GREEN PROSPERITY PROJECT

Window 3A

CfP Ref № : CFP/GP-W3A/001/2014

CALL FOR PROPOSAL

FOR

GRANTS FOR OFF-GRID COMMUNITY-OWNED RENEWABLE ENERGY PROJECTS

29th NOVEMBER 2014

MILLENNIUM CHALLENGE ACCOUNT - INDONESIA

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Acronyms and Abbreviations

AMDAL Analisa Mengenai Dampak Lingkungan APR Annual Progress Report CCOP Communications and Community Outreach Plan CfP Call for Proposal CLO Community Liaison Officer COD Commercial Operation Date DFS Detailed Feasibility Study DRA District Readiness Assessment ERR Economic Rate of Return EPC Engineering, Procurement & Construction ESIA Environmental and Social Impact Assessment ESMS Environmental and Social Management System FA Financial Agent FEED Front End Engineering & Design FS Feasibility Study GHG Green House Gas GOI Government of Indonesia GP Green Prosperity GP Facility Green Prosperity Facility GK Green Knowledge H&S Health and Safety IC Investment Committee IST Implementation Support Team LOE Level of Effort MCA-Indonesia Millennium Challenge Account - Indonesia MCC Millennium Challenge Corporation MCCIE Millennium Challenge Corporation Independent Engineer MOU Memorandum of Understanding MPR Monthly Progress Report NDA Non-Disclosure Agreement NREL National Renewable Energy Laboratory NRM Natural Resource Management O&M Operation & Maintenance PA Procurement Agent PCS Project Control Strategy PFS Pre-Feasibility Study PLN Perusahaan Listrik Negara PLUP Participatory Land Use Planning PMC Project Management Consultant PMD Project Managing Director PMM Project Management Manual QAP Quality Assurance Plan RCM Resident Country Mission RE Renewable Energy RFP Request for Proposal RoW Right of Way SGIP Social and Gender Integration Plan SOW Statement of Work SPV Special Purpose Vehicle TAP Technical Appraisal Panel TAPP Technical Assistance & Project Preparation TPC Total Project Cost TOR Terms of Reference TIP Trafficking in Persons

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TABLE OF CONTENTS

I. INTRODUCTION ....................................................................................................................... 3

II. ELIGIBILITY INFORMATION ....................................................................................................... 5

III. GRANT PROCESS OVERVIEW .................................................................................................. 10

IV. CONCEPT NOTE ELIGIBILITY AND APPRAISAL REVIEW ............................................................. 12

V. FULL APPLICATION AND APPRAISAL CRITERIA ........................................................................ 13

VI. APPLICATION CONTENTS, DEADLINES AND SUBMISSION INSTRUCTIONS ............................... 15

Annex 1 | Applicant Eligibility ...................................................................................................... 18

Annex 2 | Project Eligibility .......................................................................................................... 20

Annex 3 | Cover Letter ................................................................................................................ 22

Annex 4 | Concept Note - Table of Contents ................................................................................ 23

Annex 5 | Full Application - Table of Contents ............................................................................. 29

Annex 6 | Environmental & Social Performance Guideline ........................................................... 38

Annex 7 | Social & Gender Assessment Guideline ........................................................................ 42

Annex 8 | Monitoring and Evaluation Guideline ........................................................................... 45

Annex 9 | Fiscal, Tax and Other Guidelines .................................................................................. 47

Annex 10 | Eligible Project Costs Guideline .................................................................................. 48

Annex 11 | Applicant and Project Ownership Structure ............................................................... 51

Annex 12 | Community Letter of Support .................................................................................... 53

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Millennium Challenge Account – Indonesia Call for Proposals: Off-grid Community-Owned RE Projects

I. INTRODUCTION

On November 19, 2011, the Government of the United States, through the Millennium Challenge Corporation (MCC), entered into an agreement (the Compact) with the Government of Indonesia (GOI) aimed at reducing poverty in Indonesia through economic growth. The GOI established Millennium Challenge Account Indonesia (MCA-Indonesia) to manage and implement the Compact and its three projects on behalf of the GOI.

The five-year Compact came into force on April 2, 2013. Among the Compact’s three projects is the Green Prosperity (GP) Project, which has two main objectives

(1) Increasing productivity and reducing reliance on fossil fuels by expanding power generation from Renewable Energy (RE); and

(2) Increasing productivity and reducing land-based greenhouse gas emissions by improving land use practices and management of natural resources.

More details on the GP Project and its four activities are available at http://gp.mca-indonesia.go.id. The GP Facility is one of four activities under the GP Project. One of the key priorities of the GP Facility is to promote renewable energy for underserved communities in rural areas within the GP Provinces (see Table 2 & Figure 1) having limited to no access to electric services through the provision of a RE Grant. Under the GP Facility, MCA-Indonesia is launching a Call for Proposals (CfP) to identify RE Grant Applicants to design, develop, construct and operate community-owned RE power generation and distribution projects (Projects). Applicants must submit Applications in response to this CfP in accordance with the detailed instructions provided below. Under this CfP, MCA-Indonesia will make available up to Thirty Million Dollars ($30,000,000) in RE Grant awards available for various off-grid Projects. MCA-Indonesia’s authority to disburse grants to eligible Projects was provided by the Compact and remains available until committed but MCA-Indonesia cannot disburse grants later than April 1, 2018. Projects under this CfP shall have an installed net capacity of between 300 kW and 3 MW1. Applicants may aggregate Projects, as long as the minimum Project size is 300 kW and any one single power plant is no less than 50 kW. All aggregated RE facilities must be situated in the same GP District. A. Background and Goal of the CfP The majority of rural communities in Indonesia live in poverty with low electrification ratios. Traditionally, costly and polluting diesel fired power generation has been the main source of power

1 W throughout this CfP refers to W electricity (We). All capacities relate to net output after parasitic loads and internal losses. Mini hydro power plants are defined in this CfP as having net capacity ≥ 1 MW & ≤ 3 MW and micro < 1 MW. For non-electrical energy generation equivalency to We will be used.

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for rural areas. In addition, many remote communities still lack access to any power at all with little expectation of being supplied on-grid power by the state-owned electricity company (PLN) in the foreseeable future. At the isolated community level, a properly developed, constructed and sustainable Community-owned RE power is one of the solutions to raise the quality of life in these communities. These plants should be owned, managed and maintained by the rural communities which, however, lack sufficient capital to build them and thus need funding and technical support from third parties to achieve realization. The main goal of this CfP is to accelerate development of small-scale RE power generation facilities to be owned, managed, maintained and operated by communities for local consumption in rural, and usually remote, locations. This CfP will also be used to assess eligibility and award Technical Assistance and Project Preparation (TAPP) Grants. TAPP Grants provide need-based finance to Eligible Applicants to strengthen their project preparation on par with MCA-Indonesia standards. TAPP Grants for this CfP may range up to $250,000 for individual proposals. B. Invitation Applicants are invited to apply for grant funding from MCA-Indonesia, under the GP Facility, for the Design, Development, Construction and Operation of the off-grid community-owned RE Projects that meet the requirements of this CfP. This CfP is also available in Bahasa Indonesia but in the event of ambiguity, the English version shall prevail. This CfP and its associated and pertinent documents can be downloaded from http://gp.mca-indonesia.go.id/RE/community upon registration. All Applications should be written in English language except for the Concept Note and Community Letter of Support could be written either in English language or in Bahasa Indonesia. It is MCA-Indonesia’s preference that documentation originally in the Indonesian language, such as permits and licenses, should have an English translation appended to the Indonesian version. We envision that Applicants will have both (1) project implementation experience with the technology and (2) agreement and cooperation of the respective Indonesian communities. The application process follows two steps for this CfP:

• STEP 1 – Concept Note Submission Step 1 requires the submission by the Applicant of a Concept Note using the outline in Annex 4, completed Scoping and Screening Checklists in Annex 6 and Annex 7 and, if available, a completed Detailed Feasibility Study (DFS) for the Project. This material will be used by MCA-Indonesia to determine if the Applicant and Project meet all eligibility and appraisal requirements. Those Applications that meet the eligibility and appraisal criteria and submit an acceptable DFS will be promoted to Step 2 and invited to submit a Full Application under Call A. Those Applicants that meet the eligibility and appraisal criteria but either do not have a DFS or have a DFS which fails to meet MCA-Indonesia’s requirements will be promoted to Step 2 and invited to submit a Full Application under Call B as specified in Table 3. As Call B has a later submission deadline, it is expected that this extra time will be used by the Applicant to improve its existing DFS or develop a new one. Applicants who do not have a DFS or, in MCA-Indonesia’s assessment, require additional development of their DFS, may be eligible for a

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Technical Assistance & Project Preparation (TAPP) Grant award. All Applications which fail to meet the eligibility and appraisal criteria will be rejected.

• STEP 2 – Full Application Submission

Step 2 requires the preparation of a DFS and the Full Application for the Project using the outline in Annex 5. The Full Application is to be reviewed, ranked and either recommended for approval by the Investment Committee, based on established appraisal criteria outlined in Section V, or rejected.

See Section III, Table 3 for the anticipated timelines associated with this CfP. C. Additional Information It is preferred at the Concept Note stage that the Applicant select and announce suitably capable consultants who will be responsible for preparing the Project’s DFS, should its Concept Note be selected for Full Application. Nevertheless, an Applicant must select a Consultant to prepare its DFS shortly after the Applicant is notified of its promotion to the Full Application Stage. In the event that the Applicant qualifies for a TAPP Grant, the TAPP Grant Agreement will then be finalized based on the listing of consultant services and costs to be published by MCA-Indonesia. The selected consultants may be subject to a No Objection from MCA-Indonesia. MCA-Indonesia recognizes that the knowledge, skills and on-the ground presence and experience needed for to develop a successful RE project may not reside with any one organization. Therefore, applicants are encouraged to form strategic partnerships or consortia whose members and business focus would give greater attention to the development of a community RE power project. Note that this CfP is one of a series of requests for submissions to be issued by MCA-Indonesia for RE projects.

More Information on TAPP Grants TAPP grants shall be awarded as milestone-based cash grants to Eligible Applicants in order to support high quality, evidenced-based project preparation, and will be utilized to obtain professional services such as, but not limited to, the following:

• Feasibility Studies (FS) and Detailed Feasibility and Design Studies; • Specific studies to bridge design gaps identified within an existing FS/DFS. These could

include, among others, technical surveys and investigations; design engineering; economic and financial analysis; environmental, social and gender, and lifescape assessments;

• Capacity-building, staff training, and supervision services necessary for successful project preparation for implementation;

• Incremental work related to complying with IFC’s environment and social performance standards, economic and life-scape analysis.

II. ELIGIBILITY INFORMATION A. Applicant Eligibility Criteria

Before applying, an Applicant is strongly encouraged to verify that it meets the Applicant Eligibility requirements outlined in Annex 1. In addition an Applicant should verify that its proposed Project is not eliminated by the Project Eligibility requirements outlined in Annex 2 and that all of the eligibility

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requirements of the Compact and this CfP are met. A summary of Key Applicant Eligibility requirements is provided below but Applicants should refer to Annex 1 for a complete set of requirements when responding to this CfP. Key Applicant Eligibility requirements include:

• An Applicant, who can demonstrate, through examples submitted in its Application, that it has successfully undertaken the development, design, construction and commissioning of two or more RE power projects in Southeast Asia similar in size, scope and technology to the Project being proposed;

• An Applicant, who possesses sufficient capital to carry out the Project, either in the form of debt, sponsor contributed equity, cash reserves, community contributions and any and all grant proceeds awarded under this CfP;

• An Applicant, who can demonstrate, through examples submitted in its application, its ability to:

(a) negotiate an EPC contract that mitigates common completion risks such as cost overruns and non-performance by EPC contractors;

(b) work with local communities and governments in the Indonesian social and environmental regulatory context;

(c) ensure free-access to Project site; and (d) deliver the Project on schedule and within budget.

• An Applicant, who is a single entity project developer or a consortium of entities, which singularly (or jointly in the case of a consortium), possesses the capability, structure and financial wherewithal to act as or manage an EPC contractor and enter into a deliverables-based EPC contract including other applicable contracts; and

• An Applicant, who has the wherewithal and expertise to operate the Project and to train locally sourced O&M expertise for the Project.

B. Project Eligibility Criteria A complete listing of Project Eligibility criteria is provided in Annex 2. A summary of Key Project Eligibility requirements is listed below by thematic type but Applicants should refer to Annex 2 when preparing their Concept Note:

• Geography: Project must be located in one of the thirteen GP Provinces listed in Table 2 & Figure 1.

• Project Type: Project must employ a renewable energy technology (see targeted technology types provided in Table 1).

• GHG Reduction: Project must contribute directly or indirectly to the reduction of greenhouse gas emissions and reduce reliance on fossil fuels as energy sources.

• Favorable Project Cost to Benefit Ratio: Projects must demonstrate that the Communities being served will be recipients of tangible economic benefits and that the Project is a good value for reaching the GP goals.

• Completion Timeline: Project must be reasonably expected to be commissioned before 1st April, 2018.

• Ownership: Project must have an ownership structure through a Special Purpose Vehicle (SPV) established to own the Project, such that the community has at all times a majority equity stake in the Project. Refer to Section II.F for additional information.

