and Transfer

CCGT Combined cycle gas turbine

COD Commercial Operation Date of the New Plant

DPC Dhofar Power Company

ECA Electricity Connection Agreement

EHC Electricity Holding Company SAOC

EPC Engineering, Procurement and Construction

Existing Plant Shall have the meaning ascribed to it in Section 1.1.1 of thisRFQ

Government The Government of the Sultanate of Oman

Government Share Option Shall have the meaning ascribed to it in Section 4.2.3.2 of thisRFQ

Holding Company Shall have the meaning ascribed to it in Section 7.9.2.2 of thisRFQ

IPO Initial public offering

IPP Independent Power Project

IWPP Independent Water and Power Project

Managing Member The designated lead member of an Applicant that comprises aconsortium of entities

MEDC Muscat Electricity Distribution Company SAOC


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MER Minimum Eligibility Requirement

MIGD Million Imperial Gallons per Day

MOG Ministry of Gas

MOH Ministry of Housing

MW Mega Watt

New Plant Shall have the meaning ascribed to it in Section 1.1.1 of thisRFQ

NGSA Natural Gas Sales Agreement

OCGT Open cycle gas turbine

OETC Oman Electricity Transmission Company SAOC

OGC Oman Gas Company SAOC

OPWP Oman Power and Water Procurement Company SAOC

O&M Operation and maintenance

Parent Company Shall have the meaning ascribed to it in Section 6.4.1.1 of thisRFQ

PAEW Public Authority for Electricity and Water

PFA Project Founders Agreement

Plants Shall have the meaning ascribed to it in Section 1.1.1 of thisRFQ

PPA Power Purchase Agreement

Project The development, financing, design, engineering, construction,

ownership, operation and maintenance of a gas fired powerplant and associated facilities to be located at Raysut, Salalah inthe Sultanate of Oman and potentially the acquisition of theexisting power plant in Raysut, currently owned and operated byDPC

Project Company The developer of the Project

Project Timetable The project timetable set out in Section 1.3 of this RFQ

Power Sector Electricity sector subject to regulation under the Sector Law

Power TransmissionSystem

Means the substations, transformers, switchgears, transmissionand distribution infrastructure and all other associated works for

transmitting the electricity from the connection with the Project tothe point of supply to consumers in the Salalah region

RFP Request for Proposals

RFQ Request for Qualifications

SCOD Scheduled Commercial Operation Date

Sector Law Means the Law for the Regulation and Privatisation of the


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Electricity and Related Water Sector promulgated by SultaniDecree No. 78/2004 issued on 21 July 2004 as amended

SOQ Statement Of Qualifications

SOQ Submission Deadline The SOQ submission deadline more particularly described in theProject Timetable

TBC To be confirmed

Tender Board The Oman Tender Board


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1 Introduction

1.1 Background

1.1.1 OPWP, through Tender Board, is issuing this RFQ to seek detailed qualifications from

experienced parties, which may be a single entity responding individually, or aconsortium or other combination of entities responding jointly and severally, to this RFQfor the development, financing, design, engineering, construction, ownership, operationand maintenance of an IPP to be located at Raysut, Salalah in the Sultanate of Oman(the New Plant).

1.1.2 In addition, OPWP intends to combine the transaction with the acquisition of the existingpower station in Raysut, currently owned and operated by DPC (the ExistingPlant)(both together the Plants) at a fixed price (amount to be determined). A firmdecision as to whether the acquisition of the Existing Plant is included in the Project issubject to approval by the Council of Ministers. It is expected that the transaction will beeffected through a sale of shares.

1.1.3 The New Plant will use gas fired technology to produce electricity for transmission anddistribution in the Salalah grid. Following the successful programme of IWPPs and IPPsin Oman, OPWP wishes to execute the Project in substantially the same way as theexisting I(W)PPs. The Project is to be funded by the private sector and will also follow asimilar structure in terms of pricing and risk allocation to the previous I(W)PPs in Oman.Electricity will be purchased under a long term contract, the PPA, to be entered into withOPWP, for the purchase of the capacity and output of electricity. It is anticipated that theNew Plant will have a contracted capacity of 200 - 400 MW of electricity output over theterm of the PPA.

1.1.4 The Existing Plant uses OCGT technology to produce electricity for transmission anddistribution in the Salalah grid. It has a capacity of approximately 250 MW. In case theacquisition of the Existing Plant is part of the Project, it is anticipated that the purchaseof the capacity and output of electricity of the Existing Plant by OPWP will also becovered under the PPA. Detailed information and a standard data room will be availableto qualified bidders requesting an RFP.

1.1.5 As a result, the overall expected capacity for which bidders will be responsible is 450650 MW.

1.1.6 Oman has an extensive and successful track record of private sector participation in theelectricity and related water sector:

I(W)PPs in OmanProject Generation/

water capacityYear awarded Lead founder

ManahPhase I

90 MW 1994 Suez Energy

ManahPhase II

190 MW 1999 Suez Energy

Al Kamil 285 MW 2000 International Power (now partof GDF Suez)


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Project Generation/water capacity

Year awarded Lead founder

BarkaPhase I

427 MW20 MIGD

2000 AES

SalalahPowerSystem

240 MW 2001 PSEG

Sohar I 585 MW33 MIGD

2004 Suez Energy

Sur IWP 20.3 MIGD 2007 VeoliaRusail &BarkaPhase II

1240 MW26.4 MIGD

2006 Suez Energy

Salalah 445 MW15 MIGD

2009 Sembcorp Utilities, OmanInvestment Corporation

Barka III/Sohar II

750 MW (each) 2010 Suez Energy

Sur IPP 2000 MW 2011 MarubeniGhubrahIWP

42 MIGD 2012 TBC

1.1.7 This RFQ is a continuation of the implementation by the Government of its privatisationpolicies designed to encourage private sector participation in the power sector.

