Published on Friday October 26, 2018 in daily the Dawn ISD_RWP/LHR/KHI editions and daily the Jang ISD_RWP/LHR/KHI/MUL editions
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(Published on Friday October 26, 2018 in daily the Dawn (ISD_RWP/LHR/KHI)
editions and daily the Jang (ISD_RWP/LHR/KHI/MUL editions)
Call for Proposals
(RFP # R‐OCT‐18/24) Issue Date: October 26, 2018
Results Based Financing Facility for Quality‐Verified Small Solar Home Solutions in
Remote Off‐grid Areas
Application submission Deadline: November 12, 2018
Table of Contents
1. Background .........................................................................................................................2
2. Overview of the Project ...................................................................................................... 2
3. RBF Incentive for the Solar Vendors ...................................................................................3
Application Process ................................................................................................................3
Role of NRSP...........................................................................................................................4
Role of GIZ‐REEE.....................................................................................................................4
Independent Verification .......................................................................................................4
4. Eligibility criteria .................................................................................................................4
RBF recipients ........................................................................................................................4
Solar products ........................................................................................................................4
5. Target districts and customers ...........................................................................................5
Districts ..................................................................................................................................5
Customers ..............................................................................................................................5
6. Submission of Applications.................................................................................................5
7. Clarifications .......................................................................................................................5
8. Attachments to this Call ..................................................................................................... 61. Background National Rural Support Program (NRSP) is planning to implement a Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) funded Results Based Financing (RBF) project that provides financial incentives to private sector organizations involved in provision and up scaling of IFC Lighting Global certified solar home solutions with innovative flexible payment solutions and mechanisms (pay‐as‐you‐go, loans, instalment payments etc.). The project implementation will start from December 2018 and end in November 2019 after the completion of one year. It will receive applications from interested companies or organizations for participation in this project through this ‘Call for Proposals’, the deadline for which is November 12, 2018. Applications received after this deadline will not be accepted. 2. Overview of the Project The RBF initiative targets to provide incentives to the companies (herein referred to as ‘RBF Beneficiaries’), selling International Finance Corporation (IFC) Lighting Global Solar Home Solutions to end consumers in the remote areas through a financing mechanism as mentioned above. The project is planned to encourage the development and up scaling of good quality solar home solutions at the last miles with warranties and operations and maintenance of the systems in place. This project does not include solar lanterns or torches. Only solar home solutions fulfilling the criteria as indicated in this document later will qualify for this project. The incentives will be in the form of cash grants, which will be disbursed to RBF beneficiaries as ex‐post payments upon delivery and verification of agreed upon results. The agreed upon results in this case are the number of IFC certified solar home solutions sold to the end consumers on credit or flexible payment methods (e.g. pay‐as‐you‐go in both ownership and lease models). The value of the incentives will be a certain proportion of the value of the products sold to the end users, which will be varying depending upon the specifications of the respective system. The details can be found in the ‘Guidelines on products and incentives’, attached herewith. The RBF incentives can be used by the beneficiaries to develop their infrastructure at the last mile or as a working capital investment or both. The RBF incentives may be used for other relevant activities such as financing partnerships, marketing and awareness, training, improving the distribution channels, scaling up relevant existing solar activities etc. It will be at the discretion of each applicant to decide how to best allocate the incentives in order to introduce and / or increase the number of quality‐verified small solar home solutions for the target markets.
3. RBF Incentive for the Solar Vendors
The RBF mechanism will be used to encourage RBF beneficiaries to develop and upscale their
existing markets for solar home solutions. Moreover, the mechanism encourages the use of
PAYGO (pay‐as‐you‐go) with a remote monitoring software for the monitoring of the solar
home solutions and better operations and maintenance.
This RBF mechanism will only incentivize the organization selling or installing the solar home
solutions at the end customer’s premises, which might be a retailer, distributor, vendor, or
manufacturer. The whole mechanism of the scheme is as under:
Application Process
Companies will apply through the submission of an application on the template provided.