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• Community Contribution: Project must have a capital structure with a minimum community equity contribution of 4% of the Total Project Cost (TPC) of which 1% of TPC must be in the form of cash; the remainder can be in the form of in-kind contributions to be fully valued/monetized within the DFS.

• Operations & Maintenance: Project must achieve sustainability through provision of locally sourced Operations & Maintenance (O&M) expertise. Revenues from sale of electricity shall be sufficient to support all O&M costs for the life of the Project. The Applicant should demonstrate how O&M sustainability will be achieved including training of locally sourced operators. Similarly, the Project operations should be designed to maximize expertise at minimum costs and the Application should demonstrate how best this can be achieved.

• Environmental and Social Performance (ESP)/Social and Gender Assessment (SGA): Project must meet a core objective of improving environmental and social stewardship through adherence to ESMS, including IFC Performance Standards (see Annex 6), and SGA Standards (see Annex 7). For example, Projects must provide equal access for women and other vulnerable groups to the Project or its benefits and must endeavor to provide adequate, reliable and affordable electricity or other energy supply to every household within the defined area.

• EPC Contract: at the Concept Note stage, a Project must possess a competent turnkey Engineering, Procurement and Construction (EPC) contractor capable of accepting an EPC or comparable construction contract that is date-certain, lump sum, fixed-price and with appropriate liquidated damages to cover penalties for non-performance. EPC contractors must post Advanced Payment and Performance guarantees to ensure delivery of the Project. The Applicant should demonstrate how good value for RE Grant money will be achieved.

• Design Life/Sustainability: Project must possess a minimum 20 years design life using an acceptable methodology.

C. RE Technology Categories

MCA-Indonesia intends to feature as wide a spectrum of RE technologies as practicable in its portfolio of Community-owned RE Projects while accommodating a range of landscape types. Please note that all community-owned projects are required to be off-grid with the ability to connect to the PLN grid at a later date if such opportunity avails. Table 1 lists examples of eligible technologies. The following examples are provided for illustrative purposes only and have been deemed to be projects and technology types that are likely to be deployed within the limited compact time frame. Applicants may propose technologies other than those listed above as long as such technology(ies) and project(s) meets all eligibility requirements set forth in this CfP. While this document concentrates on electrical power generation the basic principles apply to non-electrical energy generation such as bioenergy/biofuel propagation, preparation and application. Submitting an Application for a Project which incorporates one or more of the illustrative categories does not assure that such Application will be successful.

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Table 1. Eligible Technology Examples

CATEGORY TECHNOLOGY

Biomass

Biomass through thermal or gasification technology from sustainable sources.

Bioenergy projects using Palm Oil Mill Effluent (POME) or other agricultural sources firing power plants or compressed gas for household consumption from sustainable sources. Biogas from animal manure, organic waste materials or Municipal Solid Waste to power plants.

Solar

Off-grid solar photovoltaic systems with inverter, battery or other storage capabilities. Mini-Grid-connected photovoltaic electricity generation facilities. Thermal or Concentrated Solar Technologies.

Hydropower

Aggregated Micro Hydro (≥ 300 kW ≤ 3 MW off-grid with individual power plants being ≥ 50 kW). Separate micro hydro projects, each with their own individual mini-grid, can be aggregated subject to them being in relatively close proximity to one another within a single District and managed from a single location.

Mini Hydro (≥1 MW but ≤ 3 MW).

Wind Community wind power systems including Hybrid applications with photovoltaic.

Hybrid Systems Hybrid photovoltaic or Wind with Hydro, Biomass or battery capacitance systems. Note: Hybrid systems that bring on new diesel generation that is not already in existence are not eligible.

D. Geographic Focus for the GP Project

The GP Project originally identified and selected twelve Provinces (GP Provinces) which were eligible for Community RE Grant funding by the GP Facility. The number of eligible provinces changed to thirteen on the 25th October 2012 with the creation of North Kalimantan, originally part of the eligible province of East Kalimantan. A list of these targeted GP Provinces is provided in Table 2 and illustrated in Figure 1 below. All Projects must be sited and built within these GP Provinces.

Table 2. Eligible Provinces for the Off-grid Community-owned RE Projects

GP Provinces GP Provinces

1 Jambi 8 West Sulawesi 2 West Sumatra 9 South Sulawesi 3 Bengkulu 10 Southeast Sulawesi 4 Riau 11 West Kalimantan 5 South Sumatra 12 North Kalimantan 6 West Nusa Tenggara 13 East Kalimantan 7 East Nusa Tenggara

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Figure 1. GP Provinces & GP Districts

It is a condition of entry of MCA-Indonesia into a given GP District that the local government should execute a Memorandum of Understanding (MoU) with MCA-Indonesia declaring that the District is willing to provide certain assurances as to, inter alia, open and transparent issuance of permits, etc. A number of GP Districts have executed MoU’s and these existing MoU’s are available to be downloaded after CfP registration. If an Application is received for a District which has yet to execute a MoU at date of Application, then it will be a condition that such a MoU must be in place prior to any type of grant award. Applicants should understand that, even though they may be successful in being awarded any grant, such grant will be conditional upon the execution of a MoU. Accordingly the Applicant risks losing the award for failure of the District to effect a MoU. E. MCA-Indonesia Example Projects In 2012, the National Renewable Energy Laboratory (NREL) was commissioned to study potential projects in Natural Resource Management (NRM) and RE which would likely meet MCA-Indonesia’s requirements and to undertake Pre-Feasibility Studies (PFS) on these example projects. These PFS are available and can be downloaded after registration. They will give potential applicants good background information on potential Project types and parameters. F. Project Ownership, Structure and Staffing A Special Purpose Vehicle (SPV) shall be established specifically to own the Project and all related contracts and permits. The SPV will be owned by a Community Organization, such as a Cooperative,

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possibly in conjunction with a company established by the District government (BUMD). If there is BUMD participation, then this is limited to a 49% maximum shareholding in the SPV. The SPV’s role is one of ownership of the Project after handover by MCA-Indonesia subsequent to the Commercial Operation Date (COD) of the Project. Contractually, the SPV will hold the EPC contract, warrants, licenses & permits and the O&M contract for the Project after the end of the construction warranty period. More details on Applicant and Project Ownership can be found in Annex 11. It will also hold all energy supply agreements with customers for the electrical power generated by the power plants within the Project. For Aggregated Projects involving multiple power plants, unless good evidence is presented to demonstrate the contrary, it will be required that a single SPV will own all of the individual power plants. The SPV should be established after Grant Award but before commencement of any works on the Project. It should be noted that it is not the responsibility of MCA-Indonesia to undertake the work needed to obtain any licenses & permits nor to establish the SPV. These responsibilities fall solely on the Applicant in conjunction with the community and SPV.

III. GRANT PROCESS OVERVIEW MCA-Indonesia will provide RE Grant financing for Eligible Project Costs as outlined in Annex 10. The sources of funds will come from MCA-Indonesia in the form of a cash grant, representing no more than 96% of Total Project Costs (TPC), and from the community, either in the form of a cash contribution and an in-kind contribution, community/cooperative funds or social investor equity (representing no less than 4% of TPC) to arrive at 100% of the TPC. The overall scheme and timetable for this CfP is presented in Table 3. MCA-Indonesia reserves the right to extend any review timeframe depending upon response from the market, complexity of evaluations or other considerations. A second call may be made in 2015 depending upon application volume to this CfP and availability of funds after RE Grant awards from this CfP. Once Full Applications have been appraised, those Projects which pass the 70 points (70%) scoring will be presented to the Investment Committee (IC) for their conditional approval, subject to a number of Conditions Precedent (CP’s) , such as completion of necessary permits & licenses, finalization of construction design and EPC costs. Once approved, a Conditional Award of Grant will be issued, the Grant Agreement negotiated & finalized and once all CPs are met disbursement may begin based on the milestones outlined in the Grant Agreement. At this stage the financial instruments needed to securitize the construction and warranty of the Project constructions and operations will be finalized, draft contracts completed and Grant Award confirmed.

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Table 3. Overall Scheme and Timetable for the Community RE Grant

Process Step Indicative Timeframe Target Deadline

Concept Note Submission Issue CfP - 29-November 2014 Commencement of submission of Questions 2 days 1-December 2014 Questions will be collated weekly and answered the following week through to the Closing of Questions.

Closing of Questions 7 weeks 19-January 2015 Final Posting of Answers 1 week 26-January 2015 Applicant Submits Cover Letter, Concept Note and Supporting Documents. 3 weeks 16-February 2015

Concept Note Evaluation and Appraisal by Technical Appraisal Panel (TAP) Concept Note Reviewed and Appraised by MCA-Indonesia. Successful Applicants promoted to Full Application Submission. Unsuccessful Applicants rejected.

• Successful Applicants who submit an acceptable DFS follow Call A.

• Successful Applicants who require preparation of an acceptable DFS follow Call B and may be awarded TAPP Grant funds.

4 weeks 16-March 2015

Submission of Full Application , Evaluation by TAP, Investment Committee Acceptance or Rejection and Grant Negotiation Call A Call B Call A Call B TAPP Grant Funds Awarded to Applicants to develop a new or improve an existing DFS. N/A 3 wks N/A 6-April 2015

Invited Applicants Prepare/ Submit Full Application with DFS. Full ESMS review begins. 6 wks 16

wks

27-April 2015

27-July 2015

Full Application reviewed by MCA-Indonesia. Confirmation of Feasibility/ Eligibility or Rejected.

4 weeks 25-May 2015 24-August 2015

Negotiate full terms and conditions of RE Grant 2 weeks 8-June 2015 7-September 2015

IC review and approves conditional commitment to Award Grant 2 weeks 22-June 2015 21-September 2015

Those approved move to Grant Agreement processing; others rejected. 1 week 29-June 2015 28-September 2015

Develop Transaction Documents and Execute Grant Agreement Develop transaction documents 3 weeks 20-July 2015 19-October 2015 Execute Grant Agreement 1 week 27-July 2015 26-October 2015 Disburse Grant Agreement Monitor CP’s and certify all conditions satisfied Commence Disbursement of RE Grant

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IV. CONCEPT NOTE ELIGIBILITY AND APPRAISAL REVIEW Process and Invitation Submission: Each Applicant is requested to submit a Concept Note using the format outlined in Annex 4. MCA-Indonesia will review each Concept Note to determine whether or not such submission is responsive to the requirements of the CfP. Evaluation: MCA-Indonesia’s evaluation will place particular importance on verifying that an Application meets Applicant and Project Eligibility requirements as set forth in Annex 1 and Annex 2. Specifically, this review will confirm that the Project or Applicant:

1. Is located in one or more of the GP Provinces (see Table 2 & Figure 1); 2. Employs a renewable energy technology (see targeted technology areas provided in Table

1); 3. Contributes directly or indirectly to the reduction of greenhouse gas emissions; 4. Reduces reliance on fossil fuels as energy sources; 5. Will be commissioned prior to April 1, 2018; 6. Has sufficient working capital to carry out the Project; 7. Increases access to electricity; 8. Can demonstrate sustainability of the Project in terms of, inter alia, energy supply and

operations & maintenance.

Should the Application meet the CfP’s Eligibility requirements, it will be appraised based on the information provided in the Concept Note for the following criteria:

1. Organizational Capability and Proposed Technical Approach; 2. Financials and Overall Project Sustainability; 3. Green Prosperity Project Objectives, Readiness to Proceed and Project Logic; 4. Environmental and Social Impact; 5. Overall Value

Section V below provides a detailed description of each category mentioned above bearing in mind that detailed information will not be required in the Concept Note Stage. The Project proposed in the Concept Note must meet ALL eligibility requirements in order to be appraised by the Technical Appraisal Panel (TAP). The TAP will determine if the Applicant’s proposed Project (i) warrants an invitation to submit a Full Application (ii) requires TAPP Grant proceeds for DFS development or rectification of existing DFS or (iii) is to be rejected. The Concept Note will provide a description of the Project, technical information, expected environmental effects and social impact, background information on management, financing strategy, and progress to date of critical path schedules. This information will be used as a basis for determining overall eligibility as well as the Project’s readiness to proceed within the limited time-frame of this Compact. Failure to meet all eligibility requirements will result in rejection of the Application unless the Applicant can provide additional information within a reasonable timeframe to address such eligibility deficiencies. MCA-Indonesia and its TAP will evaluate each Concept Note based upon the factors and weightings summarized in Section V, however, MCA-Indonesia may require that Applicants provide additional certifications or supporting documentation as part of this appraisal process.

