Vanuatu: Consultant for Energy Efficiency Upscaling, Fiscal Reforms (Intl.)
The Global Green Growth Institute (GGGI) was established as an intergovernmental organization with the objective of promoting sustainable development of developing and emerging countries including the least developed countries. GGGI is dedicated to supporting the creation and diffusion of the model of economic growth known as “green growth”. The green growth model integrates economic growth, environmental sustainability, poverty reduction and social inclusion.
Vanuatu is a small island developing state (SIDS) with an estimated population of 300,019 people. The country is committed to formulating strategies, national policies, and best practices for addressing GHG emissions and making a practical contribution to the global mitigation efforts. In its Nationally Determined Contributions (NDC), Vanuatu’s planned mitigation intervention includes broad renewable energy (RE) and energy efficiency (EE) measures to enable 15% savings in the energy sector. This will result in GHG emission reductions of around 30 ktCO2e/year.
In 2016, the Government of Vanuatu (GoV) developed a 15-year energy demand projection for Vanuatu using a business-as-usual approach. The study concluded that energy demand in Vanuatu could more than double between 2015 and 2030. This growth is expected to be driven largely by commercial and industrial sectors, followed by residential uptake. The report further estimated that by 2030, almost 54,000 households will receive electricity compared to 17,500 in 2015. As grid expansion projects result in more households getting connected, energy security will be impacted.
The absence of a robust and conducive regulatory framework including policies, laws, regulations, and standards in the past, has allowed an uncontrollable influx of inefficient and low-priced appliances and products into the country. Consequently, consumers buy more of the cheaper but inefficient products than the highly efficient ones which are more expensive in the long run. A detailed EE survey conducted back in 2013 indicated that only 43% of urban households had refrigerators, most of which did not have EE rating labels, and most households’ lighting products, and those used in public offices and businesses, did not meet EE standards. This culminated with the introduction of the Energy Efficiency of Electrical Appliances, Equipment and Lighting Products Act in 2016. The introduction of this legislation subsequently resulted in tighter controls on importation of refrigerants and lighting products into the country.
The tender to develop the National Energy Efficiency Strategy and Action Plan (NEESAP) for Vanuatu including the development of the Enforcement Assessment report is work in progress and is expected to be undertaken concurrently with this assignment. The NEESAP will be the guiding document for Vanuatu to achieve its energy efficiency aspirations and contribute to achieving the EE targets in the National Energy Roadmap (NERM), NDC and the National Sustainable Development Plan (NSDP).
Further to the development of the NEESAP, the development of the On-Bill Financing (OBF) guide for Vanuatu is also underway. It has the objective of increasing the uptake of high EE appliances by offering customers access to finance to meet upfront capital needs for EE products and contributing to the achievement of the national sustainable energy targets.
Nevertheless, more action is needed to enhance the uptake of EE products nationally. Domestic prices for EE products tend to be relatively higher than those of some of the neighboring Pacific Island countries, and this is attributed largely by costs relating to distance from market, coupled with government taxes.
OBJECTIVES OF THE ASSIGNMENT
The purpose of the assignment is to develop an assessment report on fiscal reforms and tax incentives including broader economic instruments to support the upscale of energy efficiency investments in Vanuatu in line with the updated NERM and the NDC.
- Project: International Consultant to Undertake Assessments on Fiscal Reforms and Incentives to Promote Energy Efficiency Upscaling in Vanuatu
- Duty Station: Port Vila, Vanuatu
- Contract Duration: 3 Months (possibly June – September 2022)
- Consultant Level: 5
- Total Fees: USD 18,000
SCOPE OF WORK
An international consultant preferably specialised in energy and finance is expected to undertake the following tasks (with the support of a local consultant recruited by GGGI):
- Project management
An inception meeting is to be conducted at the start of the consultancy with key stakeholders in the country in particular Director General of the Ministry of Climate Change, Director of Energy Department, Director of Customs and Inland Revenue, NGEF Manager and Director of Finance Department. The inception meeting is to agree on the workplan, methodology and proposed deliverables of the assignment.