Those companies selected to participate in the RBF programme will enter a “Service Level
Agreement” with NRSP. The total amount of fund allocated for the RBF project is EUR
500,000. To each company a secured access to EUR 15,000 will be guaranteed within the first
6 months. After this period, the fund is open for all participants with a first come first serve
approach.1 As RBF incentives are only disbursed after results are verified, it is the
responsibility of companies to pre‐finance the activities required to achieve the agreed
results. NRSP is not required to extend credit from its own resources but may decide to do
1
Amount and time might be subject to change due to the number of participant companiesthis on its own account.
During and at least three months after the project ends, companies need to comply with
regular checks carried out by NRSP and GIZ for verification purposes.
Role of NRSP
NRSP is responsible to execute the project and do the financial management of the RBF fund
on behalf of GIZ. NRSP will screen the companies’ applications, realise contractual
arrangements with the private companies, administer the fund, verify results and disburse
the RBF incentives.
Role of GIZ‐REEE
GIZ‐REEE (Renewable Energy & Energy Efficiency) will coordinate the overarching processes
of the RBF project and assist NRSP in setting up and running the project. In this context, GIZ‐
REEE will provide backstopping and quality control, monitor the use of the NRSP budget and
check the use of funds in line with the project objective.
Independent Verification
An independent verification, either by GIZ or its consultant, will be carried out to do spot
checks of the verification reports submitted by NRSP for the results achieved by companies.
4. Eligibility criteria
RBF recipients
All companies are eligible which
are officially registered with Securities & Exchange Commission of Pakistan (under
Companies Ordinance, 1984)
sell eligible IFC Lighting Global certified products (as mentioned in the Products
Eligibility Criteria)
provide after sales service during the warranty period and
offer end‐customer financing solutions (PAYGo or micro‐finance)
As the idea is also to work with micro‐finance institutions (MFIs), the use of PAYGo is not a
condition for eligibility. The companies are encouraged to use the incentives not to subsidise
the products, but the operational costs of product delivery.
Solar products
In order to guarantee the promotion of high quality products, only IFC Lighting Global certifiedsolar home systems (SHS) are eligible. This does not include products like solar lanterns and other similar solar pico products. If products have been directly subsidised, they are not eligible for incentives. This means, if a company or NGO uses other grant funds to obtain the products or to subsidise product prices, these sales are not eligible for RBF incentives. All sales of eligible products within the contract period are entitled to the respective RBF incentive amount. 5. Target districts and customers Districts RBF is a pilot project and for this pilot, only three districts, namely Thatta, Badin, and Muzaffargarh have been selected for its implementation. Only sales to households in these three districts will be eligible for qualification for the incentives. Customers All sales to customers are eligible, who live in a household that does not have any electricity connection through the grid, kunda or borrowing from nearby households. 6. Submission of Applications The applications cover letter (signed by the relevant person in the organization) and the completed application in the template provided should be submitted in hard copy, not later than Monday November 12, 2018, 3:00pm, to: SPO Procurement National Rural Support Programme IRM Complex, 7, Sunrise Avenue, Park Road, Chak Shehzad, Near COMSATS University, Islamabad. Ph:+92‐51‐8746170‐3 Email: procurement@nrsp.org.pk The applications will be opened in the presence of applicants or their representative on the same day Monday November 12, 2018 at 3:30pm. 7. Clarifications Any questions or clarifications regarding this call for application should be addressed to procurement@nrsp.org.pk by 1200 hours, Friday, November 2, 2018. A document will be uploaded on the NRSP website on Tuesday, November 6, 2018, responding to all the questions received during the clarification period. A meeting can also be set up on November 6, 2018, responding to the queries. A notification will be uploaded on November 2, 2018 on the NRSP website if the meeting is to be set‐up on Tuesday. Anyone not able to join in person
can be taken on Skype. The venue and details for a public link to access the meeting will be
informed in the notification uploaded on the website.