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Examples of how overall value can be assessed include estimated cost per MWh; displacement of expensive polluting fuels; number of households connected; and cost per household connection. With their Concept Note, Applicants should submit a copy of any and all PFS and or DFS previously prepared for the proposed Project. If an Applicant submits a Concept Note but, at the time of Application, has not prepared a feasibility study, then TAPP Grant proceeds may be available to fund the development of a DFS after promotion to Full Application submission in the selection process. The scope of appropriate activities to be financed through a TAPP Grant will be determined by MCA-Indonesia. TAPP Grants will be administered by MCA-Indonesia according to procedures outlined in a TAPP Grant Agreement between MCA-Indonesia and the Applicant, and disbursements will be made in accordance with the schedule negotiated in each TAPP Grant Agreement. Each Grant Agreement will have criteria that outlines eligible Project costs, and grantees will be required to document how grant money is spent in compliance with these guidelines. For each of the major tasks in a Grant Agreement, a corresponding scope of work and deliverables will be identified. Applicants will be expected to adhere to the scope of work and budget while appointing their consultants. Prior to the first disbursement of any TAPP Grant, the Applicants shall seek a No Objection from MCA-Indonesia on the consultant team and the contract terms and conditions. Applications which meet all eligibility and appraisal criteria and where an already completed and acceptable DFS is available may submit their Full Application prior to the first Full Application deadline outlined in Table 3. In the extent that there are any material deviations in the Full Application from the information provided in the Concept Note, the Applicant must update and notify MCA-Indonesia. An Applicant may make more than one Application and accordingly submit more than one Concept Note but each submission must be separate. The exception to this is the “bundling” or aggregation of micro Projects where, although details on each individual facility should be on a separate Concept Note, this bundle should be submitted as a single Application, with an additional overall Concept Note explaining the rationale behind the aggregation. Those Applicants who meet the eligibility requirements of the CfP will be advised and invited to submit a Full Application. Those Applicants who are rejected will be informed of the decision and the reasons for rejection. They may resubmit in a subsequent CfP, if any, after rectification of the reasons for rejection.

V. FULL APPLICATION AND APPRAISAL CRITERIA Applicants who are invited to submit a Full Application are required to follow the format outlined in Annex 5. MCA-Indonesia will review each submission to determine whether or not such submission is responsive to the requirements of the CfP. As part of its review process, MCA-Indonesia will conduct a thorough review of all financial, technical, legal/programmatic and environmental/social impact criteria outlined below. The Environmental & Social Performance Guideline (Annex 6) and the Social & Gender Assessment Guideline (Annex 7) gives an explanation and structure of these MCA-Indonesia requirements. In the event that a Full Application has material deviations from the information provided to MCA-Indonesia in the Concept Note, then the Applicant must inform MCA-Indonesia in writing, clearly describing and discussing the reasons for the deviation. MCA-Indonesia will then review the changes and render its opinion, in its sole and absolute discretion, as to whether the Application may proceed or be rejected.

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As part of its review process, MCA-Indonesia will conduct a thorough review of the Full Application and apply the following weightings and maximum points per category for the criteria as given in the aspects noted below. Projects must score a minimum overall rating of 70% as part of the final weighted score. Applications failing to meet this threshold score will be rejected. As part of this evaluation the TAP will appraise:

1. Organizational Capability and Proposed Technical Approach

• Reasonableness of the Project’s timeline; • EPC contractor’s experience; • Availability of equipment and labor to the Project; • Status of permitting and regulatory approvals; • Risk of force majeure, performance risk assumptions, risk management measures to be

instituted by the Applicant, quality and level of detail of contractor specifications, site conditions, Project monitoring procedures, acceptance testing and procedures;

• Strength of the EPC contract to mitigate completion risk and cost overruns; • Availability of labor force, operations management team, O&M plan, environmental,

social, monitoring & evaluation officers and training and supply of local O&M staff; • Site infrastructure, wastewater requirements, solid waste requirements, water

requirements; • Transportation logistics of Project construction equipment & material, including port

requirements, road requirements, pipeline requirements, storage/handling facility requirements and government support for infrastructure improvements;

• Distribution and Transmission Right of Way (RoW).

2. Financials and Overall Project Sustainability

• Community Equity Contribution – Greater levels of cost and risk-sharing through greater community equity contributions will rate higher in the appraisal review;

• EPC contractor’s quality, financial strength and creditworthiness; • Risk management measures to be instituted by the Applicant, cost overrun mitigation

measures, and strength of EPC contract to mitigate completion risk and cost overruns; • Long-term sourcing, quality, reliability, availability and sustainability of the Project’s

proposed technology and energy supply. For hydro power plants, this should extend to consideration of watershed protection. For biomass/biogas it should extend to sustainability and control of energy source;

• Affordability of power and household ability to pay such power cost, the market, off-take risk and certainty of demand for output;

• Revenue including whether total annual income from sale of power will exceed annual O&M contract cost (including insurance) and provide an adequate contribution to fund reserves.

3. Green Prosperity Objectives, Readiness to Proceed and Project Logic

• Green Prosperity Goals and Objectives, as outlined in the Compact, and whether or not they have been met by the proposed Project;

• Readiness to proceed including confirmation of site control, adequacy of permits and evaluation of intervener risk;

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• Project’s logic and whether or not the Project makes sense from an economic and technical standpoint, including whether or not the Project will improve living standards for beneficiaries, how many beneficiaries and whether or not the inputs from grant funding will lead to measureable outcomes based on the objectives set forth under the GP Project and this CfP.

4. Environmental and Social Benefits

• The positive environmental and social impact of the Project including social and gender equality based on Tier 1 and Tier 2 ESMS protocols (see Annex 6) and Social and Gender Integration Plan (SGIP) (see Annex 7). Applicants who demonstrate as part of their proposed approach and methodology, clear mechanisms geared toward greater inclusion and or opportunities for women in the management and operation of the Project will be rated higher under this element.

5. Overall Value

• The reasonableness of the proposed EPC construction costs, construction and payment schedules and warranties to complete the Project with supporting details and assumptions;

• Sufficiency of contingency plans to address any possible issues during construction; • Whether Project has well-documented, integrated Project baseline with detailed

supportive cost data including management reserves; • Levelized cost of electricity for similar projects using similar technologies.

VI. APPLICATION CONTENTS, DEADLINES AND SUBMISSION INSTRUCTIONS

A. Application Contents

The submission shall include the following documents as follows: A. The Cover Letter conveying the Applicant’s desire to undertake a Project in “The Off-grid

Community-owned Renewable Energy Projects” under the Community-owned RE Grant mechanism, using the template provided in Annex 3. This document should be written in English language.

B. A Concept Note describing the Applicant’s organization, the Project and its approach to

undertaking the Project, using the format provided in Annex 4. This document could be written either in English language or Bahasa Indonesia.

C. Adequate Supporting Documentation to demonstrate capability, experience, structure and

sufficient wherewithal of the Applicant to accomplish the proposed Project. This document should be written in English language.

D. In addition to the Concept Note, adequate Background Information such as maps, copies of

permits, licenses, Community Letter of Support and willingness to undertake the required minimum community contribution to the TPC (see template in Annex 12), etc. all in support of the Concept Note. The Community Letter of Support could be written either in English language or Bahasa Indonesia.

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E. If available, a DFS (this document should be written in English language) that includes: 1. An assessment of the renewable energy resource to be utilized, including year-round

availability and appropriate capacity and intermittency factors; 2. A detailed description of the proposed Project; 3. An assessment of environmental and social impact of the proposed Project; 4. A participatory Lifescape Analysis providing information of communities, targeted

beneficiaries, their livelihood and potential for improved economic opportunities; 5. Technical and financial details of the proposed Project including the ‘with Project’ business

plan; 6. A site plan with appropriate existing topographic data confirmed by survey as well as all

proposed construction to achieve the outcomes, including the proposed electricity distribution network to end users;

7. Electrical schematics for the proposed Project; 8. Supporting calculations (such as hydrologic flow data, conveyance system hydraulics, etc.) and

investigatory data, including geotechnical conditions as verified from appropriate investigations;

9. Existing and proposed beneficiary data (disaggregated by gender) to support proposed Project logic;

10. Outline specifications for all proposed construction and equipment, including catalogue cut sheets for proposed generation turbines;

11. Estimated bill of quantities used by EPC contractor to price work. B. Application Deadlines and Submission Instructions Applicants should refer to Table 3 for the Grant Award Process Schedule. In order to encourage submissions of complete Applications as early as possible, the following deadlines have been established. Unless otherwise noted Applications are due at 12:00 noon, Jakarta time on the deadline date specified below.

Concept Note:

The complete CfP Application (Cover Letter, Concept Note, Supporting Documentation and Background Information as above) should be submitted in hard printed copy and electronic copy, and must be received by MCA-Indonesia no later than 16th February 2015. Applications may be systematically reviewed as they are received. However, final selection of qualified Applicants will not occur until after all Applications received by the deadline are evaluated against all others submitted during the corresponding review.

Applications received after that time & date will be rejected and returned unopened.

Expected timelines are noted below, for those successful Applicants promoted to Full Application submission. Full Application:

For Applicants with a satisfactory DFS completed prior to Application submission, the Full Application is due no later than 27th April 2015 (Call A). For all other Applicants, the deadline for Full Application is 27th July 2015 (Call B).

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In the event that the Applicant is invited by MCA-Indonesia to submit a Full Application, the Full Application should be submitted in hard printed copy and electronic copy and will be due no later than the established deadlines above. Submission Format 1. Printed copies (1 set of original document and 3 set of copies) of the Concept Note and all the

required documents should include the title “CfP Community-RE GRANT” on the right top of the submission package and be sent to:

Grant Administrative Support Team MCA – INDONESIA

MR21 Building, 6th Floor, Jl. Menteng Raya No. 21 Jakarta 10340, Indonesia

An electronic copy of the complete CfP Application and all required attachments should also be submitted to the above address that is provided on a portable memory drive and delivered together with the printed copies.

MCA-Indonesia reserves the right to extend the date of completion of STEP 2, STEP 3 and STEP 4 in Table 3 of Section III and to cancel the second CfP in its entirety depending upon the level of applications and other considerations.

2. Any further submissions associated with this CfP, deadline dates and additional CfP, if any, will be

announced on the MCA-Indonesia website as soon as they are available. Written Questions and Written Answers 1. MCA-Indonesia will only accept Written Questions and will only give Written Answers. All Q & A

will be published on the MCA-Indonesia web site. 2. Written questions, clarification requests or feedback related to this CfP must be submitted to

gp.window3a@mca-indonesia.go.id during the period of 1st December 2014 to 19th January 2015. 3. MCA-Indonesia will respond to all queries and responses at least weekly through this period

through a rolling answering/posting at http://gp.mca-indonesia.go.id/RE/community/questions-and-answers through to the last posting on the 26th January 2015.

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Annex 1 | Applicant Eligibility

1.1. Eligible Applicant

(1) Any single entity, consortium, firm, corporation, company, partnership, association, society, trust, joint venture, joint stock company, or other business entity that has submitted an Application to MCA-Indonesia, has the authority to enter into a Grant Agreement with MCA-Indonesia under the Compact and has the right to participate in, undertake and operate renewable energy projects in Indonesia.

(2) An entity legally registered in Indonesia or elsewhere, having the right to design, develop, construct, commission and operate renewable energy projects in Indonesia.

(3) An entity that does not advocate, promote or espouse anti-democratic policies or illegal activities under Indonesian law.

(4) An organization that does not possess any person or entity that has been blacklisted in participation in procurements funded with the World Bank assistance or debarred or suspended from participations in procurements funded by the U.S. Federal Government or otherwise prohibited by applicable United States law or Executive Order or United States policies including under any then-existing antiterrorist policies.

(5) An entity that does not include Key Parties in the selection process, as well as members of their immediate families or their business partners which have a financial interest. Key Parties are defined as employees of MCA-Indonesia, MCC, and members of MWA or the staff of affiliates of the PMC, PPF, GM and the Investment Committee.

(6) An entity that has worked with communities to design, develop, construct and commission community renewable energy power plants in Southeast Asia similar in size and nature to the proposed project. This experience must include navigating Indonesia’s complex permitting process. In the event the Applicant cannot satisfy this criteria, the Applicant should present a minimum of two CVs of Senior Management to demonstrate its ability to undertake the presented Project, to the satisfaction of MCA-Indonesia.

1.2. Non-Eligible Applicant

(1) Any individuals. (2) Political parties, groups or institutions, or their subsidiaries and affiliates. (3) Entities that advocate, promote or espouse anti-democratic policies or illegal activities under

Indonesian law. (4) Any person or entity that has been blacklisted in participation in procurements funded with

the World Bank assistance or debarred or suspended from participations in procurements funded by the US Federal Government or otherwise prohibited by applicable United States law or Executive Order or United States policies including under any then-existing antiterrorist policies.

(5) Entities in which Key Parties in the selection process, as well as members of their immediate families or their business partners, have a financial interest. For the purposes of this document Key Parties are defined as employees of MCA-Indonesia, MCC, members of MWA or the staff or affiliates of all GP’s consultants or implementing entities.

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1.3. Financial Capability

The Applicant should have the financial ability to undertake the works proposed in the Cover Letter and Concept Note on the basis of the requested MCA-Indonesia RE-Grant and on the basis of milestone deliverable based grant disbursement. In the event that the Applicant is a rural community organization, private companies (e.g. technology providers, philanthropists, etc.) may act as guarantor by providing the required financial documents. The Applicant should produce its latest tax clearance certificate(s). In the event that the Applicant is a rural community organization, this document is not applicable.

1.4. Technical Expertise

The Applicant must be able to demonstrate that it has the experience or ability to undertake the scopes delineated in the Full Application’s requirements, specifically: (1) Ability to Direct the development of the Project and its ongoing management for an agreed

period of time; (2) Ability to design, procure and construct the Project to the standards required in the CfP; (3) Ability to Operate & Maintain the Project for an agreed period of time; (4) Ability to establish or support technology transfer to the rural community; (5) Ability to liaise with the rural community and local government to resolve any disputed

matters during the development, construction and ongoing operation of the Project.

The Applicant must be conversant with Health & Safety requirements applicable to the Project.

1.5. Other Applicant Requirements

(1) The Applicant should not be a state owned enterprise (BUMN) but may be an enterprise (BUMD) established by the District (“Kabupaten”) providing central government shareholding is no more than 49%.