Participate in one-to-one consultation meetings and assist in conducting consultation workshop with government officials, private sector players and other key stakeholders on fiscal reforms and incentives for greater uptake of EE appliances in Vanuatu. The key stakeholders shall include i) National Green Energy Fund ii) key government agencies (Prime Minister’s office, Ministry of Finance and Economic Management, Department of Customs and Inland Revenue, DoE, Department of Climate Change, etc., iii) Vanuatu Chamber of Commerce and Industry iv) Power Utility Companies (UNELCO and VUI) and the Utility Regulatory Authority (URA) v) high energy consumers including resorts and hotels, manufacturing industries, hospitals, schools, and vi) importers and retailers of electrical appliances and equipment.
After completion of the data gathering and assessment phase, a validation workshop is to be conducted with other stakeholders to discuss the outcome of the assessment on the fiscal instruments and broader economic instruments to support greater uptake of EE products in Vanuatu.
Analysis of policies in Vanuatu
Economic instruments for EE
The study should identify, describe, and offer case studies of the key economic instruments used to support the purchase of EE appliances and equipment. Some of the key instruments include taxes, subsidies, grants, and give-aways (government purchase and free supply). The case studies should include the design, scope and cost of measures in comparable jurisdictions.
Further information on types of economic instruments can be found here: https://iea.blob.core.windows.net/assets/imports/events/180/Background.pdf
The study is to focus on the potential use of fiscal instruments and broader economic instruments. Alternative instruments of direct regulation or information-based measures are not to be considered in this study. Direct regulation, includes minimum performance standards, bans or mandated use. Information based measures include labelling schemes and awareness raising campaigns.
Policy settings review
The study should review existing EE policy settings to identify the current use of fiscal instruments including broader economic measures to support EE. The consultant should review GoV policies, legislations, regulations, targets and other baseline reports and assessments. The review should cover fiscal policies, legislations, regulations and other baseline reports and assessments related to customs imports, taxes and duties on EE and RE.
When presenting the review of current policy settings, the study should present the results in SWOT format (strength, weakness, opportunities, and threats). The opportunities should consider application of economic instruments within particular scope (appliance types, user groups, supply chains).
Based on these assessment and SWOT analysis, the study should provide recommendations for enhanced use of fiscal instrument and broader economic instruments to promote affordability of EE appliances and consequently increase its uptake in Vanuatu and reduce the country’s GHG’s emissions. The recommendations should include the means of implementation, including any changes to policies, legislation and regulations, as well as changes to the activities of government agencies or utilities.
Development of the Fiscal Reform Assessment and Incentive Report
The international consultant is expected to develop a report outlining his/her findings on assessing the appropriate economic instruments (including fiscal policies, legislation, and regulations) to increase uptake and use of EE appliances and equipment by businesses and households in Vanuatu.
From the assessment findings, the international consultant is expected also to develop a list of fiscal reforms and incentives (policies, legislation and regulations) needed to enhance the absorption and use of EE appliances in the country. The list should be prioritised in terms of its financial and environmental impact, ease of implementation and broader implications on the national economy.
Prepare a submission paper (template to be supplied by the National Advisory Board on Climate Change (NAB)) for consideration and approval of the National Designated Authority of the Green Climate Fund. The submission paper should summarise the outcome of the report and recommendations. Similarly develop a Council of Ministers (template to be supplied by the NGEF) paper for the endorsement of the fiscal reform assessment and tax incentive report. The COM paper template will be supplied by the DoE.
DELIVERABLES AND PAYMENT SCHEDULE
The international consultant will be allocated 30 working days to complete the assignment. Work must commence immediately after contract signing and will be spread over three (3) months. The following work schedule is proposed only:
KPIs for each deliverable
Payment terms (% of contract price)
- Draft inception report
- List of inception workshop participants (gender disaggregated)
- Final agreed upon workplan for project
- Final inception report to be not more than 10 pages
- Delivered within 2 weeks after project signing
Consultation with at least 6 key stakeholders from each of the following stakeholders:
- Department of Customs and Inland Revenue
- Department of Finance and Treasury
- National Green Energy Fund Board and management
- Private sector (businesses, EE retailers and wholesalers, etc.)
- Electricity Regulator
- UNELCO and/or VUI
- Comprehensive list of stakeholders (gender disaggregated) and minutes of stakeholder interviews
Comprehensive list of stakeholders and minutes of stakeholder interviews submitted within 4 weeks after contract signing.