1.2 Objectives

1.2.1 OPWP has several objectives in implementing the Project, including:

- ensuring the security of power supply to the Salalah region;

- ensuring that power sector transactions are undertaken on a commercial basis, soas to increase transparency, economic and business efficiency, thereby achieving

economic tariffs for electricity production;

- promoting foreign and local private sector investment and participation in theSultanate of Oman;

- maximising the use of Omani products and services, including creatingemployment and training opportunities for Omani nationals; and

- transferring new and proven power production technology to the Sultanate ofOman.

1.3 Project Timetable

1.3.1 The expected Project Timetable is set out below:

Action Timeline

1 Issue of RFQ Issue Date (ID)

2 Deadline for Clarification Questions ID + 14 days

3 SOQ Submission Deadline ID + 49 days


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*Please note that if the date falls on a non-business day for OPWP, the relevant date isthe next business day

4 Declaration of Qualified Bidders ID + 77 days

5 Issue of RFP (by TB) May 2013


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2 Competition Process Outline

2.1 The Evaluation will be carried out in accordance with principles of transparency, dueprocess, equal opportunity, equality and freedom of competition and in all cases withoutdiscrimination or partiality between persons, without due legal justification.

2.2 The competitive process will include for a separate qualification stage and a biddingstage.

2.3 Only pre-qualified bidders will be allowed to submit a response to the RFP setting outthe terms under which they will be invited to submit proposals for the development,financing, design, engineering, construction, ownership, operation and maintenance ofthe Project.

2.4 During the bidding stage there will be a technical submission to include the provision oflimited technical information about their proposal together with any mark-ups of theproject documentation. The document mark-ups will be evaluated and if required arevised set of project documents will be released before bid submission.

3 Project Technical Specifications

3.1 The Project includes the development, financing, design, engineering, construction,ownership, operation and maintenance of the New Plant, a gas fired power plant with anet capacity of 200 - 400 MW. Fuel oil back-up will be required. The CommercialOperation Date is expected to be second quarter 2016.

3.2 In addition the Project may include the acquisition of the Existing Plant, an existingpower plant using OCGT technology, with a capacity of approximately 250 MW, currentlyowned and operated by DPC. The existing Plant shall then be operated and maintainedas part of the Project.

3.3 The New Plant will be developed at Raysut, which is in the Salalah region and within theboundaries, but not part of, the Salalah Free Zone and adjacent to the Existing Plant.

3.4 The developer will develop the New Plant on a sound technical basis using proventechnology, highest efficiency, safe and reliable processes and environmentallycompliant configuration, processes and operating procedures. Furthermore, plant layoutneeds to be optimised to fit within the constraints of the limited available plot.

3.5 Any proposed EPC contractor must be of high quality with demonstrable expertise toparticipate in the Project.

3.6 Gas supply infrastructure will be constructed by or on behalf of MOG and will be locatedin the vicinity of the Site and operated by MOG or its nominated representative whichhas adequate capacity to meet the requirements of the Project.

3.7 Additional information on the site condition such as topography, geo-technical data,climatic conditions, access to site, plot plan of site, interconnection points and areasavailable for plant installation and site construction facilities will be provided as part ofthe RFP to the extent available. However, Bidders will be responsible for acquiring allrelevant information required to propose an appropriate design for the Project.


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3.8 The Project is required to be developed, constructed and operated according to localenvironmental protection regulations and stipulations. The development of a fullEnvironmental Impact Assessment will be required as part of the Project. The successfulBidder will be responsible for obtaining all necessary environmental approvals for theProject. Significant environmental information related to the Existing Plant will beprovided in the RFP. Bidders will be responsible for evaluating the environmental

conditions at the Existing Plant.

3.9 The technical specification to be included in the RFP will be purely functional and includeamongst other things the following items:

minimum functional specifications;

applicable standards;

scope of plant;

commissioning and testing requirements;

dispatching and operational requirements;

operating interfaces;

health and safety requirements;

environmental aspects; and

detailed information of Existing Plant

3.10 The documentation of the Existing Plant will be made available to bidders in a dataroom. The Bidder shall be responsible to evaluate the conditions of the equipment andwill be responsible to determine any future refurbishment requirements.

3.11 The RFP will request Bidders to provide information, technical and performance data,drawings, etc, which information will be evaluated to ensure compliance with thetechnical requirements.

3.12 In addition, the successful Bidder will be responsible for obtaining all necessary permitsand approvals for construction and operation required for the Project as a whole.

4 Project Structure and Contractual Framework

4.1 Introduction

4.1.1 The successful Bidder is expected to establish a special purpose Project Company asan Omani company, pursuant to the Commercial Companies Law 1974 (as amended)and subject to the provisions of any subsequent Decrees and/or decisions issued in thisrespect, to implement the Project and to enter into the project agreements. It isanticipated that the project agreements will be substantially in the same form as forprevious I(W)PPs successfully developed and financed in Oman, including amendments


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and additional agreements relating to the potential acquisition of the Existing Plant. Tofacilitate the bid process, it is the intention that drafts of these agreements will be madeavailable in the RFP.

4.2 Project Agreements

4.2.1 Power Purchase Agreement

4.2.1.1 General

4.2.1.2 The PPA will be the principal contract between the Project Company and OPWP. It willset out the terms upon which the Project Company will design, construct andcommission the New Plant, make available the electricity production capacity and sellelectricity output of the Existing Plant and the New Plant to OPWP and, in return,receive the tariff described below.

The PPA is expected to be for a period completing 15 years after COD of the NewPlant. It is anticipated that the SCOD of the New Plant will be second quarter 2016.

4.2.1.3 Tariff Structure

In return for the Project Company making available the electricity production capacityand selling the electricity output delivered in accordance with dispatch instructions,OPWP will pay the Project Company a tariff structured with the following elements forthe New Plant and the Existing Plant respectively:

(i) Capacity Charge, consisting of:

a. Power Capacity Investment Charge (PCIC); and

b. Power Capacity Fixed Operation and Maintenance Charges (PCOM).