(2) The Applicant must not have a conflict of interest that affects the validity of the CfP process. All establishment documentation should be provided.

(3) In the event that the Applicant is a Consortium or other acceptable association, then the Partnership Agreement should be presented. One of the entities in the Partnership should act as a Lead Partner and be responsible for coordinating and implementing the proposed project.

(4) The Applicant should produce an endorsement satisfactory to MCA-Indonesia from the community in which the Project will be located. The rural community organization (e.g. cooperative, farmer group, etc.) should be involved during the preparation and submission of the Proposal. It may act as direct Applicant (with additional support from other parties) or as a member of Consortium with key tasks and roles in the proposed Project.

(5) For those entities established outside of the jurisdiction of the Republic of Indonesia, the establishment documentation should be legalized by the appropriate mission in Indonesia; International NGOs or non-profit foundations must have an established or a representative office in Indonesia as per the Presidential Regulation/Perpres No. 80/2011.

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Annex 2 | Project Eligibility 2.1. General Project Overview

Applicants may apply for one or more of the renewable energy technologies listed in Table 1 however all Projects must meet the following Project Eligibility Requirements 2.2. Eligible Project

(1) The Project is community-owned, managed and maintained. Applicant to delineate proposed structure, management and operation of the SPV which will own the Project;

(2) The Project is located in one of the eligible Provinces under the GP project as listed in Table 2 & Figure 1 of this CfP;

(3) The Project is new or a retrofit/revamp/expansion on an existing project; (4) The Project employs one of the renewable energy technologies listed in Table 1 or another

technology deemed acceptable by MCA-Indonesia; (5) The Project consists of a single facility or an aggregated one with the capacity limit as

described in Table 1 – RE Grant – GP Facility Funding Window 3a Community of this CfP; (6) The Project contributes directly or indirectly to the reduction of greenhouse gas emissions; (7) The Project generates revenue sufficient to cover the O&M costs for the life of the project; (8) The Project will be reasonably expected to be designed, developed, constructed and

commissioned prior to April 1, 2018. 2.3. Additional Requirements (where applicable)

(1) Possesses a primary objective that clearly aligns with the official objectives of the GP Project and meets all applicable requirements of the Compact and this CfP;

(2) Reduces reliance on fossil fuels by expanding renewable energy; (3) Reduces land-based greenhouse gas emissions by improving land use practices and

management of natural resources; (4) Possesses a core objective of improving environmental stewardship and providing evidence

of adoption of environmental and social safeguards and social and gender inclusion mechanisms as outlined in IFC Performance Standards and in compliance with MCA-Indonesia’s ESMS Tiers 1, 2 & 3, Framework and the SGIP Plan (see Annexes 6 and Annex 7);

(5) Provides equal access for women and other vulnerable groups to the project or its benefits (see Annex 7);

(6) Has the support of the local community; (7) Increases electrification ratios; (8) For power plants, the broad objective is to provide a reliable, continuous and sustainable

supply of electricity or bioenergy from well-engineered and constructed facilities over a period of twenty years, at such a minimum supply level as to afford a quality of supply similar to that obtainable from PLN.

(9) For non-electricity generation projects, achieves a reduction in both deforestation and the use of fossil fuels;

(10) Achieves sustainability of the energy source and project sustainability through use of local O&M expertise;

(11) Be easily and quickly readied for construction and commissioning with a presentation of current status and plan/schedule for arriving at the Commercial Operation Date (COD) of the Project;

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(12) Possesses a stakeholder engagement plan and copies of environmental documents and permits or has such plan or documentation under process;

(13) Provides a compensation plan if land acquisition and economic displacement are unavoidable;

(14) Provides a cultural heritage protection plan, in applicable geographic areas; (15) Requires a grant amount that is in compliance with the requirements set forth in this CfP. (16) Provides suitable risk allocations among counterparties.

2.5. Non-Eligible Project

(1) Any projects that would violate the terms of the Compact; (2) Any projects that located outside of GP Districts; (3) Any projects that violate the laws of Indonesia or would violate the restriction on the use of

MCC Funding set forth in Section 2.7 of the Compact; (4) Any projects that are likely to cause a significant environmental, health, or safety hazard as

defined in the Environmental & Social Performance Guideline (see Annex 6); (5) Any projects with significant potential to create, exacerbate or reinforce existing social

and/or gender inequalities (see Annex 7); (6) Any projects in which due diligence requirements and risks are too high to justify the

investment (e.g. unmanageable land ownership dispute and conflict); (7) Any project in which the Key Parties would have a conflict of interest; (8) Any projects involving forced labor or child labor; (9) Any projects which involve removal of existing non-degraded natural forest to make way for

a plantation, orchard, or farm; (10) Any projects involving activities that impinge on the rights and claims over lands and forests

by indigenous or customary communities, without full documented consent of such peoples;

(11) Any projects related to trade in endangered species of wildlife or wildlife products regulated under Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), or products derived thereof;

(12) Any projects in production of or trade in tobacco; (13) Any projects supporting the construction of coal power plants or other fossil-fuels as the

primary energy source. (14) Any projects which have due diligence requirements and risks too high to justify the

investment.

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Annex 3 | Cover Letter

To: Millennium Challenge Account-Indonesia MR21 Building, 11th Floor Jalan Menteng Raya No. 21 Jakarta 10340, Indonesia Attn. Director - Green Prosperity Subject: Responding Call for Proposals for Grants for Off-grid Community-owned Renewable

Energy Projects

[Place, Date/Month/Year] Dear Sir, We the undersigned, [name of organization, include members of the consortium, if applicable], are [type of organization] based in [complete address of organization, including location].

[Please also inform about your organization/consortium background in one or two paragraphs]

Herewith we would like to convey our interest to apply for MCA-Indonesia’s Renewable Energy Grants under the specific Call: “Off-grid Community-owned Renewable Energy Projects”. We have interest for the specific Project: [please state your project name and please also inform how your project is related with our project target as listed in Table 1 and Table 2 of this CfP].

We are willing to follow the whole procedure that is set forth by MCA-Indonesia for this particular Grant. We are pleased to discuss any details regarding our Application if required.

Sincerely yours,

[Signature of the Applicant’s Representative]

[Name & Position of Applicant’s Representative]

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Annex 4 | Concept Note - Table of Contents Applicants are advised to prepare their Concept Note using the following Table of Contents. Concept Notes may not exceed 20 pages (excluding attachments such as CVs, maps, etc.) An appropriate range is 15-20 of A4 pages in 11 size font. Applications should be prepared to address each of the items listed below. Exclusion of information listed below may weaken the overall quality of the Concept Note and may eliminate the Project from consideration. For aggregated power plants or facility, a Concept Note should be prepared for each individual power plant together with an additional Concept Note for the overall Project.

A. Applicant, Contractor and Consultant Information

1. Name of the Applicant’s Entity

The name, address, contact details, web site, country of registration and organization type (Privately or Publicly Held Company, NGO, Cooperative) of the Applicant should be given. If the Applicant is a consortium, then the individual names and details of each of the Consortium members and their proposed role in the Consortium should be given as well as a Consortium Agreement executed by the members. The organization that is the lead member should be stated. An organizational diagram should be included. Contact Persons & Key Staff:

• Contact for this CfP: Include name, position, address, phone, fax and email.

• Organizational Head Contact: Include name, position, address, phone, fax and email.

• Key Staff: List the full names of key staff who would be involved with the Project.

• Evidence of Authority: Submit evidence that the signatory of the Application has authority to bind the Applicant to the commitments and representations made in the Application and attests as to the accuracy of the information provided in the Application process.

A detailed explanation of how and to what extent the Applicant qualifies as being Eligible shall be presented.

2. Applicant’s Capabilities

Present a description of the Applicant’s general capabilities and, in particular,

• Applicant’s capability and prior experience in undertaking projects similar to that proposed. It should include a detailed description of current and previous experience with RE Projects built in Indonesia.

• Applicants must demonstrate their experience in navigating the complex permitting

process in Indonesia. • Applicants must, as a minimum, describe (a) examples of at least two projects in the

RE sector similar in nature and scope to the Project being proposed that have been

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completed (developed, financed and managed construction) by the Applicant’s organization or its Principals, and (b) examples of at least two projects in the RE sector for which the Applicant’s organization was responsible for managing the operations and maintenance of a project for a minimum of two years. Each project example must be a project for which construction has been completed.

• Applicants that are not able to include examples of two projects in their description

of current and previous experience in the RE sector should provide a detailed description of the facts that they believe are sufficient to demonstrate to MCA-Indonesia that they have the expertise that would be required to undertake the proposed Project.

• If the Applicant is a Consortium, then the capabilities of each of the Consortium

members, as they relate to their proposed role in the Consortium, should be given.

3. Engineering, Procurement & Construction Contractor Applicant must nominate a competent turnkey Engineering, Procurement and Construction (EPC) contractor capable of accepting an EPC or comparable construction contract that is date-certain, lump sum, fixed-price and with appropriate liquidated damages to cover penalties for non-performance.

• Full details of the EPC Contractor must be given including capability and experience of undertaking projects similar in nature to the Project.

• If the EPC Contractor is a consortium, then capabilities and experience of each

member and their role in the consortium should be given. • EPC contractors must post Advanced Payment and Performance guarantees to

ensure delivery of the Project.

4. Detailed Feasibility Study Consultant If a Detailed Feasibility Study/Engineering Consultant has already been selected and/or a DFS already prepared and submitted with the application, then such Consultant should be identified with their capability & experience be given. If the Consultant is a consortium then capabilities and experience of each member and their role in the consortium should be given. In the event that the Application is promoted to Full Application without a pre-identified DFS consultant, then the consultant must be identified by Applicant and a No Objection may be required from MCA-Indonesia.

B. Project Description

1. Location of Proposed Project Site(s)

• The location of the Project Site(s) should be given, clearly identifying the district, sub-district(s) and village(s) including suitably detailed maps and GPS Coordinates and clearly demonstrate that the Project lies within the GP Provinces.

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• A discussion of existing and required infrastructure to enable the Project to be constructed and operated shall be provided.

• A non-detailed transportation route for Project components (and weights and sizes of

large components) should be given together with the dimensions for the largest single component and the weight for the heaviest single component.

• The application should discuss elements which currently prevent construction and

Applicant’s plan to rectify this.

2. Executive Summary: A description of the nature and scope of the Project, including the technology, site, environmental resources affected, purpose, size, capacity, design features, beneficiaries, required infrastructure, key metrics and key milestones should be provided.

3. SPV and Contractual Structure: The proposed shareholders of and the contractual

structure for the SPV, which will be established by the Community to own the Project, shall be given by the Applicant.

4. Technical Design and Feasibility: The feasibility, sustainability and engineering &

construction should ensure a twenty years lifespan for the facility, fuels, energy sources and operations to be employed and their deployment should be addressed. In the case of a power plant, this should include, as a minimum: • The energy source should be sustainable and be in the general control of the SPV; • The plant should have automatic load flow control; • The supply of electricity should be generally available for 24 hours per day and

throughout the year2 • Each household should have a 900 W MCB installed as power limiter. The Applicant

should strive to design the plant to supply a minimum of 450 W per household, in line with PLN’s minimum connection, taking into account, if necessary, load reductions to each household at peak times.

• The number of households to be connected to each plant and the Electrification Ratio stated for each defined area.

• Specifically, if a Project consists of aggregated power plants, the percentage of all households in the overall impacted area who will be electrified by the Project should be stated with their connected load.

5. Schedule: The Project Schedule should be provided, based on the milestones in evaluation

and grant award given in Table 3 of Section III. 6. Sustainability: A discussion on the sustainability of the Project should be provided. This

should include discussion of energy supply, management, operations & maintenance, and training for locally sourced O&M personnel. It should be noted that the Applicant must provide sufficient training to the local community prior to project completion such that the community is able to operate and maintain the project over the long-term.

2 It is acknowledged that there will be shut downs for scheduled and unscheduled maintenance and seasonal variations and that some resources may not allow for a full 100% capacity factor.

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7. Project Eligibility: A detailed explanation of how and to what extent the Project will qualify as an Eligible Project shall be provided. MCA-Indonesia will base its determination that the Project is an Eligible Project on the information which the Applicant furnishes in its submission.

Applicants are encouraged to be thorough in their explanations of a Project’s qualification as an Eligible Project, including a discussion of the requirements set forth in the Compact, and Annex 4 and Annex 5 of this CfP.

8. Total Project Costs: Provide a detailed estimate of Total Project Costs in accordance with

Annex 10.

• Include a breakdown by cost category, year of expenditure and basis for amounts, with a description of the methodology and key assumptions used to make each estimate.

• Distinguish between eligible and ineligible costs as set forth in Annex 10. • If the Project is a power plant, estimated distribution and reticulation costs &

associated distances and metering to allow safe and long-lasting user power within each household. Distribution, reticulation and metering should be to PLN standards of technology & safety.

9. O&M Costs: Provide a detailed estimate of the annual O&M costs.

• O&M Costs for year one are to be included in the TPC buildup as a line item. • Insurances for the construction of the Project and for Year 1 operations should be

included in the TPC buildup as a line item. • O&M Costs for Year 2 through Year 20 are to be estimated, and show times of major

overhaul and/or component replacement and how this impacts those years’ estimated O&M costs.

