Project Implementation Support to Sofia Municipality and Toplofikacia Sofia EAD relating to the Toplofikacia Sofia CHP Project

Item Description:

The European Investment Bank (EIB or the Bank) is the financing institution of the European Union (EU). Created by the Treaty of Rome, its shareholders are the Member States of the EU, and its Board of Governors is composed of the Finance Ministers of these States. The EIB enjoys its own legal personality and financial autonomy within the Community system.

The mission of the EIB is to contribute, by financing sound investment, to the policy objectives of the EU, as laid down in its statutes and in decisions of the European Council.

The EIB contributes towards the integration, balanced development and economic and social cohesion of the Members of the EU. To this end, it raises on the markets substantial volumes of funds that aim at financing capital projects according to the objectives of the EU with the most favourable financial terms. Outside the EU the EIB implements the financial components of agreements concluded under European development aid and cooperation policies.

More background information about the EIB may be found on the website http://www.eib.org

Requirement

The EIB has a requirement for the Provision of support and advice to Sofia Municipality and Toplofikacia Sofia EAD for putting into place an adequate management and organisation for the implementation and operation phase of the Toplofikacia Sofia CHP project and for managing their obligations towards the European Commission and the European Investment Bank.

Overall objective of this Assignment

The overall objective of this Assignment is to enable SM and TOPLOFIKACIA to successfully implement and operate the Project.

Neither SM nor TOPLOFIKACIA have prior experience with the implementation and operation of similar waste to energy facilities. Consequently, SM and TOPLOFIKACIA identified a substantial need for targeted technical assistance (TA) services for the Project’s implementation phase and for the preparation of the operating phase of the Project.

Existing skills and resources in the Recipients’ organisations shall be identified and mobilised, missing skills and resources must be properly identified and addressed.

For the avoidance of doubt, the Services related to this TA operation shall neither replace SM and TOPLOFIKACIA in their roles and responsibilities as project promoters, nor duplicate activities of the “FIDIC Engineer” who is separately engaged by TOPLOFIKACIA.

The Service Provider shall establish a close and trusted collaboration with SM, TOPLOFIKACIA, and EIB. EIB, SM and TOPLOFIKACIA will collaborate closely with the Service Provider to this end.

Purpose/Specific objectives

The purpose of this contract is as follows:

• The Service Provider shall provide support and advice to SM and TOPLOFIKCIA for putting into place an adequate management and organisation for the implementation and operation phase of the Project and for managing their obligations towards the European Commission, the European Investment Bank and the Managing Authority (Task 1);
• The Service Provider shall provide support and advice to SM and TOPLOFIKACIA in relation to the procurement of a service contract with the FIDIC Engineer. The FIDIC Engineer shall act as “Engineer”, according to the FIDIC Yellow Book Design and Build Contract, and also act as independent construction supervision engineer as required by Bulgarian law. Full compliance with public procurement procedures as defined on EU and national level must be ensured (Task 2);
• The Service Provider shall provide support and advice to SM and TOPLOFIKACIA in relation to the procurement of a Design & Build contract in accordance with current FIDIC Yellow Book standards for the turn-key implementation of the Project. Full compliance with current public procurement procedures as defined on EU and national level must be ensured.

Relevant country background

Bulgaria shows severe deficits in terms of availability of proper waste treatment infrastructures, of meeting recycling targets set in the EU Directives and not least of waste prevention policies. The country is still highly depending on landfilling; other treatment options are rarely in place. Landfilling is generally not restricted or banned for municipal waste and therefore still a large amount of Biodegradable Municipal Waste (BMW) is disposed of in landfills breaching the Landfill Directive 1999/31/EC. Full self-sufficiency is not reached for municipal waste. Furthermore, many uncontrolled waste dump sites have been identified in Bulgaria. Considering the trends in the development of the amounts of landfilled BMW from 2010 to 2015, substantial efforts will have to be undertaken if Bulgaria shall fulfil the 35 % target of the EU Landfill Directive for diverting BMW from landfill by 2020.

Current situation in the sector

In order to improve municipal waste management, Sofia Municipality (SM) implements a project „Integrated System of Municipal Waste Treatment Facilities for Sofia Municipality“, financed under Priority Axis 2 („Improvement and development of waste treatment infrastructure”) of Operational Programme “Environment 2007 – 2013” by the European Regional Development Fund in accordance with the rules of Council Regulation (EO) N° 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) N° 1260/1999. The implementation and financing of the project is divided into two major phases (stages), and there is a separate decision taken for each one of them for approval by the EC. At present, Phase I has been implemented, which mainly includes construction of installations for separate collection equipment, treatment facilities for bioand green waste and construction of sanitary landfill, as well as Phase II which includes design and construction of Mechanical and Biological Treatment (MBT) plant with production of Refuse-Derived Fuel (RDF). Phases I and II are fully implemented and in operation now. Operating data of these facilities can be requested by the Service Provider from SM if and where required for the fulfilment of the tasks and objectives under this Assignment.

The project, of which this Assignment will be a part, is Phase III of the Integrated System of Municipal Waste Treatment Facilities of SM. It relates to the establishment of a modern system primarily for utilisation of RDF from MBT, producing combined heat and power (hereafter, the “Project”). Produced power will be sold to the national power grid and heat will be utilized in Sofia for the district heating network. The new system will be compliant with the EU and national legislation and allow SM to achieve targets set by EU environmental acquis communautaire.

“Toplofikacia Sofia EAD” (TOPLOFIKACIA) is a company pursuant to Art. 51 of the Municipal Property Act in which SM is a sole owner of the capital. The rights of the sole owner of the capital are exercised by the Sofia City Council. The company’s activity relates to operating and maintaining the district heating system of Sofia and consists of heat production, heat transmission, electricity and heat production and other activities servicing the main activities.

It is planned that SM together with TOPLOFIKACIA will implement and operate the Project, which has applied for financing under Operational Programme “Environment 2014-2020“ (“OPE 2014- 2020”).

A key environmental permit has already been granted to the Project (with legal appeals pending), a complete feasibility study exists (dated December 2017), and further EU Grant application documentation is finalized (notification form, counterfactual scenario, application form). JASPERS (Joint Assistance to Support Projects in European Regions) and other technical and legal experts have provided comprehensive advisory services to the Project.

In November 2019, the European Commission has approved, under EU State aid rules, Bulgarian plans to support the Project.

Design, construction and commissioning of the Project is currently scheduled to take place from 2021 until the end of 2023. This timeline is a consequence of permit conditions and EU Grant regulation and is consequently considered a very high priority.

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