8. Attachments to this Call
Application template – Annex A
Guidelines on products and incentives – Annex BAnnex A
Application Template for Companies for
Results‐based Financing for Off‐grid
Electrification
Application Deadline: November 12, 20181. Applicant background Information
Name of applicant
Contact person Name: Position:
Full contacts of Physical: Postal:
organisation
(Please also submit the Telephone: Email:
Incorporation Certificate
from SECP)
Type of organisation
1. Manufacturer/distributor
2. MFI
3. NGO
4. Others (specify)
Current footprint (list of
districts / tehsils where
your organization
operates or has operated
Implementing partners (if
any)
2. Description of the business model
a) Which solar products do you promote? Are they Lighting Global Certified? Please provide a list of all of your
products as a part of this application. Also make a distinction between the Lighting Global certified and non‐
certified products.
b) Briefly describe your current business model (distribution channels, marketing strategies etc.)
c) Does your company/organization have a flexible payment methods for products at consumer level? If yes,
briefly describe this methodd) Does your company/organization have an understanding / MoU with an MFI for microfinancing these
products? If yes, mention the name of the MFI(s) and briefly describe the type of agreement.
e) Does you company have Operations & Maintenance team available? Briefly describe your warranty and O&M
mechanism and how you handle errors in products.
3. Barriers that motivate your organization to apply to this RBF project
a) Briefly describe business and market barriers that motivate you to participate in the RBF project
b) Briefly describe the proposed solutions/actions that your organization will implement to mitigate the barriers
identified above
c) Briefly describe how the RBF project will help you mitigate barriers mentioned above, including how do you
potentially plan to spend the RBF incentives.4. Sales performance and projections
a) How is your quarterly sales performance (per product) for the last one year prior to your application for the
RBF project?
Product type/model Quarter/Year Number of products sold Sales turnover
(PKR)
Product X (indicate specific
Q2/2018
product here) Q1/2018
Q4/2017
Q3/2017
Product Y Q2/2018
Q1/2018
Q4/2017
Q3/2017
Product Z Q2/2018
Q1/2018
Q4/2017
Q3/2017
NB: Add more rows as appropriate
b) How do you project your average monthly sales performance during the duration of the RBF project
Product type/model Quarter/Year Number of products sold Sales turnover
(PKR)
Product X (indicate specific
Q4/2018
product here) Q1/2019
Q2/2019
Q3/2019
Product Y Q4/2018
Q1/2019
Q2/2019
Q3/2019
Product Z Q4/2018
Q1/2019
Q2/2019
Q3/2019
NB: Add more rows as appropriate5. Data management and reporting
a) Briefly describe your data management and reporting system (M&E system). The system must enable
verification of sales to end user. Also mention if you use remote monitoring software.
6. Statement on how the RBF will add value into your business
a) Briefly describe how the RBF project will add value into your business?
b) How can you this value addition be quantified? Please briefly describe key business development indicators
you would expect to transform during the RBF project (provide the details current situation and value added
for each indicator mentioned)Annex B
Guidelines for products and incentives for
the off‐grid solar RBF project
October 26, 2018
Table of Contents
1. Inclusion of products in the off‐grid solar RBF project ...................................................... 2
1.1. Quality requirements of the solar products .............................................................. 2
1.2. Minimum products specifications ............................................................................. 2
1.3. Validity of product admission .................................................................................... 2
1.4. Notice to RBF contracted applicants ......................................................................... 2
1.5. Impact of withdrawal of product admission on RBF incentives ................................ 3
2. Incentive structure ............................................................................................................. 4
2.1. Background ................................................................................................................ 4
2.2. Incentive calculation methodology ........................................................................... 4
2.3. Capping modalities .................................................................................................... 4
2.4. Utilization of funds ..................................................................................................... 7
3. Treatment of repossessed and unrecoverable products................................................... 8
3.1. Data sharing and types of repossessions ................................................................... 8
3.2. Treatment of repossessed and unrecoverable solar products .................................. 8
3.3. Responsibilities of RBF beneficiaries .......................................................................101. Inclusion of products in the off‐grid solar RBF project
1.1. Quality requirements of the solar products
Category Status of Admission to Quality Requirements
the RBF project
a) SHS products Direct admission Proof of a valid IFC‐Lighting Global
approved by IFC verification letter
Lighting Global1 For systems with fans, only energy
(larger than 10W) labelled fans would be allowed. For
example, for fans manufactured in
China, CEL 3‐star labelled fans, for
Pakistan, PEL 3‐star labelled fans,
for EU manufacturing EU labelled
fans, that rank the highest in energy
efficiency would be acceptable.
