GOVERNMENT OF THE PUNJAB ``

Pre-Qualification Document (PQD) for Solicited Site 135 MW Taunsa Hydropower Project District , Punjab,

(Including Evaluation Criteria)

Government of the Punjab Energy Department Punjab Power Development Board

March 2019

TABLE OF CONTENTS

Part-I: INSTRUCTIONS TO BIDDERS Page

Definitions 2 1. General 4 1.1. Background 4 1.1.1. Location and access of Project Area 4 1.1.2. Geographical Location of Taunsa Hydropower Project 4 1.1.3. Feasibility Studies 4 1.1.4. Meteorology 5 1.1.5. Flood 5 1.1.6. Pre-qualification of Companies/Consortia 5 1.2. Statement of Qualification 5 1.3. Discretion 5 1.4. Currency 5 1.5 Interpretation & Final Determination 5

2. Pre-Qualification 5 2.1. Eligibility Requirements 5 2.2. Basis for Disqualification 6

3. Financial& Technical Information 6 3.1. Financial Information 6 3.1.1 Net Worth 6 3.2. Technical Information 7 3.2.1 Experience of Power Projects 7 3.2.2 Project Implementation Approach 7

4. Financial Statement Data 8

5. Compliance Documents 8 5.1. Formats 8 5.2. Consortium Agreement 8 5.3. Foreign Instruments 9

6. Submission of Statement of Qualification (SOQ) 9 6.1. Timing, Number of Copies and Filing Requirements 9 6.2. Sealing and Marking of SOQ 9 6.3 Additional Information/Queries 10

7. Material Change 10

8. Review and Evaluation of SOQ 10 8.1 Review and Evaluation 10 8.2 Supplementary Information 10 8.3 Return of SOQ 10 8.4 No Reimbursement of Costs 10

9. Notification of Pre-Qualification 10

10. Discharge and Exemption 10 11. Use of Information 11

12. Governing Law 11

13. Disclaimer 11

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Part-II: ANNEXURES AND APPENDICES Page

Annexure A SOQ Letter 13

Annexure B Financial Statement Data 14

Annexure C Experience of Power Project 16

Annexure D-1 Power of Attorney 17

Annexure D-2 Power of Attorney 18

Annexure E Affidavit of Sponsor(s) 19

Annexure F-1 Consortium Agreement 20

Annexure F-2 Legal Opinion on Consortium Agreement 21

Annexure G Undertaking 22

Annexure H Evaluation Criteria 23

Appendix I Executive Summary of 135 MW Taunsa HPP 25

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PART – I

INSTRUCTIONS TO BIDDERS

Page 1 of 29 Pre-qualification Document PUNJAB POWER DEVELOPMENT BOARD Solicited Site-Taunsa HPP ENERGY DEPARTMENT

DEFINITIONS Authorized Member If the Applicant is a Consortium, the Authorized Member will be the Consortium member, which has been duly appointed by all Consortium members to submit and sign on their behalf all documents required hereunder and bind entire Consortium to the contents thereof.

Collective Net worth In case of a Consortium, the collective net worth of the Sponsor(s) shall be the Net worth of the Main Sponsor plus the product of (a) Net worth of each member of the consortium and (b) its %age of equity contribution as provided in consortium agreement (as required under Section 5.2 of this PQD).

Consortium Where the Sponsors are comprised of a group of individuals and/or Corporations who have submitted SOQ as per the requirements of this PQD, the Main Sponsor shall represent and bind all Sponsor(s) of the Consortium in all matters connected with the Project, including submission of SOQ on behalf of the Consortium.

Corporation Includes companies, firms and such other legal entities duly incorporated under the laws of the country where such entities Head Office is situated and recognized as having legal personality under the laws of that country, whether in Pakistan or not and other than individuals.

DISCO Any Distribution Company in Punjab i.e. Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), Gujranwala Electric Power Company (GEPCO), Faisalabad Electric Supply Company (FESCO) & Islamabad Electric Supply Company (IESCO) Due Date As notified by PPDB through electronic and print media EPC Engineering Procurement and Construction GOP Government of Pakistan GoPb Government of the Punjab. HPP Hydropower project IPP Independent Power Producer-A Power Plant normally installed to supply energy to National Grid. LOI Letter of Interest as described in the Policy LOS Letter of Support as described in the Policy

Main Sponsor If the Sponsors are a Consortium, one of the Sponsors designated/Identified as the Main Sponsor in the SOQ, having a lead role and possessing sufficient financial strength to hold at least 20% of the equity in the Project Company during the lock-in-period which will be from the date of issuance of the Letter of Support, till the sixth anniversary of the successful commissioning of the plant and who has been duly appointed by all Consortium Sponsor(s) to submit and sign on their behalf all documents required hereunder to bind the entire Consortium to the contents thereof.

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NEPRA National Electric Power Regulatory Authority

Net worth Net worth is the sum of total assets less the sum of total liabilities

In the case of a Corporation, the net worth will be determined on the basis of an average of the last three (3) years audited financial statements or the audited financial account of the year 2017-18, whichever is better, in accordance with International Financial Reporting Standards (IFRS) / Generally Accepted Accounting Principles (GAAP). In the case of an individual the net worth will be determined on the basis of his cash, liquid assets, deposits, Government securities, shares and property owned. Where immovable property is included in the total assets of an individual, the value of the property must be certified by an evaluator ranked in ‘Category I’ by the Banking Association of Pakistan (BAP). 60% (sixty percent) of the value of the total immovable property will be considered for purposes of determination of an individual net worth. In the case of foreign immovable property a reputable foreign evaluator acceptable to PPDB may certify the same. In the case of a Consortium, the collective Net Worth of all Sponsor(s) will be considered as Net worth of the Consortium which shall be calculated as per the procedure defined under “Collective Net worth”. Policy The Punjab Power Generation Policy, 2006 (Revised 2009) and Policy for Power Generation Projects, 2015 of GOP. PPDB Punjab Power Development Board.

