93350 Public Disclosure Authorized - World Bank · 2016. 7. 12. · be submitted for Bank review by...

Aide Memoire – November 2014

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Project: TA Capacity Building for Hydropower and Mining Sectors(HMTA) Project

Project Stage: Implementation

Team Leader(s): Franz Gerner, Sombath Southivong

Country: Lao PDR

Project Development Objective

To increase human capacity and improve the performance of government oversight institutions for the hydropower and mining sectors.

Key Project Data

Original Financing

Project Number P109736 Effectiveness Date 4 August 2010 Closing Date 30 September 2015

IDA Grant Amount US$ 8 million IDA Disbursement 84% Mission Start Date 3 November 2014

DFAT (AusAID) Grant Amount US$ 2.54 million DFAT (AusAID) Disbursement 100% Mission End Date 12 November 2014

Additional Financing

Grant/Credit Amount US$ 17.8 million Effectiveness Date 22 September 2014 Closing Date 30 September 2018

AF Disbursement Date of Last Mission August/September 2014 Date of Next Mission January 2015

PDO Rating Satisfactory IP Rating Satisfactory .

Introduction

1. Following an implementation support mission focusing on the mining sector component of the TA for Capacity Building inthe Hydropower and Mining Sectors Project (HMTA) Project in September 2014, the WBG carried out an implementationsupport mission focusing on hydropower components of the Project in November 2014.

2. The objectives of the mission were to review project implementation progress against the Project Development Objectives(PDO) and results framework, identify issues and challenges, make recommendations to the project implementing agenciesand agree on next steps to ensure PDO achievement and successful project completion.

3. This aide-memoire summarizes the findings, recommendations and agreements reached during the mission. Theaide-memoire will be publically disclosed. The mission would like to express its gratitude for the hospitality provided byMEM, MONRE, MOF, MPI and NA (Annex 1 provides a list of the people met).

Key Issues

4. Progress towards achieving PDO: Overall progress towards achievement of the PDO is satisfactory. The key intermediateperformance indicator targets as defined in the project result framework are largely on track, and project implementationis progressing smoothly.

5. Project Implementation Progress (IP): To improve the oversight performance of institutions, the project has made goodprogress in developing relevant policies, regulations and guidelines for better governance including environmental andsocial considerations of the hydropower and mining sectors. Standardized terms and conditions for ConcessionAgreements (CA) for both hydropower and mining have been drafted and consultations are being carried out in both thepublic and private sectors. A final draft of the Policy on Sustainable Hydropower Development (PSHD) is being submitted tothe Government’s Office for approval and expected endorsement by January 2015. Capacity building for MEM staff atcentral and local levels to improve CA implementation management and monitoring is on-going. A report on the selectedpolicy options for hydropower and mineral fiscal regimes and implementation action plans was submitted to the MoF forfurther consideration. A least cost planning for the power system study was completed and a river basin modelling studyfor 3 basins (Nam OU, Nam Ngum and Sekong) was carried out. Despite progress made, capacity for CA implementation,management and monitoring remains to be further strengthened and this will be addressed through TA support under theProject.

6. To increase human capacity in the sectors, the project has made progress under the learning program component. MEMstaff at central and local levels continues to receive training to enhance their technical knowledge in planning and

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management. Human Resource and Staff Performance Monitoring System guidelines were developed and being adopted to improve the overall HR monitoring system for MEM. Teachers and students from the National University of Lao (NUOL) and three selected technical schools have benefited from teacher training and other practical training programs on project sites that help improve their teaching and learning experiences. Basic laboratory equipment, teaching aids, and learning facilities have been provided to the NUOL and three technical schools. On-going support to further strengthen the capacity of MEM at national and local levels as well as educational institutes is needed and will be addressed under the AF. IP is satisfactory.

7. Additional Finance: Additional financing (AF) totaling $17.8 million was approved on June 3, 2014 and became effective on September 22, 2014 to scale up achievements to date.

Detailed Project Status

Overall Progress

8. The project continues to make good implementation progress. Approximately 84 percent of the original IDA grant and 100 percent of the Australian Department of Foreign Affair and Trade - DFAT grant has been disbursed to date. The remaining allocation has been fully committed. More than 90 percent of training plan has been successfully implemented. All goods packages have been procured and delivered. Most technical assistance (TA) packages have been implemented and the final deliverables of remaining packages are expected in early 2015.

9. Annual work, procurement and training plans under the AF are at an advanced stage of preparation. A number of national and technical consultants to support project implementation of various components are currently being procured and are expected to be mobilized in the coming months. Several important Term of References (TORs) for main consultant packages to support the hydropower sector development component, including power trade reform study, fiscal regime, and IPP process, are being finalized and procured in early 2015.

Joint Hydropower and Mining Learning Program:

10. Learning program for sector professionals: Implementation progress under this sub-component is on-track. With support from a national consultant, the Department of Personnel and Organization (DPO) has continuously carried out capacity building activities in close coordination with technical departments. To date, over 1,600 staff both at central and local levels have received general and basic technical training in relevant areas. Staff performance and monitoring guidelines developed during the original project has been adopted in combination with country staff performance appraisal to improve the overall HR monitoring system for MEM. A learning coordinator from each department is now appointed to work closely with DPO to strengthen coordination and capacity of MEM staff. A draft four-year work plan under the sub-component 1A and a detailed annual training plan for 2014-2015 are under preparation and were submitted to the Bank for review and clearance at the end of November 2014. The mission highlighted a need to ensure the learning component complements the capacity development efforts undertaken under component 2 and 3. As feasible, the proposed learning programs should also include knowledge on understanding and application of environmental and social safeguard considerations relevant to both sectors.

11. An international consultant will be recruited to support the development of MEM learning strategy, which aims to promote information sharing, knowledge transfer and sustainability. The draft consultant TOR is being developed and will be submitted for Bank review by the early December 2014. The development of Human Resource Information System (HRIS) is facing delays. The consultant’s contract has expired in February 2014 and the expected deliverables were not completed. The mission requested DPO to inform the Bank by December 2014 on plan to complete HRIS.

12. Education sector support: Good progress has been made under this sub-component as the NUOL and three education institutes have continued to implement their planned activities under the approved work plan achieving good results. The NUOL have continued to carry out a number of capacity building activities related to curriculum improvement by sending teachers to training programs with other academic institutes and universities in Thailand, and conducting field visits and excursions to project sites. Over 300 teachers/staff and about 4,800 students from the NUOL and three education institutes (EIs) have directly and indirectly benefited from the learning program supported through HMTA. The mission suggest that these curriculum improvements to cover also knowledge related to environmental and social risk mitigations relevant in link with sustainable development of both sectors.

13. There has been on-going discussion and a general agreement among the NUOL and the EIs on sharing educational laboratory equipment for practical training as recommended by the task team during the last mission in August 2014. This


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is to promote the optimization of limited financial resources and NUOL and EIs are in the process of revising the work-plan which will be submitted for World Bank review by December 2014.

14. The NUOL and EIs need to strengthen collaboration between MEM and the education sector to ensure that MEM staff and teachers/students from the EIs benefit from knowledge transfer from expert consultants to be mobilized under the AF. The NUOL and EIs agreed that key staff will be assigned to work closely with the consultants together with MEM and vice-versa.

15. Trade Working Groups (TWGs): Progress under TWGs activities has been slow. Following the establishment of the TWGs and the completion of a market survey study, only two workshops were conducted to discuss the work plan and agree on selected curricula to be reviewed and updated so that subject areas are relevant to the current business needs. Implementation progress has been delayed primarily due to other business commitment of the Chairs which made it difficult for the TWGs to meet and discuss issues. To avoid further delays, the task team suggests that the Co-Chairs of the TWGs lead the discussion (in the absence of the Chairs) and those TWGs meetings should be conducted on a quarterly basis. TWGs agreed to meet early next week to further discuss next steps and activities. The minutes of the meeting will be shared with the World Bank by December 2014.

Hydropower Sector Development:

16. Power Trade Strategy: The primary mode of exports from Laos to its neighbors has been through large-scale export IPPs with dedicated transmission lines from the power station to the cross-border buyer’s grid. To maximize benefits from developing domestic energy resources and power trading, Laos plans to move towards System-to-System (STS) transactions with neighboring countries which impacts the overall sector structure. At a Round Table (RT) held on November 7

th, 2014 a scope of work for technical assistance was discussed focusing on sector reform and restructuring.

The TORs is now being finalized and attached as Annex 3 and procurement will commence in December 2014.

17. The Consultant will work in coordination with, and under the direct supervision of, an on-going Working Committee led by the Direct General of DEPP. In addition, a high level Steering Committee will be formed to provide overall project strategic advice and guidance. The Consultant will also organize workshops and attend pertinent Round Tables.

18. Concession Agreement (CA) Monitoring (Independent Power Producer - IPP process): Progress has been made on building Government consensus on an expanded scope of ToRs for CA Management and Monitoring (see Annex 4). DEB, who submitted the original draft ToR, has reviewed and endorsed the final ToR. DEM and DEPP are close to finalizing review and work continues on consensus building with IPD and DESIA and it is expected that all GoL agencies will review and/or endorse ToR by end of November 2014 and submit to final Bank review by early December 2015.

19. To ensure timely procurement and coordination and promote synergies and consistency among consultancy outputs, the draft ToRs covers 13 different tasks. The ToRs also calls for a team of five expert resident international consultants including Hydropower Engineer, Legal Expert, Financial Specialist, Environmental and Social Specialist, and Institutional Expert to support different Departments of MEM, Department of Investment Promotion (IPD) of Ministry of Planning (MPI) and Department of Environmental and Social Impact Assessment (DESIA) of Ministry of Natural Resources and Environment (MONRE) for a 3 year contract duration.

20. At the request of MEM, the ToRs will include exchanges between expert international consultants hired under HMTA and Lao PDR educational institutions. As a starting point, the NUOL Faculty of Engineering has requested support for its soon to be launched Master Degree on Hydraulic Engineer.

21. Fiscal Regime: Inter-Ministerial Fiscal Regime Committee (the Committee) and Mining and Hydro-Power Working Groups reached consensus on ToRs for implementation of fiscal regimes. In September 2014 the GoL revised the mandates and appointed new members for the Committee and Working Groups. The Committee has made substantial progress and advanced the fiscal regime agenda with MOF, particularly on the mining fiscal regime front. The Committee has prepared a Work-Plan and allocated resources under HMTA-AF.

22. The Director General of MOF’s Fiscal Policy Department chaired a full plenary meeting of the Committee during the mission. The Committee approved a ToRs for a Consultant to provide technical guidance and oversight regarding a final fiscal regime recommendation for MOF, MEM and MPI; to design the fiscal regime and to set-up the enabling institutional, legal and regulatory frameworks. The ToRs also provide capacity building and practical tools to strengthen revenue administration, including human resources reinforcement, tax collection and audit data-base and IT refurbishment tools. In addition the Consultant will develop a revenue sharing strategy and framework. The ToRs bundles hydropower and mining expertise to simplify procurement and take advantage of synergies between the sectors. The Fiscal Regime ToRs (see Annex 5) will be submitted for Bank review by December 2014.


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23. The National Asset Department has prepared a draft Presidential Decree for Natural Resources Royalties. This draft Presidential Decree for Natural Resources Royalties was presented to the Governmental Meeting in October 2014. The mission was informed that this Decree may soon be submitted to the government. Thereafter, no later than December 2014 the Decree will be submitted for approval by the National Assembly. This proposed Decree raises a serious concern as it sets royalty rates without clear definition of base for their calculation and, in the case of hydropower, the variable rates is not supported by any parameters for application of the maximum and the minimum rate schemes. Moreover, the proposed decree makes no distinction between export and domestic IPPs. Particularly in the context of the mining sector, it is crucial to address the wider pool of fiscal instruments that determine state revenues, including profit tax, dividend withholding tax. For the hydropower sector it is important to address other forms of rent extraction such as discounted electricity sale and carried interest schemes. To maximize state revenues and create clear rules for investors a decree needs to consider the wider fiscal impacts before submitting to the GoL and NA for approval.

24. Policy on Sustainable Hydropower Development (PSHD): In collaboration with IFC, the draft Policy on Sustainable Hydropower Development (PSHD) has been updated to cover the technical, engineering, economic, and financial aspects in addition to social and environmental considerations. The final draft PSHD has been endorsed by the Minister of MEM and has been submitted to Government’s Office for final approval. In the meantime, DEPP has advanced on a draft PSHD implementation plan (Action Plan). In order to leverage synergies and assure coherent output from international consultants the ToR for CA Monitoring will include the implementation of PSHD, including the finalization of the drafting of guidelines and consensus building on criteria to assess PSHD implementation performance.

25. National Assembly advances discussion on Resolution on Rules and Procedures for Approval of Power Projects: Power projects above 100 MW are subject to approval by the National Assembly. The National Assembly is expected to approve rules setting minimum standards for its approval of power projects including evidence that the project was part of strategic, national sectorial plans (including river-basin optimization plans) and satisfy social and environmental requirements. The draft Resolution was expanded to include all power generation not only hydropower. Approval of the new rules is expected to take place in January 2015. The NA will convene consultations with the GOL and Provincial Authority on the Resolution before it is finalized.

Financial Management

26. Financial Management: All financial management action plans agreed in the last mission including updating FMM, amending the IFR to separate between original and additional financing sources, updating accounting software to include the new requirement in the IFR and agreeing the mechanism for public disclosure of the project audited financial statements are completed. Quarterly IFRs and audit reports were submitted timely. (A detailed assessment is in Annex 3.)

27. Audits: The existing project auditor’s contract will expire in June 2015. FY14 is the final year audit for this existing auditor. The new project auditor is to be appointed and the auditor’s ToR should be submitted to the Bank for review by mid-December 2014.

Project Management, Monitoring and Evaluation.

28. Project Coordination and Management: There was overall coordination improvement among implementing agencies and an operational system for monitoring and reporting tools on activities was developed and is being adopted. The project progress report received prior to the mission is of good quality highlighting implementation of planned activities and achievement of results and indicators. To further strengthen the capacity of PSO, the mission suggested MEM to assign additional full-time staff to work with PSO.

29. Project Implementation Manual (PIM): With support from the international consultant, the PIM was updated based on lessons learnt from project implementation during the original HMTA project. The PIM aims to address key implementation issues, clarify roles and responsibility of different key implementing agencies, and improve understanding of key standard procedures and management processes; all of which will enhance the quality of project implementation. The final draft PIM was submitted for Bank review. Once finalized, the PIM will be translated in Lao.

30. Support to Gender: Work to support the implementation of the ministerial decree on gender advancement for the hydropower and mining sector is in progress. The recruitment of the consultant is now under procurement and mobilization of the consultant is expected in early 2015. A work and training plan has been prepared.

31. Internal Control: Further support has been provided to strengthen the capacity of MEM’s internal control system. The technical consultant package is under procurement and mobilization of the consultant is expected in early 2015. The task team will share the draft guidelines for quality assurance developed for transport sector which can be used as reference


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for further development of MEM’s internal control system. Work and training plans have been prepared.

32. Information Technology (IT): Technical consultant package to develop an information technology platform to support business processes within MEM is underway.

Procurement

33. Procurement Plan: Some procurement packages are behind schedule compared to the procurement plan set out in Q3 and Q4 of 2014. The PSO recently submitted a number of Single Source Selection (SSS) requests to the Bank which are not listed in the agreed procurement plan. By the end of the mission, the PSO prepared a separate update procurement plan of the original HMTA including any proposed changes to the Bank for no objection and received clearance from the Bank. See Annex 4 for detailed procurement assessment.

34. Staffing: Some individual positions which were advertised in the local newspaper got only few expressions of interests and less than three CVs. The mission advised the PSO to re-advertise those positions in one advertisement. The notice should be posted at associated colleges and MEM’s bulletin board, including directly approaching any potential qualified candidates. The PSO will start the re-advertise process by December 14.

35. Post review: The mission followed up on the requested clarifications on the FY14 procurement post review. The Procurement Consultant would check the status and would respond to the request. The next FY15 procurement post review will be conducted during the next implementation support mission.

Safeguards

36. Environment: The mission underlined the need to strengthen inclusion of environmental and social considerations into the design and implementation of the project activities. Consequently, the scope of work and outputs for capacity building programs relevant to institutional strengthening; technical guidelines in the sector; PSHD implementation, and sector strategies (including action plans) should include elements of governance that reflect international good practice, mitigation measures and overall awareness about the possible cumulative long term environmental and social risks in the sector development.

37. Social: The Project has been developing the institutional capacity of the MEM as well as the national regulatory framework to manage social issues in the hydro and mining sectors. In particular, the Project will carry out Strategic Environmental and Social Assessment (SESA) of the mining sector and develop the policy on sustainable hydropower development including the capacity development of MEM to manage IPP processes, among other activities, which should take into account social considerations. MEM submitted the draft Terms of References (TOR) to carry out such activities. The Bank will review them and get back to MEM with comments.

Other Business:

38. Study Tour: It was proposed that a study tour to Austria will be taken place in Mid June 2015 with the objective to exchange knowledge and experience on hydropower sector development including power trade, hydropower generation planning, implementation and monitoring, and fiscal regime. The study tour will be financed under the HMTA. MEM will nominate participants comprising high level officers and inform the Bank by December 2014. The task team will facilitate the study tour and liaise with the Austrian Government to develop a suitable study tour plan.


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Key Issues and Actions Required

Actions Responsibility Date Status

1. Submit Work Plan and Annual Training Plan to WB DPO, PSO November 2014 Completed

2. Submit Work Plan and Training Plan to WB EIs, PSO November 2014 Completed

3. TWGs to meet and finalize work plan and submit minutes to WB TWGs December 2014 In progress

4. Quarterly TWGs meeting to be conducted TWGs On-going In progress

5. Submit TOR and EOI for Power Trade Reform Study to Bank PSO, DEPP December 2014 In progress

6. Submit TOR and EOI for Fiscal Regime TA to Bank PSO, MOF December 2014 In progress

7. Submit TOR and EOI for CA Monitoring TA package to Bank PSO, DEB December 2014 In progress

8. Hydropower working group meeting to be conducted to review overall implementation progress of hydropower sector development component

PSO, Hydropower

Working Group December 2014 In progress

9. Submit Work Plan and Training Plan (for Component 2) to Bank for review

DEPP, DEB, DEM, MOF,

MPI, PSO November 2014 Completed

10. Submit updated Procurement Plan for AF to Bank for review PSO November 2014 Completed

11. Follow up with GOL on the final approval/signature of PSHD. Up on receiving the approval, to organize the launching ceremony.