b) Small Solar Home Provisional admission Proof of submission of the products
Systems (SHS) to the IFC Lighting Global for testing;
that would meet Preliminary test results for key
the new Lighting specifications
Global Quality Only fans, energy labelled through
certified national ratings would
qualify.
1.2. Minimum products specifications
The product does not have a minimum specification. The only minimum requirement is
that the product should have at least two lights and a mobile phone charger. Systems with
fans will be accepted without lights and mobile phone chargers also.
1.3. Validity of product admission
Admission can be withdrawn if the Lighting Global approval of the product expires
without evidence of renewal. Sales finalized before the expiry date will qualify for
incentives.
Provisional admission is only entertained for proposal submission purposes. The
systems will not qualify for incentives until they are finally certified and approved by
IFC Lighting Global.
1.4. Notice to RBF contracted applicants
The contracting of RBF applicants will ONLY take place if the applicants are dealing in
at least one of the products meeting the product selection criteria, and there is an
evidence of an existing flexible financing mechanism (e.g. loan or PAYGO etc.) for such
products
1
https://www.lightingglobal.org/products/
2 The RBF project does not prevent the contracted RBF beneficiaries from dealing with
products of their choice whether they meet RBF criteria or not. However, the
beneficiaries will only be eligible for incentive claims against approved products that
meet the RBF product selection or eligibility criteria.
The list of approved products for this scheme will be updated after six months and the
list will be updated on NRSP website, however, NRSP reserves the right to update or
revise the list at any time subject to request by the RBF beneficiary and approval by
the RBF team in writing. This does not include products that lose their certification
because of expiry of the verification. For such products, admission will be withdrawn
with effect from the date of expiry of the approval.
Should the products that are currently NOT meeting the RBF criteria, but their testing
process has commenced, and they subsequently get approved in the future, all the
sales made by the RBF applicant within one year before and up to the products
approval date (and within the contracted period) will be eligible for incentives. This is
only applicable for already contracted RBF beneficiaries. Those companies that fail to
submit their proposals with provisional admission of the products are not eligible
under this clause.
1.5. Impact of withdrawal of product admission on RBF incentives
In the event of withdrawal of product admission:
The withdrawn product will no longer be eligible for RBF incentives;
The RBF beneficiary shall not refund the previously disbursed incentives
32. Incentive structure
2.1. Background
The value of incentives is a percentage of the total value of the solar home systems sold
to the end consumer. The amount of incentive varies from product to product depending
upon the specifications of the products. Since all products have a different output and
different efficiency, the amount has been calculated on the basis of the overall efficiency
of the output rather than the size of the system.
For the purposes of calculations, Renewable Energy Service Units (RESUs) have been
introduced and the efficiency of the output has been linked to these units. Only lights,
fans, and mobile charging ports have been incentivized. Televisions and other electronics
might be a part of the overall solar home system, but the amount of incentives is
dependent on the basis of the equipment mentioned above. Moreover, since both PAYGO
and non‐PAYGO systems are allowed as long as a flexible payment mechanism through
micro‐financing or installments exists, there is an additional incentive for the sale of
PAYGO enabled systems, that can be monitored remotely.
There is a maximum cap on the amount of incentive and the overall fund for the purposes
of payment of incentives, which is explained below in ‘Capping modalities’. Moreover,
although all the calculations have been done in Euros, the final amount of incentives has
been calculated in PKR at the exchange rate mentioned below, which will remain fixed for
the whole duration of the project to avoid frequent fluctuations in the amounts of
incentives.