PQD This Pre-Qualification Document containing eligibility criteria for Pre-Qualification and basis for Disqualification. Project Approximately 135 MW Taunsa HPP Solicited Site Project proposed to be located on right bank of Taunsa Barrage in District Muzaffargarh. Pre-Qualified Sponsors Sponsor(s) that fulfill the eligibility requirements set out in Section 2.1 and are not disqualified in terms of Section 2.2 and scoring thresh-hold marks as set out in the evaluation criteria of this PQD will be considered a Pre-Qualified Sponsor after issuance of a Notification of Pre-Qualification by PPDB.

SOQ The Statement of Qualifications to be submitted by the Sponsor(s), containing the information as set out and required under this PQD and including such additional/ supplemental information that may subsequently be provided to PPDB in response to a request by PPDB or otherwise provided here-under. Sponsor An individual or a Corporation, who must have registered with PPDB and who shall be considered as the Main Sponsor in terms of

this PQD.

Sponsors In the case of a Consortium the Sponsors shall comprise of the entire Consortium. One member of the consortium must have registered with PPDB in terms of this PQD.

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1. GENERAL

1.1 Background Government of the Punjab intends to develop 135 MW Taunsa HPP under the Policy. The updated feasibility study of the project has been completed in July 2016. Project will be developed by private sector as an IPP.

1.1.1 Location and access of Project Area Taunsa Hydropower Project is proposed to be built adjacent to the existing Taunsa Barrage on the , in District Muzaffargarh, Punjab. It is about 30km southeast of Taunsa town. It is 120 km from Multan, where there is an airport. There are road and railway leading to the project area. The nearest town is Kot Addu, 10 km southeast of the site. From project area, it is about 420km distance to Lahore and 750 km to Karachi. The road from Multan to project is asphalt paved and is generally about 7m wide. Generally speaking, the project area is easily accessible.

1.1.2 Geographical Location of Taunsa Hydropower Project Taunsa barrage was designed for a flood discharge of 28,300m3/s. However, greater than expected retrogression downstream of the barrage had necessitated construction of a subsidiary weir at 280mdownstream of the barrage to raise water level, reduce water head difference, and decrease erosion on the downstream riverbed. Two irrigation canals, Muzaffargarh (235 m3/s) and Taunsa- Panjnad (397 m3/s), take water from left side of the barrage while the other two canals, Dera Ghazi Khan (410 m3/s) and Kachhi (170 m3/s), take water from the right side of the barrage. The proposed Taunsa hydropower project is located on the right side, where there are D.G. Khan Canal and Kachhi Canal off taking from the River Indus.

1.1.3 Feasibility Studies Water and Power Development Authority (WAPDA) completed conceptual planning of the Taunsa Hydropower Project in 1985 that was subsequently updated by GTZ- the German agency for International Cooperation, in 2000. Recently GoPb has got completed detailed feasibility studies of 135 MW Taunsa HPP.

SALIENT FEATURES OF 135 MW TAUNSA HYDROPOWER PROJECT

S. Name Unit Quantities No. 1 Installed Capacity MW 135 2 Annual Generation at: i) Turbine Gwh shaft (Million 650.89 ii) Generator Terminal KWh) 637.87 iii) Bus Bar with 1% aux. 631.52 3 Plant factor %age 53.94 4 Rated Discharge per machine m3/s 287 5 Max./Min./rated water head m 7.25/3.77/5.8 6 Design Discharge m3/sec 3155.5 7 Turbine Type Type Bulb 8 Number of Turbines/Generators Set 9 9 Rated power of each MW 15.3 (/15 with 0.8 Turbine(/generator) power factor lagging)

An Executive Summary of 135 MW Taunsa HPP is available at Appendix-I

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1.1.4 Meteorology The highest monthly mean temperature of the project area is about 44.1 degree C and the lowest monthly mean temperature is about 18.0 degree C; the annual precipitation ranges from 83.0mm to 513mm and the annual mean precipitation is about 208mm; the mean annual wind speed ranges from 0.87m/s to 2.21m/s; and the mean annual relative humidity is 56.5%. 1.1.5 Flood The flood season ranges from May to September in each year. The maximum flood peak is observed at 27,000m3/s in 2010, and the minimum flood peak is observed at 5,300m3/s in 2004. 1.1.6 Pre-qualification of Companies/Consortia Interested companies/consortia are requested to submit a Statement of Qualification (SOQ) to PPDB by the Due Date in the form and manner set out herein for pre-qualification of companies/consortia. Request for Proposal (RFP) will be issued to pre-qualified companies/consortia only against payment of specified charges to submit bids. The project would be implemented on Build, Own, and Operate and Transfer (BOOT) model under the Policy and would be transferred to the Government of Punjab after the completion of concession period of 30 years from the commercial operation date. 1.2 Statement of Qualifications Information provided in the SOQ will be examined by PPDB to evaluate the technical and financial strength of Sponsor(s) for the purposes of Pre-Qualification in respect of the proposed Project. The evaluation will be carried out in terms of PQD submitted. 1.3 Discretion Notwithstanding anything contained herein, PPDB may in its discretion reject any or all SOQs without assigning any reason whatsoever and shall not be called in question. 1.4 Currency All financial information in the SOQ will be provided in United States Dollars (USD) or equivalent Pak Rupees by clearly mentioning the exchange rate applied for such conversion(s) (Refer Table B-2 of Annexure B of this PQD). 1.5 Interpretation & Final Determination The interpretation and final determination of any matter relating to the PQD and all enclosed Documents, Sections, Annexures, Compliance Documents etc. as well as any additional or supplementary information required by PPDB, will be at PPDB’s sole discretion which shall be final and binding on all Sponsor(s). 2. PRE-QUALIFICATION 2.1 Eligibility Requirements Sponsor(s) must fulfill all the following eligibility requirements, to the satisfaction of PPDB, for Pre-Qualification: (a) The Sponsor(s) must submit complete information in this PQD to PPDB by the Due Date. In addition, the Sponsor(s) must submit all additional / supplemental information if requested for by PPDB during review of the SOQ. (b) If the Sponsors are a Consortium, there must be a Main Sponsor appointed through a Power of Attorney executed by all other Consortium Sponsor(s) referred to in Section 5. (c) The Sponsor(s) must comply with all the requirements of this PQD. (d) The Net worth of the Sponsor(s) must be in accordance with Section 3.1.1(i). (e) The Net worth of the Main Sponsor must be in accordance with Section 3.1.1(ii). (f) The Sponsor (or in the case of a Consortium one of the Sponsors) must have ‘Experience of Power Projects’. For explanation see Section 3.2.