DEPP December 2014 In progress

12. To coordinate the preparation of the Risk Matrix workshop once the consultant is on board

DEB December 2014 Not yet started


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Annex 1: Persons Met

Name Institution Position

H.E. Mr. Viraphonh Viravong MEM Vice Minister

Mr. Chareune Inthavy MEM, PSO Deputy Director General, Cabinet Office

Dr. Daovong Phonekeo MEM: DEPP Director General, Dept. of Energy Policy and Planning

Mr. Chansaveng Boungnong MEM: DEPP Deputy Director General, Dept. of Energy Policy and Planning

Mr. Khamso Kouphokham MEM: DEPP Deputy Director General, Dept. of Energy Policy and Planning

Mr. Litthanoulok Laspho MEM: DEPP Director of Division, Dept. of Energy Policy and Planning

Mr. Bounthiem Saysongkham MEM:DPO Deputy Director, Department of Personnel and Organization

Mr. Souksavanh Phanthong MEM:DPO Deputy Director of Division of Personnel and Organization

Mr. Khamtanh Vongphansipaseuth MEM: DOM Deputy Director, Department of Mines

Mr. Keo Khamphavong MEM: DOM Deputy Director, Department of Mines

Mr. Saiphet Visaypaseuth MEM: DOM Division Head, Department of Mines

Mr. Bounnhong Sidavong MEM: DOM Division Head, Department of Mines

Mr. Kongkham MEM: DOM Deputy Director, Inspection Division of DOM

Mr. Sychath Boutsakitirath MEM: DEB Deputy Director General, Dept. of Energy Business

Mr. Khamphanh Sihavong MEM: DEB Deputy Chief of Project Development & Monitoring, Dept. of Energy Business

Mr. Vilath Phongphichith MEM: DEB Technical Officer, Dept. of Energy Business

Mr. Bouathep Malaykham MEM: DEM Deputy Director General, Dept. of Energy Management

Mr. Houmphanh Vongphachanh MEM: DEM Division Director, Dept. of Energy Management

Mrs. Chansavath Boupha MEM: DOI Director General, Department of Inspection

Ms. Viengkeo Sihalath MEM: DOI Technical Officer, Department of Inspection

Mr. Phouangphanh Souvannabout MEM: DEPP National Technical Consultant to 2a and 2c

Ms. Chansada Sonnasinh MEM: DPO National Consultant to DPO

Mr. Boaulay SaAthsy MONRE: DGM Deputy Director, Department of Geology and Minerals

Prof. Dr. Boualinh Soysouvanh NUOL Dean of Faculty of Engineering, Hydropower Section

Assoc. Prof. Nhinxay Visane NUOL Head of Department, Department of Civil Engineering, Faculty of Engineering

Assoc. Prof. Khampha Sihanakhone NUOL Head of Department, Electrical Engineering, Department, Faculty of Engineering

Mr. Thongpaseuth Phonesirinavong PTC Deputy Head of Mining Section

Mr. Keo Vilaythong PTC Teacher - Mining Section, Polytechnic College

Mrs. Ba Phengsouphy LGTC Teacher - Lao-Germany Technical College

Mrs. SisounthoneVongduangchanh PSO Financial Management Specialist, Consultant

Mr. Souphanthachak Sisaleumsak PSO Procurement Specialist, Consultant

Mr. Juergen Piechotta PSO M&E Specialist, Consultant

Ms. Vilayvanh Sisomboun PSO Project Coordinator, Consultant

Mr. Wihane Sibounheung TWG TWG Secretary, Consultant

Mme. Bouangeun Ounnalath MOF Director General, Department of Fiscal Policy

Dr. Sonsak Soulisak MOF Deputy Director General, Department of Fiscal Policy

Mme. Sifong Oumavong MOF Director of Division, Department of Fiscal Policy

Mr. Amphon Southiphonh MOF Director of Division, Department of Fiscal Policy

Mr. Lamphoon Syvoravong MOF Chief of Division, Department of Fiscal Policy

Mr. Sinxay Phetsavong MOF Deputy Chief Division, Tax Department

Mr. Phaytoun Tienglamay MOF Deputy Director of Division, Department of Taxation

Dr. Philany Phitsamay MOF Deputy Director General, Accounting Department

Mr. Hatsady Sithalath MOF Chief of Division, Accounting Department

Mr. Souvanny Khammanyvong MOF Deputy Director General, Department of State Assets

Mr. Duangdy Phandanouvong MOF Technical Officer, Department of State Assets

Ms. Viengsamon Kingmalay MPI Technical Officer, Department of Investment Promotion


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Ms. Veomanyphet MPI Technical Officer

Mr. Maniso Samontri NA Director General, Economic Department

Mr. BounOum Sivanpheng EDL EDL Generation Public Company

Mr. Sivath Sengdouangchanh A&G Managing Director, Allen & Gledhill


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Annex 2 – Results Framework

Project Development Objective (PDO): Increase human capacity and improve the performance of government oversight institutions for the hydropower and mining sectors

PDO Level Results Indicators* Unit of Measure

Baseline (2010)

Progress to Date Cumulative Target Values**

2014

2015 2016 2017 2018

Indicator One: Percentage of trained GOL staff report medium to intensive use of knowledge and lessons learned from capacity building measures.

Percent None Procurement of additional TA in progress, system being tested.

System developed

50 60 70 80

Indicator Two: Number of River Basins, where all Hydropower Projects are monitored for CA compliance.

Number 0 TORs for TA under development

- 1 2 3 5

Indicator Three: Percentage of on-the-ground inspections of exploration/mining operations performed using improved systems and procedures in line with international practice.

Percent 0 15 sites inspected which is about 10% of inspections of exploration/mining operations

10 20

30

40

50

INTERMEDIATE RESULTS

Intermediate Outcome (Component One) (AF): (i) Increased number of GOL personnel benefit from training on technical and cross-cutting areas in the hydropower and mining sectors; (ii) Increased capacity of national university and technical schools to develop national human resources in the mining and hydropower sectors.

Unit Baseline Progress to Date 2014 2015 2016 2017 2018

Intermediate Result indicator 1.1: Number of GoL female and male personnel trained on technical aspects, such as contract management, financial analysis, accounting, environmental and social management.

Number of staff

None 1,600 staff (474 female) 60 women 150 men

135 women 315 men

200 women 450 men

250 women 560 men

310 women 720 men

Intermediate Result indicator 1.2: Completed and operationalized the performance evaluation (KPI) system for MEM and PDEMs

Text No KPI system in place

A HRD system is being tested. Procurement of additional TA in progress

Mobilized additional consultant

Tested and trained on the application of KPI system

Approved the system by MEM

Operational ized the system

Assessment of overall results

Intermediate Result indicator 2.1: Number of teachers and students benefiting from educational courses supported through curriculum update/development, teacher training, technical/lab equipment and library materials

Number

0

324 teachers (93 females) and 5,767 students (1,002 females) Total: 6,091

4,100

4,200

4,300

4,400

4,500

Intermediate Result indicator 2.2: Direct project beneficiaries (number), of which

Number Percent

0 7,691 beneficiaries (1,569 females)

460 25%

700 25%

900 25%

1,060 25%

1,280 25%


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female (percentage)

Intermediate Outcome (Component Two) (AF): i) Enhanced planning capacity for hydropower development; (ii) Improved institutional processes and procedures for CA monitoring; (iii) Improved transparency and performance of hydropower development through the implementation of PSHD.


Intermediate Result Indicator 3.1: Percentage of Hydropower Power Purchasing Agreement (PPA) that are subject to the avoided costs methodology

Percent 0

TA is on board, work is in progress to develop avoided costs methodology

0

10

20

30

50

Intermediate Result Indicator 3.2: Completed power trade strategy and action plan.

Text No power trade strategy and action plan

TOR for TA consultant package being developed

Consultant mobilized

Round table consultation and draft strategy and action plan

Final Draft

Intermediate Result Indicator 4.1: Percentage of new hydropower IPP applying the standard CA requirements.

Percent 0 Draft Standard CA completed. Road-Testing is in progress.

0 20 50 80 100

Intermediate Result Indicator 4.2: Applied Standard Operation Procedures (SOP) for IPP process.

Text No SOP TOR for TA consultant package being developed

Consultant mobilized

Draft SOP Final SOP SOP Applied SOP Applied

Intermediate Result Indicator 5: Annual report on the implementation of the PSHD.

Text Original NPSH in place

Final signature from PMO is expected by December 2014

PSHD approved by MEM

Annual Report Annual Report Annual Report Annual Report

Intermediate Outcome (Component Three) (AF): (i) Improved Governance of the Mining Sector; (ii) Improved Government Oversight of the Sector.


Intermediate Results Indicator 6.1: Applied model contracts to new mining concession.

Text Non-standardize terms and conditions for mining concession

Draft model contract completed

Final draft of model contract

Moratorium on new mining concession still in place

Applied model contract to new mining concession



Intermediate Result Indicator 6.2: Number of approved mining regulations.

Number 0 4 final draft regulations completed. Public consultation is in progress.

4 6 8 10 12

Intermediate Result Indicator 6.3: Completed sector strategy and action plan.

Text No strategy and plan for mining sector

TOR for TA being developed. Mobilized consultant

Draft strategy Final Draft

Intermediate Result Indicator 7.1: Applied Standard Operation Procedures (SOP) for mining concession process

Text No SOP TOR for TA being developed. Consultant mobilized

Draft SOP Final SOP SOP Applied SOP Applied


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Annex 3: Financial Management Review

Financial Management. Overall the financial management performance remains “Satisfactory” for this mission. All financial management action plans in last mission such as updating FMM, amending the IFR to separate between original and additional financing sources, updating accounting software to include the new requirement in the IFR and agreeing the mechanism for public disclosure of the project audited financial statements are completed. Many quarters IFRs including the latest one were submitted timely and the audit reports were also submitted timely. To maintain the Satisfactory rating the following actions need to be taken.

FM staffing. The project should maintain the same numbers of staff in PSO finance unit. The existing FM Consultant is resigning and her contract will finish on March 31, 2015. The recruitment of the new FM Consultant is in progress and should be on board no later than February 28, 2015. This is to ensure proper work transfer within the finance unit of the PSO.

Budget. Since the fiscal year for this project is from January – December, the budget/work plans should also be done following this fiscal year. This is to enable the project management team to perform the quarterly variance analysis and include them in each quarter IFR. The mission noticed that the work plans submitted by some departments to be included in the annual budget for FY15 (ie: Jan 1 – Dec 31, 2015) are from Oct 1 – Sept 30, 2015. The project should inform each department to prepare the work plans from Jan 1 – Dec 2015 then submitted to the finance unit for consolidation into an annual budget. It was agreed that annual consolidated budget will be submitted to the Bank for review by December 2014.

External audit. The existing project auditor’s contract will expire in June 2015. FY14 is the final year audit for this existing auditor. The new project auditor is to be appointed and the auditor’s ToR should be submitted to the Bank for review as soon as possible.

Disbursement status. The cumulative disbursement as at November 7, 2014 for IDA H5390 is SDR 4.195 mil (equiv.to US$6.176 mil), which represents 83.91% of the total IDA grant of SDR 5 mil (equiv.to US$ 8 mil). The disbursement rate is considered on track as there are only about four contracts left to be disbursed under this original grant. When this original grant is fully utilized, we would like to remind the project to use additional financing Grant no. IDA H9470 first before using IDA Credit no. IDA 54490 as specified in the AF financing agreement.

Advances. From reviewing the Project advance control books, there is only one delay in advance from Department of Mines (DOM). We encourage DOM to assign someone to prepare and submit the expenditure summaries to PSO finance unit on time. The project FMM requires that advances be cleared within 14 working days.

Project Fixed Assets. Physical verification of assets has not yet been conducted. Management Letter in FY13 recommended the project to perform the physical count of fixed assets. Up to November 2014 the physical count of fixed assets is pending. The project should arrange the year end count of fixed assets by December 31, 2014.

Transaction review. FM team conducted SOEs and payment transactions review from WA# HMTA-33 to 46 and WA# TF-11 to 30 during the mission. We found that one per diem and accommodation receipt for one participant does not specify the numbers of days charged for per diem and accommodation, one payment voucher was not approved by the project director, one receipt is not dated, one training was conducted for 20 days but participant signing sheet does not specify from which date to which date is the training for and one training in Indonesia boarding passes were obtained on the arrival date but not on the departure date. The detail findings information was discussed with the project FM team and will be sent to the project in a separate communication. We recommend the PSO finance team to carefully review the supporting documents especially for the training category as these issues can lead to ineligible expenditures if not properly monitored in the future.


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Annex 4: Procurement Review

Procurement Plan: The mission discussed the procurement plan status with PSO and some additional proposed activities. There is limited progress on the procurement activities of the HMTA-AF and some procurement packages which indicated the procurement process in Q3 and Q4 of 2014 are behind schedule. PSO will submit the updated procurement plan, including any proposed changes to the Bank for no objection by end of November 2014. PSO recently submitted a number of SSS requests to the Bank which are not listed in the agreed procurement plan. The PSO agreed to prepare a separate procurement plan of the original HMTA which will finance the SSS contracts and submit to the Bank for no objection prior to sending any additional request. The draft HMTA updated Procurement Plan will be submitted by November 2014.

Some individual positions which were advertised in the newspaper got only few expressions of interests and less than three CVs. The mission suggested PSO to re-advertise those positions in one joint advertisement. The notice should be posted at the associated colleges and MEM’s bulletin board, including direct approach to any potential qualified candidates. PSO will start the re-advertise process by November 14.

The mission followed up on the request clarifications on the FY14 procurement post review. The Procurement Consultant would check the status and would respond to the request. The mission informed him that the next FY15 procurement post review will be conducted during the next implementation support mission.

Procurement Tracking Table: It was agreed during the AF preparation that PSO will use the procurement tracking form to monitor the actual procurement progress from the approved procurement plan so as to identify any slippage from the plan and coordinate with IDs. There is no updated on the tracking form and no updated on the ‘List of Signed Contract’ since the Procurement consultant came on board in May. It was agreed to update those tables and have them ready for the next mission.

Capacity Building: During the HMTA-AF preparation, it was agreed to strengthening the implementation arrangement of the HMTA-AF especially on the procurement function by assigning one full time staff to work with PSO, and the re-definition of roles and responsibilities between sector departments and PSO. The mission was also informed during last mission that a new full time staff has been identified to work as a procurement officer to get the knowledge transferred from the Procurement Consultant. The mission followed up on the progress and the status and was informed that the mentioned MEM staff did not join PSO and Mr. Keosanguan who was assigned from the beginning of HMTA has left for his study abroad. The mission strongly recommends the MEM to assign a new staff with good English (as most of the procurement documents are in English language) to work full time with the Procurement Consultant. The issue of the MEM’s capacity building and knowledge transfer have been raised from the beginning of the original of HMTA and followed up every mission, there is no good progress on this matter. The Bank would request MEM to seriously consider this matter and advise the Bank the name of the assigned staff to take the important role by November 12.


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Annex 5: Draft Terms of Reference for Power Sector Development and Reform

Laos: Power Sector Development and Reform

Draft Terms of Reference

November 12, 2014

A. Introduction

Lao PDR (Laos) is a relatively poor, land-locked country which has significant natural resource

wealth, mainly hydropower potential and mineral deposits. The Laos economy has been growing

rapidly over the last decade, as has the demand for electric power. The country is still primarily agrarian,

but industrial growth is an important element of the country’s economic future.

Over the past twenty years, the Lao energy strategy focused on hydropower development and

the electrification of the country. The export of electricity has become one of the main pillars of the

country’s economic and social development; and a significant increase in fiscal revenue from

hydropower exports has helped to increase incomes and reduce poverty. The national electrification

program has delivered an impressive increase in access to electricity from 15% in the mid-1990s to

about 90% in 2014.

On the other hand, an aggressive hydropower development program has increased

environmental and social risks, and exposed institutional and regulatory weaknesses in the sector.

Furthermore, while the country developed significant export capacity (which will increase substantially

in the next couple of years) the domestic power market has been underserved and remains prone to low

reliability and pressures to import electricity due to an underdeveloped and inefficient transmission and

distribution network.

With numerous projects at various stages of development, it is expected that there will be a

substantial power surplus by 2017. Given its wealth of hydro resources and geographic location, Laos

will continue to be a significant electricity exporter in the Greater Mekong Sub-region (GMS). In the

future, it could also emerge as a transmission hub and linchpin of the GMS power market. To be both a

reliable supplier and wheeler of power much will be required, including a substantially improved power

grid, as well as a suitable legal, regulatory and institutional framework. Therefore, the new strategy

should recognize the importance of improving the quantity and quality of power supply in the domestic

market, while integrating the Lao power grid both internally and in the regional power market. A key

objective is to mitigate the potential risks and optimize the benefits of a hydropower build-up.

B. Current Power Sector Structure

The rising electricity demand in Laos has been met by: (a) hydropower plants wholly owned by

Electricite du Lao (EdL) and its subsidiary EdL-Gen; (b) Laos’ share in and purchases from

export-oriented IPPs (Independent Power Projects); and (c) electricity imports from Thailand, China,

and Vietnam. To supplement domestic power generation, Laos imported about one-third of its

electricity needs (1.2 TWh out of 3.4 TWh) in 2013. About 80 percent of imports came from Thailand,

18 percent from China, and 2 percent from Vietnam. The cost of imports reached US$65 million in

2013, or about 0.6 percent of GDP. In the absence of imports, EdL is both capacity and energy short;

but, as noted above, with the numerous generation projects under development there will be a surplus

by 2017.

By 2013, the total electric energy sales through the national power grid reached 3,381 GWh

with residential customers accounting for 38 percent, followed by the industrial sector at 33 percent and


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the commercial sector at 22 percent. The power transmission and distribution losses averaged about

16-17 percent in 2012, with some areas experiencing losses of over 20 percent. It is estimated that the

distribution losses are about 14.3% of the total wires losses, including around 6% of non-technical

losses. Transmission losses are estimated at about 2.5%.

The power sector is under the overall supervision of the Ministry of Energy and Mines (MEM).

EdL is a publicly owned, vertically integrated utility responsible for the generation, transmission and

distribution of power in Laos. Under the current market structure, EdL is the single buyer of electricity

to serve its domestic customers and also has sole responsibility for the transmission and distribution

businesses. EdL is the majority owner of EdL-Gen which owns and operates 387 MW of hydropower

and also purchases from IPPs. A major thermal export IPP (Hongsa Lignite, 1878 MW) is expected to

be in service in 2015. As with all export IPPs, EdL will receive a percentage of the energy from Hongsa,

which will become an important part of its overall generation mix.

EdL provides transmission services in Laos in four service areas: north, central, and two

southern zones. The power grid is not integrated and there isn’t power exchange at high voltage levels

between all these zones, which necessitates imports of electricity at the distribution level. Also, there

are high voltage lines (230 kV and 500 kV) associated with export IPPs – such as Theun Hinboun,

Houay Ho, Nam Theun 2, and Nam Ngum 2 – but these currently bypass the Lao grid. As these

facilities (both generation and transmission) will revert to Laos at the end of the concession period, they

should be considered part of the sector’s long-range plans. The Lao Holding State Enterprise (LHSE)

manages the state’s holdings and facilitates generation investments and currently owns stakes in several

IPP projects. The current operating structure of the Lao power sector is shown below.