10. Power Sales: Based on these costs from 8 above, undertake a P&L estimate of the Project

based on the estimate O&M cost for Year 2 of the plant and the current PLN price of power for 900 W connections and determine the breakeven price of power. The assumed delivered quantity of electricity shall be as determined in Sub-Clause 3 above.

11. Provincial and Local Support: Describe the status of potential and actual forms, amounts

and conditions of provincial and local support for the Project. Provide timelines for such assistance. The Applicant is required to submit a letter of support from the community for both the Applicant and the Project. A draft letter is attached to this Annex. Additional documents, such as letters and permits from the Kabupaten, can also be presented.

12. Proposed Project or Facility Location: Identify the proposed location in the GP Provinces

clearly identifying the district, sub-districts and villages and the rationale for the site location. An Applicant proposing more than one location for a project must set forth in its Application its justification for siting the project in more than one location. Applicant must confirm that (a) the site is located in a GP Province; and (b) is in a rural community with key tasks and roles assigned to specific community members both in the design, development, construction and operation of the project.

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C. Project Benefits and Impacts

1. Beneficiaries:

The applicant shall provide the following:

• A description of targeted beneficiaries disaggregated by gender and different social/ethnic groups as appropriate;

• An assurance that no social groups face unequal risks from the proposed investment and activity;

• A discussion on the project’s impact on local employment opportunities for both genders and for different skill levels; and

• A discussion of proposed actions to support equal participation of women, ethnic minorities and other vulnerable groups in the process.

2. Environmental, Social and Gender Impact:

• Describe how and to what measurable extent the project plans to reduce both greenhouse gas and air pollutant emissions compared to existing methodologies.

• Describe how this Project meets the environmental requirements as set forth in MCC’s Environmental Guidelines in Annex 6, including how to measure and verify those benefits.

• Describe how and to what measurable extent the Project meets key priorities and addresses associated risks as outlined in MCA Indonesia’s Environment and Social Management System (ESMS) Framework, the GP Project ESMS and MCA Indonesia’s Social and Gender Integration Plan (SGIP), including identification of any studies that will be required to further understand and identify risks, mitigation and opportunity options related to environmental and social issues. Complete and submit the Scoping and Screening Checklists in Annex 6 and Annex 7. These documents, along with the IFC Performance Standard documents (which underpin the ESMS) can be found at www.gp.mca-indonesia.go.id/RE/community

Use the findings of a social and gender assessment to describe targeted beneficiaries by project location and identifying different groups and their livelihoods, and indicate proportion of targeted beneficiaries from women, men and marginalized populations. Description of key local institutions active in the target area and working with target population in proposed GP activities should also be included. Specifically, what percentage of total households and enterprises will be electrified by renewable energy sources in targeted area as a result of projects? Describe potential increases in economic activities (with types) and productivity in the project location, especially proportion of women owned enterprises, and support to value chain production, if any. Additional guidance is provided in Annex 7.

3. Inputs for a Social Benefit-Cost Analysis:

Information provided to determine eligibility will be used to conduct a social benefit-cost analysis during the Full Application stage. The analysis will be used to calculate the economic rate of return (ERR) for the project, considering a 20-year project horizon. A minimum ERR of 10% is required for the project to be eligible. The ERR calculations will be undertaken by MCA-Indonesia once a Project is promoted to the second phase of Full Application. The data and assumptions submitted by the Applicant are subject to verification, and submission of data and assumptions that cannot be verified or are found

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to be misleading can result in the project being deemed ineligible. More information regarding ERR can be found at GP Portal (http://gp.mca-indonesia.go.id/RE/community).

D. Project Monitoring & Evaluation

A discussion on how this project can be monitored and evaluated should be described in the Monitoring & Evaluation Plan (see Annex 5, Section L and Annex 8).

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Annex 5 | Full Application - Table of Contents This Annex is provided as an illustrative example of the items suggested to be included in the Full Application. Additional requirements and elements to address in the Application may be added after the Concept Note stage and during due diligence review. Applicants will be notified accordingly. Applicants are advised to prepare their applications using the following Table of Contents. Exclusion of information listed below may weaken the overall quality of the application and may eliminate the project from consideration.

A. General Information on Applicant The name, address, contact details, web site, country of registration and organization type (Privately or Publicly Held Company, NGO, Cooperative) of the Applicant should be given. If there are changes from the Concept Note stage, such differences should be made clear and explained.

If the Applicant is a consortium, then the individual names and details of each of the Consortium members and their proposed role in the Consortium should be given as well as a Consortium Agreement executed by the members. The organization that is the lead member should be stated. An organizational diagram should be included. If there are changes from the Concept Note stage, such differences should be made clear and explained. Contact Persons & Key Staff: • Contact for this CfP: Include name, position, address, phone, fax and email. • Organizational Head Contact: Include name, position, address, phone, fax and email. • Key Staff: List the full names of key staff who would be involved with the Project. • Evidence of Authority: Submit evidence that the signatory of the Application has authority to

bind the Applicant to the commitments and representations made in the Application and attests as to the accuracy of the information provided in the Application process.

A detailed explanation of how and to what extent the Applicant qualifies as being Eligible shall be presented.

B. Applicant’s and Principals’ Capabilities Describe each Applicant’s and each Principal’s capabilities, financial strengths, investment in the venture to date and as anticipated during the construction and operation phases of the venture (i.e. continuing financial support) and proposed equity investment in the Project, as well as the Project’s strategic significance to each Project Sponsor and Principal.

C. General Information on Special Purpose Vehicle (SPV)

1. Expected name of SPV and expected location of establishment and domicile. 2. Expected structure of SPV and details of Shareholders, including names, addresses, contact

details and management structure. 3. Role of each Shareholder and description of past expertise. 4. Shareholder organization type (Privately or Publicly Held Company, NGO, Cooperative,

Consortium). 5. Project Site Address.

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D. Applicant Contact Person 1. Contact for this CfP: Include name, position, address, phone, fax and email. 2. Organizational Head Contact: Include name, position, address, phone, fax and email. This

head should possess the Authority to bind the Applicant to any and all contractual provisions negotiated between MCA-Indonesia and the Project Sponsor.

E. Organization (Corporate and Personnel) 1. Organizational Chart: Provide a current corporate organizational chart showing the

Applicant’s relationship to any subsidiaries, affiliates, parent organizations, or joint ventures associated with the Project. Show the Applicant’s relationship to each Principal. For the purpose of this CfP, a “Principal” is any person who owns or will own five or more percent of the Project.

2. Key Staff: List the full names (including middle name or initial) and CVs of key staffs to be involved with the project (see Annex 11).

3. Evidence of Authority: Submit evidence that the signatory of the Application has authority to bind the Project Sponsor to the commitments and representations made in the Application and attests as to the accuracy of the information provided in the Application process.

F. Project Description

1. Executive Summary: Provide a description of the nature and scope of the Project, including the technology, site, environmental resources affected, purpose, size, capacity, design features, key metrics, and key milestones. Describe the commercial feasibility of the technology(ies) and how such technology(ies) are intended to be employed in the Project. Include target dates for:

I. financial close for the RE Grant and Community contribution II. commencement of site preparation and construction

III. commercial operation; and IV. marketing the output

2. Project Eligibility: Provide a detailed explanation of how and to what extent the Project will qualify as an Eligible Project. MCA-Indonesia will base its determination that the Project is an Eligible Project on the information the Applicant furnishes in its submission. Applicants are encouraged to be thorough in their explanations of a Project’s qualification as an Eligible Project, including a discussion of the requirements set forth in Annex 2.

3. Letters of Interest: Provide a letter of interest for all parties named in Section A above.

4. Detailed Total Project Costs: Provide a detailed estimate of Total Project Costs in accordance with generally accepted accounting principles and practices. Include a breakdown by cost category, year of expenditure and basis for amounts, and include a description of the methodology and key assumptions used make each estimate. Distinguish between eligible and ineligible costs as set forth in Annex 10.

5. Provincial and Local Support: Describe the status of potential and actual forms, amounts and conditions of provincial and local support for the project or facility. Provide timelines for such assistance.

6. Proposed Project or Facility Location: Identify the proposed location in one of the twenty four eligible districts in Indonesia and the rationale for the site location. An Applicant proposing more than one location for a project must set forth in its Application its justification for siting the project in more than one location. Applicant must confirm that the site is located in an eligible province of Indonesia as set forth in the Compact.

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G. Technical Information 1. Description of Project Design: A description of the basic processes involved in the Project

design.

2. Description of Technology: A description of the technology to be employed in the Project, and a description of how this technology meets the eligibility requirements as set forth in Annex 2.

3. Sketches: Conceptual level sketches and details outlining general plant layout, process and materials flows, and operating parameters and throughputs for key processes.

4. Critical Path Agreement Status: The status of critical path contracts and agreements, such as a Front-end engineering agreement, technology license and teaming agreements, Engineering, Procurement and Construction (“EPC”) contract, long-lead contracts, feedstock agreements, and plant off-take or sales agreements.

5. Planning Documents: Key planning documents for the Project such as the construction plan, operation and maintenance plan, waste disposal plan, and preliminary risk management plan.

6. Acquisition Strategies: Raw material, equipment, and component supply chain acquisition strategies.

7. Key Contracts and Agreements: Provide a top-level description, schedule, current status, and drafts or executed copies of all critical path contracts and agreements relevant to the investment, design, engineering, financing, construction, startup, commissioning, shakedown, operation and maintenance of the Project, including:

i. EPC contract; ii. Long-term contracts for materials, components and equipment to be used in the Project;

iii. Any leases, operating or maintenance contracts; iv. Any additional relevant agreements or commitments; v. If drafts or executed copies of any of the foregoing contracts and agreements are

unavailable, provide a detailed description of such contracts and agreements, including all key terms and counterparties, and indicate when copies of such contracts and agreements will be available.

8. Engineering and Construction Plans: A detailed description of the engineering and design contractor(s), EPC contractor(s), equipment supplier(s), and construction schedules for the Project.

i. For each engineering and design contractor, EPC contractor and equipment supplier to be involved in the Project, describe their major activities as linked to specified cost milestones and performance guarantees, as well as performance guarantees, performance bonds, liquidated damages provisions, and equipment warranties to be provided.

ii. Describe the following: 1. The extent to which all required contractors are engaged; and 2. The extent to which pre-construction design has been completed.

iii. Describe each contractor or supplier’s experience and qualifications as related to the Project.

The draft EPC contract for the Project based on the DFS should be included. In the event that the Project is Aggregated, then each plant should be have a separate construction contract within an overall EPC Contract such that each plant is individually costed and performance security arrangements made for each plant and overall.

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This EPC Contract will be subject to the review by MCA-Indonesia and may be subject to negotiation of any or all Terms & Conditions, leading up to an acceptable contract which will be considered by the Investment Committee.

9. Key Site Components: Describe the key site components of the Project and risks associated with their availability (e.g. water, electricity, gas, or other utilities). Describe site access (roads, highway and rail) including rights-of-way, easements, and logistical considerations.

10. Operation Costs: Provide an estimate of operation costs on an annual basis.

11. Project Plan: Provide a comprehensive Project plan that will guide design, engineering, and construction of the Project, including a description of:

i. Prior successful implementation of similar project plans for projects of this scale by the Applicant or any Project Sponsor (Applicants that are not able to include examples of successful implementation of similar project plans for projects of this scale should provide a detailed description of the facts that they believe are sufficient to demonstrate to MCA-Indonesia that they have the expertise that would be evidenced in examples of successful implementation of similar project plans for projects of this scale. MCA-Indonesia will determine in its sole and final judgment, whether the experience described shows sufficient expertise);

ii. Each step of the proposed process; iii. Fully sourced or cited material and energy balance, including system simulation for

processes, using industry standard software; iv. The process for selecting an EPC firm, if applicable, or the internal resources used to serve

this function; v. Equipment requirements;

vi. Rights or licenses to use processes proposed; vii. An integrated schedule or Project work plan that encompasses time periods for design,

procurement (including long-lead procurements), construction (including mobilization, testing and start-up), and commissioning. The project shall identify any Project dependencies such as the timing of land-use agreements, environmental permits, or licenses, or physical improvements such as utility tie-ins;

viii. Minimum design specifications in which process flow diagrams are coupled to preliminary cost estimates;

ix. Project management tools, including Gantt charts, resource-based scheduling or other methods to assess and track progress;

x. Staffing plans, including identification of costs and resources to design, engineer, construct and operate the Project;

xi. Project risks and mitigation strategies, including risk related to construction, performance, etc. and the potential Project impact and mitigation of such risks;

xii. Contingency plans to address cost overruns and schedule slippage.

12. Operating and Maintenance Plan: i. The plant operating plan, proposed providers, expected staffing requirements,

anticipated parts inventory, major maintenance schedules, estimate annual downtime and any performance guarantees and related liquidated damage provisions;

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ii. A description of the plans for commissioning and initial operations, taking into account the construction schedule, the establishment of material supply chains, the hiring, and training of management and operating personnel, logistics, potential bottlenecks, and delays, financing for contingencies and working capital;

iii. A description of any plans for expanding capacity over initial operations and the Applicant or the Project Sponsor’s experience with comparable ramp-ups; and

iv. A description of the operations and maintenance plans for the Project, including acquisitions of critical spares, inventory sources, operations and maintenance procedures, and associated risks.