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(g) The Sponsor(s) must have submitted and executed the Compliance Documents referred to in Section 5 in the form and manner prescribed and submitted the same to PPDB part of the SOQ through courier and by hand. (h) The Main Sponsor in the SOQ will be required to hold at least 20% of the equity of the project company during the “lock-in-period” which will be from the date of issuance the Letter of Support till the sixth anniversary of the successful commissioning of the plant. The Pre-Qualified Sponsor(s) must similarly together hold 51% of the equity for the same period. (i) When the Sponsor(s) is / are a new company specifically incorporated for submission of a solicited site proposal the eligibility requirements shall be applicable to the shareholders of the new company rather than to the new company itself. (j) The sponsor must submit a comprehensive approach and methodology proposal for the solicited site in accordance with section 3.2.2.

2.2 Basis for Disqualification The following may be the basis for disqualification of a Sponsor(s) by PPDB at any time/stage: (a) if the Sponsor(s) fails to comply with any of the requirements of Section 2.1, in the time, form and manner prescribed; (b) misrepresentation, withholding or concealment of information in the SOQ by the Sponsor(s); (c) if the Sponsor(s) fails to disclose or provide any additional information as may be required by PPDB during the evaluation and qualification process; (d) if the Sponsor or any of the Sponsors of the Consortium are currently in wilful default on its obligations to any bank or financial institution in or outside Pakistan; (e) if the Sponsor or any of the Sponsors of the Consortium have been declared bankrupt or insolvent in the last three (3) years; (f) if PPDB determines that the Sponsors or any Sponsor of a Consortium is prohibited from doing business with GoPb on grounds which may include but are not limited to public policy or national interest; (g) failure to report any material change in the SOQ following submission thereof; (h) a material change in the SOQ, without prior approval of PPDB, which results or may with the passage of time result in the disqualification in terms of this PQD; (i) When the Sponsor(s) is/are a new company specifically incorporated for submitting a proposal for the Project, the basis for disqualification shall be applicable to the shareholders of the new company rather than to the new company itself; (j) if the applicant, or any officer, director or owner thereof, has been in substantial noncompliance of the terms and conditions of prior project contracts. 3. FINANCIAL AND TECHNICAL INFORMATION For the purposes of Sections 2.1(d), (e) and (f) PPDB will require the following Financial and Technical information: 3.1 Financial Information 3.1.1 Net worth i) The Collective Net worth of the Sponsor(s) must not be less than 1.5 times of the proposed equity in the Project. As per Policy the minimum equity required by the Sponsor(s) is 20% of the total project cost (the “Project Equity”). For calculation purposes the notional cost of the Project would be taken as USD 3.0 Million/MW. ii) The Main Sponsor must also have a Net worth at least equal to 2.5 times the proposed equity contribution in the Project. As per Policy, the minimum equity contribution by the

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Main Sponsor is 20% of the Project Equity. For calculation purposes the notional cost of the Project would be taken as USD 3.0 Million/MW. Information in respect of Section 3.1 must be provided in the form attached in Annexure ‘B’ accompanied with supporting documentary evidences. 3.2 Technical Information 3.2.1 Experience of Power Project The Sponsor (or in the case of a Consortium any member of the Sponsors) must have prior experience of at least one (1) Hydropower Project of 100 MW or more capacity. Only power projects successfully commissioned in the past fifteen (15) years having installed capacity not less than 100MW each will be considered for Pre-Qualification of Sponsor(s). A maximum of four (4) projects will be considered for evaluations and preference will be given to sponsors having experience of hydropower projects. “Experience of Power Projects” shall include successful experience of acting as all or one of the following: . Lead Project Developer . Lead Construction Contractor . Direct or Indirect shareholder of at least 15% of an existing project company which has successfully commissioned a power project of 100 MW capacity or above. . Lead Operation Manager

Note: -Experience as Independent Power Producer for Planning, Installation and Operation of Power Projects, Information in respect of Section 3.2.1 must be provided in the form attached in Annexure ‘C’ accompanied with supporting documentary evidence. 1. For the power project development, experience given in section 3.2.1 of the PQD, there will be no change whatsoever. 2. Regarding the power projects, operation and management experience of section 1.1 (b) of Annexure-G, the word "commissioned” in the 3rd line of Section 3.2.1 shall be replaced with the word “working”. 3.2.2. Project Implementation Approach Project Implementation Approach Score of the Sponsor(s) will be obtained by adding scores achieved in sub-categories “Understanding of Project Development”, “Timelines of Major Milestones”, “Methodology” and “Project Development Setup”. For this purpose the following formula will be used for each Sponsor: a) Understanding of Project Development Under this section the Sponsor(s) is required to precisely elaborate his understanding about the hydropower project development process in Pakistan specific to the Project by keeping in view the Project site and local conditions. This should include but not limited to the following: i. Power Policy(ies), applicable laws and customary practices in development of hydropower projects. ii. Consents and permissions required from different entities of federal and provincial, governments and local authorities and departments w.r.t. Proposed Project iii. Stages involved in developing Proposed Project iv. Identification of potential difficulties and their remedies for smooth implementation of the Proposed Project

b) Timelines of Major Milestones Under this section the Sponsor(s) is required to identify major activities and sub-activities and to give timelines in shape of monthly bar chart w.r.t. to the development/implementation of