C. Power Trade and Current Export Business Model

The bulk of Lao exports are based upon export IPPs that are developed on a BOT basis with

long-term PPAs and transmission systems that are dedicated to the projects’ exports only. Nam Theun

Current Operating Structure of the Lao Power Sector

Electricité du Laos (EDL)

Non-integrated Transmission System (230kV and 115kV) (North/ Cental - South)

Distribution (67% of total households)

Single Buyer and Retail

Power imports (from EGAT, PEA,

EVN and Yunnan/China)

Domestic IPPs

Power sales to Cambodia (EDC)

IPP projects with export to

Thailand since 1998

Privately owned transmission facilities

through dedicated lines and substations

EVN

IPP projects with export to

Vietnam by 2012

Large consumers

EGAT

Lao State Holding Enterprise (LSHE)

NT2,HSA, NN3, NNGP1, XPXN, SK4, SK5, NK1,

NT1

Power Exchange with EGAT

EDL- GEN (public)

Subsidiary of EDL, own & operate

387 MW of hydropower


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2 and the projects mentioned above are examples. GoL also has a stake in the export IPPs and receives

revenues, not only from dividends, but also from taxes and royalties. EdL is a contractual off-taker from

each of the export IPPs; but it does not provide grid services. This model is inherently less risky for

IPPs and, despite the high cost of the dedicated power lines, attracted significant investments in the

past.

In the current phase of the GMS power market, any substantial electricity trade among the

countries has been primarily project-based, with power transmitted cross-border via dedicated

transmission lines. The next phase of the GMS market, toward which Laos and the region are moving,

will involve more substantial transactions between and among country grids. This is called

system-to-system (or STS) trade in these TORs. While some export IPPs may continue to be developed,

the new model envisions that a substantial export business will be maintained, albeit via transactions

that will flow from the Lao grid to neighboring systems. In effect, this means that significant power

surpluses are likely to be acquired – over and above domestic requirements – for the purposes of

cross-border exports.

Laos expects significant benefits from its evolution to an STS mode of doing business. Among

them are that the Lao grid will be internally integrated and connected with neighboring countries, which

will have broad implications for the country, including more reliable in-country electricity service. An

enhanced grid will also put downward pressure on prices, as the ability to move low cost power from

the sources to the users will be improved. In addition, because Laos will be in a position to aggregate

and sell power from a range of resources, it will be able to enhance their value and returns to Laos.

D. Challenges of the Power Sector

Meeting Future Domestic Energy Demand: Demand for electricity has grown rapidly in

recent years. The peak load demand rose from about 209 MW in 2003 to 649 MW in 2013, growing on

average 12 percent annually. This demand increase has been driven by the commercial and the

industrial sectors, and by rising rate of electrification in the country. The grid remains weak; large

portions of the country are not covered and some regions are not connected to one another. Parts of the

country cannot be supplied by domestic generation resources and, as a result, EdL is required to import

power to serve customers in these areas. To improve security, reliability and efficiency of power supply

in the domestic market, the Government aims to attract investment to promote additional network

development to serve domestic load.

Limitations of Current Export-Oriented IPP Model: The power sector has developed rapidly

in the past following a model of export oriented power projects (i.e., export IPPs) and associated

network infrastructure. Despite its successes, this model has its limitations today. The dedicated

transmission facilities developed under the export IPP model tend to be more suitable for large

hydropower developments. The number of very large projects in Laos that can be done on a BOT basis

is sure to dwindle in the future; and a different transactional model will be required for the maximizing

the benefits of smaller scale projects. The export IPP approach of developing hydropower for

cross-border sales may not be suitable for maximizing the benefits from the sale of power from Laos’

large potential of smaller and medium sized hydropower. To optimize benefits from the country’s

overall portfolio of hydropower projects, the Government is developing a new strategy (i.e.,

system-to-system transactions).

The Financial Situation of EdL is Declining: The root causes of the declining financial

viability of EdL are: (i) continued investments in hydropower generation; (ii) high distribution losses;

and (iii) accumulation of arrears due to non-payment for electricity services provided to public entities

(such as irrigation systems, Public Street lighting etc.). Also, EdL is the signatory on numerous Power


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Purchase Agreements (PPAs) for IPPs whose output will not be required by EdL, thus causing a surplus

of generation in the power grid. In the absence of any changes to the institutional and contractual

arrangements, the financial risks associated with marketing this surplus will be to EdL’s account, as it

has been the contractual (PPA) purchaser of power from the IPP projects. The Government recognizes

the need to improve financial situation of EdL and has developed the second Financial Viability Action

Plan (FVAP2) that includes, inter alia, a reduction in accounts receivables and the elimination of

non-technical distribution losses. The Government aims to improve the financial position of EdL and

its long term sustainability, as it is critical for the future development of the power sector.

The Current Power Sector Structure is Inadequate: The role and responsibilities of EdL are

not clearly defined and the utility takes on financial responsibilities that negatively impact its core

business. For example, investments in hydropower are above EdL’s financing capacity. Currently, EdL is

building more than 1,000 MW of hydropower plants for the domestic market (about a quarter of the 4,000

MW which is currently under construction in Laos). It is expected that the new hydropower assets will be

transferred to EdL-Gen after their completion, while EdL would keep liabilities (debt etc.) associated

with the construction of these plants. Also, hydropower investments carried out by EdL shifted financial

resources away from its core T&D business. Due to large investments in hydropower EdL is

under-investing in its core business (power transmission and distribution) which contributed to increasing

T&D losses. Government aims to review the overall market structure and the roles and responsibilities of

EdL and other participants in the market.

Lack of Efficient Regulatory Oversight and Power Sector Pricing: While the average retail

tariff (about 7.1 US cents/kWh) appears close to the economic cost of electricity supply in Lao PDR, it is

significantly below the cost of electricity imports (about 10 US cents/kWh). The end-user tariffs should

reflect the full economic costs of electricity supply provided collectively by EDL, EDL-Gen and IPPs.

MEM should establish T&D tariffs for EdL which will be passed-through to end-users together with other

eligible costs of power supply. If any subsidy (or cross-subsidy) is needed to protect vulnerable

consumers, the subsidy should be transparent, well targeted, and affordable in order to avoid

accumulation of financial losses in EdL. If accumulation of financial losses continues it will lead to

de-capitalization of EdL and decline of its creditworthiness; this would, in turn, undermine EdL’s ability

to invest and maintain existing assets and lead to a decline in reliability and quality of electricity supply in

the domestic market. Government aims to establish an efficient regulatory and pricing regime for power.

E. Current Laos Energy Policy

The Government is currently preparing ‘vision 2030’ in the energy sector, together with the

strategy 2025 and the next 5-year plan 2015-2020. The vision and strategy for the sector are

conceptually formed and include:

Access to electricity for over 90% of the population;

Sufficient supplies to adequately serve load, including new industry;

Promotion of renewable resources;

Minimizing the environmental and social impacts associated with energy supply.

F. Objectives of Technical Assistance

Laos faces substantial challenges in the power sector and seeks to develop a comprehensive new

strategy to ensure a secure, reliable and efficient power supply in an environmentally and socially

sustainable manner to both domestic and export markets. This TA will support the Government of Laos

in developing a relevant market structure and policy, institutional and regulatory framework that


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governs the sector in the future. This is a large undertaking and the TA will be implemented in phases

to ensure it is aligned with the Government’s development of Vision 2030.

G. Scope of Work

The scope of work required to achieve the above objectives is described in detail under the three

tasks below. The primary focus of these Terms of Reference (TORs) is on the evolving export business

in Laos, the domestic network development requirements and its implications for the structure of the

power sector. The largest part of the Consultant’s work will be the analysis of strategic options for Lao

PDR power market reform and restructuring and recommendation of a suitable reform path.

This will include the development of an appropriate policy, regulatory and institutional

framework. This will also require a range of issues to be addressed, among others: the institutional

arrangements for planning, procuring, and selling power cross-border; institutional arrangements for

developing and operating the domestic grid; the development of policies for mitigating the major

business risks; addressing issues associated with providing electricity service to new, major industrial

loads; and identifying the nature of potential beneficial regulatory arrangements.

As part of its assignment, the Consultant will consider the suitability of existing institutional

arrangements for the power sector in terms of mobilizing investments and managing sector reform

effectively. The Consultant will review and assess the current policy framework, as well as any

on-going ideas, discussions or plans to revise any of its relevant parts. A further area of study will be

the financial structure and sustainability of entities operating in the energy sector and the investment

and financing needs required for effective and sustainable development of the energy sector.

Although a detailed assessment of international experience is not required, it is expected that the

Consultant will be informed by pertinent international examples.

Task I: Conduct a Detailed Review of Current Power Market Structure and the Policy,

Regulatory and Institutional Framework that Governs the Sector

Under task I the Consultant will conduct a detailed review of the Lao power sector and the

current market, policy, institutional and regulatory arrangements and assess strength and weaknesses of

the current framework. This will be achieved through the development of an initial “data review”,

making use of all existing studies and information related to the energy sector. Field collection and

confirmation of data is expected to be significant. The Consultant will:

Review/assess pertinent sector documents, consultant’s reports1, laws and policies and meet with

key sector stakeholders so as to strengthen its understanding of the sector in its current form;

Review/assess policy, institutional and regulatory framework that governs the sector;

Review/assess current Government energy policy and vision.

Review/assess the current power market structure, the roles and responsibilities of EdL and other

market participants;

Review/assess the financial structure and sustainability of entities operating in the sector (e.g.,

EdL; LHSE, EdL-Gen, etc);

1 Among other studies, the GoL has commissioned and completed in 2013 a comprehensive series of studies

covering power sector institutional, legal and regulatory framework aspects by the consultant Societe

Francaise de Conseil – SOFRECO.. This report, together with other past reports of relevance to the

Consultant’s work, will be made available.


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Review/assess the power system’s features, supply and demand balance and energy mix, including

relevant terms of PPAs for the IPP projects currently under development;

Review/assess power system planning, how and by whom performed, its overall quality;

Assess medium to longer-term (2030) prospects for regional power trade from the perspective of

Lao PDR.

Output: The main output of this task will be a report on the current situation of the sector, analysis of

the sector strengths, weaknesses, opportunities and threats (SWOT analysis), supply and demand

balance and the Government’s vision of the future market structure. This report will be finalized four

[4] months after commencement of the study and will be submitted in both English and Lao.

Task II: Develop Reform Options and Recommend Reform Path for Lao Power Sector

Based on the results of detailed data review and SWOT analysis, the Consultant will:

Conduct a detailed analysis of the current challenges facing the power sector and assess main risks

and identify mitigation measures;

Assess relative benefits, costs and risks to EdL, GoL, and other Lao entities associated with the STS

export model(s) and recommend the approach best suited for the Lao PDR taking into account

relevant interational experience;

Identify and assess options for power sector reform and restructuring which will optimize benefits

and mitigate risks of the recommended export model. Carry out a comparative analysis, recommend,

formulate and write-up the preferred option for power sector reform and restructuring, including the

specific functions and responsibilities of EdL and other market participants: e.g., EdL, EdL-Gen,

and LHSE. This should include the power purchasing and sales function as well as transmission

ownership and operation. It should also include the management and operation of the BOT

projects that will be turned over to Laos at the end of the pertinent concession periods. For each

option, the specific functions of each existing sector entity should be clearly identified; similarly, if

any new sector entity is recommended, the same is required.

Address how and by whom power system planning would be performed for the various power

sector structure options;

Address the financing needs required for effective development and management of the power

market reform and restructuring based on “best case scenario” without any resource constraints;

Discuss financing options for future transmission and distribution network development (private,

public, etc.) and address the general nature, availability and costs of outside financing including

foreign direct investment and loans;

Develop suitable power sector regulatory regime (Who should regulate, what should be regulated

and how regulation should be conducted?)

Identify tariff setting options for the recommended power sector structure and recommend a suitable

transmission tariff regulatory regime based on international experience.

Develop guidelines for the generation pricing policy and recommend suitable regulatory regime for

pricing of new power generation;

Identify key policy steps, capacity building needs, milestones and targets for the power sector

reform based on the above analysis.

Output: The main output of this task will be a report on the current challenges of the sector and options

for a reform path, key policy steps required and capacity building needs. This report will include a


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Summary outlining all key recommendations and conclusions, and the essentials of the strategic reform

path analysis. This report will be finalized eight [8] months after commencement of the study and will

be submitted in both English and Lao.

Task III: Develop a Roadmap, Detailed Action Plan and Investment Program for the Power

Reform Path

Once the GoL has decided on strategic directions and priorities for power sector reform and

restructuring, on the basis of the options outlined by Consultant and the recommendations for the power

sector reform path, the Consultant, in close coordination with GoL, will develop a detailed road map,

action plan and investment program for implementing the power market reform, policy, institutional

and regulatory, arrangements and capacity building to support the sector reform and restructuring. The

road map and action plan will include the sequencing of steps that need to be taken to implement the

power sector reform path as well as estimated time frames for doing so; investment program and its cost

estimates and timeline necessary to fulfill the Action Plan; and to carry out consultations with relevant

stakeholders.

Output: The main output of this task will be a Roadmap, detailed Action Plan and Investment Program

for power market reform. This will be finalized twelve [12] months after commencement of the study

and will be submitted in both English and Lao.

Task IV: Just-in-Time Services

In addition to the foregoing tasks, it is anticipated that advice will be required on various matters

from time-to-time, on an as-needed basis. It is expected that the focus will be in two related areas: (1)

the commercial and technical aspects of cross-border STS trade; and (2) the requirements for

coordination between the Lao and other grid(s) necessary to effectuate the transactions. At present,

Laos and potential cross-border counter-parties engage in on-going discussions regarding trade products

and delivery arrangements.

While the specific matters that may arise cannot be identified beforehand, the just-in-time

advisors should have significant professional experience with regard to power system planning and

operations, as well as transactions involving, for example, short- and long-term sales of peak and

off-peak energy, firm and non-firm power; and so on. This could include advice regarding how much

to sell, for what time periods, at what prices, and so on. The services sought here are not legal

services or a detailed transaction advisory, but are more of a commercial and technical nature.

The services here will not require the preparation of major reports. However, it is anticipated

that short written notes may be required from time-to-time, on an as-needed basis.

H. Outputs, Timelines and Implementation Arrangements

The Consultant will work in coordination with, and under the direct supervision of, an

on-going Working Committee led by the Direct General of DEPP. All deliverables will be provided,

in English and Lao, to that Committee, with copies to the World Bank. In addition, for purposes of

this work, a high level Steering Committee will be formed to provide overall project strategic advice

and guidance. It is expected that the Steering Committee will include representatives from MEM, MOF,

Ministry of Planning, Ministry of Environment, and other relevant agencies involved in the power

sector development and reform.

The Consultant will deliver brief Monthly Progress Reports, to keep the GoL succinctly

informed regarding the progress of this assignment and related administrative issues. Such Progress


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Reports will include updates to the project schedule and task-flow diagram. The Progress Report will

also serve to set out the work program for the following months, while ensuring the GoL remains

satisfied with the project’s direction.

The Consultant will organize two stakeholder workshops after the delivery of Tasks II and III,

or at another time to be mutually agreed. A Final Report will reflect the consensus outcome of

stakeholder discussions and will include: (a) a detailed analysis of the current market structure, policy

regulatory and institutional arrangements; (b) reform options and a recommended reform path; and (c) a

Roadmap and detailed Action Plan and Investment Program for implementation. In addition, the

Consultant’s team leader will be required to be present at two Round Table discussions with the GoL, to

be organized by the client.

Output/ Milestone Deadlines

Task I Report Contract signing + 120 days

Task II Report Contract signing + 240 days

Final Report (including Task I, II and II) Contract signing + 365 days

Task IV Services Ongoing, as required, beginning

immediately after contract signing

I. Key Required Qualifications and Skills

The table provides indicative qualifications and skills requirements and person-days by type of

expertise as well as an estimated aggregate level of required inputs from international consultants. The

consultants should provide their proposals based on their assessment of required skills mix, input levels

per skills type and aggregate input needs. Local expertise will, however, be critical for successful

execution of this assignment, particularly a solid knowledge and understanding of the Laos power

sector and network system to conduct Task I of the assignment.

Staff Indicative

person-da

ys

Skills Required

Power Sector

Restructuring

Expert (Team

Leader)

110 At least Master’s Degree in Finance, Engineer Economics or Business

Administration. At least 15 years of relevant international experience in power

sector restructuring. The Expert should have broad international experience on

all policy, pricing, regulatory and issues related to power sector reform and

should preferably have good knowledge of the energy sector in Laos. As the

team leader, he/she will be ultimately responsible for the team and the outputs of

the assignment.

Power Market

and Regulatory

Expert

90 At least Master’s Degree in Energy/Power Systems, Economics, Law or

Electrical Engineering. At least 15 years of relevant international experience,

including in power markets, policies and regulations related to power sectors in

both competitive and non-competitive markets.

Power Engineer 50 At least Master’s Degree in Power Engineering, Civil Engineering or other

engineering field. At least 10 years of relevant work experience in developing,

planning and/or operating integrated power systems, encompassing both

generation and transmission planning. Familiarity with power plant dispatch

economics, hydrothermal coordination and integration in power markets is

essential.

Commercial

Power Trade

Expert

50 At least 10 years undertaking transactions or, at a senior level, advising clients

regarding transactions. The transactions referred to should be for, inter alia,

various peak and off-peak, short-and long-term energy products; short and long


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term firm products; and so on. The expert will be required to provide some of

the just-in-time services pursuant to Task IV. An understanding of the

pertinent contractual arrangements is essential; but legal expertise is not

required.

Power Sector

Financial

Expert

50 At least Master’s Degree in Economics/Finance, Business Administration. At

least 10 years of relevant work experience in power sector financing of in

developing and developed countries and in various market models (competitive,

non-competitive).

Local Expert 50 At least 15 years of relevant work experience in the Lao power sector and

knowledge of its legal, regulatory and market arrangements.

Total 400


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Annex 6: Draft Terms of Reference for CA Monitoring (IPP Process)

Laos: CA Monitoring (IPP Process)

Subcomponent 2B, 2C and 2D – Management and Monitoring Support, Capacity Building

Programme Update Technical Guidelines and PSHD Implementation

Draft Terms of Reference

November 25, 2014

1- Background and National Context

Lao PDR has large hydropower resources in a region where power demand is growing rapidly. Total

electricity consumption in Laos has grown at an average rate of 12 per cent annually in the last ten

years, mostly due to developments in the mining sector. The total installed hydropower capacity in

Laos is currently 3,293 MW, of which 878 MW is for domestic supply and 2,150 MW is for export.

Hydropower projects currently under construction have a total installed capacity of 5,553 MW of which

2,539 MW is for domestic supply and 3,014 MW is for export.

In Lao PDR, historically the development of hydropower resources has been investor-driven.

Independent Power Producers (IPPs) and other private investors have been engaged in power

generation activities in Laos since 1988. IPPs form the majority of Lao PDR´s total power generation

capacity and are a crucial part of the country´s electricity sector, undertaking investments in generation

capacity which the government would not be able to finance on its own.