(ii) Energy Charge, consisting of:

a. Electrical Energy Variable Operation and Maintenance Charges (EEOM);

b. Electrical Energy Start-up Charges (EESUC); and

c. Fuel Charges (FC).

These charges will be set according to the amounts included and evaluated in thesuccessful Bidders proposal.

The Capacity Charge will be payable based on the availability of the electricityproduction capacity of the Project. The Capacity Charge is designed to cover fixedcosts, including fixed O&M, debt service, and return on capital.

It is anticipated that the Energy Charge will be designed to cover variable operatingcosts of electricity generation, including fuel costs. The fuel cost component of theEnergy Charge will be based on the offered heat rate, corrected for ambient conditions,to be specified by the successful Bidder in its proposal. The cost of the gas will be fixed


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under the Natural Gas Supply Agreement for the term of the PPA.

It is anticipated that the investment element of the Capacity Charge will be linked to theOmani Rial US Dollar exchange rate, at a percentage to be specified by the Bidder.The fixed and variable operation and maintenance charges will be linked to the OmaniRial US Dollar exchange rate, the US inflation rate and the Omani inflation rate, in

the portion to be specified by each Bidder.

4.2.1.4 Bid Bond

As part of their response to the RFP, Bidders shall be required to submit a bid bond inrespect of the performance of their obligations under and arising from the RFP.

4.2.1.5 Performance Bond

The PPA will require the successful Bidder to post a performance bond and will includemilestones for commencement of construction and achievement of the COD of the

New Plant, as well as achieving minimum guaranteed capacities and efficiencies onboth Plants. Failure to achieve these dates or performance criteria may result intermination of the PPA and/or a claim under the Performance Bond.

4.2.1.6 Dispatch Procedures

Currently plants within the Salalah System are dispatched by DPC. Subsequent to therestructuring of DPC, it is expected that there will be a transition of responsibility toOETC (or another party on behalf of OETC).The Project Company will receive dispatchinstructions based on availability declarations it makes.

4.2.1.7 Testing of the Plant

The PPA will provide for the performance of acceptance tests for the purpose ofcommissioning the New Plant, which must be duly completed in order to achieve theCOD. Among other requirements, the acceptance tests will comprise tests forfunctionality, contracted capacity, efficiency, reliability and health, safety &environmental compliance. The PPA will require the Project Company to undertakeplant performance tests for the Existing Plant and, once the COD of the New Plant hasoccurred, also for the New Plant on an annual basis to determine the actual capacity ofthe Plant which is available for dispatch and whether the capacity of the Project mustbe de-rated, the results of which will be taken into account in the payment of thecapacity charge.

4.2.2 Natural Gas Sales Agreement

The Project Company will be required to enter into an NGSA with MOG at the same timeas the PPA. This will provide for the purchase by the Project Company of natural gasfrom MOG and for the sale and delivery by MOG of natural gas to the Plant.


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The Project Company will be entitled to nominate up to a maximum quantity of naturalgas to be delivered on any day and MOG will be required to supply gas at such requiredquantities and which meets the quality set out in the agreed natural gas specifications.

The unit price of the natural gas will be a pass through via the PPA. The term of theNGSA will be coterminous with the PPA. The Project Company will not have any "take-

or-pay" obligation under the NGSA.

MOG will be responsible for the design, construction, testing, commissioning, operationand maintenance of any gas connection facilities to be provided by MOG under theNGSA.

4.2.3 Usufruct Agreement

Land rights for the Project site will be granted to the Project Company pursuant to ausufruct agreement to be made and entered between the MOH and the ProjectCompany.

The expected site for the Project is the plot of land already granted under a usufructagreement to the Existing Plant in Raysut.

If necessary, a usufruct right over a temporary construction area will be granted to theProject Company for a period that expires after the COD or termination of the PPA.

4.2.4 Project Founders' Agreement

4.2.4.1 The successful Bidder will be required to enter into a PFA with EHC. The PFA willcontain certain restrictions on share disposals and provide for the listing, by publicoffering, of a minimum percentage of 35% of the issued share capital of the ProjectCompany on the Muscat Securities Market. This listing must take place within aspecified period after the date of incorporation of the Project Company.

4.2.4.2 The PFA will also contain a right, but not an obligation, for EHC to acquire the balanceof any shares that are not sold pursuant to the public offering. Any such shares will bemade available to EHC at a price determined in accordance with a pre-agreed formula(the Government Share Option).

4.2.5 Electricity Connection Agreement

This agreement will be entered into between the Project Company and DPC or itssuccessor(s) with responsibility for transmission and distribution services and will

provide for the connection of the Project with the power transmission and distributionsystem, respectively.

In addition to providing for the connection of the Project with the power transmission anddistribution system, the Electricity Connection Agreement will describe the boundary ofownership, operational and safety responsibilities and the rights of each of the parties inrespect of power connection facilities.


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4.2.6 Electricity Supply Agreement

This agreement will be entered into between the Project Company and DPC and willprovide for the supply to the Project of any required electricity.

4.2.7 Share Purchase Agreement

The Share Purchase Agreement will be entered into by the seller of the Existing Plantand the Project Company. The Share Purchase Agreement will effect the transfer of 100per cent of the shares in the Existing Plant from the sellers to the buyer and will includeall associated assets and liabilities. It is expected that the Share Purchase Agreementwill provide for the sale of the shares against a pre-established fixed consideration, andthat the Bidders will compete on the basis of a tariff in the RFP process.

The successful Bidder will assume the employment contracts of the Existing Plantemployees. Subsequent to the purchase of the Existing Plant, the successful Bidder willmanage the employment contracts according to Omani Law.

The draft agreement will be provided in the RFP.