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Proposed Project starting from issuance of LOS up to Financial Close. This should cover but not limited to the following: i. Time required for achievement of Financial Close from issuance of LOS c) Methodology Under this section the Sponsor(s) is required to precisely explain the method/work plan for implementing various activities of Proposed Project in relation to his understanding and above said timelines. The methodology should include but not limited to, its actions/performance under Letter of Support, including negotiation of project concession documents, arrangement of equity/debt and achievement of Financial Close, etc. d) Project Development Setup Under this section the Sponsor(s)is required to provide organization chart and his proposed team including but not limited to, the technical, financial and legal experts for undertaking management/coordination for executing various major activities under the LOS. Further, the Sponsor(s) will demonstrate plan for setting up office in Pakistan to coordinate and take timely decisions regarding the Proposed Project’s development activities. 4. FINANCIAL STATEMENT DATA The Sponsor shall submit the following information to PPDB as part of the SOQ: (a) in the case of Corporations, audited financial statements for the last three (3) years demonstrating financial viability, duly audited by a reputable firm of qualified accountants, which shall consist of consolidated financial statements in case the Sponsor(s) is/are a holding company. Similar financial information for any parent company, affiliates and associated undertakings/companies should also be included / accompanied with supporting documentary evidences. (b) in the case of individuals, details of cash, liquid assets, deposits, government securities, shares and property owned; Information in respect of ‘Financial Statements’ must be provided in the form attached in ‘Annexure B’

5. COMPLIANCE DOCUMENTS 5.1 Format The Compliance Documents referred below, duly completed in the forms attached, accompanied with supporting documentary evidence shall be submitted by all Sponsor(s) as part of the SOQ by hand or through courier only. Such SOQ/information received through email or fax shall not be considered.

Compliance Document Annexure SOQ Letter A Financial Strength B Experience of Power Project C Power of Attorney D-1 &D-2 Affidavit of Sponsor E Consortium Agreement F-1 Legal Opinion on Consortium Agreement F-2 Undertaking G

5.2 Consortium Agreement In addition to the above in the case of a Consortium the Sponsors are required to submit to PPDB as part of the SOQ an Agreement between all the Consortium Sponsors clearly stating: (a) the percentage (%) of each of the Consortium Sponsor’s equity stake in the Project; (b) the role of each Sponsor in the Consortium;

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(c) Main Sponsor’s obligation to subscribe to not less than twenty percent (20%) of the total issued and paid up share capital of the project company and maintain such shareholding from issuance of the Letter of Support till the sixth (6th)anniversary of successful commissioning of the Project; and (d) The Consortium Sponsors shall together hold at least fifty one percent (51%) of the total issued and paid up share capital of the project company and maintain such shareholding from the issuance of the Letter of Support until the sixth (6th) anniversary of successful commissioning of the Project. (e) Where the Consortium Agreement is governed by a law other than Pakistani law, PPDB will require a legal opinion from a law firm, acceptable to PPDB, qualified to issue opinions on the law governing the Consortium Agreement, confirming that the Consortium Agreement is legal, valid, binding and enforceable. 5.3 Foreign Instruments All Powers of Attorney and Affidavits executed outside of Pakistan must be authorized by a Notary Public or any Court, Judge, Magistrate and shall be counter signed by the Pakistan Consul or Vice-Consul or representative of the Government of Pakistan in the country of origin. 6. SUBMISSION OF SOQ 6.1 Timing, Number of Copies and Filing Requirements Sponsor(s) must submit through courier or by hand, an original and 3 (three) copies of its SOQ within the Due Date to PPDB at the following: Managing Director Punjab Power Development Board 1st Floor, Irrigation Secretariat, Old Anarkali, Library Road, Lahore. Ph. +92-42-99213879, +92-42-99213885 Fax. +92-42-99213875 Email: [email protected] Each SOQ shall be in English accompanied by the supporting documents. Should any original supporting documents not be in English a certified translation of the same in English shall be provided by the Sponsor(s). Submission of SOQ through fax, e-mail, cable & telegram will not be accepted. In case of submission by courier, it should be ensured that SOQ is reached the above mentioned office before or on the Due Date. In case of submission by hand, the SOQ should be submitted to the above mentioned office by the Due Date in such case a Receipt from the authorized person in the office of the Managing Director should be obtained. 6.2 Sealing and Marking of SOQ In order to avoid the possibility of loss of the contents of an SOQ due to a rupture, all the SOQ should be enclosed in a sealed envelope which itself should be enclosed in another envelope. Both the inner and outer envelopes must be marked with the full address as shown above and also be labelled as follows: . Commercial Papers . Does not contain Merchandise . Company Statement of Qualification Form . Main Sponsor’s name and contact person . Address . Telephone Number . Fax Number

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6.3 Additional Information/Queries Additional information/queries (if required) regarding the submission of proposals for the Project can be obtained from: Managing Director Punjab Power Development Board 1st Floor, Irrigation Secretariat, Old Anarkali, Library Road, Lahore. Ph. +92-042-99213879, 99213877 Fax. +92-042-99213875 Email: [email protected]

7. MATERIAL CHANGE (a) Sponsor(s) must immediately report to PPDB in writing any material change in the information provided in their SOQ (including any information relevant to any Consortium / Sponsor). The determination of material change shall be in PPDB’s sole and exclusive discretion. Any failure to report such material change shall constitute grounds for disqualification. The material change itself could also lead to disqualification of the Sponsor(s). (b) No significant change in the ownership or control of the Sponsor(s) shall be allowed at any time without the prior written consent of PPDB. In giving such consent PPDB may require the submission of modified SOQ by the Sponsor(s) to be re-evaluated under the terms and conditions of this PQD. 8. REVIEW AND EVALUATION OF SOQ 8.1 Review and Evaluation The Compliance Document of the Sponsor(s), as demonstrated in the Sponsor(s) SOQ, will be reviewed and evaluated by PPDB to determine as to whether the Sponsor(s) / Partners(s) will ultimately be eligible for development of 135 MW Taunsa HPP. RFP will be issued to all sponsors pre-qualified in accordance with the criteria for evaluation of Statement of Qualification (SOQ) against payment of specified fee. 8.2 Supplementary Information Where PPDB deems it necessary, it may request supplementary information or documentation from Sponsor(s) and whenever such request is made the Sponsor(s) shall provide the same to PPDB by such date as may be specified by PPDB. 8.3 Return of SOQ PPDB shall be under no obligation to return any SOQ or supporting materials submitted by Sponsor(s). 8.4 No Reimbursement of Costs PPDB shall not entertain any claim nor shall it reimburse the Sponsor(s) for any costs incurred, including but not limited to, the registration, purchase, submission, or any other costs associated with or incidental thereto with this PQD. 9. NOTIFICATION OF PRE-QUALIFICATION If the Sponsor(s) fulfil the eligibility requirements set out in Section 2.1 and are not disqualified in terms of Section 2.2 will be issued a Notification of Pre-Qualification to the Main Sponsor. 10. DISCHARGE AND EXEMPTION Sponsor(s) that submit SOQ exempt and discharge GoPb including PPDB, its consultants, advisors and personnel, completely and unconditionally from any responsibility or liability for the decisions that may be made with respect to its Pre-Qualification hereunder and that GoPb, PPDB, its consultants, advisors and personnel shall not be liable for any such actions and shall be under no obligation to inform the Sponsor(s) of the grounds for disqualification.