13. Detailed Feasibility Study/Engineering Report: Provide the Consultant’s/Engineer’s report that includes a review, evaluations, analysis, and recommendations in the following areas:

i. Base Technology; ii. Project Feasibility Study;

iii. Engineering Design and Approach; iv. Process Safety Design and Facility Safety Planning; v. Integrated Project schedule, including the schedule for completion;

vi. Cost estimates and technical input to the financial model; vii. Contractual requirements and arrangements;

viii. Proposed supply chain; ix. Projects risks, including mitigation activities and milestones; x. Direct labor requirements during construction and operation;

xi. Siting and permitting; xii. Testing and commissioning;

xiii. Operation and Maintenance; and xiv. Decommissioning plan and costs.

H. Legal and Regulatory Information

1. Legal Opinions/Material Reports: Provide a copy of all applicable legal opinions, and other material reports, analyses and reviews concerning the Project.

2. Permits and Approvals: Provide a complete list of national, regional, provincial and local permits, licenses, and approvals required to site, construct, implement and operate the Project, including environmental authorizations or reviews necessary to commence construction. For permits and approvals already received, provide the filing and approval dates and parties involved. For all remaining required permits and approvals, provide documentation validating the filing date and the expected date(s) for obtaining them and describe all additional actions required to obtain such permits and approvals. Explain whether governmental entities are required to approve the activities of the Applicant contemplated by this CfP or described in the Application. It should be noted that it is not the responsibility of MCA-Indonesia to undertake the work needed to obtain any licenses & permits. These responsibilities fall solely on the Applicant in conjunction with the SPV.

3. Background and Legal Structure: i. Describe the organizational history, ownership chain, and legal structure (e.g.

corporation, partnership, or LLC) of the Applicant and each Project Sponsor.

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ii. Include copies of the statutory authorities under which the Applicant and each Project Sponsor were created and copies of the good standing certificates for each such entity.

iii. Provide a current organizational chart showing the Applicant’s relationship to each Project Sponsor, the venture and to any subsidiaries or affiliates. Advise if there are any proposed changes to the current organizational structure of the Applicant.

4. Legal Authority: Describe the legal authority of the Applicant to carry out the Project activities. Provide supporting documentation.

5. Litigation and/or Conflicts: Disclose any current, threatened (in writing), or pending litigation involving the Applicant, a Principal, or to the Applicant’s knowledge, any other relevant party, related to permitting, public involvement, environmental issues, construction defects, fraud, securities fraud, conflict of interest, failure to perform under a local, regional or national contract, or other charges which may reflect on the Applicant’s, Principal’s, or any Project Sponsor’s reputation, financial position or ability to complete the Project.

6. Letters of Support and Endorsement from the Communities in the sphere of the Projects: Applicants should obtain and provide letters of support & endorsement from relevant local government (Kelurahan, Kacamatan and Kabupaten) confirming their desire for such a Project to be constructed and operated, confirming that the required permits and licenses required will be issued in a timely manner based on complete and correct applications and that Applicant has exclusivity in this endeavor until or unless the Applicant is rejected or withdraws from the application.

7. Potential Environmental Impacts: Submit a report containing the status of all provincial and local environmental reviews and analysis of the potential environmental impacts and risks of the Project in sufficient detail to enable MCA-Indonesia to assess the significance of the environmental impacts and risks and to determine the level of environmental review that will be required. See Annex 6 for the Environmental and Social Performance Datasheet.

I. Business Plan

Business Plan: Provide a business plan that demonstrates the Applicant’s expertise, financial strength, and management capability to undertake and operate the projects as proposed.

1. Provide a description of the following elements of the Applicant’s business plan for the project or facility.

2. Output: Provide a detailed description of the project or facility’s output. Please include all signed and committed off-take and/or sales agreements.

3. Applicant’s Capability: Describe in detail the capabilities and experience of the Applicant and each Project Sponsor, Principal, contractor, and every other counterparty that the Applicant believes will enable the project to be successful.

4. Market Analysis: i. Include an analysis of the current and projected market for the project or facility’s

output. Discuss the prevailing economic and demographic trends in the target market for the project of facility’s output. Identify the market’s dependency on tax benefits (i.e. feed-in-tariffs) or other government policy. Provide a justification for revenue projections (price and volume) and costs. Describe the project’s projected customer base and suppliers. Revenue derived from project must be sufficient to cover all O&M costs.

ii. Describe the Applicant’s current and potential competitors for the project or facility’s output.

iii. Provide a detailed description of any competitive advantages.

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5. Operating and Market-Related Risks and Mitigation Strategies: Provide a detailed analysis of the operating and market-related risks associated with the project (e.g., market factors, price volatility) and mitigation strategies to be employed (e.g., sales contracts and reserves).

6. Management Plan: i. Provide a staffing chart indicating the individuals (including position and qualifications)

proposed to operate the project. Provide a description of the management plan of operations to be employed in carrying out the project, and information concerning the management experience of each officer or key person associated with the project; and

ii. Describe the role of management in the operation of the Applicant’s other businesses, if any.

7. Supply and Sales Agreements: i. Provide a detailed analysis of the market for the project or facility’s feedstock and output; ii. Provide a detailed description of the project’s plan for ensuring an adequate supply of

materials, equipment, and components as needed for successful operation. Provide drafts or executed copies of all material supply contracts for the project;

iii. Provide the project’s forecast for sales capacity and feedstock (availability and costs); iv. Provide drafts or executed copies of all feedstock agreements and sales contracts or

other revenue-generating agreements that will provide revenue for the project. Provide an analysis of the creditworthiness of counterparties who are party to such agreements; and

v. Provide copies and detailed summaries of all other material sales and revenue contracts.

8. Insurance Coverage: Provide a detailed description of the proposed insurance coverage for the project, together with a report from an insurance consultant that addresses the appropriateness and adequacy of such coverage.

9. Growth Plan: Describe any proposals for expanding the business enterprise beyond the project.

10. Jobs Created/Retained: Provide a brief description of the number and type of jobs expected to be created or retained in the province if the project were to proceed as proposed in the Application.

J. Financial Plan

1. Detailed Financial Plan: Provide a description of the following elements of the Applicant’s proposed financial plan for the project or facility:

i. List all proposed sources of expected equity and debt funding by provider, type, and aggregate amount, and provide a copy of the financial closing checklists for each financing, if available. Outline the timing of expected equity contributions and debt funding;

ii. Describe uses, timing, and amount of expected, MCA-Indonesia cash proceeds, sponsor equity, strategic/passive equity and debt funding;

iii. Whether the project will benefit directly or indirectly from certain other forms of international, national, provincial or local support, such as grants, loans, loan guarantees or tax credits to support the financing, construction and operation of the project or

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facility. Indicate whether any such incentives or assistance are subject to other claims and the circumstances under which confiscation or reallocation could occur;

iv. For each party associated with the project, provide a detailed description of their liabilities over the term of the project’s financing;

v. The preliminary funding plan for the debt facility component of the project, including the total amount for (i) working capital financing, (ii) medium-term financing for machinery and equipment and (iii) longer-term financing for the site and facility. Include a summary of any funding intended to be procured through the use of special purpose entities. Summarize each tranche of funding (e.g., amount, maturity, amortization schedule, the proposed debt percentage, and whether it is a fixed or floating rate tranche;

vi. Include a schedule indicating all anticipated short term financing or credit facilities required for on-going operations of the project, including all working capital facilities, performance bonds and similar forms of financing available to or anticipated to be available to the project or facility. Describe the nature of the security or collateral that is intended to be made available to secure these working capital and other short term facilities.

2. Financial Statements: Provide unaudited financial statements for the Applicant for the past two years (or since inception if the Applicant has not been in existence for at least two years). Include all associated notes and describe business and financial interests of controlling or commonly controlled organization or persons, including parent companies, subsidiaries, and other affiliated entities or partners of the Applicant or Sponsors.

3. Project Financial Model and Analysis: i. Include a working financial model (with formulas) with pro-forma financial statements

for the Project. List the major assumptions in a separate worksheet with the model. ii. For projects employing debt financing as part of its capital structure, Include assumptions

and calculations for the tenor of the debt, plus two (2) years. iii. Include detailed income statements, balance sheets, cash flow statements and waterfall

statements. iv. Include financial ratios (e.g., interest coverage ratios, fixed charge coverage ratios, debt-

to-capital ratios, asset coverage ratios and working capital ratios (including high and low points)) and other relevant terms in the proposed term sheet. Highlight those periods during construction and operation in which non-compliance with the proposed financial ratios is most likely.

v. Include sensitivity analyses that demonstrate the project’s performance under appropriate stress scenarios, including low sales prices, reduced project performance, loss of major customers, high input material prices, and the impact of future competing technologies.

vi. Include a complete description of the operational and financial assumptions and methodologies incorporated in the financial model.

vii. For projects that are employing debt as part of its capital structure, the financial analysis should demonstrate that there is a reasonable prospect that the Applicant will be able to repay the principal and interest on the debt obligation and any other project debt incurred. Discuss the ability to meet its debt service obligations.

4. Credit History: Provide the credit history of the Applicant and any person or business entity owning or controlling a five percent (5%) or greater interest in the project or the Applicant,

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the off-taker(s), the feedstock supplier (if applicable), and the EPC contractor. Provide the full name of the person or entity, address and date of organization or date of birth, as applicable.

5. Other Financial Information: Include any other information about the Applicant and any Project Sponsor that provides a comprehensive summary of the Applicant or Project Sponsor’s business and financial situation, including specific information relevant to analyzing historical cash flow on a secular, normalized basis.

K. Environment & Social Performance and Social Gender Assessment Plan 1. Provide Environment & Social Performance Plan that include risk identification and mitigation

during pre-construction, construction, commissioning, and operation & maintenance. 2. Description of targeted beneficiaries in the project area, identifying different groups and their

livelihoods, and indicate proportion of targeted beneficiaries from women, men and marginalized populations. Description of key local institutions active in the target area and working with target population in proposed GP activities should also be included.

L. Monitoring & Evaluation Plan

Provide an M&E Plan based on the Project Rationale & Objectives at the Application Stage, including: 1. Monitoring & Evaluation Approach: describe general approach to tracking and reporting

progress toward project objectives, detailing data collection strategies. This will include the M&E Plan indicator template, as provided in Annex 8.

2. Progress and Quality Tracking: elaborate more detailed planning regarding the M&E Mechanism for controlling the progress and quality of the Project that can answer two basic questions on activity level project monitoring:

i. Did we do what we have promised to do? ii. How well are the activities being implemented?

3. Evaluation & Learning Assessment: elaborate more detailed planning regarding the mechanism for feedback/learning loops or a strategy in information utilization for improving the program implementation. Research questions that the Applicant may want to collaborate on with MCA-Indonesia M&E should be elaborated.

Please refer to Annex 8 of this CfP for more guidance.

M. Certifications 1. Lobbying Debarment and Related Certifications and Assurances 2. Applicant Validation Statement 3. Sample Letter of Commitment 4. Penalty or Perjury Statement

N. Option to Restrict Disclosure and Use of Certain Data

Applicants should specify which information, if any has restricted disclosure and define the nature of this disclosure. MCA-Indonesia will assume Applications can be in the public domain unless advised of to the contrary.

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Annex 6 | Environmental & Social Performance Guideline 6.1. ESMS - MCA-Indonesia The Environmental and Social Management System (ESMS) for MCA-Indonesia has been published at the following link. http://gp.mca-indonesia.go.id/RE/community. This framework is Compact specific.

6.2. ESMS - GP Project The Environmental and Social Management System (ESMS) for the GP Project has been published at the following link: http://gp.mca-indonesia.go.id/RE/community. This framework is GP Project specific. 6.3. ESMS Project Screening and Scoping Checklist Applicants should conduct a self-assessment using the checklist below to determine their project’s eligibility. 6.4. International Finance Corporation Performance Standards (IFC PS) All Project’s must follow the IFC’s Performance Standards which can be downloaded at the following link: http://gp.mca-indonesia.go.id/RE/community

The following checklist will assist the applicant in conducting an assessment of their proposed activities:

Step 1: Eligibility Criteria

Eligibility Screening Criteria Eligibility for Project

Natural Habitat Natural habitats are defined as land and water areas where the ecosystems' biological communities are formed largely by native plant and animal species and human activity has not essentially modified the area's primary ecological functions

Applies? Yes or

No

Does the Project involve removal of existing non-degraded natural forest to make way for a plantation, orchard, or farm?

If yes, project ineligible

Will the Project result in significant degradation or conversion of natural habitats and/or forest areas, proposed protected areas or areas that are considered of species ecological significance?

If yes, Project ineligible

Is the Project related to trade in endangered species of wildlife or wildlife products regulated under CITES, or product derived thereof?

If yes, Project ineligible

Is the Project in a sensitive sector and sensitive location/area (based on MCC environmental and social assessment guidelines)?

If yes, Project ineligible

Is the Project located within any National or Provincial protected areas? If yes, then an full ESIA must be prepared in accordance with GOI regulation and MCC guidelines

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Eligibility Screening Criteria Eligibility for Project

Indigenous Peoples The objective is to identify indigenous peoples, consult with them, ensure that they participate in and benefit from projects in a culturally appropriate way and adverse impacts on them are avoided, or where not feasible, minimized or mitigated.

Applies? Yes or

No

Are indigenous people present/reside in the Project area? If yes, an indigenous people plan will be prepared in accordance with IP framework

Does the Project involve activities that impinge on lands owned, or claimed under adjudication, by indigenous or customary communities, without full document consent of such peoples?