4.3 Project Financing Aspects

4.3.1 Financing for the Project will be the sole responsibility of the successful Bidder. Bidderswill not be restricted in any way from sourcing finance for the Project from a combinationof its own resources and from the debt markets, other than applicable Omani legalrequirements. OPWP recognises that the successful Bidder may wish to raise limitedrecourse financing in relation to the Project and that lenders may expect to be affordedcertain rights in relation to such financing. Accordingly, if required, relevant projectcontracts will contain provisions requiring the counterparties to enter into appropriate

direct agreements with the lenders.

4.3.2 As part of the bidding process, Bidders will be required to submit clear evidence of theircommitted financing with their proposal. Those Bidders seeking to finance the Projectusing non-recourse or limited recourse project finance debt will be required to submitcommitted financing together with evidence in the form of commitment letters fromfinancial institutions to provide the debt financing on the terms indicated by the Bidder inits proposal. Those seeking to utilise other sources of finance will need to demonstrateand provide similar evidence that the required funding has been allocated for the Project.

4.3.3 The execution of the Project agreements will not be subject to financing of the Project.However, committed finance proposals are expected to allow for financial close and firstdisbursement within three months of the execution of the PPA. The Project Company willbe required to provide a limited notice to proceed to the EPC contractor at the time theProject agreements are executed.

5 Relevant Regulatory Framework

5.1 The electricity and related water sector in Oman is regulated by AER under the SectorLaw. Article 4 of the Sector Law provides that in order to undertake any of the regulated


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activities set out in such law, a company must obtain either a licence or an exemptionfrom AER.

5.2 Article 100 of the Sector Law requires the grant of a licence to be on the basis of anapplication submitted to AER in the form as specified by AER. AER is required by theSector Law to ensure that licences are only granted to Appropriate Persons and to this

end AER will evaluate Bidders compliance with the Appropriate Person Criteria duringthe competition process. The Applicant should liaise with AER and provide with its SOQa letter from AER confirming that, on the basis of information provided by the Applicantto AER, AER expects the Applicant to satisfy the Appropriate Person Criteria.

5.3 Pursuant to Article 74(h) of the Sector Law, OPWP's functions and powers include theprocurement of new capacity. Article 74(j) of the Sector Law provides that the purchaseby OPWP of capacity and output shall be on the best economic terms.

5.4 Article 3 of the Sector Law provides that the functions assigned to OPWP under theSector Law shall be subject to the regulatory provisions of the Sector Law. Accordingly,both the competition process (conducted by OPWP) and the contract management of

the PPA, will be regulated by AER.

5.5 Based on the current legislative framework, including various provisions of the SectorLaw, the Privatisation Law and the PAEW Law, we are seeking approval of the Councilof Ministers for the privatisation of the Existing Plant.

6 Eligibility Requirements and Selection Process

6.1 Introduction

In order to pre-qualify to bid for the Project, the Applicant must submit a detailed SOQ bythe deadline mentioned in the Project timetable. Based on the stated requirements,

Applicants determined to be qualified will be invited to participate in a competitive bidprocess for the Project. The Tender Board reserves the right to determine, at its absolutediscretion, an Applicants qualification to participate in the competitive bid process for theProject.

6.2 General Considerations

6.2.1 Each Applicant that is a consortium should designate a Managing Member who shouldbe experienced in the power generation industry. It is not required that a consortium beformally constituted for the submission of an SOQ. However, any change in thecomposition of the consortium will necessitate re-evaluation of the consortiumsqualification.

6.2.2 The Applicant, or if the Applicant is a consortium, each consortium member, must be abusiness organisation duly organised and existing and registered in good standing underthe laws of its country.

6.2.3 No Applicant may contain any entity that is a member, or have an affiliate that is amember, of more than one consortium responding to this RFQ, unless approved inwriting by OPWP prior to the submission of the SOQ. Applicants should note that this


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requirement is not intended to restrict envisaged suppliers of equipment or services fromsupporting more than one Applicant in that role.

6.2.4 An entity that is a potential O&M contractor or EPC contractor may be involved in thiscontractual capacity alone with more than one Applicant and in this capacity will not betreated as being part of the Applicant. However, where an O&M contractor and/or EPC

contractor is also participating directly as an Applicant (either as an individual entity or asan entity forming part of a consortium that is an Applicant) then it may only participate inmore than one consortium after obtaining written approval in accordance with paragraph6.2.3 above.

6.3 Applicant Entities

6.3.1 Single Entity Applicant

6.3.1.1 If the Applicant is a single entity, it must satisfy each of the MERs.

6.3.1.2 In addition, the Applicant will be the "Lead Founder" for the purposes of the PFA and

will be required to maintain equity commitments in the Project Company as set out inthe PFA, as follows:

(i) in the period prior to the later of the IPO or the third anniversary of theCommercial Operation Date, hold at least 50.1% of the shares in the ProjectCompany; and

(ii) in the period from the IPO up to the third anniversary of the CommercialOperation Date (if this falls after), continue to hold a post-IPO pro-ratareduced minimum percentage of the shares in the Project Company.

6.3.2 Consortium Applicant:

6.3.2.1 An Applicant that is a consortium must designate a Managing Member. The ManagingMember must, as a minimum:

(i) satisfy MER 1; and

(ii) satisfy either MER 2 or MER 3.

6.3.2.2 In addition, the Managing Member will be the "Lead Founder" for the purposes of thePFA and will be required to maintain the Lead Founder equity commitments as set outin paragraph 6.3.1.2 above

6.3.2.3 Where not all MERs are satisfied by the Managing Member, the experience of the

consortium (other than the Managing Member) will be evaluated in respect of theremaining MERs. Any of MER 2, MER 3 and MER 4 which is not met by the ManagingMember must be met by another member of the consortium (a "QualifyingConsortium Member") so that all the MERs are satisfied by the consortium as awhole. For the avoidance of doubt, each MER needs to be passed by the ManagingMember or a Qualifying Consortium Member (as the case may be, considering the


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provisions of section 6.3.2.1) on an individual basis and not through aggregation withanother member of the consortium.