The development of the hydropower sector to date has been done on an ad hoc basis, driven by FDI and

revenue prospects rather than integrated strategies (energy and water). Lao PDR country-specific

circumstances pressure the government of Lao PDR (GOL) to make difficult choices when the private

sector comes with unsolicited proposals to develop Lao PDR hydro-resources.

These choices usually require a clear policy framework and sector strategy. Lao PDR’s institutional

capacity to effectively select, oversee, monitor, and manage a large number of hydropower projects

needs to be strengthened. Rapid development of hydropower project outstrips the pace of

development of institutional capacity to manage and monitor IPPs in the Lao PDR.

The GOL has put in place important building blocks for the effective management of the private sector

led and investor driven hydropower development. The GOL has enacted laws (e.g. Investor Promotion

Law, Energy Law) and regulations, and has put in place key management tools such as standard

model Concession Agreement (Standardized CA), Standard Environmental and Social Obligations

for Hydropower Sector (SESO), minimum requirements for Feasibility Studies and most recently, the

National Policy on Sustainable Hydropower Development has been updated to cover technical,

engineering, economic, and financial aspects, and it has been renamed “Policy on Sustainable

Hydropower Development” (PSHD)2.

Institutionalization, the effective application of the PSHD, and the implementation of follow-up

activities are critical to the sustainability of the hydropower sector and to enable effective private sector

2 Following Prime Minister approval expected in the last quarter of 2014, the PSHD would be applied throughout the project

development process for all hydropower projects irrespective of their sizes. [To be confirmed with DEPP].


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participation. Further work is needed to fully operationalize the PSHD. There is work to be done on

refining and disseminating the revised PHSD and Standardized CA—including raising awareness of the

revised policy and Standardized CA within and beyond Government, and building capacity to identify,

develop and manage the hydropower projects within the PHSD framework.

In parallel, the GOL needs to move forward with implementing hydropower transactions

following the principles and processes set out in the PSHD and the Standardized CA, thereby

achieving value from those projects, and demonstrating commitment across GOL to follow the

country’s legal and regulatory framework and enforce Concession Agreements in practice.

Only by giving concerted attention to the process of concession contract management and monitoring,

will the GoL be able to fully implement the PSHD and achieve full value from its exploitation of its

hydropower endowment.

During the investment process to obtain a hydropower concession developers follow a staged process

which involves the agreement and signing of three key pieces of documentation, namely: the MoU, the

Project Development Agreement (PDA), and the Concession Agreement (CA) and reaching commercial

operation date (COD) and transferring the project back to GoL upon expiration of concession (the “IPP

Process”)

The GoL has a fundamental interest in ensuring the PSHD is effectively and consistently applied

throughout the IPP process, in accordance a broad range of objectives that take due regard of

developing and implementing highest priority hydropower projects that will deliver the most value to

assure long term sustainable growth and development. Implementation of the PSHD is an integral part

of the IPP Process covering the entire life cycle of hydropower planning, construction, commissioning,

operation and transfer stages.

1.1 The Hydropower Sector Organization

Various institutions are involved in the Lao PDR electricity sector with which developers must interact

in the IPP process. The Ministry of Energy and Mines (MEM) under the includes three

directly-concerned departments (Department of Energy Policy & Planning (DEPP); Department of

Energy Management (DEM), Department of Energy Business (DEB) that, along with the Department of

Environment and Social Impact Assessment (DESIA) of the Ministry of Natural Resources and

Environment (MONRE) and the Investment Promotion Department (IPD) of the Ministry of Planning

and Investment, are key agencies responsible for the IPP Process. A brief description of the roles of

these leading departments (in accordance with Ministerial Decree 0641/MEM dated May 10, 2012) in

the IPP process follows:

The Investment Promotion Department (IPD)

Point of Entry for investors – it is the one-stop-service for providing information on the investment

process in Lao PDR. The IPD administers the foreign investment system and reviews investment

applications in accordance to the Investment Promotion Law. The GoL establishes also the Committee

for Investment Promotion (CIP) at the central and local levels.


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Department of Energy Policy & Planning (DEPP)

Responsible for policy formulation, strategic planning including collection and processing of data on

electricity generation potential, and preparing and implementing regulations regarding generation and

transmission development.

Department of Energy Management (DEM)

Responsible for management, examination, monitoring and inspection of the design construction and

operation of energy development projects including, substations, transmission, distribution system and

energy usage in accordance with technical standards, security and safety rules required by laws and

regulations.

Department of Energy Business (DEB)

Responsible for monitoring and managing investment in the Lao power sector and having primary

responsibility for representing the Government in all negotiations, agreements and interactions with

private sector developers reviewing and commenting on project studies and documents and making

final recommendation for MPI regarding the execution of hydropower concession agreements.

Department of Environment and Social Impact Assessment (DESIA)

Acts as a Secretariat in the Environmental and Social Impact Assessment (ESIA). It is directly

responsible for approving the ESIA and negotiating and approving the Standard Environmental and

Social Obligations (SESO) as well as mitigation plans prepared by the project Developers, which

become part of the Concession Agreement and, then, used for monitoring their execution by the

Developers in conformity with the agreement.

In addition, in line with delegation policies to provinces and local authorities, at provincial (local) level

an organization system that mirrors the central organization system of MEM has been put in place. The

Provincial Department of Energy and Mines (PDEM) is directed by MEM and managed by the

Governor of the relevant Province. It has responsibility to follow-up the developer’s work progress for

implementation of a hydropower project. Attachment 2 shows the organization and responsibilities

of different agencies for implementation of the IPP Process at central and local levels.

1.2 Hydropower and Mining Technical Assistance Project

Since 2010, the International Development Association (IDA – World Bank Group) has provided a

grant to the GoL -- the Hydropower and Mining Sector Technical Assistance Project (HMTA). The

development objective of the HMTA is to increase human resources capacity and improve the

performance of Government oversight institutions for the hydropower and mining sectors. HMTA

comprises four components:

Component 1. Joint Hydropower and Mining Learning Program

Component 2. Hydropower Sector Development.


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Component 3. Mining Sector Development.

Component 4. Project Administration and Management.

Component 2 is divided into four sub components as follows:

Subcomponent 2 .A. Hydropower Policy Planning

Subcomponent 2. B.1 Hydropower Concession Agreement Management and monitoring support,

including technical, engineering, environmental and social safeguards and CA Compliance

Subcomponent 2. C Hydropower Management – update technical guidelines and DEM Capacity

building

Subcomponent 2. D Implementation of the PSHD. – Development of Guidelines and

Monitoring and Evaluation on PSHD Implementation

The HMTA resources were fully committed with key studies concluded and capacity building under

way. In 2014, the GoL obtained additional IDA financing under the HMTA. The HMTA Additional

Finance (HMTA AF) is intended to support institutional sustainability by financing sector management

improvements through the operationalization of upstream work (legal, regulatory and technical aspects)

while continue to strengthening organizational as well as managerial and technical human capacity

development. The MEM is ready to implement the HMTA AF. Under the original HMTA, a

comprehensive advisory study3 was commissioned and has been completed by the consultant Societe

Francaise de Conseil - SOFRECO (the SOFRECO Consultancy) for the requirements of

Subcomponent 2b covering the institutional, technical, financial and legal aspects of hydropower

concession management and monitoring.

The output of the work carried under the original HMTA, is not limited to the institutional, technical,

financial and legal aspects but covers a gamut of subjects under a number of expert reports as listed in

Annex 1. These expert reports will be available to the selected Implementation Consultant Support

Team as reference material and as a starting point for the delivery of services under this Terms of

Reference.

An important lesson learned from the implementation of the original HMTA is that in the context of

low absorptive capacity, the various inputs from international consultants working separately on

specific components can be of limited effectiveness, in particular when consultant’s recommendations

require follow-up consultations, coordination with components studied by other consultants and/or

training of GoL staff. In order to ensure timely procurement and coordination and promote synergies

and consistency among consultancy outputs, this Terms of Reference club together a number of topics

and recommendations made under the HMTA.

In order to address the issue of sustainability of capacity development efforts this Terms of Reference

apply to the services required from an international consultancy company to deploy an “Implementation

3 Institutional, Technical, Financial and Legal Advisory Services for IPP Hydropower Concession Management.

SOFRECO. Final Report March 2014.


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Consultant Support Team” to provide technical guidance, training and oversight to IPD, DEPP, DEM,

DEB and DESIA to implement the recommendations of the SOFRECO and other Consultants Reports

for HMTA’s Subcomponents 2B , 2C and 2 D (together “Annex 1 Reports). Another lesson learned

from HMTA implementation is that inter-agency and inter-ministerial coordination needs to improve.

In line with delegation policies to provinces and local authorities it is necessary to extend technical

assistance support to MEM staff at provincial and local levels as well as to facilitate agreement on

operational policy and /or procedures between central and local agencies. As such, in addition to formal

training, an on-the-job training approach will be applied for building capacity of MEM staff and PDEM

through involving all levels ranging from high-level management to technical level. It is anticipated that

at first stage the focus will be on building capacity of MEM staff at central government level. In turn,

staff from central government will continue and intensify the current practice of training staff at PDEM

level. It is not envisaged initially to deploy international consultants to the provinces, other than to

make an assessment and to develop a capacity building program for PDEMs as further detailed in this

ToR.

The key performance indicators under the HMTA-AF related to this ToR is the increased incidence

of compliance with concession agreements and full implementation of the PSHD, enhanced capabilities

in data collection and development planning to serve the needs of the hydropower sector.

1.3 Objectives

The objective of the Terms of Reference is to describe the services of an Implementation Consultant

Support Team to carry out a range of consulting services with respect to:

Institutionalization and operationalization of the PSHD– assessment of institutional, legal and

regulatory framework for implementation of the PSHD, and

Strengthening the capacity of the GoL agencies including IPD, DEPP, DEM, DEB, DESIA and

PDEMs to deliver their respective mandates related to the implementation of the PSHD through

the management and monitoring of the IPP Process by harmonizing their duties and

responsibilities, reinforcing human resources capacity -- and putting in place institutional

arrangements, operating rules and procedures with an adequate quality control process.

This Consulting Services’ objective has a number of constituent components including:

Assessment of Institutional, Legal and Regulatory Framework

Assessment of IPP Process – review of Memorandum of Understanding and Project

Development Agreement templates

Develop Standard Operating Procedures covering entire IPP Process

Reorganization of the work process of IPD, DEPP, DEM, DEB and DESIA

Technical tools for management and monitoring of IPP Process including power generation data

base and IT Refurbishment for IPD, DEPP, DEM, DEB and DESIA;;

Capacity Reinforcement Program for each of IPD, DEPP, DEM, DEB and DESIA;

MOU, PDA and CA Assistance Programme

Development of Early Project Screening Methodology; Enhancement of Feasibility Study Tools

as a Gateway Review; and Project Cost Estimation Tools;

Help Desk and Panel of Experts

Hydropower Concession Bidding Procedure


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Review and Update of Technical Guidelines and LEPTS

Regulatory Framework for Small Hydro Projects

Regulatory Framework for Hand-Back of Power Plant after expiration of Concession

Regulatory Framework for Dam Safety

2- Scope of services

The following scope of work should be considered essential but not all-inclusive. The proposed

consulting service process is by nature “open” and it is up to the Implementation Consultant Support

Team to proactively identify all necessary areas of work within its scope of expertise, ensuring that the

analytical output is thorough and complete and that knowledge is retained by beneficiaries of consulting

services. The Implementation Consultant Support Team must be able to respond positively to needs

for complementary analysis and capacity building that GoL could require in the execution of this

mandate for work regarding institutionalization of the PSHD through the IPP Process in furtherance of

Subcomponents 2B, 2C and 2 D of the HMTA AF.

2.1 Perform Diagnostic Assessment of Legal, Regulatory, Institutional Framework supporting

IPP Process and Implementation of the PSHD.

The Implementation Consultant Support Team will critically review, refine, supplement and update the

Annex 1 Reports on Institutional and Regulatory Framework to provide a detailed diagnostic

assessment based on institutional and legal gap analysis to determine whether or not the current legal,

regulatory and institutional framework in Lao PDR supports effective implementation,

institutionalization and operations of the PSHD through the IPP Process and the extent to which new or

modified laws and regulations or institutional changes are necessary.

The Implementation Consultant Support Team will be responsible for undertaking further investigation

and analysis as required. The Implementation Consultant Support Team will review the main pieces

of legislation4 covering IPPs in Lao PDR, as well as other general and sector specific laws affecting

the IPP Process the Implementation Consultant Support Team deems necessary to ensure effectively

implementation of the PSHD.

The review will seek to uncover gaps (and overlaps) both in the formal legal, institutional and

regulatory framework and on the IPP Process– the ‘theory’, but also how it works in ‘practice’. Indeed,

a ‘gap’ may be manifest as a failing in the coverage, comprehensiveness, rationality or appropriateness

of the legal and institutional framework, both the formal framework and how it is implemented in

practice.

4 Main legal instruments include: the Electricity Law (2012); LEPTS Decree (2007 as updated), EIA Decree (2010), Ministerial

Instruction on Environmental and Social Impact Assessment (ESIA) of the Investment Projects and Activities (8030/MONRE

(Dec 2013), Ministerial Instruction on Initial Environmental Examination (IEE) of the Investment Projects and Activities

(8029/MONRE (Dec 2013), Standard Environmental and Social Obligations (latest v 27 with rolling updates), CAR Decree

(2005), Protection Forest Decree (2010), Environmental Protection Law (2013), and other related laws/decrees currently being

revised (Water, Forestry and Land Laws).


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This assignment is principally concerned with interventions that will facilitate the full implementation

and institutionalization of the PSHD and the new standard CA to complement the current efforts in

streamlining the IPP Process regulatory framework. Ultimately, the Implementation Consultant

Support Team is expected to develop a set of practical and implementable proposals to strengthen the

regulatory, procedural and institutional framework , which will have material implications or outcomes

in facilitating the effective institutionalization of the PSHD and implementation of the IPP Process.

The Implementation Consultant Support Team will develop standard operating procedures for the IPP

Process (IPP Process SOP) that are essential to the practical implementation of the PSHD and the IPP

Process itself.

A Plan of Action, Implementation Guidelines and Performance Criteria for the PSHD have been

prepared and are currently under discussion. The Implementation Consultant Support Team will

review these materials and lead a consultative process to finalize the drafts and jump-start the PSHD

implementation process.

The diagnostic assessment should be informed by the PSHD Plan of Action and ancillary materials and

not repeat the institutional, legal and regulatory analysis undertaken as part of the Annex 1 Reports.

Rather, the assessment should pick up where the Annex 1 Reports leaves off, by updating it and

applying the “gap analysis” at the IPP legal, institutional and regulatory level, to examine how

specific IPP Process steps could be streamlined and what interventions will be needed to allow

implementation of efficient and transparent IPP Process fully informed by the PSHD. In undertaking

this analysis of the institutional, legal and regulatory framework, the Implementation Consultant

Support Team is expected to coordinate with the Consultants leading the work on other components of

the HMTA-AF including : (i) Fiscal Regime for the Hydropower sector under the HMTA-AF; (ii)

Hydropower Modelling work to assure consideration of cumulative and induced impact of multiple

dams in the same water basin; (iii) Power Sector Restructuring and Reform; and (iv) any other WBG

activities (particularly IFC) in hydropower and mining sector in Lao PDR.

The deliverables of this component are expected to include

Standard Operating Procedures (SOP) to standardize the IPP Process and provide step-by-step

how-to instructions providing a detailed explanation of how the hydropower sector management

value chain works in Lao PDR and how a project can be designed and implemented in a fully

coordinated manner. An effective IPP Process SOP communicates who will perform the task,

what materials are necessary, where the task will take place, when the task shall be performed,

and how the person will execute the task. The IPP Process SOP document will serve as an

instructional resource that allows employees of DPI, DEPP, DEM, DEB and DESIA to act

without asking for directions, reassurance, or guidance. The step-by-step written procedure is

also intended to help hold employees accountable because employee expectations are

documented and their actions can be measured against the IPP Process SOP.

Institutional, Legal and Regulatory Assessment and Gap Report

Report on Proposals to Strengthen Regulatory Framework for IPP Process, with detailed

arguments in support of the proposals

Draft, Review, Complete and Implement Action Plan, Implementation Guidelines and

Performance Criteria for Implementation of the PSHD

Document Templates and tools to apply the Guidelines for Monitoring Compliance with PSHD

Test the Guidelines

PSHD Implementation Status Report


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Assistance with Draft of new decrees and amendments to existing laws, regulations, or new laws

and regulations

Various Consultation Workshops to build consensus regarding deliverables

2.2 Institutional Analysis

Hydropower development in Lao PDR requires input, consultation and approval from a number of

Ministries and other GOL agencies. The position of DEPP, DEM and DEB within this structure is

shown in Figure 1 together with some of the other concerned Ministries. Figure 1 is not intended to be

exhaustive.

DEB is mandated to provide a single point of contact with GOL for project developers. There is

consequently a requirement for DEB to navigate and manage interfaces between other Departments

within MEM, other Ministries, and Departments at Provincial level.

Figure 1: Institutional Structure

The 2014 SOFRECO study3 concluded that existing arrangements between MEM Departments and

other Government agencies were complex. Agency mandates were not always clearly defined and

understood, and there were sometimes gaps or overlaps in responsibility.

The Implementation Consultant Support Team is required to undertake a review of the mandates and

duties of the relevant energy departments within MEM, MPI and MONRE through a process of review,

consultation and analysis the Implementation Consultant Support Team will identify where mandates

require adjustment or clarification to ensure fully joined up coverage and coordination of the necessary

tasks in furtherance of implementation of the PSHD through the IPP process.

Ministry of Energy and

Mines

Ministry of Natural

Resources and Environment

Ministry of Finance

Ministry of Public Works and Transport

Ministry of Planning and Investment

and Forestry

Department of Energy

Business

Department of Energy

Management

Department of Energy Policy and Planning

Provincial level Department of Energy and Mines

Other Provincial level Departments

District Office of Energy and Mines

Central Government

Provincial level

District level


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This review will identify key interface points and define communication routes and responsibilities.

The primary objective will be to revise the mandates of MEM, MPI and MONRE departments

engaged with the IPP Process, as well as the mandate of the various divisions such that the IPP Process

is rendered more efficient and the strategic objectives of GoL are achieved and PSHD is successfully

implemented. It is envisaged that the results will be presented in graphical and tabular form, where

possible, to assist the clarity and accessibility of the recommendations.

The Implementation Consultant Support Team is additionally required to review IPP Process’s interface

requirements and responsibilities between MEM and other Government agencies at Central, Provincial

and District level. It is envisaged that it will not be practical within the scope of these services to

achieve consensus for revised duties and responsibilities with all related Government agencies.

However all key interfaces should be identified such that the necessary functions and outputs of MEM

can be included in the analysis to enable implementation of the PSHD.

2.3 Reorganization of IPD, DEPP, DEM, DEB and DESIA Work Processes

The number of projects initiated at IPD and negotiated and managed by DEPP, DEM, DEB and DESIA

has increased significantly in recent years and there is now a requirement for a reorganisation of work

processes and procedures to respond to this increased workload.