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11. USE OF INFORMATION Permission for disclosure of information submitted by Sponsor(s) as part of the SOQ is not required for the release of information to GoPb including PPDB, its consultants, advisors and personnel for the purpose of Pre-Qualification and evaluation. 12. GOVERNING LAW This PQD will be governed by and construed in accordance with all applicable Laws of Pakistan. 13. DISCLAIMER This Prequalification Document (PQD) by Punjab Power Development Board (PPDB) does not create any legal and financial commitment. Moreover, PPDB reserves the right to withdraw from or cancel the process or any part thereof or to vary any of its terms at any time without giving any reason whatsoever. This PQD does not constitute an agreement; its sole purpose is to provide interested parties with information that may be useful to them in submitting their Expressions of Interest (EOIs) pursuant to issuance of this PQD. Nothing contained in any other provisions of this PQD nor any statements made orally or in writing by any person or party shall have the effect of negating or suspending any of the disclaimers set forth in this disclaimer.

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PART – II

ANNEXURES AND APPENDICES

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Annexure A 135 MW Taunsa Hydropower Project

SOQ Letter Managing Director Punjab Power Development Board Irrigation Secretariat, Old Anarkali, Lahore.

The undersigned Last Name: ______First Name: ______Title/Position: ______Company: [____Applicant______] (the “Main Sponsor”)

In case of consortium: the consortium consists of the following consortium partners: a. _____ [Main Sponsor] b. _____ [Partner] Acting as the legal representative of the persons/entities pursuant to the [power(s) of attorney] attached hereto as Annexure-D1 and Annexure-D2, located at the following address: Address: ______Telephone: ______Fax: ______Email: ______

Hereby certify, represent, warrant and agree, on behalf of the Sponsor(s) that: 1. This Statement of Qualifications (“SOQ”) Letter, along with all its attachments listed at Annexure B to G attached hereto, forms our SOQ and is submitted in response to the Pre-Qualification Document issued by PPDB, in order to get pre-qualified for development of solicited site of 135 MW Taunsa Hydropower Project. All capitalized terms used herein shall have the meanings assigned to such terms in the Policy. 2. We certify that: (i) the information submitted as part of this SOQ is complete and accurate and legally binding upon individual Sponsor and each and every member of the consortium]: (ii) we will be bound severally and jointly to (a) this SOQ, (b) the terms of the Proposal submitted with PPDB along with this SOQ, (c) (i) we accept the documents, terms and Conditions of the PQD; and (ii) we will pay all fees as described in the Policy, and/or advised by PPDB. 3. We understand the criteria and process for evaluation of SOQ established in this PQD, and acknowledge that PPDB is not obliged to accept our SOQ and/or accept our Proposal based on this SOQ and may at any time reject our SOQ or cancel the pre-qualification process at its sole discretion and that PPDB shall not be liable for any such actions and shall be under no obligation to inform the Applicant of the grounds for them. 4. PPDB and its authorized representatives are hereby authorized to conduct any inquiries or investigations to verify the statements, documents and information submitted in connection with this SOQ, and to seek clarification from our bankers and clients regarding and financial and technical aspects. This SOQ letter will also serve as authorization to any individual or authorized representative of any institution referred to in the supporting information, to provide such information deemed necessary and requested by you to verify statements and information to provide such information provided in this SOQ or with regards to the resources, experience and competence of the Applicant. In [location], on this [date] The Main Sponsor duly authorized to execute the SOQ for and on behalf of the Applicant [consortium]:

______Authorized signature and seal Name: …………………………………… C.N.I.C. ______Page 13 of 29 Pre-qualification Document PUNJAB POWER DEVELOPMENT BOARD Solicited Site-Taunsa HPP ENERGY DEPARTMENT

Annexure B 135 MW Taunsa Hydropower Project Financial Statement Data

B-1 The Sponsor, or each of the Sponsors in the case of a Consortium, must fill Table B-1 below accompanied with supporting documentary evidence. Table B-1: Financial Statement Data Name of Sponsor (Individual/Corporation/Consortium Sponsor) (All figures in USD or equivalent Pak Rupees) 2016 2017 2018 1 Current assets 2 - Cash and cash equivalents 3 - Other current assets 4 Fixed assets 5 Other assets (please specify) 6 Total assets 7 Current liabilities 8 Long-term liabilities 9 Other liabilities 10 Total liabilities 11 Net Worth (6 minus 10) 12 Shareholders’ equity 13 - Paid up capital 14 - Retained earnings 15 - Others (please specify) 16 Other Reserves (please specify) Operating Results 17 Revenues 18 Gross profit 19 Income before interest and tax 20 Financial charges 21 Tax 22 Net profit after tax 23 Dividends paid

______Authorized signature and seal

C.N.I.C. #.______

Notes

1. In case the sponsors are a Consortium, please provide a separate Annex B for each member of the consortium. 2. Please provide last three (3) years audited financial statements in accordance with International Financial Reporting Standards (IFRS) / Generally Accepted Accounting Principles (GAAP). In case the Sponsors are a Consortium, attach last three (3) years audited financial statements for each member of the consortium. 3. In case any Sponsor(s) has subsidiary companies, consolidated financial statements are also

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required in accordance with International Financial Reporting Standards (IFRS) / Generally Accepted Accounting Principles (GAAP). 4. In the case of listed companies please also attach most recent quarterly financial statements. 5. In case the reporting currency in the financial statements is not in US Dollars, conversion rate prevailing on [______] shall be used which rate must be specified below 6. For the sake of calculation of financial worth of the consortium, the financial credentials of each member (other than the Main Sponsors) shall be considered on prorata basis as per the project equity contribution of the respective member

Reporting Currency Conversion Rate used in Financial Statements

------

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Annexure C 135 MW Taunsa Hydropower Project Experience of Power Project

The Sponsor, or each of the Sponsors in the case of a Consortium, shall provide the required information regarding the Experience of Power Projects in Table C-1. The information provided herein will be used by PPDB to assess the Sponsor(s) qualifications required under Section 3.2 of the PQD. Only projects successfully commissioned within past 15 years having and having capacity of not less than 100 MW of the Project will be considered Pre-qualification of Sponsor(s). “Experience of Power Projects” shall include experience of acting as all or one of the following:  Lead Project Developer  Lead Construction Contractor  Direct or Indirect shareholder of at least 15% of an existing project company which has successfully commissioned a power project of 100 MW capacity or above.  Lead Operation Manager

The Sponsor, or each of the Sponsors in the case of a Consortium, must fill Table C-1 below separately for each project completed by it accompanied with supporting documentary evidence.