6.3.2.4 Each Qualifying Consortium Member will be a "Qualifying Founder" for the purposesof the Project Founders' Agreement and will be required to maintain equitycommitments in the Project Company as set out in the PFA, as follows:

(i) in the period prior to the later of the IPO or the third anniversary of theCommercial Operation Date, hold at least twenty per cent (20%) of theshares in the Project Company; and

(ii) in the period from the IPO up to the third anniversary of the CommercialOperation Date (if this falls after the IPO), continue to hold a post-IPO pro-rata reduced minimum percentage of the shares in the Project Company.

6.3.2.5 Where a member is neither a Lead Founder nor a Qualifying Founder they shall be

required to maintain their initial equity commitments in the Project Company in theperiod up to the earlier of the IPO or the third anniversary of the Commercial OperationDate.

6.3.2.6 In the event that an Applicant meets the MERs solely due to the qualifications of theManaging Member, the Managing Member must retain majority control of the ProjectCompany through a shareholding of at least 50.1% in the Project Company in theperiod prior to the IPO, and a reduced percentage in the period from the IPO up to thethird anniversary of the Commercial Operation Date if this occurs after the IPO.

6.4 Evaluation of Statement of Qualifications

6.4.1 Each SOQ will be evaluated to determine whether the Applicant satisfies the followingMERs:

6.4.1.1 Minimum Eligibility Requirement 1 (MER 1)

A minimum tangible net worth of US$250 million (or equivalent) in each of the pastthree years as evidenced by audited accounts of the Applicant or Managing Member.Where the Applicant or Managing Member is a subsidiary of a larger company (ParentCompany), then the net-worth of the Parent Company of the Applicant or theManaging Member and its subsidiaries shall be taken into account. However, the

Applicant or Managing Member must confirm that the Parent Company will be preparedto issue guarantees of support to the Applicant or the Managing Member. Such Parent

Company guarantees will extend to both financial and other commitments of resources.Any proposal submitted by any Applicant or Managing Member which relies on suchParent Company guarantee to meet the requirements of MER 1, which does notinclude such executed Parent Company guarantee will be disqualified.

Details of tangible net worth are to be included by the Applicant in Appendix C format.


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Strong track record of successfully developing I(W)PPs as demonstrated by two (2)operational gas fired power plants each with a capacity of at least 250 MW, of which atleast one such project should have been developed using CCGT technology and atleast one such project should have been developed outside the country in which the

largest proportion of the group turnover of the Applicant or Managing Member orQualifying Consortium Member arises. The CCGT candidate project must havecommenced commercial operations within the five (5) year period immediatelypreceding the SOQ date and the other IPP/IWPP candidate project must havecommenced commercial operations within the eight (8) year period immediatelypreceding the SOQ date. In the case that the Applicant intends to submit a proposal foran alternative technology, for example open cycle gas turbines or reciprocatingengines, appropriate related experience with respect to that technology must besubmitted.

Details of these projects are to be included by the Applicant in Appendix D format.


Have a minimum cumulative ownership of 500 MW of gas fired power capacity inprojects (IPP or IWPP) developed on a BOO/BOOT basis. The qualifying period ofownership shall be no less than two (2) years during the last seven (7) years. Suchownership shall be determined by multiplying the Applicants or Managing Members orQualifying Consortium Members percentage shareholding in a project by the totalcapacity (MW) of that project.

Also, ownership of a minimum of 20% of the equity in at least one (1) gas fired powerplant using CCGT technology with a minimum capacity of 250 MW, which shall havebeen developed outside the country in which the largest proportion of the group

turnover of the Applicant or Managing Member or Qualifying Consortium Memberarises. The period of ownership shall be no less than two (2) years (including theperiod of commencement of commercial operations) during the stipulated seven (7)year period. In the case that the Applicant intends to submit a proposal for analternative technology, for example open cycle gas turbines or reciprocating engines,appropriate related experience with respect to the technology must be submitted.

Details of these projects are to be included by the Applicant in Appendix E format.


Demonstrate strong operating experience evidenced through the Applicant orManaging Member or Qualifying Consortium Member being the O&M provider ormanaging a third party O&M provider (together O&M experience) on at least three (3)combined cycle plants with a capacity of 250 MW or more of which at least one hasbeen developed outside the country in which the largest proportion of the groupturnover of the Applicant or Managing Member or Qualifying Consortium Memberarises. Such O&M contracts entered into or managed should include the initial start-upphase (i.e. the first year of operations of such plants) and should not have ended morethan three (3) years prior to submission of the SOQ. In the case that the Applicantintends to submit a proposal for an alternative technology, for example open cycle gas


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turbines or reciprocating engines, appropriate related experience with respect to thetechnology must be submitted.

Details of such projects are to be included by the Applicant in Appendix F format.

6.4.2 Provision of a letter from AER confirming that, on the basis of information provided by

the Applicant to AER, AER expects the Applicant to satisfy the Appropriate PersonCriteria.

A scan of the AER letter is to be included by the Applicant in Appendix G format.

7 Instructions to Applicants

7.1 Clarifications and Additional Information Request

7.1.1 Clarifications and requests for further information in relation to this RFQ may be raised.All such clarifications and requests shall be in writing and submitted to the Tender Boardno later than fourteen (14) days after the issue of the RFQ. In addition to submitting hardcopies of requests for clarification, Applicants shall submit such clarifications and

requests in accordance with the requirements of Appendix H of this RFQ in MicrosoftOffice 2007 and PDF formats. Written requests, together with a CD Rom, for clarificationshall be addressed to the Tender Board and shall be delivered by mail or by handmarked to the attention of and addressed to:

H.E. The ChairmanTender BoardP.O. Box 787

Al-KhuwairPostal Code 133Sultanate of Oman

Electronic copies shall be submitted to [email protected].