2.2. Incentive calculation methodology
The methodology that has been used to calculate the amount of incentives is as under:
1 lumen‐hour = 1 RESU
1 RPM‐hour = 0.35 RESU
Availability of mobile charging port: 150 RESU
Remote monitoring through PAYGO: Euro 5
1 RESU = Euro 0.01
Exchange rate (1 Euro) = Pakistani Rupees 150
The specifications and details of the systems have been taken from the specification
sheets on IFC Lighting Global website and those shared by the IFC Lighting Pakistan
program.
2.3. Capping modalities
The overall amount of incentive for the whole scheme is EUR 500,000, which will be
divided between companies as per their products and the number of systems that have
been sold by the company as per the requirements of this scheme. The incentive amount
for each system continues to be calculated as mentioned above but some capping
4measures have been put into place to limit the amount of incentives to ensure that the
objective of this scheme is achieved in essence, which is to trigger the market and not
subsidizing the products. The following caps have been put in place:
Sr. Type of cap Description
No.
1 Maximum amount The maximum amount of incentive that would be paid
per system out against each system is 60 Euros, that is PKR 9,000.
2 Percentage of the The amount of incentive is limited to a maximum of 30%
price of the price of the system that has been submitted to
the IFC Lighting Pakistan program for reference
purposes.
The lower of the two caps will be applicable to each system i.e. if the 30% of the total
price of the system is over PKR 9,000, the maximum incentive will be 9,000 rupees.
However, if PKR 9,000 is more than 30% of the price, although the specifications of the
system allow for a higher incentive to be paid, the cap of 30% of the price will be applied.
Final
Accessories Incentive
Brand Product Size
+PAYGO Payable
(PKR)
Home 120 12 Watt 3 LEDs 4,170
1 portable light
Mobile Charging
Port
Sun King
Fan 20 Watt 1 Fan 3,750
Mobile Charging
Port
D330 6.5 Watt 2 LEDs 2,745
1 Tubelight
Mobile Charging
Port
d. light
X850 38 Watts 1 Tubelight 8,850
4 Bulbs
Torch
5Mobile Charging
Port
19" TV
SF20 16 Watt 1 Fan 3,300
LED Light inbuilt
Mobile Charging
Port
Energy 50 50 Watts 3 LEDs 7,800
1 Fan
1 TV
Mobile Charging
Port
Niwa
Energy 40 40 Watts 3 LEDs 6,287
1 Fan
1 TV
Mobile Charging
Port
Roshni Advanced 50 Watts 2 Bulbs 9,000
1 Portable Tubelight
1 Fan
Mobile Charging
Port
PAYGO
BBOXX
Roshni Premium 50 Watts 4 Bulbs 9,000
1 Portable Tubelight
1 Fan
Mobile Charging
Port
PAYGO
Omnivoltaic
Energy Sigma Home 35 Watts 3 Bulbs 6,939
Solutions 1 Fan
6Mobile Charging
Port
Sigma Home Plus 55 Watts 4 Bulbs 9,000
1 Fan
Mobile Charging
Port
Sigma Premium 75 Watts 4 Bulbs 9,000
1 Fan
Mobile Charging
Port
The amount of incentives mentioned here has been calculated considering that the
systems having PAYGO modality are actually PAYGO enabled. For the systems that do not
have PAYGO modality enabled for the systems on ground and cannot be monitored
remotely, the additional PAYGO incentive of EUR 5 has not been calculated. The
companies will be mentioning in their claims about the availability of PAYGO modality.
Moreover, the companies using PAYGO will also be required to give access to their remote
monitoring software for the duration of the project. If a company introduces remote
monitoring through PAYGO technology with flexible payment mechanism in the course of
this scheme, they can put up a request to NRSP to revise the incentive. All such requests
will be considered on a case to case basis.
2.4. Utilization of funds
The overall funds allocated for the RBF scheme amount to EUR 500,000. Each contracted
company will have access to at least EUR 15,000 in the first quarter, however, the amount
will be proportional to the number of sales and if the sales are higher, a higher amount
can also be claimed. After the first quarter, the overall fund will be utilized on a first come
first serve basis.