Table C-1: Experience of Power Projects Name of Sponsor (Individual/Corporation/Consortium Sponsor)

(______[Name of previous project] Power Project ) No. Item Information 1 Name of the Sponsor 2 Sponsor(s) role in the project completed i.e. Lead Project Developer, Lead Construction Contractor, Majority Share holder or Lead Operations Manager

3 Name of Project 4 Sponsor(s) share in the equity of the completed project (if applicable) 5 Location of plant 6 Name of owner (including contact person, his address and telephone, fax No.’s/ email address ) 7 Name of power purchaser 8 Capacity of plant 9 Type of plant 10 Fuel of plant 11 Number and rated capacity of units 12 Status of plant [Under construction or commercial operation] 13. Number of Years of successful operation Total number of years______from______to ______.

14 Principal manufacturers of major equipment

15 List of specific major tasks/services performed by Sponsor(s) 16 Date of award of project 17 Duration of construction period 18 Commercial operations date of each unit 19 Total capital cost of project 20 Companies and institutions who financed the project [names and amounts in USD, required if the Sponsor(s) were equity partners in the project] 21 Value of contract [amount in USD required if Sponsor(s) were a Lead contractor ] 22 Any other details

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Annexure D-1 Power of Attorney

[IMPORTANT NOTICE: Power of Attorney to be printed on stamp paper or equivalent in case of a foreign Applicant signed and notarized. In the case of a Pakistani Attorney, a copy of his computerized national identity card (“CNIC”) should be attached with the Power of Attorney. In the case of a non-Pakistani Attorney, a copy of his passport should be attached.]

Instructions for Applicants:

If the Applicant is a Consortium each member of the Consortium, other than the member being nominated, shall furnish a Power of Attorney authorizing the a member to act and receive instructions on behalf of all the Consortium members and to submit the Proposals for and on their behalf.

KNOW BY ALL MEN THAT by this Power of Attorney (“Power of Attorney”), ______[Insert name of Consortium member] having its registered office at [], does hereby nominate, appoint and authorize ______[insert the name of the Authorized Member] having its registered Head Office at [] hereinafter referred to as the “Attorney”, to : (i) sign and submit to the Government of Punjab, Punjab Power Development Board, (PPDB) or its authorized nominee the Proposal and all other documents and instruments (“Proposal”) required pursuant to the Pre-qualification Documents (PQD) for approximately 135 MW Taunsa solicited Hydropower Project located on Indus River (Project), including but not limited to the Proposal Letter, financial and technical strength information and the Project implementation Approach; (ii) execute all such deeds, documents and instruments as may be considered necessary and expedient in relation to the foregoing; and (iii) perform and carry out all other actions as may be required by PPDB under the PQD Document. ______[Insert name of Consortium member] does hereby ratify and confirm whatever the Attorney shall do by virtue of these presents.

Name of the Grantor……………. Designation: ……………………. National ID Card/ Passport No. ………………… WITNESSES: 1.

2.______

NOTARY PUBLIC:

______

______

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Annexure D-2 Power of Attorney

[IMPORTANT NOTICE: Power of Attorney to be printed on stamp paper or equivalent in case of a foreign Applicant, signed and notarized. In the case of a Pakistani Attorney, a copy of his computerized national identity card (“CNIC”) should be attached with the Power of Attorney. In the case of a non-Pakistani Attorney, a copy of his passport should be attached.] Instructions for Applicants:

1. If the Applicant is not a Consortium, it will furnish a Power of Attorney authorizing the person who signs the Proposal Letter and other documents forming parts of the Proposal to sign for and on behalf of the Sponsor(s) and to bind the Sponsor(s) to the signed Proposal and any subsequent agreement.

2. If the Sponsors is a Consortium, each member of the Consortium (including the member being nominated) shall furnish a Power of Attorney authorizing the person or persons who sign(s) the Proposal Letter and other documents forming parts of the Proposal to sign for and on behalf of the Sponsor(s), which term includes all members of Consortium, and to bind the Sponsors to the signed Proposal and any subsequent agreement.

KNOW BY ALL MEN THAT by this Power of Attorney (“Power of Attorney”), ______[Insert name of Consortium member] having its registered office at [], does hereby nominate, appoint and authorize Mr ______s/o of ______, r/o ______(whose specimen signature appears below) on behalf of ______[Insert name of Consortium member] hereinafter referred to as the “Attorney”, to : (i) sign and submit to the Government of Punjab, Punjab Power Development Board, (PPDB) or its authorized nominee the Proposal and all other documents and instruments (“Proposal”) required pursuant to the Pre-qualification Documents (PQD) for approximately 135 MW Taunsa solicited Hydropower Project located onIndus River (Project), including but not limited to the Proposal Letter, financial and technical strength information and the Project implementation Approach; (ii) execute all such deeds, documents and instruments as may be considered necessary and expedient in relation to the foregoing; and (iii) perform and carry out all other actions as may be required by PPDB under the PQD.

______[Insert name of Consortium member] does hereby ratify and confirm whatever the Attorney shall do by virtue of these presents.

Name of the Grantor……………. Designation: ……………………. WITNESSES: National ID Card/ Passport No. …………………

1.