7.1.2 All questions and/or requests for clarification or other comments made by Applicants tothe Tender Board which relate to this RFQ shall be in English.

7.1.3 The responsibility for correct delivery/transmission of clarifications and requests forinformation will rest entirely with the Applicant.

7.1.4 The Tender Board reserves the right not to respond to any clarifications or requests forinformation with respect to this RFQ.

7.2 Submission of the SOQ

7.2.1 SOQs must be submitted by hand by the SOQ Submission Deadline to:

H.E. The ChairmanTender BoardP.O. Box 787



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7.2.2 Responsibility for actual physical delivery rests entirely with Applicants.

7.3 Original documents

7.3.1 The original of each SOQ shall include the original of all documents required to besubmitted with or as part of an SOQ.

7.4 Ownership of SOQs

7.4.1 On submission, the SOQ and all copies thereof shall become the absolute property ofthe Tender Board who shall be entitled to copy and distribute the same to OPWP andOPWP may copy and/or reproduce the same and distribute to appropriate third parties,as reasonably required in connection with this Project and/or as required by applicablelaw.

7.5 Language

7.5.1 All SOQs and supporting documents must be in English. Where an original document is

written in a language other than English, the Applicant shall provide a correct Englishtranslation. In the event of any discrepancy between the English and non-Englishversions of the document, the English version shall prevail.

7.6 Sealing and Marking of the SOQ Submission

7.6.1 The original SOQ documents must be enclosed in an inner envelope marked Originaland four (4) copies of SOQ documents must be enclosed in an inner envelope markedCopy, together with three (3) CD Roms containing the SOQ material.

7.6.2 Both of these envelopes shall be placed in a strong outer envelope or box markedOriginal and Copies SOQ sealed and shall bear the tender number, project name,and address of the Tender Board.

7.6.3 The exterior of the sealed outer envelope or box must not reveal the identity of theApplicant and shall be delivered as specified in the RFQ.

7.6.4 The Tender Board may, at its discretion, extend the deadline for submission of SOQs byamending the RFQ.

7.7 SOQ Opening

7.7.1 SOQs will be opened at the time and date specified in the RFQ at the offices of theTender Board. Any SOQs received by the Tender Board after the deadline forsubmission of SOQs will be rejected whatever the cause for delay.


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7.8 Responsibility of Applicant

7.8.1 Applicants are solely responsible for satisfying themselves with respect to all mattersthat may in any way affect the Project. Failure to do so will be at the Applicant's entirerisk and no relief will be given for errors or omissions by an Applicant or by OPWP.

7.9 Submissions by Consortium

7.9.1 Where an Applicant is a consortium:

(i) All SOQs shall indicate the legal name, principal address or place ofbusiness, place of incorporation and registered number of incorporation ofeach member of the consortium;

(ii) Each Member must accept joint and several responsibility for all obligations inrelation to this RFQ by separately signing the Form of Submission Letter(Appendix A) and shall provide satisfactory evidence as to the due authorityof the person executing the Submission Letter to do so on behalf of thatmember of the consortium; and

(iii) One member of the consortium must be nominated as the Managing Memberof the consortium. The Managing Member of the consortium will beauthorised to be responsible for all dealings with the Tender Board up to butexcluding execution of the Project Agreements. Pre-qualified Bidders shall berequired to include in their responses to the RFP satisfactory evidence as tothe validity and effectiveness of this appointment.

7.10 Information Requirement in SOQ

All SOQs shall include, in addition to completed Appendices A (Form of SubmissionLetter) and B (Executive Summary) the following sections:

7.10.1 Technical Capability

7.10.1.1 This section shall include the following:

(i) A summary table as set out in the form of Appendix D (IPP/IWPP experience)hereto, which includes details relating to gas fired IPP/IWPP projects that the

Applicant has developed and which have commenced operations over thelast eight (8) years. Of the projects listed in the form of Appendix D, thoseprojects meeting the requirement of MER 2 should be highlighted;

(ii) A summary table as set out in the form of Appendix E (Summary of

BOO/BOOT Experience on IPP/IWPP projects) hereto, which includes thenames, locations, size and type of IPP/IWPP projects the Applicant has beeninvolved with and the extent of the Applicant's involvement through equity ineach such project over the last seven (7) years. Of the projects listed in theform of Appendix E, those projects meeting the requirement of MER 3 shouldbe highlighted;

(iii) A summary table as set out in the form of Appendix F (O&M Experience)hereto, which includes details on the projects where the Applicant has been


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the O&M provider and where the Applicants involvement as O&M providerhas not ended earlier than three (3) years ago. Of the projects listed in theform of Appendix F, those projects meeting the requirement of MER 4 shouldbe highlighted;

(iv) Other relevant information relating to the Applicant's technical experience and

capabilities that the Applicant believes would be helpful in assessing theApplicants SOQ; and

(v) A scan of the AER letter regarding Appropriate Person Criteria as set out inthe form of Appendix G.

7.10.2 Financial Capability

7.10.2.1 This section of the SOQ shall include the following information about the Applicant(including, in the case of an Applicant which is a consortium, such information for eachmember of the consortium):

(i) Copies of annual audited financial statements for each of the last three (3)years and quarterly or other periodic financial statements since the lastannual audited financial statements. Such financial statements shall include aconsolidated balance sheet, consolidated income statement, consolidatedcash flow statement and consolidated owners equity statement, along withcorresponding footnotes, in accordance with generally accepted accountingpractices.

(ii) Information set out in Appendix C for the purpose of calculation of thetangible net worth of the Applicant and, in case the Applicant is part of awider group of companies, for such Holding Company and the Applicant.

7.10.2.2 Where the Applicant is a majority owned subsidiary of a group, it must submit theaforementioned financial information both for the ultimate holding company (theHolding Company) and the Applicant together with a clear organization chart showingthe relationship with the Holding Company.