If yes, Project ineligible.

Physical Cultural Resources Physical cultural resources include movable or immovable objects, sites, structures, groups of structures, natural features and landscapes that have archaeological, paleontological, historical, architectural, religious, aesthetic or other cultural significance.

Applies? Yes or

No

Will the Project cause temporary or permanent relocation or any other type of impact on physical cultural resources known to be of local, regional or national significance based on national or provincial lists, proposed national or provincial lists and/or identified during public consultation with local affected people’s groups?

If yes, Project is ineligible

Are there any significant affects to physical cultural resources, considered especially important or sensitive, particularly to local groups (e.g. grave sites)?

If yes, Project is ineligible

Involuntary Resettlement Involuntary resettlement includes those situations involving involuntary taking of land and involuntary restrictions of access to legally designated parks and protected areas. The policy aims to avoid involuntary resettlement to the extent feasible, or to minimize and mitigate its adverse social and economic impacts.

Applies? Yes or

No

Is any land used by people/organizations likely to be acquired as a result of the project?

If yes, a Land Acquisition and Resettlement Action Plan (LARAP) will be prepared in accordance with the Land Acquisition and Resettlement Policy Framework

Will any project activity involve restriction of use on adjoining land? Is land ownership affected by the project? Will there be a loss of housing, assets or incomes of local people/organizations?

Will any social or economic activities or livelihood be affected by land-use related changes?

Forests Forest is defined as an area of land not less than 1.0 hectare with tree crown cover of more than 10 percent that has trees with the potential to reach a minimum height of 2 meters at maturity in situ and includes forests dedicated to production, protection, multiple uses or conservation.

Applies? Yes or No

Will the Project cause temporary or permanent reduction or degradation to ecosystem function of, or resources within, a forest as defined above?

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Step 2: Safeguards Screening Checklist

Safeguards Screening Criteria Applies? Yes or

No

Which EMP is required

Is the Project an upgrading or extension from the existing activity/project?

If yes, the Project will covered under an update to EIA and/or EMP for upgrades/extension

Is the Project place in a new site? If yes, an ESIA and/or EMP for new site will be prepared

Does the Project require land acquisition, involuntary resettlement and/or compensation for lost assets?

If yes, a LARAP will be prepared, under the LARPF

Does the Project involve the resettlement of indigenous people? If yes, an IP Plan will be prepared under the IP framework

Step 3: Environmental and Social Impact Scoping Checklist

Complete the following scoping checklist to confirm whether the standard template for mitigation is suitable for each project, or whether additional mitigation measures are required.

ENVIRONMENTAL AND SOCIAL IMPACT SCOPING Applies?

Yes or No

Outcomes for EMP

Can the Project potentially contaminate the soil with oil? If the answer to any one of the question is yes, the standard mitigation plan and monitoring plan will apply to this Project.

Does the Project location have neighbors within 50m of the construction site?

Will the Project result in clearing vegetation?

Does the Project involve earthworks?

Does the Project have any predicted environmental or social impact not listed above?

If yes, then additional mitigation and monitoring measures will be developed for the project in the EMP

Does the Project have additional activities such as access road upgrade, new access road, others associated infrastructure, etc.?

If yes, then the EMP must include the mitigation and monitoring of environmental and social impacts from the additional works.

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6.4. ESP Performance Datasheet

ESP Datasheet for Concept Stage

IFC Performance Standard Trigger

(Please refer to the ESMS Tier 1 & Tier 2 of GP Project and IFC Performance Standards)

Please check the Yes/No boxes for Applicable Trigger – If “Yes” box is checked, please provide an explanation Yes No

PS1. Assessment and Management of Environmental and Social Risks & Impacts

PS2. Labor and Working Condition PS3. Resources Efficiency and Pollution Prevention PS4. Community Health, Safety & Security PS5. Land Acquisition and Involuntary Resettlement PS6. Biodiversity Observation and Sustainable Management of Living Natural Resources

PS7. Indigenous Peoples PS8. Cultural Heritage

2. Please give the Applicant’s capacity for ESP

3. Please give name & CV of ESP Specialist

4. Environmental Category based on MCC Guidelines with short explanation.

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Annex 7 | Social & Gender Assessment Guideline Applicants are required to provide a brief summary of the social and gender assessment and integration plans for their projects in the following manner. Social and Gender Assessment: In order to fulfill requirements of MCA Indonesia’s Social and Gender Integration Plan (SGIP) and inform project design and beneficiary targeting and selection, Applicants during Step 1 will carry out a preliminary participatory social and gender assessment that will include desk review of existing literature on social and gender issues in targeted areas and consultations with women and men, local community based organizations and other stakeholders in order to identify constraints and economic opportunities in the RE sector and collect information needed to guide beneficiary selection, training and other support needs. The SGIP is based on MCC’s Gender policy, which mandates – (a) equal opportunity for participation in and benefits from project investments by women and marginalized groups, (b) Lifescape analysis (social and gender assessment) to be undertaken as part of project preparation and design; (c) participatory approach including women, men and marginalized communities in project preparation and implementation; (d) women, men and marginalized groups identified as target beneficiaries in projects; and (e) any potential risks related to Trafficking in Person (TIP) such as forced labor, coercion and/or involuntary servitude, and if there are any such risks, how these will be managed. This process should include use of tools such as focus group discussion (FGDs); key informant interviews (KIIs); beneficiary assessment; participatory natural resource mapping with community and key stakeholders in order to identify targeted beneficiaries, their existing livelihood patterns, institutions working with beneficiaries, and gaps in services if any; their livelihood depending on natural resources, degradation affecting livelihoods and how the relationship between people and natural resources can be harnessed properly for sustainability and scalability of RE and low carbon development. This preliminary assessment to also identify key social and gender based constraints, as well as opportunities, and contributes to the detailed design of the proposal, identify beneficiaries, especially tools for equitable participation and benefits; and monitoring and evaluation of the investments. Identification of vulnerable groups: As part of the SGIP requirements and as part of the process of conducting the participatory social assessment, the Applicant is required to identify vulnerable groups, if any, in their target areas. Vulnerable and marginalized groups are defined as groups that experience a higher risk of exclusion of social and economic aspects resulting in their higher poverty than the general population. The IFC Performance Standards specify that vulnerable status may stem from an individual’s or group’s race, color, sex, language, religion, political or other opinion, national or social origin, property, birth, or other status. Vulnerability is location, sector and context-specific and the following table provides an indicative list of potential vulnerability in targeted beneficiaries, if members of vulnerable groups are selected as beneficiaries, these should be included in the monitoring indicators.

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Potential vulnerable groups Potential vulnerability/exclusion 1. Poor landless women, female headed

households 2. Landless farming household 3. Ethnic minority, poor migrants 4. Lower caste, groups exclusively working

for the elites

1. May not be able to bear electricity connection and/or regular cost

2. May not be able to bear electricity connection and/or regular cost

3. Dominant group favoritism, lack of established social networks and/ or representation, may not be able to access electricity

4. May not be allowed to participate in RE project activities and benefit from investments

Applicant’s Social and Gender Integration Plan is expected to include the following: 1. Objective and Output The project’s design and activities should explicitly demonstrate a contribution towards equal access and opportunity to all, especially women and vulnerable groups to participate and benefit from the projects. 2. Beneficiaries Highlight key characteristics of targeted direct and indirect beneficiaries including sex, wealth/economic and vulnerability status. 3. Capacity building Include capacity building activities for local communities, especially for technology transfers to women, vulnerable groups and households in remote areas that could enhance their economic opportunities. Grantees can propose to work with local social/gender experts and local organizations who can support outreach for gender and social inclusion and sustainability of the outcomes. 4. Budget Applicant are encouraged to include budget for gender related activities and vulnerable inclusiveness. The activities can include supporting economic activities of households, especially of women and vulnerable groups and promoting value chain, market access, conducting regular assessment and dissemination of good gender practices. 5. No Trafficking In Person (TIP) and Child Labor Both MCC and MCA-Indonesia have “zero tolerance” on TIP and child labor, therefore, applicants will not engage in such activities. Social and gender integration in the Project design and technical approaches will be evaluated using the following Checklist

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In the Concept Note Stage, the quality of both Proposals and preliminary participatory social and gender assessment, including description and mapping of beneficiaries and livelihood strategies, will be examined together with Social and Gender Integration in the project design and technical approaches. In the event that an Application is successful, then, once the Grant Award is committed and activity has commenced, the Quality of Lifescape Analysis, including detailed description and mapping of beneficiaries and their potential economic opportunities, will be undertaken. The final proposal will include designs for provision of equal access and opportunity to all, especially women and vulnerable groups. The Applicant are also encouraged to promote economic opportunities and entrepreneurship using electricity for households, so as to increase income and facilitate poverty reduction.

Area Yes or No Remarks

Development Stage Participative Social and gender Assessment Do Project preparation, implementation and monitoring include gender and social participatory process? Has preliminary social and gender analysis been undertaken?

Are social and gender inclusion activities included in the project design and outputs of the proposal, using the findings of the assessment?

.

Budget Does the proposal clearly state the specific budget line items for Social and Gender related activities and vulnerable inclusiveness along with the outputs?

Beneficiaries Are poor women and men, and vulnerable community identified clearly as targeted beneficiaries?

Access and Opportunity Does the proposal clearly state equal access and opportunity for poor women and men, and vulnerable communities to participate in and receive benefits from different project activities (employment, training, electricity connection etc.) and outputs?

Capacity building Does Capacity building for beneficiaries, especially women and vulnerable groups has been clearly defined in the proposal?

Benefit sharing Does the proposal include benefit sharing with communities’ activity? Is there any special provision for women and vulnerable groups within the benefit sharing approach?

Conformation with MCA Indonesia and MCC rules on not engaged in TIP and child labor.

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Annex 8 | Monitoring and Evaluation Guideline

At the Concept Note Stage, Applicants are not required to provide any information or plan.

At the Full Application Stage, the following is to be provided:

A. Monitoring Data

Eligible Applicants are required to provide a preliminary M&E Plan, including clear output and outcome indicators and their targets. Outcomes and outputs for the M&E Plan should be clearly linked to the program logic and objectives. Guidance on developing M&E Plans and categorizing indicators is available at:

http://www.mcc.gov/documents/guidance/policy-050112-monitoring-and-evaluation.pdf

The project M&E Plan will be finalized upon signing of the Partnership Grant agreement, and the Lead Organization in the partnership will be expected to undertake day-to-day monitoring of the progress of their projects based on the M&E Plan indicators.

This M&E Plan must align with the Indonesia Compact M&E Plan (available here: http://www.mcc.gov/pages/countries/evaluation/indonesia-compact) such that the project-level data can feed into the GP aggregate performance indicators, though it should be noted that the 2013 GP M&E Plan is currently being revised, and a 2014 version should be available online by the end of December. All grantees will need to submit monitoring data to MCA-Indonesia on a quarterly basis, as an update on progress toward achieving outputs.

Specifically for the Full Application Stage, the Applicant has to submit the following template to describe their M&E Plan:

Indicator Level

Indicator Name Definition Unit of

Measure Disaggregation Reporting Frequency

Baseline

Target (Year)

Outcome related to project objectives

Outputs (related to project activities)

Process (related to project inputs).

The M&E Plan will be reviewed by MCA-I M&E and will be finalized as part of the grant agreement. Grantees will agree to providing data on M&E Plan indicators on a quarterly basis, or less frequently if agreed by MCA-I.

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B. Impact Evaluation and Research Questions

Testing and adding to the body of learning around the relationship between renewable energy investments and economic growth or poverty reduction is of special interest to MCC and MCA-Indonesia. To aid in MCA-Indonesia’s effort to draw policy and implementation lessons from the project through project-level impact evaluations, Eligible Applicants may suggest research questions that could be examined as part of the impact evaluation of the proposed projects, e.g.:

• effectiveness of one type of construction modality over another • effectiveness of different approaches to connecting customers • the impact of the provision of electricity on household consumption and production

If a Project is selected for impact evaluation, the MCA-I M&E team will work closely with the Project team to develop evaluation plan in line with implementation. Note that Grantees will be expected to collaborate with the M&E team in order to facilitate a rigorous evaluation; this could include discussions about designing implementation strategies that allow for comparisons between “treatment” groups that receive the project interventions and “comparison” groups that do not.

Similarly, Grantees will be expect to adhere to agreed-to implementation and evaluation strategies. Grantees may be expected to provide routine administrative data to support the impact evaluation, but M&E will collect all survey-based data.

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Annex 9 | Fiscal, Tax and Other Guidelines 9.1. Standard Operating Procedure for Tax Facility and Duty for Compact Program

MCA-Indonesia is developing a Standard Operating Procedure for Tax Facility and Duty for Compact Program. This document will be finalized prior to the request for Full Application and will be able to be uploaded from: http://gp.mca-indonesia.go.id/RE/community 9.2. Technical Standard Guideline

The community owned renewable energy projects will follow technical standards as defined by PLN Guideline Number 0357.K/DIR/2014. This standard can be downloaded from: http://gp.mca-indonesia.go.id/RE/community In addition, the PLN Distribution & Reticulation standards are available from: http://gp.mca-indonesia.go.id/RE/community 9.3. Asset Transfer Guideline The Asset Transfer for the community owned renewable energy projects will follow the MCA-Indonesia’s guideline. This document will be finalized prior to the request for Full Application and will be able to be uploaded from http://gp.mca-indonesia.go.id

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Annex 10 | Eligible Project Costs Guideline Eligible Use of Grant Funds – Allowable and Unallowable Costs

Consistent with the MCC Cost Principles for Accountable Entity Operations, MCA-Indonesia is committed to ensuring that all disbursements of funds meet the following criteria:

§ Be directly related to the grant objectives; § Be reasonable; § Be accounted for properly; § Be incurred within the grant period; § Be documented properly; § Not be used for expenses that are unallowable.

