IV. SCOPE OF WORK
The training will provide the participants with the background for developing the institutional and human capacity to design, manage, and operate a power trading entity for Nepal.
Classroom lectures are to be delivered by highly experienced instructors, supplemented by hands-on exercises that emphasize development of skills and knowledge in the functional operations of power trading. Emphasis should be on providing hands-on activities including role play, class exercise, review of PPAs, PSAs, etc.
Training will supply participants with proficiency in the following topics:
- The evolution of power trading as a separate entity in the power sector, the various roles played by power traders, basic guidelines for power trading, propriety trading vs. portfolio optimization, arbitrage
- Market participants & their role: brokers, traders, dealers, market makers, liquidity providers, marketers, wholesale merchants, investment banks, and traders
- Setting up a power trading entity:
- Legal framework for operation of a power trading entity
- Procedures and terms and conditions for granting of trading license
- Statutory compliance for traders
- Human resources and infrastructure requirements for setting up of a power trading entity
- Net worth and working capital considerations and requirements
- Short term, long/medium term power purchase and sales
- Power purchase/sales agreements: major contractual, financial and commercial provisions and their significance
- Scheduling, billing, energy accounting, settlement, and bidding on power exchanges
- Tariff models for competitive bidding processes, review of the existing tariff models in Nepal
- Identifying and mitigating risks
- Gap analysis of existing and required policies in Nepal
- Case studies within the region
- Guarantees (such as sovereign guarantee from GOP) or no guarantees
The contractor will conduct two modules of training, each consisting of five days, for 16 delegates from Nepal, 4 delegates each from Bangladesh and Bhutan, and 2 delegates each from Afghanistan, Pakistan, and Sri Lanka (30 total). The same set of delegates will participate in both modules of training. The participants will be nominated by the USAID missions and USEA will handle all coordination with the delegates.
The training program is to be tailored to South Asia with specific focus on Nepal to provide participants with the knowledge of operating a power trading entity for their respective countries.
Task 1: 1st module of training. The contractor will organize, host and conduct Module 1 – a five-day classroom-style training program for the SARI/EI delegation. The training will be the first in a set of two training programs designed to prepare SARI/EI countries for short and long-term power trading. Module 1 will focus on the overall background, rules, and regulations that govern power trading, and will provide the participants with the background knowledge to prepare them for the more advanced material of Module 2. At the start of Module 1, a pre-training assessment will be conducted to evaluate the participants’ knowledge of the material.
Task 2: 2nd module of training. The contractor will organize, host and conduct Module 2 – a five-day classroom-style training program for the SARI/EI delegation. The training will be the second of two training programs designed for short and long-term power trading. Module 2 will provide more in-depth understanding on power trading entities, power purchase and sales, the drafting of power purchase agreements, the tariff models for competitive bidding, due diligence for contracting, activities on behalf of advance option buyers and state utilities, private project developer for the sale of power-on-power exchange, etc. The participants will be given virtual control room operation experience in the various areas of power trading, viz. scheduling, billing, energy accounting and settlement, bidding on power exchanges, etc. A post-training assessment will be conducted to evaluate the participants’ improved knowledge of the material. Additionally, USEA requests the contractor include a session in the training for brainstorming with the participants – during the final day of training, participants are to develop action plans outlining steps that need to be taken to design, develop and operate a power trading entity; this session should be led by the contractor and written summaries of the action plans be organized for later submission to USEA. Lastly, contractor must provide certificates of completion to each participant, to be co-signed by USEA and USAID.