2.______

NOTARY PUBLIC: ______(Specimen Signature of Authorized Attorney (Specimen Signature of Authorized Attorney)

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Annexure E

Affidavit of Sponsor(s)

[IMPORTANT NOTICE: Affidavit to be printed on stamp paper or a Legal Paper or equivalent in case of a foreign Applicant signed and notarized. A separate Affidavit from each Consortium member will be required.

Instructions for Applicants:

All Sponsor(s) whether individual or a Consortium, each member of the Consortium must submit an affidavit.

Instructions for Sponsor: Every Sponsor (including each Sponsor of a Consortium) must submit an Affidavit.

AFFIDAVIT OF {Name of Sponsor (Individual/Corporation)} [] SON OF/HEAD OFFICE[] RESIDENT OF /LOCATED AT []

I the above named deponent do hereby solemnly declare and affirm on oath as under:

1. That [insert name of Consortium Sponsor/ Individual] is not presently under default with any financial institution and has not been declared as bankrupt or insolvent under the laws of any country which has jurisdiction over [insert name of Consortium Sponsor/ Individual] in the last three (3) years.

2. (Only the Main Sponsor is required to submit this point) That the Main Sponsor does not own more than 25% of the total generation capacity in Pakistan at the time of submission of SOQ. 3. (Only the Main Sponsor is required to submit this point). That the Main Sponsor hereby commits irrevocably in the SOQ to hold at least twenty percent (20%) of the equity of the project company during the “lock-in-period” which will be from the issuance date of the Letter of Support until the sixth anniversary of the successful commissioning of the plant. 4. That the Sponsor(s) hereby commit in the SOQ to provide collectively fifty one percent (51%) of the total equity in the Project and to hold such minimum equity from the date of the LOS to the sixth anniversary (6th) of the Commercial Operations Date of the Project, if the Sponsor(s) were to be selected as the successful Pre-Qualified Sponsor. 5. That within its shareholders, owners and companies there is no individual working for PPDB, GoPb or WAPDA and DISCOs.

Deponent

Verification Verified on oath this day/month of [], 2016 at [] that the contents of this Affidavit are true and correct to the best of my knowledge and belief and that nothing has been concealed therein.

Deponent

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ANNEXURE F-1

CONSORTIUM AGREEMENT

Instructions for Sponsors: (Only applicable in the case of a Consortium).The Consortium Agreement inter-se the Sponsors must be submitted to PPDB. Please see Section 5.2 for instructions.

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ANNEXURE F-2

LEGAL OPINION ON CONSORTIUM AGREEMENT

Instructions for Sponsors: (Only applicable in the case of a Consortium). A legal opinion on Consortium Agreements governed by a law other than Pakistani law must be submitted to PPDB. Please see Section 5.2 (e) for instructions.

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ANNEXURE G

UNDERTAKING

[IMPORTANT NOTICE: Declaration to be printed on stamp paper singed and notarized from country origin]

Sponsor (Instructions for Sponsor: Every Sponsor (including each partner of a Consortium) must submit a Declaration).

Declaration of [ Name______Company______Designation having its registered office______] I the above-named deponent do hereby solemnly declare and affirm on oath: That [insert name of Consortium Partner / Individual] is not presently involved in any litigation against any entity / functionary of Government in Power Sector and doesn’t have any history of legal and regulatory incompliance.

That [insert name of Consortium Partner / Individual] has not committed any misrepresentation and concealment of information in the SOQ.

That [insert name of Consortium Partner/ Individual] is not blacklisted / restrained to operate in power sector anywhere.

That the information provided in Annex B & C is true and correct to the best of my knowledge and belief and that nothing has been concealed therein.

Signatures: ______Designation: ______Company Seal: ______CNIC / Passport # ______

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ANNEXURE H

Criteria for Evaluation of PQD for Solicited Site Projects

1. TOTAL SCORE [100 Marks]

1.1 TECHNICAL STRENGTH SCORE (30 Marks)

(a). Power Project Development Experience 20 Marks (b) Power Project Operation, Management Experience 10 Marks

1.2 FINANCIAL STRENGTH SCORE (60 Marks)

Applicant Financial Strength Score = A (nw) + A (lr) + A (bp) + A (ab)

Whereas; A(nw) =Net worth Score of the Sponsor(s) 30 Marks A(lr) =Liquidity Score of the Sponsor(s) 05 Marks A(bp) =Borrowing Power Score of the Sponsor(s) 15 Marks A(ab) =Asset Base Score of the Sponsor(s) 10 Marks

1.3 PROJECT IMPLEMENTATION METHODOLOGY (10 Marks)

a) Understanding of Project Development 1.5 Marks b) Timelines of Major Milestones 4.0 Marks c) Methodology 3.0 Marks d) Project Development Setup 1.5 Marks

2. QUALIFYING SCORE 65%

Aggregate qualifying score shall be 65% with the provision of obtaining minimum of 40% in each component of Technical, Financial and Project Implementation strength.

3. EXPLANATIONS:

3.1 TECHNICAL EVALUATION

a) Power Project Development Experience: A maximum of four (4) power projects shall be considered for evaluation. Each project will secure 20% marks against Power Project Development Experience (1.1.a above). For each hydropower project 5% additional marks will be given. b) Power Project Operation, Management Experience: A maximum of four (4) power projects shall be considered for evaluation. Each project will secure 20% marks against Power Project O&M Experience (1.1.b above). For each hydropower project 5% additional marks will be given. 3.2 FINANCIAL EVALUATION 3.2(1) Net worth Score of the Sponsor(s) 30 Marks

Description Marks Collective Net worth of the Sponsor(s) is equal to 1.5 time 12 the equity contribution

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Collective Net worth of the Sponsor(s) is greater than 1.5 time the equity contribution but less than or equal to 2 16 times of the equity contribution Collective Net worth of the Sponsor(s) is greater than 2 time the equity contribution but less than or equal to 2.5 20 times of the equity contribution Collective Net worth of the Sponsor(s) is greater than 2.5 time the equity contribution but less than or equal to 3 25 times of the equity contribution

Collective Net worth of the Sponsor(s) is greater than 3 30 time the equity contribution *Note: For the purpose of calculation of net worth, the equity contribution will be taken as 20% of the notional Project cost.