- Prepare economic instrument descriptions and case studies
- Review existing policy settings, presented in SWOT analysis
- Develop recommendations for enhanced use of economic instruments
- Economic instrument descriptions and case studies
- Review and SWOT analysis
- Draft recommendations
- SWOT analysis delivered and approved by GGGI within 7 weeks after project signing
Develop the Fiscal Reform Assessment and Incentive Report
- Draft Fiscal Reform Assessment and Tax Incentive Report
- Draft Fiscal Reform Assessment and Tax Incentive Report submitted within 9 weeks after contract signing
Conduct a Validation Workshop to discuss and agree on the fiscal reform assessment and recommended tax incentives to promote EE in Vanuatu
- List of validation workshop participants (gender disaggregated)
- Validation Workshop report
- List of participants and workshop report submitted within 10 weeks after validation workshop
Finalise Assessment Report on Fiscal Reforms and Tax Incentives measures to Upscale use of EE appliances in Vanuatu
- Final Assessment Report on Fiscal Reforms and Tax Incentives to promote use of EE appliances
- Final Assessment Report on Fiscal Reform and Tax Incentives submitted and approved by GGGI within 12 weeks after contract signing
Prepare a submission paper for NDA Endorsement.
Also prepare a COM submission paper for the COM endorsement
- Completed Submission paper for NDA Endorsement
- Completed Submission paper for COM endorsement
- NDA paper and COM paper submitted and accepted by GGGI within 12 weeks after contract signing.
All reports and outputs must be in English, in accordance with GGGI’s formatting requirements, and submitted in hard copy and electronic formats along with complete sets of raw data, research materials, and interview notes.
This project is expected to be completed within 3 months (12 weeks) of contract signing with a tentative timetable as follows:Submission of Inception Report within two weeks (after project signing) Submission of list of stakeholders (gender disaggregated) and minutes of stakeholder interviews within 4 weeks Submission of Policy Analysis report within 7 weeks Submission of Draft Fiscal Reform Assessment and Tax Incentive Report within 9 weeks Submission of Validation Workshop Report including list of participants within 10 weeks Submission of Final Assessment Report on Fiscal Reforms and Tax Incentives within 12 weeks Submission of NDA paper and COM’s paper within 12 weeks.
REPORTING ARRANGEMENTSThe consultant is expected to work under the general guidance of the GGGI project lead in close collaboration with the Director of the DoE. Due to the COVID-19 restrictions, the international consultant(s) may not be able to travel to Vanuatu but would rely on the local consultant for local coordination to collect data, arrange workshops, meetings, and other logistics in-country. However, the lead international consultant(s) is to make arrangement to participate at the workshops, meetings etc. virtually where appropriate. The consultant must include in his financial proposal one mission to Vanuatu (if s/he lives outside of Vanuatu) to conduct the validation workshop if possible. All developed products under this assignment (incl. raw files and editable forms) will become property of DoE and GGGI. The Consultant shall submit the Final Report which should reflect the outcome of all activities prepared by the consultant. All relevant technical papers, reports, and other documents prepared from the start to the end of the assignment shall be attached to the Final Report. The Consultant shall submit the report in electronic versions readable by a Microsoft Office application. All outputs must be in English. Final report must be approved by the GGGI with the agreement of the Vanuatu Ministry of Climate Change. The Consultant shall consider the comments and necessary revisions proposed. Within 14 days from the receipt of the comments or modification proposal from the GGGI, the Consultant shall prepare and submit the final versions of the report.
The international consultant must meet the following competency requirements:
A. A minimum of a Masters’ degree or equivalent in Engineering, Economics, Finance, International Development, Business Administration, Strategic Management, or any other related field
B. A minimum of 8 years’ experience in the areas of energy efficiency and renewable energy financing.
C. A minimum of 5 years’ experience on related assignments particularly on analyzing economic instruments to promote RE&EE.
D. A demonstrated experience in strong problem-solving communication, research, and outstanding analytical writing skills with a proven ability to write analytical reports
E. A demonstrated working knowledge of Vanuatu’s energy, finance and economic landscape
F. Immediate availability of the contractor
A prospective local consultant should submit in English only her/his proposal and with an attached CV detailing her/his qualifications and experience and its relevance to the assignment. The proposal should also outline her/his approach and methodology in achieving the desired assignment outcome.
Date to close is Korean Standard Time (KST). Applications submitted after the deadline will not be considered Application. Cover Letter, and CV must be sent in English. A consortium, or a firm may not be engaged for the individual consultant assignment.