Call for Request for Application (RFA) for Grant Program

USAID Urja Nepal Program

Call for Request for Application (RFA) for Grant Program

RFA-URJA-2024-003

The USAID Urja Nepal Program (Urja Nepal) is supported by the American people through the United States Agency for International Development and implemented by Deloitte Consulting LLP. Urja Nepal aims to create a financially viable electricity sector that provides affordable, reliable, and secure power and enables the entry of private sector investment into the Nepal market through following four objectives: 

    Objective 1: Utility Performance and Relevant Sector Policies are Improved.

    Objective 2: Advanced Energy Systems Deployed

    Objective 3: Increased Private Sector Engagement

    Objective 4: Cross Border Electricity Trade between Nepal and its Neighbors Advanced

Project Description

The dairy sector in Nepal is crucial for both rural and urban economies, providing livelihoods to millions of small and marginal farmers and contributing significantly to the nation's GDP. It accounts for 63% of livestock GDP and 9% of agricultural GDP, with an annual milk production growth rate of 4.9%, reaching 2.48 million tons in 2020/21. This sector is vital for poverty alleviation and links urban and rural commerce. However, it is energy-intensive, relying heavily on thermal energy, primarily from firewood and diesel. Transitioning to cleaner energy sources is essential for sustainability, but high upfront costs and limited financing options pose significant challenges in Nepal's dairy sector. It is against these backgrounds that the energy service companies (ESCOs) based business models are becoming more relevant in Nepal.

An ESCO provides a range of energy solutions, including the design and implementation of energy-saving projects, retrofitting, and energy conservation measures. Operating under an Energy Performance Service Contract (EPSC), ESCOs manage the risks associated with these interventions. An EPSC is a budget-neutral agreement between the ESCO and the facility owner, where payments to the ESCO are based on achieving specified energy performance guarantees. The ESCO conducts an energy audit, identifies improvements, designs, and implements the project, and arranges financing. The facility owner repays the project cost from the monetary savings generated, with the ESCO guaranteeing sufficient savings to cover the project costs over the contract period. After the contract ends, additional cost savings benefit the facility owner.

As a pilot program to help address the issue in dairy sector, Urja Nepal is launching the grant activity “ESCO Pilot Grant for Dairy Industry” in one of the dairy plants within the Kathmandu Valley. Details of the dairy plant is in the RFA document.

Project Requirements:

The grants program aims to switch existing fossil fuel fired boilers to biomass boilers in the dairy industry. The application must also include detailed technical specifications of the proposed scope of supply, along with a list of associated accessories. Additionally, the applicant must provide performance guarantees on energy savings, addressing boiler efficiency, specific fuel consumption for biomass firing, percentage savings from the baseline energy scenario, and annual energy savings in kWh/MJ. Furthermore, guarantees and warranty conditions related to the operational parameters of the facility, such as temperature and pressure, must be specified, ensuring compliance with applicable standards.

The key activities under the grants program shall be included but not limited to the following activities:

• Design, implementation, and monitoring of energy-efficient technology.
• Carry out baseline energy study and site assessment and come up with installation plan.
• Draft and finalize the Energy Performance Service Contract.
• Procure required technology, install it and ensure compatibility with existing systems.
• Quality Assurance and Testing: Conduct checks and tests under various conditions.
• Carry out post installation activities like thorough quality assurance checks and testing procedures to verify the functionality and performance of the installed technologies. Along with proper documentation and reporting.
• Train personnel of the dairy industry in operation and maintenance and provide post-installation support and assistance.
• Repayment based on established energy savings under EPSC.

For further information, please refer to the application instructions below, including the detailed RFA with full application requirements.

Applicants must show how the proposed program will provide “additionality” to the existing program. Additionality is defined as a quick scale up or expansion of an existing program that will need minimal overhead and operational costs. USAID Urja Nepal plans to award one grant under this RFA with a grant amount not exceeding USD 35,000 equivalent to NPR 4.6 million only.

Urja Nepal requests technical and budget applications (using a provided template) from eligible applicants who are registered or have the legal authority to do business in Nepal with the following documents, by August 2, 2024. Requests should include the following:

• A completed technical application.
• A completed budget application
• Budget supporting documents, including the budget narrative, as applicable
• A copy of the applicant’s valid legal registration
• Organizational profile and/or chart.
• Operation policies and procedures
• Statutory audit report of fiscal year 2079/080
• CVs for project personnel (if necessary)

To apply, applications must be submitted online through the Fluxx Grants Portal. To do so, interested applicants must:

Register on the portal at https://dgrants.fluxx.io/apply/Urja

Receive the login credentials

Apply for the grant as per the instruction from the portal.

The detailed RFA document can be obtained by following this link or send a request to info@urja-nepal.com with RFA-URJA-2024-003 in subject line.

Issuance of this RFA does not obligate Deloitte and/or Urja Nepal to award a grant, nor will it pay any costs associated with the preparation or submission of application. Furthermore, Deloitte and/or Urja Nepal reserve the right to reject all applications, if such action is considered to be in the best interest of Deloitte and/or Urja Nepal.

The final award is contingent upon USAID approval.