The Implementation Consultant Support Team shall review previous studies3 and undertake a further

programme of review, needs assessment and consultation within each of IPD, DEPP, DEM, DEB and

DESIA. Based on this review the Implementation Consultant Support Team shall develop a Quality

Plan for each of the IPD, DEPP, DEM, DEB and DESIA operations. Each Quality Plan should be

structured as a single document that provides a simple and accessible reference for staff on how to

perform the full range of functions in their mandate. The Quality Plan should include the following as

a minimum:

Flow charts defining the processes for each stage of a project. These charts should indicate

the decision and approval gateways, and the criteria for passing each gateway and proceeding

to the next stage.

Organograms defining management structure, communication routes and authority at each

management level.

Procedures for identifying performance indicators, monitoring progress and assessing when

performance indicators are achieved.

The deliverables of this component are expected to include:

Revised Mandates

Protocols for communication between various GoL agencies

Protocols for communication between central and provincial authorities

A detailed work plan for implementation of new mandates and communication protocols


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Standard procedures for the health and safety of personnel with particular reference to visiting

active construction sites and operational projects.

A standard filing system for project documents and correspondence, including procedures for

data and document storage, retrieval and archiving.

Procedures for checking, approval and traceability of work undertaken by staff.

Procedures for receiving feedback from projects and key stakeholders in the IPP process,

assessing lessons learned and updating procedures to continuously improve performance.

The Quality Plan should be structured such that a specific Execution Plan can be produced for each

project based on the standard Quality Plan.

2.4 Technical Tools, Generalization, Quality Improvement and Management of Power

Generation Database and Full Synchronization of MOU, PDA and Concession Agreement

Database and other IPP Related Databases and IT Refurbishment

Despite considerable on-going efforts and much improvement, MEM/DEPP's power generation

database (the “Power Generation Database”) is still incomplete, inconsistent and not up-to-date. A

reliable, complete and up-dated Power Generation Database is necessary for implementation of the

PSHD and the IPP Process. For DEPP to achieve useful and reliable planning results, DEB to have

fully informed negotiations of CA and be able to effectively monitor their implementation; DEM to

properly conduct technical monitoring; DESIA to adequately design and monitor ESIA and SESO; and

for IPD to be able to effectively select the best developers; the data sourcing, the data quality and their

management merit improvement.

As part of this consultancy, the Implementation Consultant Support Team will take stock of the existing

databases at each of DEPP, DEB, DEM, DESIA and IPD. The Implementation Consultant team will

assist and coordinate the efforts of each of IPD, DEPP, DEM, DESIA and IPD to continue to:

Complete and update the Power Generation Database;

Validate assumptions and remove inconsistencies;

Generalize the existing hydropower database and include all relevant hydropower plants /

projects, thermal power plants / projects, main transmission lines / projects and import/export

options that are relevant for the Lao power system;

Include measurement or metering data for validation and calibration of model components; and

Introduce quality management.


Consultation Workshops

Quality Plan for each of IPD, DEPP, DEM, DEB and DESIA

Guidelines and Templates for project specific Execution Plans


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Continuous data management is required to keep the Power Generation Database current and to upgrade

it. The Power Generation Database has to be updated and validated periodically. The Consultant

Implementation Team will assist DEPP, DEB, DEM, IPD and DESIA to establish processes and

coordination for:

Continuously updating data, and for synchronizing data with sources at EDL, EDL-Gen, DEB’s own

CA database, DEM’s own Technical Monitoring database; DESIA’s ESIA and SESO database, IPD’s

Investor Application and MOU’s database and other external sources including access to information

generated by concession companies and developers.

The Implementation Consultant Support Team will assist DEPP, DEM, DEB, DESIA and IPD to

identify and utilize appropriate information technology (IT) tools to support data consistency and avoid

inconsistent data and the current high work input for data synchronization and validation, e.g.:

Automate data workflow;

Set up an SQL database to improve data management and train staff in working with the

database;

improve the IT infrastructure, e.g. server for DEPP, DEB, DEM, DESIA and IPD backup

service and anti- virus software; and

Establishing functional organizational structure with roles and responsibilities of staff at each of

DEPP, DESIA, IPD, DEM and DEB to obtain, update and manage necessary data for their own

accountability.

The Implementation Consultant Support Team will therefore assist the creation of a central database

populated with information from different sources including power generation data from DEPP, and on

the existing MOUs, PDA and Concession Agreements, including data sourced at DEB, EDL, EDL-Gen

and provincial agencies.

With respect to existing hydropower projects, for each MOU, PDA and CA the database will provide an

Executive Summary/Manual/Track Log summarizing contract obligations, including regarding SESO

and ESIA, performance indicators, milestones, progress reports requirements and establishing

monitoring procedures and checkpoints. Automation initiatives assure full coordination and avoid

duplication of work.

With respect to new CAs, the Implementation Consultant Support Team will work with DEB staff on a

daily basis including site visits and remotely for the first four months of the initial implementation of

the CA (i.e. before the project enters into Commercial Operations), training the staff and developing a

system of processes, templates, customized tools, schedules and plans for PPP Contracts’ Monitoring

and Supervision as below:

a. Drafting an Executive Summary/Manual/Track Log summarizing contract obligations (including as

set forth in the SESO and ESIA for relevant project), performance indicators, milestones, progress report

requirements and establishing monitoring procedures and check-points. The DEB, DEM, DEPP, DESIA

and IPD staff needs to know exactly what is expected and when it is expected.


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b. Create a Risk Management Plan – understanding the allocation of risk under the various contracts

related to the CA, listing each risk and associated responsibilities – identify information needed to

monitor risk and possible actions to mitigate the risk.

c. Create a filing system containing in addition to the Concession Contract and related project

agreements (PPA, EPC, Shareholders Agreement) and ancillary documents, performance measurement

schedules, the financial model, budget and other related documentation.

d. Establishing Monitoring and Supervision protocols for the relationship with the private party.

The Implementation Consultant Support Team will further discuss with IPD, DEPP, DEM, DEB and

DESIA what are their specific needs regarding establishment of database and investigate, develop,

recommend suitable proprietary software and implement an appropriate computerized system and

training to facilitate the day to day operations of each of IPD, DEPP, DEM, DEB and DESIA.

With respect to DEM, previous studies have indicated that although a large amount of monitoring data

is gathered by concessionaires of the dams they are not shared and evaluated independently by DEM

and signed-off, despite specific CA requirements. The Implementation Consultant Support Team will

provide technical assistance to assist DEM staff to:

Investigate, develop, recommend suitable proprietary software and implement an appropriate

computerized maintenance management system for dams under construction and under operation.

Create a process for concessionaires to share electronically, the required evidence of compliance with

LEPTS during construction and operation. This may include sharing the database plot, archives,

evaluation and sign-offs on the instrumentation data gathered over the years for operating dams

[DRAFT Note – List Dams in Operation]

Process, enter monitoring data into a database, plot and evaluate monitoring data.

Interpret wide variety of data plots and charts

Evaluate the safety and performance of dams as represented by their instrumentation data

Evaluate data, decide on appropriate actions to be taken under different circumstances;

In addition the Implementation Consultant Support, team will discuss with DEM:

Provision of automated dam monitoring and operational early warning systems (ADAS/SCADA) for certain basins

Database of reservoir water quality and sedimentation studies

others

With respect to DEPP, there is a need for assistance with updating Lahmey planning software or

identifying suitable replacement software that would perform in a more efficient and updated basis

similar functions to Lahmey.


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DEPP is also seeking to identify suitable software to assist with reservoir sediment assessment (multiple

basins) and sediment transport analysis so that DEPP is able to advise IPP Process in terms of

where to best locate new projects in the future.

Finally, the current IT facilities within IPD, DEPP, DEB, DEM and DESIA, are no longer suitable for

the rapid growth of the hydropower sector and require fundamental refurbishment. Current problems

include:

Limited or unreliable access to the central server and the Internet.

Website cannot be updated due to limited administrative rights.

Computers run on a variety of unlicensed Windows operating systems. Most of the software is unlicensed and some of the hardware is obsolete.

Printers and scanners are generally not connected to the network.

The Implementation Consultant Support Team is required to undertake a review of existing facilities

and a programme of consultation and needs assessment. The Implementation Consultant Support

Team will then design and specify a new IT system for MEM in general comprising servers, computers,

software, Internet access and peripheral devices. A new centralized database shall be designed for the

storage of all project documentation. The system shall be configured so that other GoL departments

may share it. The Implementation Consultant Support Team should be informed of IT system

requirements of MPI and MONRE. Protocols and security levels will be required for data uploading,

access, removal and archiving.

The entire new hardware and software system shall be procured by open competitive bidding and the

Implementation Consultant Support Team will be required to produce procurement documents and a

budget cost estimate. Following approval by DEB the Implementation Consultant Support Team will

then manage the procurement process, assess bidders and recommend award. The Implementation

Consultant Support Team will also supervise installation of the new systems, authorize payments and

manage any warranty issues.

The Implementation Consultant Support Team will implement a staff-training programme in

conjunction with the selected suppliers and provide remote technical support for the period of the

services.

The Implementation Consultant Support Team will design and implement a new IPP Process web site.

The function of the web site will be to provide a portal for developers to obtain details on the PSHD and

the IPP Process, access standardized documents such as the Standard CA and Power Purchase

Agreement (PPA), learn about specific requirements such as the Lao Electric Power Technical

Standards (LEPTS) and details of projects in the development pipeline. The Implementation

Consultant Support Team will provide support for the maintenance and updating of the web site for the

period of the services.


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2.5 Capacity Reinforcement Programme

The SOFRECO Consultancy has developed a comprehensive Capacity Reinforcement Plan for DEB.

The Implementation Consultant Support Team will critically review and improve the SOFRECO DEB

Capacity Reinforcement Plan (see Annex 1 Reports). Similar capacity reinforcement plans are needed

for IPD, DEPP, DEM, DESIA and the PDEMs.

At the initial stage, the Implementation Consultant Support Team will conduct a detailed analysis of the

activities under the mandates of each division under IPD, DEPP, DEM, DESIA and the PDEMS, as

applicable and identify the minimum capacity to carry out these activities as a minimum referential.

Thereafter the identified capacity needs can be used to evaluate the gaps between the referential

(required capacity) and the assessed capacity of the personnel current in the position with the activities

of each division current capacity of each of IPD, DEPP, DEM and DESIA.

The analysis and assessment will cover the human resources capacities not only in terms of missions

and duties but also capacities in terms of relation and interaction with all stakeholders, governmental

agencies and private developers involved in the IPP process. This assessment will provide the base for

among others, the development of Capacity Reinforcement Plans.

The Implementation Consultant Support Team will be expected to prepare a Needs Assessment

Report and propose a Capacity Reinforcement Plans for each of IPD, DEPP, DEM and DESIA based

on “best case scenario” without any resource constraints. The compensation packages should be

evaluated to assure these departments are able to attract and retain a skilled labour force. The Capacity

Reinforcement Plan should provide a list of detailed activities, tentative time schedule of

implementation and estimated implementation budget. Moreover the Capacity Reinforcement Plan

has to provide a clear set of targets and robust methodology for continuous assessment of results.

The proposed Capacity Plan should be matched with the Capacity Reinforcement Plan for DEB

developed by SOFRECO, which, in turn can be further improved in light of results from work on other

components of this consultancy services.


Generalized Central Database for Power Generation

MOU, PDA and Concession Agreement Database

DEM Dam Safety Monitoring Database

Establishment of Functional Organisational Structure with roles and responsibilities of staff at each

of DEPP, DESIA, IPD, DEM and DEB to obtain, update and manage necessary data for their own

accountability.

Procedures and Protocols for Interface with Developer

Bid documentation for IT equipment and services, including Project Management Software

Training in use of IT equipment and services

New IPP Process website


36 | P a g e

The Implementation Consultant Support Team shall provide technical assistance to each of the IPD,

DEPP, DEM, DEB and DESIA, on a rotating basis, over a three-year period to reinforce in house

capabilities for the delivery of their mandates. The primary intention is to act on behalf of IPD, DEPP,

DEM, DEB and DESIA on technical issues while at the same time implementing the Capacity

Reinforcement Plans.

At the same time, the approach to capacity building at PDEM level needs to be adapted to the specific

circumstances of the relevant PDEMs. At first, it is expected that MEM staff from central government

will take the lead with the on-going “on-the-job” training, which will eventually be intensified.

The Implementation Consultant Support Team will review the findings and recommendations made by

the SOFRECO Consultancy “DEB Training Program” with respect to a “two stage training program to

reach provincial level”. The First Stage would be dedicated to the central level agencies of MEM.

At the end of the First Stage, a “Team of Trainers” would be selected based on an open process (top

performers who have a desire to contribute in educating others). The Second Stage would be mainly

dedicated to the capacity reinforcement at provincial level of Lao PDR provincial departments and

offices of the Ministry of Energy and Mines (PDEMs). The Second Stage training program would be

fully implemented and managed at provincial level by the Team of Trainers. At the inception of the

Second Stage it is possible that the Team of Trainers would benefit from support to be provided by

international and local consultants. SOFRECO recommended that Luang Prabang and Champassank

provinces become centers to train the surrounding provinces as these two provinces have strategic

geographical locations and could aggregate a number of provinces for target training programs.

The Implementation Consultant Team is expected to make operational two pilot training programs for

PDEMS in furtherance of SOFRECO Consultancy’s recommendations with relevant adjustments

discussed with DEB, DEPP, DEM, DESIA and IPD.

This technical assistance will not replace the role of Contract Engineer appointed for the monitoring of

specific projects. The scope will however include assistance to DEM, DEB and PDEM’s staff with

the following up and implementation Contract Engineer recommendations.

The technical assistance will take the form of access to a range of specialist skills within the

hydropower sector covering civil, mechanical and electrical engineering and also contractual and

commercial capability. These inputs will typically be provided by Implementation Consultant Support

Team to be seconded to each of the IPD, DEPP, DEM, DEB and DESIA offices in Vientiane which in

turn will be supported by specialist staff in the home office, visiting when required.

An important part of these consulting services will be to assist DEB, DEM, DEPP and DESIA with the

drafting and negotiation of the CA technical schedules. These schedules should provide adequate

definition of project design, construction and operation requirements. Requirements for GOL Works

such as roads, transmission and irrigation facilities must also be specified. GOL monitoring and

objection rights must be defined, since without these provisions GOL monitoring and enforcement has

no contractual basis.

The Implementation Consultant Support Team will further discuss with DEB, DEM, DEPP, DESIA and

IPD specific training requirements that can be implemented as part of the scope of work described in

this ToR


37 | P a g e

2.6 MOU, PDA and Standardized Concession Agreement Assistance Programme

Prior to negotiating CA terms, there has usually been a period of some years during which GoL has

agreed to award preliminary rights to a developer in the form of a Memorandum of Understanding

(“MOU”) and a Project Development Agreement (“PDA”). The terms of the preliminary agreements

play a significant role in shaping the CA that the GoL can later negotiate with the developer.

The Implementation Consultant Support Team in close coordination with the IPD, DEPP, DEB, will

review the application of the IPP Process in practice and identify areas that could be strengthened in

the templates MOU and PDAs in use. The review will take into consideration the requirements of the

standardized CA and work backwards and consider what requirements then need to be incorporated into

the MOU and PDAs.

The SOFRECO Consultancy provided a draft Guideline for Developers Pre-screening, which the

Implementation Consultant Support Team shall review and make operable in the context of early

screening of projects. In addition to review of MOU, the Implementation Consultant Support Team

shall also review, update and simplify the Application form and further documentation forms that

Developers routinely file under the IPP Process to assure that GoL is obtaining robust information, and

also with a view to streamline the system.

A standardized CA has been drafted as part of the earlier studies3. This standardized CA includes pro

forma technical schedules and these will require original text for each project as described in Section

2.4 of these Terms of Reference.

A Training Programme for DEB (Contract Division staff) will be provided under these Terms of

Reference to improve capacity in negotiation and implementation of the standard CA. The training

programme will cover negotiation techniques, the basic structure and composition of the standard CA

and the functions and objectives of each of its sections. The training programme will additionally

cover the broader legal framework of an IPP project, the function of the CA within that framework, and

the essential terms for the Shareholders Agreement and Power Purchase Agreement.

A similar training will be provided for IPD with respect to negotiation of MOUs, PDA and CAs and to

DEM, DEPP and other relevant agencies involved with negotiation of the PDA and CA as well.

The Implementation Consultant Support Team shall obtain feedback from actual project negotiations

based on the existing MOU and PDA forms and particularly the new standardized CA. This feedback


Capacity Reinforcement Plans

Capacity Reinforcement Evaluation Methodology

Workshop training materials and on-the-job training materials

Draft CA Schedules for IPP under negotiation

Prepare training materials and Conduct training of Trainers for teams assigned to train in the

provinces

Design and supervise2 Pilot Training Program at PDEMs using Trainer of Trainers/


38 | P a g e

should be incorporated into the training programme for discussion and consideration. The

Implementation Consultant Support Team will draft recommendations for revised MOU, PDA and CA

text based on feedback and subsequent analysis.

2.7 Early Project Screening Methodology, Project Cost Estimation and Feasibility Studies

The GoL can identify high-priority projects that are central to achieving Lao PDR overall development

objectives, where the use of IPPs to exploit Lao PDR hydropower resources is expected to deliver

greater value for money and foster sustainable development. GoL can prioritize the projects that will

deliver the most suitable outcomes including with regard to access to electricity generated by project,

river basin cumulative impact analysis, water rights impact, appropriate treatment of environmental and

social issues.

The Implementation Consultant Support Team shall develop and provide a methodology consistent with

the PSHD for the early screening of projects to allow IPD to make an informed recommendation

regarding the signing of MOUs. In the process of developing such methodology the Consultant

Support Team will take into consideration the work already undertaken by IPD, including with support

from the UNDP.

[The Implementation Consultant Support Team shall develop and provide a cost estimation model that

will permit DEPP, DEM, DEB to undertake independent analysis of project costs in order to review and

challenge figures submitted by potential developers.

The civil works component of the model shall be based on a resources approach where cost rates for the

main activities are built up analytically using current procurement costs and typical production

calculations. The following resource information should typically be required as input data:

Materials – the source and cost of materials, including temporary materials.

Labour – the cost of various skill levels, social charges, insurance and non-working time; and

Construction Plant – purchase price, running costs, depreciation and re-sale value.

These data should then be combined to form the net cost unit rates for key activities such as

underground excavation, embankment construction and reinforced concrete works. Indirect costs for

contractor’s supervision, indirect labour, site facilities, indirect plant and other general expenses should

then be added. Finally a mark-up for contractor’s overheads, tax, profit and risk should be added so

that a complete and transparent cost estimate is developed.