The project is planned to continue for twelve months, however, if the market picks up
scale really quick and the funds are utilized before twelve months have passed, the
scheme will come to an end too. In that case, all the companies contracted under this
scheme will be informed at least three months before the closure and updated about the
status of utilization of funds.
73. Treatment of repossessed and unrecoverable products
3.1. Data sharing and types of repossessions
All the companies contracted under the RBF scheme will be required to share data about
the repossessed systems alongside their regular reports. The data on the repossessed
systems will then be assessed in order to establish a proper mechanism on how to treat
them with regard to incentive pay‐out, taking into consideration the RBF verification
guidelines (particularly on traceability of products to the consumer level) and fraud risk.
The following scenarios may arise:
Permanent repossessions – This occurs when the end consumers have completely
defaulted payment and the companies are capable of repossessing the systems.
This only occurs when the cost of repossession makes financial sense for the
companies. Otherwise the companies face the risk of loss due to defaulting
customers if the cost of recovery does not make financial sense. This affects both
PAYGO and non‐PAYGO products.
Temporary repossessions – This occurs when the companies temporarily
repossess the products (partially or completely) from the defaulting customers
temporarily due to cash flow problems in order to enforce the agreed upon
payment schedules. Once the customers resume payments, the products are
returned to them.
Unrecoverable – This occurs when the customers have defaulted but the products
cannot be repossessed due to uneconomical cost of recovery. For PAYGO
products, they are usually switched off when the customers do not adhere to the
payment schedules. Such products will usually not be in use despite them being
physically at the customers’ premises, unless where the customers bypass the
control.
3.2. Treatment of repossessed and unrecoverable solar products
Sr. Type of
Details Treatment
No. repossession
1 Permanent Permanent default but Deducted from the incentive
repossession the product is in good calculation in the current reporting
with possibility condition and can be period.
of resale resold to consumers
The incentive payout will be
considered in subsequent reporting
period subject to proof that the
products in question are resold to
other clients and can be traced
(products should still be in good
working condition and should have
8the same warranty terms as other
customers)
2 Permanent Permanent default but Deducted from the incentive
repossession the product can be calculation in the current reporting
without repossessed. However, period.
possibility of it cannot be resold due
resale to poor conditions. However, the incentive payout can
be considered at the end of the
project subject to the following
conditions:
‐ Proof that the repossessed
systems cannot be resold to
other customers due to their
poor condition and have been
written off the balance sheets of
the company.
‐ Proof that the products in
question have been repossessed
for at least six months.
‐ The incentive payout will only
cover repossessed systems of up
to 5% of the total sales over the
entire project period (partial risk
cover for unforeseen default).
3 Temporary Temporary and means Deferred to the next reporting
repossession of enforcing payment period and considered for incentive
payout subject to the following
conditions:
‐ Proof that the products in
question have been returned to
the original customers who
acquired them; or
‐ Proof that the products in
question have been resold to
other customers and can be
traced.
4 Unrecoverable Permanent default (at Deducted from the incentive
products due least 6 months) but the calculation in the current reporting
to default products cannot be period.
repossessed due to
uneconomical cost of However, the incentive payout can
recovery be considered at the end of the
9project subject to the following
conditions:
‐ Proof that the products in
question have been
defaulted for at least six
months
‐ The incentive payout will
however, only cover
repossessed products of up
to 5% of the total sales over
the entire project period
(partial risk cover for
unforeseen default).
3.3. Responsibilities of RBF beneficiaries
The beneficiaries will continue disclosing the data of the repossessed and unrecoverable
systems, clearly indicating at least the following information depending upon the nature
of the transaction:
Type of repossession
Repossessed products that have been returned to the original customers (in case
of temporary repossession)
Repossessed products that have been resold to the new customers (providing the
details of the new customers to aid the verification and tracking process)
Repossessed products that have no resale value (written‐off products)
Database of unrecoverable products
In case, the case of repossession is different from the abovementioned types of
repossession, the companies can explain the scenario in the report and
management will look at those scenarios from a case‐to‐case basis)
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