7.10.2.3 Where an Applicant has less than three (3) years of operation, it must submit theaforementioned financial information covering the full three (3) year period by providingsuch financial information for its parent company or predecessor(s) as appropriate.

7.10.3 Legal Capability

7.10.3.1 This section shall include the following information for the Applicant (including, in the

case of any Applicant that is a consortium, such information for each member of theconsortium):

(i) Copies of the Applicants organisational documents (e.g., certificate ofincorporation, contract or deed of incorporation, memorandum and/or articlesof association, bylaws, etc.) together with all amendments thereto, if any;

(ii) Copies of a certificate of registration in the commercial and/or companyregistry or a good standing certificate from the jurisdiction of the Applicants


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incorporation (or, if unavailable in such jurisdiction as a matter of law, anequivalent thereof); and

(iii) Evidence of the signatorys legal authority to sign the form of SubmissionLetter set out in Appendix A and to be submitted as part of the SOQ.

7.10.4 Following successful qualification, prequalified Bidders shall within thirty (30) days of theDeclaration of Qualified Bidders (referred to in the Project Timetable), provide certifiedcopies of the documents required to be provided under clause 7.10.

7.10.5 Other information to be provided by all Applicants

7.10.5.1 Supplementary information or documentation may be requested from the Applicant andthe same shall be provided by the Applicant in order to furtherconsider the ApplicantsSOQ.

7.10.5.2 Where the Applicant (or where the Applicant is a consortium, each member of theApplicant) is part of a wider group of companies, the SOQ must include sufficientinformation to make clear where in the hierarchy of that group of companies the

Applicant (or the member of the consortium) is situated.

7.10.5.3 Where the Applicant (or where the Applicant is a consortium, any member of theApplicant) is an existing investor within the power and water sector in Oman, theApplicant shall provide details of its equity interest/shareholding in companies havingan interest in this sector.

7.10.6 Shareholder Guarantee

7.10.6.1 If the Managing Member and any Qualifying Member(s) of a pre-qualified Bidder (for aBidding Group) or the pre-qualified Bidder itself (for a sole Bidder), is reliant on thefinancial standing, resources and/or experience of its respective shareholders or parentcompanies to meet any MER, then such pre-qualified Bidder shall be required tosubmit along with its bid, a shareholder guarantee in favour of OPWP and issued bythe ultimate parent companies or shareholder(s) of: (a) the Managing Member and anyQualifying Member(s) (for a Bidding Group); or (b) the pre-qualified Bidder itself (for asole Bidder). The shareholder guarantee is intended to guarantee compliance by thepre-qualified Bidder with its obligations under and arising from the RFP, including theentry into the project documents, as well as compliance by the Managing Member, anyQualifying Member(s) or the pre-qualified Bidder itself (in the case of a sole Bidder)with their obligations under the PFA relating to the Project (the form of PFA will be

issued with the RFP).

7.10.6.2 The form of shareholder guarantee will be attached to the RFP, and more than oneshareholder guarantee may be required for each Bidder (i.e. if more than oneshareholder or parent company is relied upon by the Bidder to meet the MERs).

Applicants are required to confirm in the SOQ submission letter (the form of which isattached at Appendix A of this RFQ) that, subject to any requests for clarificationsubmitted in accordance with Appendix H of this RFQ, they have read and understood


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the requirements of this RFQ in full, including the requirements of this clause 7.10.6.

7.10.7 Other Conditions

7.10.7.1 By submitting its SOQ, the Applicant (including, in the case of Applicant which is aconsortium, each member of the consortium) releases the Tender Board, OPWP andits advisors and consultants, irrevocably, completely and unconditionally, from any andall liability for claims, losses, damages, costs, expenses or any other liabilities in anyway related to or arising from the assessment of, and associated decisional processregarding, the Applicants SOQ and/or eligibility and qualifications for the Project.

7.10.8 Evaluation and Notification of Evaluation Results

7.10.8.1 Notification of prequalification will be through an announcement by the Tender Board.The decision of the Tender Board of the shortlist of Pre-qualified Bidders will be final.


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Appendix A: Form of Submission Letter

HE The Chairman

Tender BoardP.O. Box 787


Dated [ ] [ January], 2013.

Your Excellency,

Salalah 2 IPP Response to the Request for Qualifications for the development of anIndependent Power Project and potential acquisition the existing power plant currentlyowned and operated by DPC at Raysut, Salalah

This is in reference to the Request for Qualifications (RFQ) relating to the development,financing, design, engineering, construction, ownership, operation and maintenance of anIndependent Power Project (the IPP) and potential acquisition of an existing power plantlocated at Raysut, Salalah, in the Sultanate of Oman.

We are pleased to submit our response in accordance with the terms of the RFQ and confirmthat, subject to our meeting the RFQ requirements and upon the issue of the Request forProposals (RFP), it is our intent to submit a proposal for the Project.

Subject to any requests for clarification we submit in accordance with Appendix G of the RFQ,we hereby confirm that we have read and understood the requirements of the RFQ in full,including the requirements of clause 7.9.6 of the RFQ.

[This response is made on behalf of a consortium comprising the following members:][Composition of the consortium to be provided]

[[] has been designated as the Managing Member of the consortium and is duly authorised bythis Submission Letter to represent the interests of all of the consortium members in its dealingswith the Tender Board, OPWP and its advisers with respect to the Project.]

Yours faithfully,

Please Note: Letter to be signed by an authorised signatory of the Applicant [and for anyApplicant that is a consortium, by authorised signatories for all members of the consortium] and

where any such signatory is not an authorised signatory as evidenced in the informationrequired to be provided by the Applicant pursuant to clause 7.9.3 of the RFQ, a power ofattorney which authorises such signatory to sign on behalf of the Applicant or consortiummember will be required. If the power of attorney of the signatory(ies) to the letter is issued in acountry other than Oman, then the power of attorney shall bear on its face evidence of itsauthentication by the Oman Embassy in the issuing country, or if no such embassy exists insuch country, by another Arab embassy in such country.