Before entering into a Grant Agreement, MCA-Indonesia shall determine the estimated Project Costs for the project that is the subject of the agreement. To assist MCA-Indonesia in making that determination, the Applicant must estimate, calculate and record all such costs incurred in the design, engineering, financing, construction, startup, commissioning and shakedown of the Project in accordance with generally accepted accounting principles and practices. Among other things, the Applicant must calculate the sum of necessary, reasonable and customary costs that it has paid and expects to pay, which are directly related to the project, including costs for escalation and contingencies, to estimate the total Project Costs. Allowable costs include direct project related costs of the grant as detailed specifically in the budget and approved as part of the Grant Agreement. A. Project Costs include: (1) Costs of acquisition, lease, or rental of real property, including engineering fees, surveys, title insurance, recording fees, and legal fees incurred in connection with land acquisition, lease or rental, site improvements, site restoration, access roads, and fencing; (2) Costs of engineering, architectural, legal and bond fees, and insurance paid in connection with construction of the facility; and materials, labor, services, travel and transportation for facility design, construction, startup, commissioning and shakedown; (3) Costs of equipment purchases; (4) Costs to provide equipment, facilities, and services related to safety and environmental protection; (5) Financial and legal services costs, including establishment of the SPV and any other professional services and fees necessary to obtain required licenses and permits and to prepare environmental reports and data; (6) Costs of necessary and appropriate insurance and bonds of all types; (7) Costs of design, engineering, startup, commissioning, shakedown and Operations & Maintenance training during construction and warranty periods; (8) Costs of obtaining licenses to intellectual property necessary to design, construct, and operate the Project;

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(9) A reasonable contingency reserve for cost overruns during construction; (10) First 12 months of operating and maintenance costs from COD (part of EPC contractor’s warranty as part of their capacity building services); (11) The fees & costs associated with the Project Managing Director during construction and for the first three years period and the fees & costs associated with the Community Liaison Officer during Project construction and for the first three years period. In the event that the Project Managing Director and the Community Liaison Officer is the same entity then only one set of costs is allowed. (12) The cost of constructing the Vocational Training Center and operating it, either one year after COD or until the end of the Compact, whichever is first. B. Project Costs do not include:

To ensure that the funds are used to directly support this goal, applicants shall not use any grant funding for the following types of expenses:

§ Military, law enforcement or surveillance equipment; § Entertainment expenses and promotional items without a clear functional benefit to the

project; § Salary or honoraria payments for current employees of the Government of Indonesia or local

officials to include excessive reimbursement of costs incurred3; § Gifts, gratuities, donations; § Payments of any kind to politically affiliated organizations or parties, as well as costs related

to campaigns for public office; § Alcoholic beverages or tobacco products; § Fines, penalties, or bad debts; § International travel expenses unless related to project team mobilization. All project related

air travel should utilize economy class tickets; § Direct tax payments or indirect support of grantee tax liability. This includes VAT (PPN) or any

other taxes that are excluded from the Compact including Import Duty and prepayment of corporation taxes;

§ Miscellaneous, undefined and/or contingency costs; § Indirect grantee overhead or administration costs; § Existing grantee obligations prior to the signing the Grant Agreement; § Compensation to members of the media for services. § Unreasonable salary payments and/or any compensation or distribution of grant funds to

officers, staff or shareholders which is not supported by wage reports and employee time sheets for work completed in connection with the grant;

§ Costs of advertising which are not necessary for completion of the grant as a specific deliverable, including advertising and public relations designed primarily to promote the grantee organization rather than complete the project;

§ Costs of any illegal activity contrary to local, provincial or national laws, as well as any prohibited activities under the MCC Compact;

§ Fees and commissions charged to Grant Applicant, including finder’s fees, for obtaining funds;

3 MCA-Indonesia reserves the right to consider applications which include direct costs related to the salary of education professionals who contribute to a grant program as part of a fellowship or similar arrangement.

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§ Parent corporation or other affiliated entity’s general and administrative expenses, and non-project related Parent Corporation or affiliated entity assessments, including organizational expenses;

§ Goodwill, franchise, trade, or brand name costs; § Dividends and profit sharing to stockholders, employees, and officers; § Research, development, and demonstration costs of readying the technology for

employment in a commercial project; § Costs that are excessive or are not directly required to carry out the project, as determined

by MCA-Indonesia, including but not limited to the cost of hedging instruments; § Expenses incurred after startup, commissioning, and shakedown before the facility has been

placed in service; § Operating costs incurred any time after 12 months from COD or after the end of the compact,

whichever is sooner; and § Costs of Detailed Feasibility Studies/Front End Engineering & Design paid for by TAPP Grants.

Funds provided under a GP Grant Partnership shall not be used to procure any goods or services furnished by any firm or individual whose name appears on the Excluded Parties Lists. This list is provided in the Eligibility Verification Procedures included in the MCC Program Procurement Guidelines4. Eligibility checks must be conducted and documented by grantees for all significant contract awards and payments.

4 See MCC Program Procurement Guidelines, Eligibility Verification Procedures, (Part 10, page 72) https://www.mcc.gov/documents/guidance/mcc-guidelines-programprocurement.pdf

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Annex 11 | Applicant and Project Ownership Structure

This Annex is provided for Illustrative purposes only. This staffing, project ownership and organizational structure is provided only as a guide to Applicants. Applicants may choose to use the following structure or propose another effective structure in managing the design, development, construction and commissioning of their proposed project which is equally or more effective as this example. A sample description of some primary roles is described below:

Project Managing Director (PMD) responsible for the overall administrative management of the construction, O&M, distribution of power to end-users and collection of revenues from the sale of power. This is not a technical role but one where the PMD reports to the Community Organization. The PMD should act in the best interests of the SPV.

This PMD shall hold this position from date of Grant Award, through construction of the Project to Commercial Operation Date (COD) plus a period of two years. The fees associated with this initial PMD period should be included in the Total Project Cost build up. At the second year anniversary of the COD of the Project, the PMD would be reappointed by the Community or replaced by an alternative person undertaking the same role. From this date the fees will be for the cost of the SPV.

Community Liaison Officer (CLO) whose role is to liaise with the Community, reporting to the PMD. The CLO should be able to speak the local language/dialect and be aware of local cultures & customs. The PMD and the CLO may be the same person. This CLO would have a tenure of the period from the date of the Grant Award, through construction of the Project to COD plus a period of two years. The fee associated with this initial PMD period should be included in the Total Project Cost build up. At the second anniversary of the COD of the Project, the CLO would be reappointed by the Community or replaced by an alternative person undertaking the same role. From this date the fees will at the cost of the SPV.

Engineering, Procurement & Construction (EPC) Contractor who will be responsible for the design, procurement and construction of the power generation plant and the distribution, reticulation and connection (with or without metering as deemed suitable) to users. This EPC contractor may be a single entity or consortium or other association approved by MCA-I.

Operations & Maintenance (O&M) Contractor who will also be responsible for providing the O&M of the Project for a period of one year from COD. The first year of operating costs from the COD will be considered eligible Project costs.

Vocational Training Centre & Operator (VTCO) should be established by the Applicant during the Project construction phase and be financially and technically maintained during construction and for two years after the COD. This should be managed to locally train operators in at least the Project technology such that appropriate operators are capable of undertaking the O&M onwards from the second anniversary of the COD.

Environmental, Monitoring & Evaluation Officer and Social & Gender Officer who will be dedicated for monitoring and evaluation of the Environmental & Social Performance (ESP), Monitoring (M&E) and Social & Gender Assessment (SGA) that is based on MCA-Indonesia’s standards. This person will support and report to the ESP, M&E and SGA Team from MCA-Indonesia during construction and during the one year warranty period.

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A member of the Consortium may take more than one position providing that the member has the capability and experience in both roles. For example, the PMD and CLO could be one entity and the EPC contractor, O&M contractor and VTCO could be one entity. The Schematic Diagram for this arrangement and the SPV is shown in Figure 1. This is based on the Project being a power plant. If the Project is a Biofuel Plant, then a similar structure should be used. The role of the Applicant is to assist, steer and manage the SPV on behalf of the Community Organization using “best prudent practices” methodology in the establishment and operation of the SPV and the Project. Accordingly, it is the responsibility of the Applicant to ensure that all licenses and permits required to design, develop, construct and operate the Project are obtained, along with the actual design, construction and operation. The Grant Agreement will require that all permits be in place prior to grant disbursement. As such, this requirement will be a condition precedent prior to grant execution. MCA-Indonesia will provide funding for eligible project costs and will coordinate with the local government in supporting these endeavors. A diagram of a potential ownership structure is provided below for illustrative purposes only.

① SPV contracts EPC for Power Plant & any Distribu�on & Re�cula�on ② EPC to Operate & Maintain the asset for 2 years from COD. MCA-Indonesia to provide funding for

first 12 months of operating costs. ③ EPC to coordinate with Voca�onal Training College as trainer for 2 years from COD ④ Provincial Voca�onal Training College established to provide local skills ⑤ The SPV could have a single owner or 2 par�es or more. ⑥ Each household enters into a Customer Agreement. ⑦ Tariff expected to be at PLN Rates to minimise complica�ons ⑧ The Project Managing Director has operational control over the SPV for a 5 year term; the Community

Liaison Officer has a 5 year term. ⑨ Collection & Escrow Waterfall by third party, e.g. rural bank such as BRI with remote meter reading

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Annex 12 | Community Letter of Support

Community Letter of Support

…………………….., ………… 20…… Dear Sirs, Herewith we the undersigned: • Name: .............................. .. • Identity Card No: .................................. • Position: .................................. (Village Head / Head of Indigenous Group / etc.) acting on behalf of the villagers of ................, …………….. District, ............... Province . Hereby we declare support for the proposed renewable energy development project(s) in the village of ................, ………………. District that plans to use the …………………….technology, having a generating capacity of ............ kW intended for people in our area. The project is planned to be built with the help of grant funding from the MCA-Indonesia if the project has fulfilled the requirements specified by MCA-Indonesia. We support the company or Consortium below that plans to carry out the construction of the project: • Company Name: .............................. .. • Owners of the Company: ................................. • Company Address: .................................. • Deed of Company: ..................... .. • Decree of the Minister of Justice and Human Rights: ..................... .. Our community acknowledges and agreed to contribute in this project in form of: 1. ............................................. .. 2. ............................................. .. 3. ............................................. .. 4. ............................................. .. We hope that MCA-Indonesia can approve this project, which is very beneficial for the people in our area. This statement is honestly made to support the success of the project. We thank you for your attention.

Yours sincerely,

………………………………. [Village Head / Head of Indigenous Group / etc.]

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Surat Dukungan Komunitas

Kepada Yth: Direktur Program Kemakmuran Hijau MCA-Indonesia Gedung MR21, Lantai 11 Jalan Menteng Raya No. 21 Jakarta 10340, Indonesia

………………….., ………… 20…… Dengan hormat, Bersama ini kami yang bertandatangan di bawah ini:

• Nama : ………………………….. • No KTP: ……………………………. • Jabatan :……………………………. (Kepala Desa/Kepala Adat/dll)

bertindak mewakili masyarakat Desa ……………., Kecamatan ……………., Kabupaten …………….. Propinsi …………. di Indonesia. Dengan ini Kami menyatakan dukungannya terhadap proyek pembangunan pembangkit energi terbarukan di Desa ……………., Kecamatan ……………., Kabupaten …………….. Propinsi …………. yang menggunakan teknologi …………….. yang direncanakan memiliki kapasitas pembangkit sebesar ………….. kW yang diperuntukan untuk masyarakat di daerah kami. Proyek ini direncanakan akan dibangun dengan dana bantuan hibah dari MCA-Indonesia apabila proyek tersebut telah memenuhi persyaratan-persayaratan yang ditentukan oleh MCA-Indonesia. Kami sangat mendukung perusahaan tersebut di bawah ini yang direncanakan akan melakukan pembangunan proyek tersebut:

• Nama Perusahaan: ………………………….. • Pemilik Perusahaan: …………………………… • Alamat Perusahaan: ……………………………. • Akta Pendirian Perusahaan:………………….. • SK Menteri Hukum dan HAM RI:…………………..

Di dalam proyek ini, masyarakat kami telah menyadari dan sepakat akan memberikan kontribusi kepada proyek ini berupa:

1. ……………………………………….. 2. ……………………………………….. 3. ……………………………………….. 4. ………………………………………..

Besar harapan kami, MCA-Indonesia dapat menyetujui proyek ini yang sangat memberi manfaat bagi masyarakat di daerah kami. Demikian pernyataan ini kami buat sejujur-jujurnya untuk mendukung keberhasilan proyek tersebut. Atas perhatiannya kami ucapkan terima kasih yang sebesar-besarnya.

Hormat Kami,

[Kepala Desa/Kepala Adat/dll]