Improved templates for MOU and PDA

Assistance for Development of Risk Matrix for IPP projects under negotiation

Tool kit for Training on MOU, PDA and CA

Private Sector Forum (Hydropower Working Group) for consultation on MOU, PDA and CA

templates

Assist in the negotiation of the Standardized CAs

Amendments to the Standardized CA based on actual project negotiation


39 | P a g e

The electrical and mechanical components of project cost will require a data base populated with

information from suppliers and bid prices from other projects. These data will need to be brought to a

common date through suitable escalation and currency adjustment processes and then adapted to project

specific parameters such as discharge, head, and leading dimensions.

Cost estimation of hydro-mechanical components will largely be based on the current price of steel.

Standard adjustments will then be required for fabrication and erection costs.

The Implementation Consultant Support Team will use agreed costs on a recent DEB project to

calibrate the model for specific conditions in Laos. The Implementation Consultant Support Team

will then participate in at least one set of project cost negotiations to test the model and make further

refinements so that developer’s figures can be effectively challenged.

Finally the Implementation Consultant Support Team will provide a training programme for DEB staff

in the use of the model and provide default data as a starting point for its future use.] [DRAFT Note –

query if too specific for ToRs?]

[DRAFT NOTE – expand to include enhancing Feasibility Study as a tool – also obtain input from IFC

– Kate Lazarus on this section]

2.8 Pool of Experts and Help Desk

The role of the Implementation Consultant Support Team under this Component, is to develop selection

criteria and provide liaison with a pre-selected list of both National and International just-in-time

advisors, on-demand, hands-on support who are appropriately skilled and available in short notice to

provide quick assistance with issues arising out of the implementation of the IPP Process to IPD,

DEPP, DEB, DEM, and DESIA through two mechanisms(1) ‘helpdesk’ to provide rapid-response

assistance and (2) In-country help for addressing more demanding issues.

The Expert Pool help-desk technical assistance will be rendered in the form of quick, direct, practical

responses to specific issues that can be answered in a phone call or by email. If slightly longer

responses were required, individual work streams can be agreed with the Implementation Consultant

Support Team’s approval would help mobilize the relevant expertise from the pre-selected list: for

example X days to review a particular document and provide advisory feed-back.


Methodology for Early Screening of IPP projects (building on SOFRECO and taking into

consideration UNDP work with IPD)

Cost Estimation Model for evaluation of IPP project

Training on Methodology and Model

Piloting Model use in 2 or 3 actual projects

Tool kit for training on Early Screening Methodology, Feasibility Study and Cost Estimation

Model


40 | P a g e

The Implementation Consultant Support Team will help establish and mobilize an eight member Pool

of Experts (combination of international and local experts) who shall be available to act in an advisory

role to IPD, DEPP, DEB, DEM and DESIA on specific issues. The panel should comprise:

An Economist with a master degree in an energy and working experience in hydro-project financial model

An Environmental generalist with a master degree in EIAs and working expertise in hydropower sector development projects;

A Dam Safety Management Specialist with post graduate degree in civil engineering with working expertise in dam safety, design, construction and operational and management issues related to hydro-engineering projects and emergency contingency planning;

A Hydro-Mechanical Specialist with a master degree in mechanical engineering with update hands-on practical experience in design and installation of gates an control systems on dam and appurtenant structures in relation to safety of dams

Geologist/Geotechnical Engineer with a degree in Engineering Geology, Geotechnical Engineering and/or Soil Mechanics and foundation engineering with working experience on foundation exploration, design, foundation treatment, etc. (domestic expert).

Electronics/Electric Specialist with basic degree in electrical/electronics engineering with working experience in design of hydropower plants industrial control systems and application of sensor technology.

A social scientist with working expertise in resettlement and indigenous peoples in South East Asia; and

A lawyer with working experience in hydropower concessions in the developing world in general and specifically in the Lao PDR context.

This component involves working in practice with IPD, DEPP, DEM, DEB and DESIA to move

forward the development and monitoring of IPP projects and full implementation of the PSHD. This is

expected to be primarily “demand-led”—that is, provided in response to requests from GoL. The Pool

will be available to act in an advisory role and will not have contractual authority during project

development.

The exact scope cannot be defined at this stage but for guidance it is envisaged that the pool will be

required to undertake quarterly missions to Lao PDR during the three-year period of consulting services

under these Terms of Reference. Each mission will typically comprise a one-week field visit and one

week in Vientiane for reporting and presenting findings to IPD, DEPP, DEM, DEB and DESIA and

other relevant stakeholders.

It is anticipated that the first assignment under this component will call on the members of Expert Pool

Team with expertise on dam safety. There is growing awareness in Lao PDR that i introducing

international best practice in dam safety and effective hydrological-meteorological data management,

and participatory decision-making mechanism has to become a priority for MEM. The Expert Pool

Team will work closely with DEM and build on the work on Dam Safety that is currently being

undertaken by USAID.


41 | P a g e

The Expert Panel together with DEM staff (and other relevant agencies) will make on site examination

of selected dams and submit preliminary reports prioritizing the implementation of remedial repairs and

modifications to select major and medium size dams to ensure downstream public safety and to

improve their physical stability and hydrological safety, operational efficiency and reliability.

2.9 Hydropower Concession Bidding Procedure

There is currently no competitive legal basis for the award of a hydropower concession to a particular

developer. These concessions are valuable and unique national assets. A process is therefore

required to ensure that the most suitable developer is selected for each concession. JICA has in the past

undertaken work to advise GoL on competitive bidding procedures for hydropower projects.

The Implementation Consultant Support Team will undertake a review of JICA’s work and the current

practice internationally to identify the procedures that have been adopted for the selection of private

developers. This study need not be confined to the private hydropower sector and relevant examples

should be considered from other forms of private power generation and other multi-disciplinary

development projects. Case studies will be undertaken for instances where competitive processes have

been employed. A study of alternatives will then be undertaken to assess the relative strengths and

weaknesses of each process and the potential applicability to the award of hydropower concessions in

Laos. Finally recommendations for a preferred procedure should be made. These recommendations

would include:

An outline description of the preferred process and the reasons for its selection;

The level of project studies required prior to launching the selection process and recommendations on how these studies might be funded;

The level of detail to be disclosed in the invitation document and the level of detail required in the bid submission;

Selection criteria to assess the technical, commercial and environmental merits of the developers offer; and

Procedures for assessment and reimbursement of the costs of earlier studies, including feasibility studies and other investments made by first-mover developers, including reward systems.


Memorandum with short responses

Short Reports on Issues Raised by GoL

Preliminary Reports on Dam Safety for selected dams

Work Program for Pool of Experts

ToRs for Hiring Expert Panel Member

RFP for Hiring Expert Panel Members

RFP for Follow-Up Work Recommended by Expert Panel, including remedial works


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2.10 REVIEW AND UPDATE TECHNICAL GUIDELINES AND LEPTS

In 2004, MEM adopted the Lao Electric Power Technical Standards (LEPTS). LEPTS was drafted

based on general global standards, taking into consideration the experience of Japan, which was,

state-of-the-art at the time. While most of LEPTS provisions remain fundamentally applicable, it needs

to be further detailed and updated considering the specific context, technological advances, newly

adopted international technical standards and the changing needs of the Lao PDR hydropower sector.

In close consultation with DEM, the Implementation Consultant Support Team will conduct a detailed

review of LEPTS to update it, make it more specific and operational and at the same time more “user

friendly” and practical. To that end, the Implementation Consultant Support Team before making

recommendations will spend sufficient time on the job with the DEM staff to fully understand the

challenges DEM staff current experiences in applying LEPTS on a day-to-day basis. It takes time to

upgrade and make more user-friendly technical guidelines that can be used with confidence and easy by

DEM staff. LEPTs will be reviewed specifically looking for simplicity and ease of reading/identifying

key actions.

The objective would be for the Consultant Support Team to start the review of LEPTS early in the

delivery of the consultancy service under this ToRs as coordinating inputs from different staff sources

could take considerable time. This task will continue throughout the duration of the consultancy

services.

The SOFRECO Consultancy provided an initial review of LEPTS and identified a number of provisions

that need to be revised to provide better specifications and guidance for inspection and monitoring. As

a prevailing matter – many provisions of LEPTS are too general. It is necessary to be more precise with

respect to applicable requirements and address down to detail design matters. In addition, the review

has to take into consideration that provincial government’s authority over development of hydropower

resources was expanded from hydropower facilities of 5 MW to 15 MW.

The Implementation Consultant Support Team will also review and update the entire body of technical

guidelines currently applicable, including provisions under the Law on Electricity (amended in 2011)

and the Lao Grid Code to assure a coherent technical framework for inspection and monitoring of

hydropower facilities.

In order to update LEPTS and other Technical Guidelines, the Implementation Consultant Support

Team would discuss and advise on best international practices and avoid duplication of efforts already

undertaken in other countries. Preferably, small expert panels would be initiated for each Guideline to

be reviewed. The panels would consist of representatives of DEM and invited experts. The panel would


Report on International Best Practice and Experience with Competitive IPP bidding and how

countries manage unsolicited proposals

Regulations for Competitive Bidding Process

Bonus, Compensation and other forms of reward systems for first mover

Workshop with stakeholders to discuss pros and cons of introduction of competitive bidding in

Lao PDR and how countries manage unsolicited proposals


43 | P a g e

submit recommendations and build consensus prior to adopting a final language for the revised LEPTS

or Technical Guideline text. If the panel decides to adopt other countries guidelines (duly modified to

ensure relevance to Lao PDR conditions), then appropriate acknowledgement would need to be

incorporated, copyright considerations and approvals from relevant international committees sought.

This latter approach (guidelines following closed the ones in existence in certain country) may be

proposed for guidelines that are yet to be commenced such as guidelines for the hand-back of assets

upon expiry of concession term; reservoir sedimentation surveys and dam safety for example.

The Implementation Consultant Support Team will create specific regulation pertaining to technical

inspection and monitoring of projects commissioned on a built and transfer basis supported by turnkey

construction contracts.

2.11 INSTITUTIONAL AND REGULATORY FRAMEWORK AND GUIDELINES FOR (i)

THE LICENSING, CONSTRUCTION, OPERATING AND MONITORING OF SMALL

HYDROPOWER PLANTS, (ii) THE HAND-BACK¥DECOMMISSIONING OF

HYDROPOWER FACILITIES ON EXPIRY OR TERMINATION OF CONCESSION, and (iii)

DAM SAFETY

Licensing and Monitoring of Small Hydropower Plants

There are currently 150 MoUs signed for the development of small hydro projects (equal or below 15

MW). The GoL is in the process of enacting a policy on licensing and on electricity tariff for small

hydropower plants. The development of small hydropower plants remains largely unregulated in Lao

PDR, even though there are many under operation and currently the provincial authority has the power

to approve projects equal or below 15 MW.

The Implementation Consultant Support Team will provide a review of current international best

practices and analyze the procedures that have been adopted for the regulation of development and

operation of small hydro plants. Case studies will be undertaken to illustrate the application of

regulations for small hydropower plants. Finally, the Implementation Consultant Support Team will


Revised LEPTS

Workshop Training on revised LEPTS

On the job Training on revised LEPTS

Revised set of Technical Guidelines assuring coherence between Electricity Law, Lao Grid Code

and applicable technical guidelines

Mechanism for Monitoring and Evaluating Implementation of LEPTS

Creating Specific Units at DEM with responsibility of certain LEPTS requirements such as Dam

Safety

Regulation providing application of these guidelines in the context of Turn-key projects, without

Concession Agreements

New Guidelines on preparation of Hand-Back of Assets upon Expiry of Concession Term;

Reservoir Sedimentation Surveys and Methodology, Dam Safety, Emergency Action Plans


44 | P a g e

make recommendations for procedures to be adopted in the Lao PDR context for licensing, construction,

inspection, operation and managing and monitoring development of small hydro power plants and a

draft of such procedures will be prepared by Implementation Consultant Support Team and discussed

with relevant GoL authorities. An important issue is the optimization of cascade flow and conducting

assessment in order to maximize output of relevant river basin. This work on cascade flow optimization

is being undertaken under another Consultancy supported under HMTA-AF. It will be necessary for

the Implementation Consultant Support Team to coordinate the work on development of regulatory

framework for small hydropower plants with the work on optimization of cascade flow.

The Implementation Consultant Support Team will undertake an assessment of needs by visiting a

selected sample of small hydro power plants with DEM to provide support for provincial staff

inspections and to develop a Capacity Reinforcement Plan based on findings from site visit. The

Capacity Reinforcement Plan will assure coherent application of new policies, rules and sound

inspection and monitoring of small hydropower plants by PDEMs. It is anticipated that the format of

Trainer or Trainers will be the best model to build capacity of PDEMs.

Hand-Back of Power-Plant Facility upon expiration of Concession Term.

The Implementation Consultant Support Team will also provide a review of current international best

practices and analyze the technical requirements and procedures that have been adopted for the

regulation of the hand-back of the hydropower plant facilities and dam to the governments upon expiry

or termination of the concession. Case studies will be undertaken to illustrate the application of

regulations that have assured the proper state of the facilities, including with respect to requirements

regarding on-going sedimentation assessment, survey, transportation and control to assure longevity of

dams, and good state and operating conditions of dams when returned to governments. Finally, the

Implementation Consultant Support Team will make recommendations for regulation, procedures and

practical guidelines to be adopted in the Lao PDR context for how the hand-back should take place.

Dam Safety

[DRAFT Note – More to come… Discuss internally WBG and obtain direct feedback from USAID on

their program with DEM for DAM Safety and add the feedback to this specific task.]


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2.12 KNOWLEDGE EXCHANGE WITH NUOL AND OTHER LAO PDR EDUCATIONAL

INSTITUTIONS

[DRAFT NOTE – Under discussion with WBG Education Experts – brainstorming ideas on how to

develop a program to share hydropower sector industrial knowledge brought by HMTA consultants

with students in Lao PDR – initial idea is to develop an official course by engaging counterpart

professors that together with consultants will be develop an outline of the relevant course. The

consultant will develop teaching materials and jointly with the professor will teach the course for a

trimester – students will be required to read materials and will be tested on the subject matter – the

idea is to make sure that “knowledge sticks”. – The training materials are to be shared with the

“Hydropower Training Center” to be established with support from HMTA – AF – it is important to

coordinate this task with Component 1 – Learning. NUOL’s Professor Bouahlinh is developing a new

Master Program on Hydraulics Engineer with support from DAAD of Germany – it is agreed in

principle that the Expert that will assist DEM updating LEPTS will be required to teach in the

Hydraulic Engineering Master Program – this section will be further revised.]

3- Qualifications and ToR Approach

These Terms of Reference apply to the services required from a suitably qualified company (the

Consultant) to refine and implement the recommendations of the Annex 1 Reports and assist with the

institutionalization of the HMTA through implementation of the IPP Process as provided under

Subcomponents 2B, 2C and 2D of the HMTA AF. The qualified company (or consortium of

companies) will field a diverse team of experienced individuals (see qualifications below) to be

stationed and/or rotate at the offices of IPD, DEPP, DEM, DEB and DESIA in Vientiane – the

“Implementation Consultant Support Team”. It is envisaged that a head-resident consultant will be

attached to the DEB (the Team Leader) for a period of up 36 months. In addition to implementing the

components listed above concerning DEB, the Team Leader will supervise and coordinate the work

of the other consultants -–the respective responsibilities and coordination arrangements will be

established in advance by the Team Leader in coordination with the relevant GoL agency. Each of IPD,

DEPP, DEM, DEB and DESIA will designate a technical team to work with their respective consultant


Report on best international practices on licensing, inspection, construction, operation and

monitoring Small Hydropower Plants; Asset Hand-Back/Decommissioning; and Dam Safety .

Workshop Training on licensing, construction and operations and monitoring Small Hydropower

plants; Asset Hand-back and Dam Safety

Regulation on Small Hydropower Plants, Asset Hand-Back/Decommissioning and Dam Safety.

Guidelines on Small Hydropower Plant Construction, Operation,Management and Monitoring

Guidelines on Asset Hand-Back (to be added to LEPTS)

Guidelines on Dam Safety (to be added to LEPTS)

Practical training, capacity building and application of Guidelines at PDEMs level in the case of

small hydropower plants.

Workshops and Stakeholder Consultation on the regulation of Small Hydropower plants and Asset

Hand-Over upon expiry or termination of concession.

Assessment Report of PDEMs and training regarding Small Hydropower plants


46 | P a g e

member of the Implementation Consultant Support Team in implementing the components described

above and will provide relevant administrative support. The Team Leader will also be required to report

on activity progress to a wider group of stakeholders including the World Bank Group, and particularly

the Hydropower Working Group5. [Draft Note – discuss reporting to PSHD Working Group.]

The work of the Implementation Consultant Support Team will be complemented by use of national

Lao PDR Consultants who will provide long-term on-the-job coaching to GoL staff and act as interface

with the Implementation Consultant Support Team. A National Coordinator will be stationed at DEB.

A Hydropower Engineer will be attached to DEM for a period of 24 months. In addition to having

primary responsibility for updating LEPTS as provided in Task 2.10, the Hydropower Engineer will

participate in a pilot program to promote integration between GoL’s international consultants and

programs at the NUOL. The Hydropower Engineer will be responsible for teaching on a part time

basis (Fridays and Saturdays) a course as part of the newly created 2 year Program Master Degree in

Hydraulic Engineer at NUOL.

From time to time other members of the Implementation Consultant Support Team will also be required

to deliver lectures, prepare teaching materials and share knowledge with students and faculty at NUOL

or other Lao PDR academic institutions.

It is expected that the Implementation Consultant Support Team will consist of, but not necessarily be

limited to, the following skills profiles. Where members of the team can fulfil more than one skills

profile, there is no requirement to have separate positions for each profile. In addition, the

Implementation Consultant Support Team may include the services of short-term consultants if desired.

The Implementation Consultant Support Team shall include all the necessary experts required to

complete the work as specified under this Terms of Reference. Additional skills/individuals may be

proposed.

Team Members Qualifications Comments

Team Leader Qualifications: Law Degree and sound

knowledge of international best practice

regulations applied to private sector

participation and concession agreements in

the hydropower sector – masters degree on

Project Finance Law or Commercial Law

a plus

Professional Experience: At least 15 years

professional legal experience in advising

governments on Public Private

Partnerships, and substantive transaction

experience in the hydropower sector.

Based at DEB full

time for 36 months.

Responsible for all

team members

including those

assigned to DEM and

DEPP.

5 The Hydropower Working Group (HWG) was established to enhance coordination and facilitate timely

implementation of the HMTA-AF activities under the hydropower sector development. The HWG is chaired by the

Head of the PSO and comprise the Deputy Director General of DEPP, DEM and DEB.


47 | P a g e

Experience with multilateral entities, in

economic development, public

administration & policy, other

infrastructure sectors, or related field a

plus.

Specific experience and skills required:

o Extensive experience in working on

hydropower sector from a public or private

perspective, ideally across the project life

cycle from analysing options, negotiating

concession agreements to implementing

actual transactions

o Experience in supporting Governments to

strengthen the enabling environment and

build capacity for effective implementation

of hydropower concessions

o Demonstrated ability in project and/or

business planning from the strategic,

managerial and financial perspective

o Proven Project Management capability,

including planning and delivering complex

projects with multiple stakeholders within

tight timeframes

o Good understanding of the Lao PDR

economic, political, institutional and

cultural context

o Excellent verbal and written

communication skills; native-level fluency

in English required

o Excellent interpersonal

skills—demonstrated ability to network

and win the confidence/trust of all levels of

Government Officials and partner

organizations, etc.