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Appendix B: Executive Summary Basic Information on Applicant

Appendix B:EXECUTIVE SUMMARY

BASIC INFORMATION ON APPLICANT

(Columns 2 to 5 to becompleted as required forApplicants who are aconsortium)

Applicant(Member 1)

Applicant(Member 2)

Applicant(Member 3)

Applicant(Member 4)

[...]

Company name

Address of headquarters

Contact details:

(a) Name

(b) Address

(c) Telephone number

(d) Fax number

(e) Contact e-mail address

Address of Omani or regionaloffice (if applicable)

(a) Name

(b) Address

(c) Telephone number

(d) Fax number

(e) Contact e-mail address

Company profile (shortdescription may besubmitted as a separateaddendum)

Selected key information(state financial year for whichdata is provided):

(a) Total assets*

(b) Total shareholders

funds/net worth*(c) Turnover *

(d) Net income*

Credit rating(S&P/Moodys/Fitch/Other please specify)

Number of employees

Year established

Primary areas of business(indicate staff numbers andturnover in US Dollars for


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Appendix B:EXECUTIVE SUMMARY

BASIC INFORMATION ON APPLICANT

(Columns 2 to 5 to becompleted as required forApplicants who are aconsortium)

Applicant(Member 1)

Applicant(Member 2)

Applicant(Member 3)

Applicant(Member 4)

[...]

each business area)

No. of years engaged inpower projects

No. of years engaged inBOO/BOOT infrastructureprojects

No. of gas fired IPP/IWPPprojects undertaken in the lastfive 5) years (a) as leader (b)in major role

No. of BOO/BOOTinfrastructure projectsundertaken in the last five (5)years (a) as leader (b) inmajor role

Proposed level ofshareholding in the Project:(a) Minimum (b) Maximum

Relationship betweenmembers of a consortiumcomprising the Applicant: (a)

Proposed for the Project (b)Previous projects

* Where the Applicant (or a member of a consortium being the Applicant) is a majority ownedsubsidiary of group, figures for the ultimate Holding Company may also be quoted in addition tothose of the Applicant itself.


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Appendix C: Financial Information

Information set out in the table below for the purpose of calculation of the tangible net worth of theApplicant or the Managing Member of the Consortium as required by MER 1.

Item As at Fiscal Yearend for period n-1

As at Fiscal Yearend for period n-2

As at Fiscal Yearend for period n-3

Paid-in capital

Retained earnings

Revaluation reserves

Other reserves

Currency translation adjustment

Less: Treasury stock

Subtotal: Net worth

Less: Goodwill

Less: Net intangibles

Less: Loans to shareholders

TANGIBLE NET WORTH

Please indicate the accountingstandards under which theannual accounts that providedthe information used in thecalculation above were audited

where n is Applicants current Fiscal Year


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Appendix D: Summary ofIPP/IWPP development experience

Appendix D: SUMMARY OF IPP/IWPP DEVELOPMENT EXPERIENCE IN THE LAST 8 YEARSas required by MER 2

(to be completed by the Applicant or the Managing Member )

No Items

1 Name of plant

2 Location of plant

3 Capacity in MW

4 Project type (BOO, BOOT, etc.)

5 Financial Close date

6Applicants Role on the project (e.g. Owner,Developer, O&M provider, EPC contractoretc.)

7If the Applicant is not the owner of the plant,please provide name of owner

8Applicants role after plant commissioning(e.g. owned, operated and/or maintained)

9 Project/plant cost

10 Sources of funds for project/plant

11 Share of Applicants resources in funding

12 Entity to whom power output provided

13 Duration of contract/concession

14 Technology used

15 No. of units, type and ratings

16Dates of scheduled and actual commercialoperation date of each unit

17 Principal manufacturers of major equipment

18 General role (e.g. base load)


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Appendix E: Summary of Project Ownership Experience for IPPs/ IWPPs

Appendix E: SUMMARY OF BOO/BOOT PROJECT OWNDERSHIP EXPERIENCE FOR IPPs/ IWPPsIN THE LAST seven (7) YEARS as required by MER 3

(to be completed by the Applicant or the Managing Member or Qualifying Consortium Member)

Nameof

ProjectLocation

Gas fired(Yes/No)

TechnologyUsed

Capacity(MW)

ApplicantsShare ofEquity

Investment inpercentage

Dates ofperiod of

stake held

CommercialOperation

Date


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Appendix F: O&M Experience as required by MER 4

Appendix F: O&M Experience as required by MER 4

(to be completed by the Applicant or the Managing Member or Qualifying Consortium Member)

No Items

1 Name of plant

2 Location of plant

3 Name of owner/developer

4 Project type & size (MW)

5Applicants role on the project (eg. O&Mprovider, Managing the O&M provider etc.)

6 Project / plant cost

7 Annual Operating Budget (US$ million)

8Does the Applicant own the plant? If not,please name the owner

9 To whom is the power provided

10Technology (CCGT/OCGT/other pleasespecify)

11 Date of commercial operation

12 Main manufacturers of major equipment

13 Operating profile (e.g. base load)

14Number (actual and as % of total employees)of local employees

15 Dates of experience (from to)


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Appendix G: Scan of AER Letter Regarding Appropriate Person Criteria


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Appendix H: Form of Request for Clarification

Identity of Interested Party _________________________

Date Submitted _________________________

Tender No. _________________________

Note: The Interested Party must (i) number each question they submit sequentially (ii) specify theappendix, page and paragraph of the RFQ to which their question relates; and (iii) specifywhether the nature of the question raised is technical, legal, financial or other and (iv) submit as

hard and soft copy inMicrosoft Office 2007 and PDF formats.

QuestionNo

ParaRef

PageNo

Technical /Legal / Financial

Request for Clarification

salalah 2 rfq - final

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