3.2(2) LIQUIDITY ASSETS Any sponsor with highest liquidity shall qualify full marks provided that the liquidity score in case of ranking of more than one sponsor shall be calculated as under: LS Score = A (lr) = (LR / Hr) x 5 LR = sum of the liquidity of the Main Sponsor plus product of (a) liquidity of each member of the consortium and (b) its %age equity as provided in the consortium agreement Hr = highest collective liquidity of the Sponsor(s) amongst all applicants 3.2(3) THE BORROWING POWER In case of single sponsor borrowing power must be based on at least 20% equity provided that in case of more than one sponsor, the ranking shall be calculated in accordance with the following formula. BP Score = A (bp) = (Lr/DER) x 15, where:- DER = Debt/Equity; and Debt = sum of the debt of the Main Sponsor plus product of (a)debt of each member of the consortium and (b) its %age equity as provided in the consortium agreement Equity = sum of the equity of the Main Sponsor plus product of (a)equity of each member of the consortium and (b) its %age equity as provided in the consortium agreement Lr = lowest debt / equity ratio of the Sponsor(s) amongst all applicants 3.2(4) ASSET BASE SCORE OF THE APPLICANT.

In case of single sponsor the asset score shall be ascertained according to the possession of at 1.5 times equity contribution of the project, provided that in case of more than one sponsor ranking shall be calculated in accordance with the following formula. AB Score = A (ab) = (V/Hab) x 10, where:-

V = sum of the total assets of the Main Sponsor plus product of (a) total assets of each member of the consortium and (b) its %age equity as provided in the consortium agreement Hab = highest collective total assets of the Sponsor(s) amongst all applicants

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APPENDIX-I

DESCRIPTION OF 135 MW TAUNSA HYDROPOWER PROJECT

1. Pakistan is a developing country where the rapidly growing population’s electricity demands have overloaded the power infrastructure. The fulfilment of these demands has become a serious concern and challenge for the Government. The Provincial Governments are taking steps as per national and provincial policies to plan and execute power projects and generate electric power through various sources and projects.

2. The Government of Punjab has also planned and initiated several power projects to fill up the demand and supply gap. The establishment of Punjab Power Development Board (PPDB) in 1995 was a step forward to achieve this goal. The Punjab Power Development Board (PPDB) on behalf of Government of Punjab intends to develop the Taunsa Hydropower Project through private sponsors as Independent Power Producer (IPP).

3. The technical due diligence of Feasibility Study (2013) by China Three Gorges International and BIDR was assigned to NESPAK. Due diligence report was submitted by NESPAK in 2014 after independent technical assessment of Taunsa Hydropower Project based on the review of various project related documents and a site visit. In light of the due diligence results NESPAK was assigned the task to update the Feasibility Study carried out by TGI and BIDR in June 2013.

4. Taunsa Hydropower Project is proposed to be located on right bank of Taunsa Barrage (676867.8088 Eastings (m) & 3376973.1271 Northings (m)) across Indus River. It is a run of the river, low head hydropower scheme envisaged to provide power to the national grid. The proposed project area is located on the Indus alluvial plain where the area opened up to form a large alluvial plain of Indus deposits containing sands and silts from thousands of years. Quaternary deposits mainly comprises manmade fill, Indus River alluvial deposits of clayey silt and silty sand. The plain is virtually flat, having an approximate general slope of 0.18 m per km towards the sea. Project location map is shown as Figure -1.

5. The highest monthly mean temperature of the project area is about 35.4 °C and the lowest monthly mean temperature is about 12.9 °C; the annual mean precipitation is about 210 mm; the mean annual wind speed range from ranges 0.4 knots to 6.8 knots and the mean annual relative humidity ranges from 22.7% to 88.6%.

6. During the updation of Feasibility Study, NESPAK carried out topographic survey, hydrological studies, geological and geotechnical site investigations, installed capacity optimization, electro- mechanical design, layout planning and hydraulic design, sedimentation and flood management studies, structural design, economic and financial analysis. The Land Acquisition & Resettlement Plan (LARP) has also been updated.

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Figure-1: Project Location Map

7. The main components of the scheme include a power channel consisting of headrace and tailrace, powerhouse, aqueducts, road and railway bridge. Hydraulic and structural engineering design has been carried out in accordance with the current engineering practices. The mechanical, electrical and control systems have also been designed for this scheme.

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8. Main features of the proposed Taunsa Hydropower Project are given below:

Barrage Design Discharge 28,312 m3/sec Powerhouse Design Discharge 3,155.5 m3/sec Installed Capacity 135 MW Rated Discharge 3,155.5 m3/sec Gross Head 6.0m Rated Head 5.8m Annual Generation at: i) Turbine shaft 650.89 GWh ii) Generator Terminal 637.87 GWh iii) Bus Bar with 1% aux. 631.52 GWh Turbine Type 3 Blade Bulb Turbine Turbine Units 9 Units Plant Factor 55.04% Runner Diameter 7.045m Turbine Speed 73.2 rpm

9. The proposed recommended layout of the hydropower scheme located on the right side of Taunsa Barrage is shown in Figure-2. The isometric views of the proposed Project are shown in Figures-3 & 4.

10. Four power generation alternatives were analysed to come to a conclusion for the most appropriate hydropower scheme through power optimization. The selection of most appropriate turbine type, i.e. bulb type turbine, was made considering the available head across and discharge variations. The rated head of 5.8 m has been selected which proved to be viable through economic analysis.

11. Physical model studies of the proposed power scheme carried out at Irrigation Research Institute (IRI), Nandipur. A testing scheme was chalked out and model tests were run accordingly to physically observe the flow pattern and behavior of proposed designs for different discharges. The hydraulic performance of the proposed designs was satisfactory at the physical model.

12. A sedimentation study was carried out to estimate the amount of sediment inflow and its consequences on the barrage and powerhouse. It was concluded in the study that average annual sediment influx at Taunsa Barrage is 104 million tons including bed sediment load at 10% of suspended sediment load. The effect of the construction of Taunsa Hydropower Project on the flood management capacities of the barrage is included in the study.

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Figure-2: Recommended Layout of Proposed Hydropower Scheme

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Figure-3: Isometric view of proposed Project

Figure-4: Isometric view of proposed Project

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