Legal Advisor (International)(3011 Views)
About Ministry of Mines and Petroleum
The long lasting conflict in Afghanistan has had a severe impact on the power sector, both directly (dilapidated generation, transmission and distribution infrastructure) and indirectly (serious management issues at the national power utility). In addition, Afghanistan still largely relies on imports from neighboring countries for its power supply, which is not only costly but also raises concerns of the security and reliability of supply. With the help of the donor community, significant efforts have been undertaken by the Government of Afghanistan (GoIRA) to reform and modernize the power sector, by both upgrading and developing infrastructure and by improving overall management of the sector.
As part of efforts to increase availability of power in the country and self-reliance, GoIRA is exploring options to develop domestic generation capacity. In this respect, discussions have been held between GoIRA and various private parties for the development of a gas-to-power plant in Mazar-e-Sharif (estimated 50MW) under an Independent Power Plant (IPP) arrangement, “the Mazar IPP”. The Mazar IPP would be implemented on a direct agreement basis (without a competitive process). It would also represent the first project of its kind in Afghanistan and is, therefore, considered important in terms of precedent setting as it could serve as a model for future transactions of the same nature.
Public parties involved in discussions on the Mazar IPP have so far included the Ministry of Finance (MoF), the Ministry of Energy and Water (MEW), the Ministry of Mines and Petroleum (MoMP), Da Afghanistan Breshan Sherkat (DABS), the national power utility, and Afghan Gas Enterprise (AGE), the state-owned gas facility. Private parties involved include the International Finance Corporation (IFC) and the Ghazanfar Group (GG), a private Afghan conglomerate. A Memorandum of Understanding (MoU) was signed between the parties in connection with the Mazar IPP on May 13, 2015, and the Heads of Terms were signed between the parties on September 22, 2016 to capture key contractual terms
While structuring discussions are still on-going between the parties, the following parameters are expected:
- the Mazar IPP would be established as a corporation in Afghanistan (Project Company) and the plant constructed on private land;
- the gas needed for the plant would be supplied by AGE under a long term gas supply agreement;
- power produced would be purchased by DABS under an off-take agreement (estimated 20 years term).
To ensure the viability of the Mazar IPP, the issuance of several guarantees is also being considered, including to secure the purchase of power by DABS and certain termination payment. Such guarantees could be provided by the World Bank’s International Development Association (IDA). In addition, Political Risk Insurance is being considered to cover political risk for the sponsors, which could be provided by the Multilateral Investment Guarantee Agency (MIGA) . The structure of the Mazar IPP is not yet finalized and the required guarantees will depend upon the structure of the transaction.
It should be noted that similar to the power sector, the gas sector is currently undergoing a restructuring, involving, among others: a proposed corporatization and commercialization of AGE (with the objective of making it a market-oriented profitable company), a review of the sector legal, regulatory and institutional framework (with the objective of establishing a modern and coherent policy framework – including opening the exploration and production stages to private sector operators), a review of price and tariffs issues and the establishment of a regulator.
Given the number and complexity of issues to go ahead with the Mazar IPP, GoIRA has requested assistance from the World Bank, through the Afghanistan Extractives for Development Project (AE4D) implemented by MoMP, to hire a set of individual consultants (spanning both gas and power sector expertise as well as legal, financial and economic expertise) to support project preparation. The consultants are expected to work closely together and with MoMP as well as other public parties, including AGE, MEW, DABS and MoF during the preparation of the Mazar IPP. It is further expected that the individual consultants will work with a transaction advisory firm, to be hired during the preparation stage, who will provide additional support to GoIRA. The transaction advisory firm will take on responsibilities related to the negotiation and closing of this transaction and will also build capacity of the different public entities involved in the Mazar IPP to undertake additional PPP-type transactions in the future, which are expected to build on the structuring precedents set by the Mazar IPP.
MoMP, via the AE4D project, intends to engage the services of an experienced legal advisor to assist in the implementation of this activity as well as a potential further IPP arrangement that is comparable to the Mazar IPP in its key components and pertinent matters (as further detailed below) and that is ready for implementation. These terms of reference seek to invite proposals from consultants qualified and experienced in the legal preparation of IPPs to provide the services described under the scope of work below.