Lawyer Qualifications: Postgraduate degree in

commercial law from a recognised

international institution.


professional experience with public,

private, or multilateral entities, with at least

10 years in the development of project

documents over the full hydropower

project lifecycle, including MOU’s,

PDA’s; CA’s and PPA’s.

Intermittent inputs

totalling 4 months.

Based at DEB office

to work directly with

Team Leader


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o Extensive experience in working in the

hydropower sector from a public or private

perspective, preferably including the

implementation of actual transactions;

o Experience in supporting Governments to

strengthen the enabling environment and

build capacity for effective implementation

of hydropower concessions;

o Good regional experience preferably, with

an understanding of the Lao PDR


cultural context;



in English required.

National Coordinator Qualifications: Minimum bachelor’s

degree academic qualification from

national or regional university

Professional Experience: Minimum 10

years’ experience in a relevant

specialization including interface with Lao

Government


o fluent in English and Lao language

speaking and writing

Lao national preferred

Based at DEB full

time for 36 months to

work directly with

Team Leader.

Hydropower Engineer Qualifications: Post Graduate Degree in

Civil Engineering specializing in subjects

related to all types of dams design and

construction engineering and dam safety.

He/she should have experience advising on

best international practices related to dam’s

technical guidelines Chartered Engineer

status with membership of the Institution of

Civil Engineers (ICE), London, or other

recognized institution equivalent of the

ICE.

Professional Experience: Minimum of 15

years working experience after basic

degree in design, construction, operation

Based at DEM full

time for a total period

of 24 months. To

work closely with

DEB team and

provide direct support

to the Team Leader.


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and maintenance of dams and dam safety

management.

Specific Experience and skills required

Regional Experience on hydropower

development, preferably in Lao PDR;

Proven Project Management capability,



tight timeframes

Good understanding of the Lao PDR


cultural context

Excellent verbal and written


in English required




Government Officials, universities and

partner organizations, etc.

o Teaching experience in post-graduate

programs is welcome.

To teach on a part time

basis at NUOL Master

of Hydraulic Engineer

Program.

Environmentalist

Specialist

Qualifications: Environmental Engineer

with a minimum of 10 years experience

with Environmental Impact Assessment of

hydropower dams.

MSc in Environmental Engineering from a

recognized university or educational

institution




tight timeframes



cultural context



in English required

Based at DEPP part

time for a period of 18

months.

To work closely with

DESIA and provide

direct support to DEB

and Team Leader

[DRAFT NOTE –

consider discussing

splitting time of this

Consultant 50%/50%

between DEPP and


50 | P a g e





organizations, etc. [DRAFT Note- Check

with Kate and Ruxandra]

DESIA.]

Social Impact

Specialist

Qualifications: Master in Social Impact

Analysis with a minimum of 10 years

experience with Social Impact Assessment

of hydropower dams.

MSc in Social Engineering from a


institution




tight timeframes



cultural context



in English required





organizations, etc. [DRAFT Note- Check

with Kate and Ruxandra]

Based at DESIA full

time for a period of 18

months

Provide direct support

to the Team Leader

Business Administrator Qualifications: Postgraduate degree in

Business Administration, Economics,

Finance or a related field


professional experience with hydropower

sector transactions, experience dealing

with hydropower developers and in

Based at IPD full time

for a period of 6

months

To provide direct

support to the Team

Leader


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economic development, public

administration & policy and, infrastructure

and related field welcome.


o Regional experience, preferably in Lao

PDR;




Capacity Building

Training Coordinator

A minimum of 10 years of experience in

training of governmental personnel in core

skills related to development of

hydropower projects, or related field

Preferably Master’s level educational

qualifications in a related field from a


institution

Total time input of 36

months.

To rotate between

IPD, DEPP, DEM,

DEB and DESIA

during a 36 months

period

Electrical

Engineer

Qualifications: Degree in Electrical

Engineering.




and maintenance of transmission systems

and hydropower projects.


o Regional experience of transmission and

hydropower developments, preferably in

Lao PDR;




Based at DEM part


of 6 months.


DEB team and


to Team Leader.

Mechanical Qualifications: Degree in Mechanical Based at DEM part



52 | P a g e

Engineer Engineering.




and maintenance of hydropower projects.


o Regional experience of hydropower

developments, preferably in Lao PDR;




of 3 months.


DEB team and


to the Team Leader

Cost Estimator Qualifications: Degree in Civil

Engineering or related subject.



degree as a contractors cost estimator on

major civil engineering projects, preferably

related to the hydropower or water supply

sector.



PDR;




Based at DEB part


of 3 months.

To provide direct

support to the Team

Leader.

Project Finance

Specialist

Qualifications: Degree in Economics,

Business studies or related subject.



degree as a financial analyst of major

engineering projects, preferably related to

the power sector.



PDR;



Based at DEB part


of 3 months.

To rotate between

IPD, DEPP, DEM,

DEB and DESIA

during a 36 months

period

To provide direct

support to the Team

Leader.


53 | P a g e


Institutional Expert Qualifications: Degree in Politics, Business

studies or related subject.



degree in Government administration.



PDR;




Based at DEB part


of 3 months.

To rotate between

IPD, DEPP, DEM,

DEB and DESIA

during a 12 months

period

[OTHERS? – Human Resource

Specialist?]

4- Period of Services

The services will be provided over a period of 36 months, with some earlier components starting sooner

than others. The interested bidders shall include within their submission an outline draft programme,

work plan and budget for the services showing a breakdown of costs to have consultants seconded as

described in 3 above and the periods of input in Lao PDR and home office for other consultants, as well

as final submission dates for each of the eleven work areas as described in 2.1; 2.2; 2.3,2.4; 2.5; 2.6;

2.7; 2.8; 2.9; 2.10;and 2.11 above.

The total time input for the services is estimated to be ???man months. [DRAFT NOTE – need input on

time to be allocated for each tasks and more important the sequencing of the tasks – to perhaps

incorporate a table tentatively indicating each of the Outputs and the relevant allocation of time and

level of effort per Expert Consultant. To be further discussed]

5- Conflicts of Interest

The Consultants are required to disclose any participation they may have with private sector

hydropower developers with interests in Laos that may potentially constitute a conflict of interest with

providing independent advisory services to GOL.

6- Support Provided by GOL and Consultant

The GoL will provide (i) office space and basic office furniture, (ii) technical counterparts, and (iii)

basic office assistance. The Implementation Consultant Support Team will be responsible of other

services that may be needed including – (i) translation of reports in Lao language, (ii) local transport,


54 | P a g e

(iii) international telecommunication, (iv) organization of the workshops, and (v) other means required

for performing services

7- Confidentiality

The Consultants shall keep confidential all information that the Implementation Consultant Support

Team receives, directly or indirectly, from IPD, DEPP, DEM, DEB, DESIA and the PDEMs , or any

other GOL entity or other provider of information under this assignment, as well as all copies or

analyses that the Consultants make, or have been made by third parties, on the basis of such information

(collectively, the Material). The Consultants shall use the Material exclusively for the purpose of

providing the services described in these Terms of Reference. The confidentiality obligations shall not

apply to information in the public domain.


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Annex 7: Draft Terms of Reference for Fiscal Regime

REVISED November 4, 2014 DRAFT FOR DISCUSSION PURPOSES ONLY

Terms of Reference (TOR)

Consultancy Services for

Implementation of Mining and Hydropower

Fiscal Regimes

1. BACKGROUND

1.1. Lao PDR is in the midst of an economic transformation, which comes with great

development opportunities. Nevertheless, this economic transformation presents important

challenges. Primary among these challenges is the sustainability of mining and

hydropower development. The hydropower and the mining sectors are the core drivers of

economic growth for the Lao economy, together accounting for 18.5 percent of government

revenues in 2013.

1.2. Hydropower in particular is growing rapidly, with the installed generating capacity rising

from 200MW in 1996 to 700MW in 2006 and to over of 3,229.65 MW today, and,

according to the World Energy Council, there is still potential to develop an additional 18

GW of hydropower capacity. Of the already existing 3,229.65 MW of hydropower

capacity 812 MW generates electricity to meet domestic demand, while the remaining 2,417

MW generates electricity for export to Thailand, Vietnam and Cambodia.6

1.3. This rapid pace of hydropower development is expected to continue with 18 hydropower

projects under construction by independent power producers (IPPs) with a planned total

installed capacity of 3,660 MW. Most of these projects currently under construction are

expected to reach commercial operation by 2020. In addition there are numerous projects

under early stage of development. As a result, the share of government revenue generated

by the hydropower sector exports is expected to soon outpace other sectors in importance, as

the hydropower potential of Lao PDR is substantial compared to its population size and

expected power needs.

1.4. Lao PDR has also experienced a decade of unprecedented growth in the mining sector as

total mineral sales have increased from some US$10-20 million in 2003 to US$1.7 billion in

2013. 337 licenses are registered as either producing or under development. The great

majority of the production (more than 90%) can be ascribed to two operations, i.e. Lane

Xang Minerals Ltd. and Phou Bia Mining. These two companies contribute more than 95%

of all government revenue from the mining industry. However, Lao’s metal mining

6 Source: Ministry of Energy and Mines (MEM) – Department of Energy Policy and Planning (DEPP) – May, 2014

(There are 25 hydropower plants in operation, 6 are export IPPs, 19 hydropower plants are for domestic consumption

including 11 small hydro plant ((≤15MW). Please note that MEM/DEPPs database may be not-up-to-date. Because

the enormous dynamic of Lao power system, a continuous data management is required.


56 | P a g e

industry can be expected to decline beyond 2020 unless exploration spending at a very

significant rate can be attracted after 2015.

1.5. There is growing recognition in Lao PDR that the taxation-royalty regime for each of the

hydropower and mining sectors needs to be improved, with the consequent impacts of both

attracting high quality foreign direct investment in the sector and optimizing Government

revenues from these sectors. Overall, a key obstacle to the realization of those sector aims is

the lack of a standardized approach to hydropower and mining project development and

taxation, and the consequent lack of openness and transparency of the process.

1.6. A different regime is needed in the mining sector than in the hydropower sector because of

the mining sector’s long and costly exploration period, its capital intensity in the initial

stages of a project, its high closure costs, and less certain stream of revenues. One of the

most important issues for Laos is where Laos wants to position its Mineral Fiscal Regime

compared with other mining countries and the extent to which it seeks to attract private

sector mineral exploration and investment that is in line with good international practice.

At the same time for both the mining and the hydropower fiscal regime a fine balance needs

to be struck between various objectives - trying to be internationally competitive,

maintaining a simple regime, capturing the maximum possible rents, raising revenue early in

the project process, raising dependable revenue, and taking care of central-local issues.

1.7. A key determinant of the future level of success in attracting private sector to develop

further hydropower and mining projects in Laos is the standardization of the taxation regime

that developers will be subject to. Moreover the taxation regime of hydro power and mining

will be crucial in framing the future development of the country through the amount of tax

revenues flowing from projects to fund the regulatory functions of the sectors that originate

these revenues. Currently both the hydropower and mining sector government agencies

charged with sector planning, oversight, monitoring and inspection lack the resources to

effectively carry out the full panoply of duties for which they are currently responsible.

Finally the measures adopted for sharing these revenues among different stakeholders can

contribute to rapid, sustainable growth and poverty reduction.

1.8. The overall risks of having an incomplete and inadequate tax regime is that the tax

collection process will be less effective, less efficient and lead to higher levels of investment

uncertainty, ultimately jeopardizing sustainable growth and poverty reduction.

1.9. Since 2010, the Ministry of Energy and Mines (MEM), the Ministry of Finance (MOF) and

the Ministry of Investment Promotion (MIP) have been supported in the implementation of

their mandates related to hydropower and mining sectors by the World Bank Group’s

Technical Assistance for Capacity Building in the Hydropower and Mining Sectors

(HMTA) Project. The HMTA, has the objective “to increase human resources capacity

and improve the performance of government oversight institutions in the hydropower

and mining sectors”.

1.10. Component 2 of the HMTA-AF project focuses on Hydropower Sector Development.

Component 3 of the HMTA-AF project focuses on Mining Sector Development. This

present assignment covers part of Sub- component 2.A “Hydropower Policy and Planning”


57 | P a g e

and Sub-component 3.A “Improvement of Mining Sector Governance”. Subcomponents 2.A

and 3.A are designed to among other purposes to provide support to the establishment of

fiscal regimes to improve revenue collection and facilitate budget allocation to ministries

involved in hydropower and mining sector management activities.

1.11. The original HMTA resources were fully committed by closing of 2013, with key studies

concluded and capacity building under way. In 2014, the GoL obtained additional IDA

financing under the HMTA. The HMTA Additional Finance (HMTA AF) is intended to

continue supporting institutional sustainability by financing sector management

improvements through the operationalization of upstream work (legal, regulatory and

technical aspects) while continuing to strengthening organizational as well as managerial

and technical human capacity development.

1.12. Under the original HMTA, two comprehensive advisory studies were commissioned and

have been completed for the requirements of Subcomponent 2. A and 3.C covering options

for appropriate fiscal regimes for each of the hydropower and mining sectors. The output of

the hydropower and mining sectors fiscal regime work carried under the original HMTA

proposed a fiscal regime and revenue sharing options and provided a platform of discussion

across all the various ministries and agencies involved. This output is presented in two

main expert reports:

1.12.1. The August 2013 - ÅF-Mercados Emi “Options Paper on Hydropower Fiscal and

Revenue Sharing Issues” (the “Mercados Hydropower Fiscal Regime Options Report”)

1.12.2. The March 2014 - Adam-Smith International “Assessment of Policy Options for

Optimizing the Mining Fiscal Regime in Lao PDR. (the “Adam -Smith Mining Fiscal

Regime Options Report”)

1.13. These expert reports will be available to the selected Consultant as reference material and

as a starting point for the delivery of services under this Terms of Reference. In order to

ensure timely procurement and coordination and promote synergies and consistency among

consultancy outputs, this Terms of Reference club together a number of topics and

recommendations made under the Mercados Hydropower Fiscal Regime Options Report and

the Adam-Smith Mining Fiscal Regime Options Report.

This Terms of Reference apply to the services required from an international consultancy company (the

“Consultant”) to to provide technical guidance, training and oversight to selected agencies under the

MOF, MEM ad MIP to implement the recommendations of the Mercados Hydropower Fiscal Regime

Options Report and the Adam-Smith Mining and Fiscal Regime Options Report.

2. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS

2.1 This initiative follows revisions to hydropower and mining legislation in recent years with the

aim of improving public resource management and industry conformity with a broadly applicable

regulatory framework. In order to review the policies, objectives and instruments guiding the royalty

and fiscal regime in the hydropower and mining sector, since 2010 (?) a Task Force has been established

by the Ministry of Finance (MOF) (State Asset Management Department and Tax Department) and the


58 | P a g e

Ministry of Energy and Mines (MEM) (Department of Mines - DOM).

In 2013, the Minister of Finance formally established the Fiscal Regime Committee for the Hydropower

and Mining Sectors. The Fiscal Regime Committee is an inter-ministerial committee chaired by the

Director General of MOF’s Fiscal Policy Department and comprised by high level representatives

(Director Generals and Deputy Director Generals) of MOF’s Tax Department and Asset Management

Department, MEM’s Department of Mines (DOM) and the Department of Energy Policy and Planning

(DEPP); and the Department of Investment Planning (DIP) of the Minister of Planning and Investment

(MPI).

The MOF also established a Hydropower Working Group and a Mining Working Group with specific

mandates to integrate policies related to royalties and taxes for each of the Hydropower and Mining

sectors in national policies. The Fiscal Regime Committee and the Working Groups have reviewed the

Mercados Hydropower Fiscal Regime Options Report and Adam -Smith Mining Fiscal Regime Options

Report. These Reports provide a foundation for deciding on the hydropower and mining fiscal

policy mix that is most appropriate in the Lao PDR social and economic context as well as in

recognition of world markets and the hydropower and mining investment outlook. However, if the Lao

PDR objective is not only growth of taxation and royalty revenue, but also, stability and sustainability of

the hydropower and mineral industry investment over the long term, the implications of various ways of

implementing recommended options must be well understood along with the applicable accounting

procedures.

In view of this, the Fiscal Regime Committee and the Working Groups are seeking further expert

support from Consultant to provide technical guidance and oversight to the Fiscal Regime Committee

and the Working Groups to make a final tax-royalty and revenue sharing policy recommendation to the

MOF, MEM and MPI. A Work Plan has been prepared and is currently under discussion. The

Consultant will review the Work Plan and lead a consultative process to finalize the draft and jump-start

the Fiscal Regime implementation process.

2.2 The Minister of Finance recently created a Hydropower and Mining Tax Unit under the Department

of Taxation. The Consultants shall provide technical guidance, training and oversight to the Hydropower

and Mining Tax Unit. The incipient Hydropower and Mining Tax Unit will have the responsibility to

implement hydropower and mining fiscal regime related activities including fiscal modeling, accounting

and hydropower and mining financial statements, tax collection, updating revenues projections, etc.

3. OBJECTIVES

The objective of the Terms of Reference is to describe the services of a Consultant to carry out a range

of consulting services with respect to assisting the Inter-ministerial Fiscal Regime Committee and the

Working Groups with the design and institutionalization of a transparent and non-discretionary fiscal

regime, ensuring that revenues to the GoL are maximized and at the same time, encouraging investor

competition. Developing an adequate administrative and audit capacity and adhering to internationally

accepted accounting and reporting standards would reinforce this. There is enhanced awareness in

Lao-PDR, that the following general steps will be needed to achieve these standards:


59 | P a g e

Design and adoption of a transparent and non-discretionary Fiscal Regime for each of the

Hydropower and Mining Sector and their institutionalization and operationalization; and

Strengthen revenue administration and monitoring through targeted capacity building of

different authorities at MoF, MEM and MPI to deliver their mandates related to the

implementation of the Fiscal Regime by reinforcing human resources capacity and

putting in place supporting institutional arrangements, rules and procedures.

This Consulting Services’ objective has a number of constituent components including:

Design a Hydropower Sector Fiscal Regime

Design a Mining Sector Fiscal Regime

Set-up of an Institutional, Legal and Regulatory Framework to support the new Fiscal

Regime for the Hydropower and Mining Sector

Development and improvement of Financial Model

Development a Hydropower Revenue Forecasting Model and Manual

Refine the Mining Revenue Forecasting Model and Manual

Development of price transfer guidelines according to OECD principles

Development of Risk Management Framework

Development of Revenue Sharing Framework

Reorganization of the work process of HydroPower and Mining Tax Unit

Technical tools for tax collection, data base and IT Refurbishment

Capacity Reinforcement Program

4. SCOPE OF WORK

The following scope of work should be considered essential to achieve the objectives outlined above,

but not all inclusive. The proposed consulting service process is by nature “open” and it is up to the

Consultant to proactively identify all necessary areas of work within its scope of expertise, ensuring that

the analytical output is thorough and complete. The Consultant must be able to respond positively to

needs for complementary analysis that the Inter-ministerial Fiscal Regime Committee and Working

Groups could require in the execution of this mandate for work regarding Subcomponents 2A and 3C of

the HMTA-AF.