While the legal advisor will be hired by MoMP under AE4D, the legal advisor will need to provide assistance to all Government stakeholders involved in the Mazar IPP and potentially another IPP (MoMP, AGE, MEW, DABS and MoF). A key task of the legal advisor will be to reconcile the different views of the various stakeholders and to safeguard the interests of GoIRA.
|Date Posted:||01 Jan 2017||Reference:||MoMP / AE4D / CS - IC - 03|
|Closing Date:||29 Jan 2017||Work Type:||Unknown/Other|
|Number of Vacancies:||1||Gender:||Any|
|Functional Area:||Legal||Open Ended:||NO|
|Nationality:||Any||Salary Range:||As per company salary scale|
|Contract Type:||Short Term||Years of Experience:||10 Year(s)|
|Contract Duration:||1 Year(s) & 0 Month(s)||Extension Possibility:||No|
Duties and Responsibilities
1. Initial Stage
The structure of the Mazar IPP is still under discussion (as might be the case for a comparable IPP arrangement) – and GoIRA will be required to take positions on a series of technical (including commercial), financial and legal issues, so as to allow for these IPPs to move ahead . In this respect, the legal advisor is expected to provide just-in-time assistance on such issues as the GoIRA (i.e. MoMP, AGE, MEW, DABS and MoF) will request. The legal advisor may also take the initiative to raise issues that it considers important for GoIRA to address.
Assistance at the initial stage shall focus on the preparation of a legal and regulatory due diligence report for the Mazar IPP (and potentially another IPP), which should cover issues such as:
• Review of Afghanistan legal framework to understand the legal and regulatory basis to enable a private power generator to operate/sell power to DABS. This would include an assessment of potential impact of draft Electricity Law and draft PPP Regulations. It should be noted that the legal framework is in the process of being modernized on a number of issues in Afghanistan (including the power and gas sector and broader PPP framework). Going ahead with IPPs will necessitate looking into a number of laws and regulations – and to assess under which conditions IPPs can proceed. Laws and regulations to be looked into may cover: power sector (including conditions for an IPP to operate); gas sector; PPPs; corporate issues; guarantees; real estate and lease; foreign investments; tax and customs; dispute resolution; institutional framework (PPPs, gas and power sectors, etc.); procurement (including to check that the proposed approach – direct negotiations – is possible, but also as regards the conclusion of the gas supply contract and power purchase agreement); safety, social and environment safeguards, etc. Given the ongoing reforms on various aspects of the legal framework in Afghanistan, it is likely that the IPPs will need to address a number of issues that are not – or not yet – regulated by a law. The approach could therefore consist of relying on agreements within the IPP contract(s). In doing so, the legal advisor would need to keep in mind the various laws/policies currently awaiting approval and more generally the overall, systemic objectives of the sectoral reforms underway. Any gaps in this respect (between specific arrangements proposed under the Mazar IPP and potentially another IPP arrangement and proposed sectoral reform) should be identified upfront by the legal advisor.
• Corporate and institutional arrangements, which would include a review of AGE’s/DABS’s articles of incorporation to understand AGE’s/DABS’s legal ability to enter into a GSA/PPA with a private power generator;
• Lenders issues (e.g., permissibility of direct agreements between lender and government entities);
• Foreign investment issues (possible restrictions on ownership of local companies by foreign investors, restrictions on currency conversions);
• Asset and land due diligence to determine title of ownership and ability of MoMP/MEW/DABS/AGE to allow private power generator to connect to GoIRA land/infrastructure;
• Dispute resolution (e.g., does the national court system satisfy the investors' need for a fair, transparent and efficient dispute resolution mechanism? If not, is domestic or international arbitration a possibility?);
• Review of Heads of Terms. Heads of Terms for the Mazar IPP were signed on September 22, 2016 (and similar documents may be signed for a comparable IPP arrangement). While these Heads of Terms are non-binding, they are expected to guide the development of the Project Agreements. The legal advisor is expected to review these Heads of Terms to familiarize herself/himself with the proposed contractual positions and obligations, including:
(i) risks to be assumed by each party;
(ii) performance standards to be achieved by the private partner;
(iii) procedures for monitoring compliance with contractual obligations;
(iv) dispute resolution mechanisms;
(v) exit and termination procedures;
(vi) force majeure procedures; and
(vii) payment regimes.
2. Transaction Stage
Once the structure for the Mazar IPP (and potentially another IPP) has been finalized and agreed, a number of agreements will need to be prepared and negotiated among the parties (the Project Agreements). While it is difficult to precisely list the Project Agreements until the final project structure(s) has been agreed upon, possible agreements include: an Energy Conversion Agreement or Power Purchase Agreement (PPA); a Gas Supply Agreement (GSA) , an Implementation Agreement (IA - to include a GoIRA sovereign guarantee along with other GoIRA support), Land Lease Agreement (LLA) and any other direct agreements needed for the project(s), i.e. connection agreement (which maybe be inside the PPA), environmental and/or water use agreement (the mode of operation of an IPP in Afghanistan – as well as any contracts to be concluded with GoIRA for this purpose – will need to be determined). A key task for the legal advisor is to support GoIRA to understand the package of agreements it must put in place, depending on the deal structure which is decided.
Assistance at the transaction stage is expected to include:
• Review of Project Agreements: the Project Company will take responsibility for the drafting of the Project Agreements for the Mazar IPP. The legal advisor would review draft Project Agreements (both initial drafts and revised versions), support GoIRA in reviewing the agreements, and provide written comments on the documentation. The review should take into account: (a) regional and international precedents; (b) local situation and its impact on project implementation and investment requirements; and (c) the nature of the Mazar IPP as the first IPP in Afghanistan, which is also expected to serve as a basis for future transactions. Specific support would include:
(i) support in understanding clearly the risks that GoIRA would assume upon entering into the agreements, and the fairness of the proposed risk allocation;
(ii) support GoIRA in its review of proposed commercial terms (based on the economic and financial analysis undertaken during the preparation phase).
Depending on the progress made during the transaction stage of the Mazar IPP (and potentially another IPP), the legal advisor – in cooperation with the transaction advisory firm – may also be expected to support GoIRA in the negotiation of the final Project Agreements, in order to protect the interests of GoIRA and ensure the fairness of the final Project Agreements
Because the Mazar IPP is still under preparation, with discussions ongoing on its structure, and the selection of an additional IPP(s) has not been made, some level of flexibility is needed in the definition of the responsibilities of the legal advisor– as well as for the delivery of services.
As regards the initial phase, the legal advisor would be expected, as discussions on the structure advance, to advise the public stakeholders on the main parameters of the proposed transaction(s), from a legal point of view, and prepare a legal and regulatory due diligence report to capture analysis and recommendations, from a legal and regulatory perspective, that may or will impact the Mazar IPP (and potentially another IPP).
As regards the transaction phase for the Mazar IPP, the legal advisor would be expected to assist the public stakeholders in reviewing the draft Project Agreements to ensure that: (i) contractual structure and contractual terms are in compliance with good business practices in the industry; and (ii) the interest of the GoIRA and relevant public parties involved are properly assessed, understood and defended. This may include the preparation of legal opinion documents on specific issues, and written feedback on the draft Project Agreements.
III. SUBMISSION OF DELIVERABLES, TIMELINE, AND PAYMENT SCHEDULE:
The following written deliverables as expected from the legal advisor:
• Initial Stage:
a. Legal Framework Due Diligence Report
• Transaction Stage:
a. Written comments on Project Agreement drafts
b. Preparation of legal opinion reports, as required
c. Preparation of summary document outlining key legal contractual obligations of GoIRA and the private partner
All deliverables are to be provided in English. All deliverables must be in Microsoft Word format (with relevant annexure and tables in excel format where required) and must be delivered to MoMP and the World Bank Task Team Leaders, Fanny Missfeldt-Ringius at email@example.com and Christina Paul at firstname.lastname@example.org. All original text, figures/tables must be delivered in a format which enables modifications. All non-original work must be properly sourced and referenced. The World Bank Group team will engage regularly with the legal advisor for completion and submission of the deliverables. The legal advisor will be expected to attend all meetings, teleconferences and briefing sessions and respond to other communication promptly for the duration of the Assignment.
• The legal advisor is expected to have minimum of a Master’s Degree in law. S/he must be fully conversant with all aspects of PPP. S/ It is anticipated that the skills and expertise required for this assignment will include the following:
• At least 10-15 years relevant experience in successfully leading similar assignments related to PPP/IPP structuring and contract design;
• Relevant legal expertise, with relevant experience in legal due diligence, project finance, gas and power issues (including power/gas sector agreements), and structuring, drafting and negotiation of PPP agreements;
• Demonstrated ability to work with government/public sector decision-makers and organizations;
• Knowledge of relevant best practices in regard to policies, legislation, institutional and regulatory frameworks for PPPs;
• Strong oral and written communication skills in English language with a capacity to communicate effectively to a wide variety of audiences, including conducting presentations;
• Ability to manage multiple tasks effectively and a strong team player with excellent leadership and interpersonal skills and the ability to work in a high profile environment;
• Experience with working in Afghanistan or in countries where there is no PPP precedent and/or with challenging political and security situations would be strongly preferred;
• Prior experience working with international organization, such as the World Bank Group, would be considered an asset;
• Good analytical skills, and the ability to work through complex legal issues;
• Good drafting and negotiation skills.
Afghanistan - Balkh
Afghanistan - Kabul
Masters Degree, Legal
Expressions of interest (including CV and three referees) should be sent to the email address below by no later than 15:00 hours (local time) 14 January 2017. Reference MoMP / AE4D / CS - IC - 03 must be quoted on all correspondence and the Expression of interest.
Ministry of Mines and Petroleum, Program Management Unit (PMU)
Attention: Mr. Abdul Waheed Khalili
Afghanistan Geological Survey Building (AGS), 2nd floor, Annex,
Close to Abdul Haq roundabout, 3rd Macrorayan, Kabul, Afghanistan.
Cell phone Nos.: +93 (0) 789 22 14 42
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