TASK 1 – Review and Update of Available Studies, Data and Fiscal Regime Options

Under Task 1 the Consultant will conduct a detailed review of Lao PDR current fiscal practices in place

as set out in Concession Agreements, legal, institutional and regulatory frameworks and critically review

the options considered and options recommended in recent Fiscal Regime Options Studies

commissioned by the GoL. The quality and comprehensiveness of this data and options review will

ensure high-quality advice the GoL requires. This review will ultimately inform the design and adoption

by GoL of adequate fiscal regimes for each of the Hydropower and Mining Sectors, respectively.

1. Review/assess pertinent sector documents, Independent Power Producer Process, concession

agreements, laws, regulations and policies and consult with key sector stakeholders so as to gain


60 | P a g e

a comprehensive understanding of royalties and tax current environment, legal and regulatory

framework;

2. Review/assess institutional framework, the mandates and duties of various agencies of MEM,

MOF and MIP involved with Royalty and Tax determination, negotiation, collection and

enforcement;

3. Review/assess current strategies and procedures for Royalty and Tax determination, negotiation,

collection and enforcement;

4. Review/assess Fiscal Option Studies commissioned by GoL as listed in Annex 1;

5. Review/assess the Financial Model developed and simulations carried out to test the fiscal

options under the Fiscal Option Studies listed in Annex 1.

6. Review/assess the methodology for identification, analysis and ranking of fiscal regime options

used in the Fiscal Options Studies listed in Annex 1

7. Identify any information and data gaps and undertake independent data field research to

corroborate and update data utilized in the Fiscal Options Studies listed in Annex 1.

Outputs: The main output of this task will be the Data and Options Review Report containing an

updated, structured and informed review of the status quo and the options available for Hydropower and

Mining sector Fiscal Regimes. This Data and Options Review Report should be a stand-alone report and

be a reference source and constitute a decision-making framework for use by the GoL and other

stakeholders.

TASK II –Design of Hydropower and Mining Fiscal Regimes, Policy and Legal Framework

Once the GoL has decided on the features of the new Hydropower and Mining Fiscal Regimes based on

the results of the Data Review and Update, the Consultant will assist the Inter-Ministerial Fiscal

Committee and Working Groups in designing each of the Hydropower and Mining sectors Fiscal

Regimes including among others:

1) Development of a clear policy statement or position to provide the basic overall support

framework for the new Fiscal Regimes for each of the Hydropower and Mining sectors;

2) Development of a detailed design of Tax and Royalty Instruments and Rates;

3) [In the case of hydropower sector, development of a transparent mechanisms for providing

fiscal benefits, including rules which allows project to be easily classified between different

categories in order to clearly determine which are the fiscal benefits a project is entitled of;]

4) [In the case of hydropower sector, development of a minimum bound and identification of

selected secondary taxes that can be negotiated in order to provide negotiation floors and

ceilings; ]

5) [In the case of the mining sector, include in the law a fiscal stability provision for limited

time (to be determined) that is limited to stabilizing the rates for profits tax, for

non-resident withholding taxes, for mineral royalties and possibly for a maximum rate on

import duties;] [Draft Note: query if too specific?]

6) Identification and development of related revenue sharing policies that can be financed with


61 | P a g e

specific taxes from the hydropower sector and mining sector respectively;

7) Propose text of legislation and or regulations governing the levy of taxes under the new

Fiscal Regimes including with respect to loss carryover, depreciation rates, transfer of

interest, value added taxes and custom duties;

8) Propose regulation on related party transactions and incorporate OECD guidelines for

transfer pricing;

9) Propose amendments to existing tax and royalty laws and regulations to enable

implementation of new fiscal regime;

10) Propose regulations that clarify central and local authorities role in the new Fiscal Regime;

11) Support the National Assembly to enact the relevant new legislation and amendment to

applicable legal instruments; and

12) Prepare a comprehensive communications strategy and plan in support of legal and

regulatory changes to institutionalize the Fiscal Regime.

Output: The main output of this task will be a (i) Policy Statement on Hydropower and Mining Fiscal

Regime; (ii) draft legislation and or regulations governing the levy of taxes and royalties in each of the

the hydropower and mining sectors; (iii) draft amendments to tax and royalties laws and regulations; and

(iv) communication strategy and plan.

TASK III – Design of an Institutional Set-Up for the Fiscal Regimes

Under Task III, along with the development of the legal framework (Task II), the Consultant will design

an institutional set up to support and streamline the implementation of each of the Fiscal Regimes, with

emphasis on greater fiscal accountability and the determination not to allow a proliferation of agencies

that may duplicate functions or work at cross purposes.

1) Design an institutional set up to support the new Fiscal Regimes for each of the

Hydropower and Mining sectors;

2) Rationale and justification for creating new institutions based on international best

practices;

3) Outline the specific roles and relationships between the new institutions and the

coordination and harmonization with existing ones;

4) Prepare models for new central and provincial executing, regulatory and research or

analytical agencies, as the case may be, including an organizational and management

structure recommending job profiles and any human resource competencies required,

budgeting and financial management processes and practices; reporting arrangements

to the Minister or Cabinet; accountability and accountability mechanisms, and key

performance indicators (as relevant); and

5) Produce an Implementation Plan for the establishment of the recommended

Institutional Set-Up.

Output: Report on Institutional Set-Up including recommendations, Draft Institutional Models

including organization charts, Terms of Reference and Job Profiles, Budget, Accountability Mechanisms

and Key Performance Indicators.


62 | P a g e

TASK IV – Design of Technical Tools, Procedures and Guidelines for Fiscal Regime

With due regard to the overall policy, legislative and institutional framework being developed under

Tasks I, II and III, under this Task IV, the Consultant will prepare practical technical tools consisting of

detailed modeling tools, technical procedures and guidelines produced in the form of handbooks and

manuals, to aid in the Fiscal Regime implementation process throughout the various stages of royalty

and taxation determination and collection.

1) Development and refinement of a Tax and Royalty modeling; and drafting of a

Handbook;

2) Development and refinement of Revenue Forecasting Model and development

of a Hydropower Fiscal Regime Hydropower Revenue Forecasting Handbook;

3) Refinement and update of Mineral Fiscal Regime Mineral Revenue Forecasting

Handbook (already existing);

4) Development of a comprehensive tax collection enforcement procedures manual;

5) Improve the audit planning and monitoring process, as well as the overall audit

policies, including development of performance criteria for the tax audit function;

6) Review and improve procedures and techniques for desk audit and for field audits;

7) Development of guidelines/manual for financial reporting

Output: The deliverables under this Task are expected to include a Tax and Royalty Modeling for

each of the Hydropower sector and Mining sector; Revenue Forecasting Models and Handbooks; Tax

Collection Enforcement Procedures Manual

TASK V – Revenue Sharing Strategies and Framework

With due regard to the overall policy, legislative and institutional framework being developed under

Tasks I, II and III, under this Task V, the Consultant will assist the Inter-Ministerial Committee and the

Working Groups to continue the dialogue and build consensus on strategies and frameworks for

revenue sharing. Hydropower and mining projects can cause significant negative impacts, particularly of

a social or environmental nature but also economically. It is in the best interests of all stakeholders to

ensure that the impacts and opportunities associated with hydropower and mining projects are optimally

managed, in the most simple sense, this means ensuring that the benefits associated with projects are

well distributed and the negative impacts of projects are mitigated and compensated where it is

appropriate to do so.

1. Conduct a series of consultations with all stakeholders including MEM, MOF,

MONROE, MAF and MPI to build consensus regarding Revenue Sharing Strategies;

2. Review fiscal instruments to be applied to revenue sharing (royalties seems to be the

preferred instrument as payments are directly linked to the value generated by the project;

3. Review and assess lessons learned from Lao PDR hydro-projects regarding methodology

for delivering benefits, including the use of dedicated development funds or via local

governments budgets;

4. If the use of dedicated funds is to be recommended, then review key issues related to

governance of funds so that governance structures facilitate revenue sharing objectives

and guarantee transparency and accountability;


63 | P a g e

5. Take stock and assess the impact of a sample of existing dedicated funds and determine

if revenues flowing from new projects could also be channeled to beneficiaries through

existing funds – (e.g. Funds with specific purposes Forestry Management and

Afforestation, Water Resource Preservation and Management, Environmental Protection

and Conservation and Development Funds); and

6. Review options for including design of revenue sharing strategies around the river basin

and provincial levels.

Outputs: Framework for Revenue Sharing; Report on Lessons Learned from Revenue Sharing of

Existing Projects and Assessment of Existing Dedicated Funds.

TASK VI – Database and IT Refurbishment

The Consultant will take stock of the existing database and automation initiatives, assure full

coordination and avoid duplication of work by discussing with relevant tax agencies involved in the tax

and royalty determination, assessment and collection what are their needs regarding establishment of

database and investigate, develop, recommend suitable proprietary software and implement an

appropriate computerized system to facilitate day to day operations

1) Develop computerized system for core taxation business processes (registration, tax

account management, document management, returns processing, audit collections,

etc);

2) Develop modern collection enforcement IT system;

3) Develop computerized system for performing desk and field audit;

4) With respect to existing fiscal provisions under Concession Agreements, drafting an

Executive Summary/Manual/Track Log summarizing fiscal obligations, financial

statement report requirements and establishing monitoring procedures and

check-points;

5) Create a computerized tool for risk management –– identify information needed to

monitor risk and possible actions to mitigate the risk;

6) Establishing automated tax and royalty collection related protocols for the

relationship with the concessionaire;

7) Undertake a review of existing IT equipment and design and specify a new IT system

comprising servers, computers, software, internet access and peripheral devices. A

new centralised data base shall be designed for the storage of all project

documentation. The system shall be configured so that it may be shared by other

GoL departments;

8) Develop Protocols and security levels for data uploading, access, removal and

archiving harmonized with other GoL protocols;


64 | P a g e

9) Produce procurement documents for open competitive bidding of new hardware and

software system and a budget cost estimate;

10) Take the lead and facilitate management of the IT hardware and software

procurement process, assess bidders and recommend awards;

11) Provide supervision of installation of the new systems, authorise payments and

manage any warranty issues;

12) Develop a staffing plan to address gaps in current staffing levels and skills to apply

the new systems and Implement a staff training programme in conjunction with the

selected suppliers;

13) Design and implement a new Hydropower and Mining Fiscal Regime web site. The

function of the web site will be to provide a portal for developers to obtain details on

the new Fiscal Regime, access standardised documents, learn about applicable

specific requirements; and

14) Provide on-going training for staff and provide support for the maintenance and

updating of the web site for the period of the consulting services.

Outputs: The deliverables of this Task are expected to include: (i) Report on Assessment of existing

IT equipment and needs, (ii) Bid documentation for IT equipment and services, (iii) training in use of

IT equipment and services, and (iv) Design of new Fiscal Regime website.

TASK VII –Human Resources Assessment & Capacity Building

Under this Task VII, the Consultant with knowledge the activities under the mandates of each of

[Hydropower and Mining Tax Unit; Fiscal Policy Department, Tax Department and State Assets

Department and provincial tax agencies], as applicable will identify the minimum capacity to carry out

these activities as a minimum referential. Thereafter the identified capacity needs can be used to

evaluate the gaps between the referential (required capacity) and the assessed capacity of the personnel

current in the position with the activities of each relevant division relevant for the implementation of the

new Fiscal Regimes. This assessment will provide the base for the development of Capacity

Reinforcement Plans.

1) Assessment of HR needs and review and improving job classification and remuneration

system, recruitment policies and the staff rotation program;

2) Review job descriptions/qualifications for Hydro and Mining Fiscal Unit staff;

3) Prepare a budget to cover estimated capital, operating, staffing and consultant costs (it

will be necessary to outsource in the early stages of deployment of the new Fiscal

Regimes);

4) Document possible future GoL HR options for structuring and staffing the relevant

units effected by the new Fiscal Regime and consider constraints and legal regulations

in the assessment of HR options; discuss short listed options in detail with GoL;

5) Prepare Capacity Reinforcement Plans including list of detailed activities, time


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schedule, budget and clear set of targets and robust methodology for assessment of

results;

6) In parallel to developing Capacity Reinforcement Plans, the Consultant will provide on

the job practical training and also prepare and conduct a comprehensive training

program supported by detailed training materials covering technical and processing

information at introductory, advanced and remedial level to the Hydropower and

Mining Tax Unit and [others] on the following topics: (i) state asset management; (ii)

tax collection and compliance, (iii) international standard accounting principles; (iv)

analysis of hydropower and mining companies financial statements and balance sheets

[others?];

7) Conduct training of trainers for the Hydropower and Mining Tax Unit [others]

including but not limited to topics highlighted above;

8) Develop Program of Knowledge Exchange with NUOL and other Lao PDR

Educational Institutions to share knowledge and lessons learned from this

consultancy.

Outputs: The deliverables of this Task are expected to include: Assessment of HR needs; Capacity

Reinforcement Plans and Training Materials.

5. [OUTPUTS AND TIMELINE] [DRAFT NOTE – This Section needs to be discussed during

the course of the meetings this week. ]

The Consultant will organize at least one bi-monthly stakeholder workshops that should coincide with

delivery of outputs under Tasks I, II, III and IV. [This Section to be finalized next week, following

meetings with Fiscal Regime Committee and Working Group].

The Consultant will deliver brief Monthly Progress Reports, to keep the Inter-Ministerial Fiscal

Committee and Working Groups succinctly informed regarding the progress of this assignment and

related administrative issues. Such Progress Reports will include updates to the project schedule and

task-flow diagram. The Progress Report will also serve to set out the work program for the following

months, while ensuring the GoL remains satisfied with the project’s direction.

This assignment will be implemented under the leadership of the Inter-Ministerial Fiscal Committee and

the Working Groups. All key ministries and agencies relevant to the work will be engaged. Approvals

of the outputs submitted by the Consultants will be the responsibility of [?], etc…Will be finalized next

week, following meetings with Fiscal Committee and Working Groups.

The following is an estimated time frame of the Consulting assignment:

Output/ Milestone Deadlines

Task I Data and Options Review Report Contract signing + 40 days

Task II Policy Statement on Fiscal Regimes Contract signing + [ ] days

Task II Draft Legislation and Regulations on FR Contract signing + [ ] days

Task II Draft Amendment to Existing Regulations Contract signing + [ ]days

Task III Report on Institutional Set Up for FR Contract signing+ [ ] days

Task III Draft Institutional Models Contract signing +[ ]days


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Task IV Tax and Royalty Modeling Contract signing +[ ]days

Task IV Revenue Forecasting Model Contract signing + [ ]days

Task IV Tax Collection and Audit Manuals Contract signing +[ ]days

Task V Framework for Revenue Sharing Contract signing + [ ] days

Task VI Report on Lessons Learned from RMs+

Funds Assesssment

Contract signing + [ ] days

Task V Report on Assessment of IT Equipment Contract signing +[ ]days

Task V Bid Documentation for new IT Equipment Contract signing + [ ] days

Task V Design of Fiscal Regime Website Contract signing + [ ]days

Task VI Report on Assesement of HR Needs Contract signing + [ ]days

Task VI Capacity Reinforcement Plans and

Materials

Contract siging + [ ] days

6. KEY REQUIRED QUALIFICATIONS AND SKILLS

The table provides indicative qualifications and skills requirements and person-days by type of expertise

as well as an estimated aggregate level of required inputs from international consultants. The consultants

should provide their proposals based on their assessment of required skills mix, input levels per skills

type and aggregate input needs. Key skills to be provided have been noted, although it is likely that

these team members will not be required to be engaged over the full length of the assignment. Local

expertise will, however, be critical for successful execution of this assignment, particularly a solid

knowledge and understanding of the Lao PDR IPP process, institutional, legal and regulatory

framework.

Staff Indicative

person-da

ys

Skills Required

Natural

Resources

Taxation

Expert

(Team

Leader)

[ ] At least Master’s Degree in Finance, Engineer Economics or

Business Administration. At least 15 years of relevant

international experience developing natural resources fiscal

regimes. The Expert should have broad international experience

on all policy, institutional and regulatory aspects and issues

related to hydropower and mining sectors taxation with emphasis

on royalty assessments and should preferably have good

knowledge of the energy and mining sectors in Laos. As the team

leader, he/she will be ultimately responsible for the team and the

outputs of the assignment.

Hydropower

Taxation

Specialist

[ ] At least Master’s Degree in Energy/Hydropower Systems,

Economics, Law or Electrical Engineering. At least 15 years of

relevant international experience, including hydropower taxation

policies and regulations with emphasis on royalties

Mining

Taxation

Specialist

[ ] At least Master’s Degree in Power Engineering, Civil

Engineering or other engineering field. At least 10 years of

relevant work experience in developing, planning and/or

operating integrated power systems, encompassing both

generation and transmission planning. Familiarity with power


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plant dispatch economics, hydrothermal coordination and

integration in power markets is essential.

Revenue

Management

Specialist

[ ] At least Master’s Degree in Economics/Finance, Business

Administration. At least 10 years of relevant work experience in

natural resources revenue management in developing and

developed countries.

Internationl

Legal

Advisor

Policy Expert

[ ] At least Juris Doctor/Bachalaureate in Law. At least 15 years

of relevant work experience in advising governements on policy

formulation and legal and institutional set-ups. Experience with

implementing new taxation regimes a plus.

International

Legal

Advisor

Taxation

Expert

[ ] At least Juris Doctor/Bachalaureate in Law. At least 15 years of

relevant work experience in advising governments on natural

resources taxation and various aspects of legal, institutional and

regulatory framework supporting natural resources fiscal regimes

and at least 10 years experience in drafting legal instruments to

implement tax reform in developing and developed countries.

Local

Legal

Advisor

Taxation

Expert

[ ] At least law degree and 10 years of legal work experience in Lao

PDR, with a comprehensive knowledge of Lao PDR hydropower

and mining sectors institutional, legal and regulatory framework

Revenue

Sharing

Expert

[ ]

IT Specialist

Communicati

ons Specialist

HR Specialist

Local Expert [ ]

Total

ANNEX 1

The August 2013 - ÅF-Mercados Emi “Options Paper on Hydropower Fiscal and

Revenue Sharing Issues” (the “Mercados Hydropower Fiscal Regime Options

Report”)

The March 2014 - Adam-Smith International “Assessment of Policy Options for

Optimizing the Mining Fiscal Regime in Lao PDR. (the “Adam -Smith Mining

Fiscal Regime Options Report”)

[DRAFT NOTE – others?]

93350 Public Disclosure Authorized - World Bank · 2016. 7. 12. · be submitted for Bank review by...

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