Request for offer n° 143312




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SPECIFIC TERMS OF REFERENCE



FWC Commission 2007 – Lot n° 1
REQUEST FOR OFFER N° 143312

Preparation of TOR “Enhancement of environmental protection measures in the oil/gas industry of Central Asia”




  1. BACKGROUND

The project “Enhancement of environmental protection measures in the oil/gas industry of Central Asia” is to be financed by the European Commission under the Central Asian Action Programme 2006 (CAAP 2006). The attached Project Fiche 3 is an integral part of CAAP 2006 and provides the necessary background information on the project.


As stated in the above mentioned Project Fiche, the project is a part of the Inogate Programme. The Inogate Programme was recently extended to a wider policy dialogue aimed at enhancing energy cooperation between the European Union and the countries of the Black Sea, the Caspian Basin and their neighbours. This policy dialogue started in the Energy Ministerial Conference in Baku, November 2004 and running as ‘Baku Initiative’. The dialogue is aiming to develop enhanced energy cooperation for supporting the gradual development of regional energy markets in the Caspian Littoral States and their neighbouring countries in order to facilitate, in the future, a gradual integration between the respective energy markets and the European Union.
2nd Energy Ministerial Conference took place in Astana, on 30 November 2006, where the participating countries have endorsed a Road Map for the regional energy cooperation, and set out a plan of actions to bridge the gap between the current situation and the long-term vision. As agreed, the cooperation should focus on the following objectives:
a. Converging of energy markets on the basis of the EU internal energy market principles taking into account the particularities of the Partner Countries;

b. Enhancing energy security by addressing the issues of energy exports/imports, supply diversification, energy transit and energy demand;

c. Supporting sustainable energy development, including the development of energy efficiency, renewable energy sources and demand side management;

d. Attracting investment towards energy projects of common and regional interest.


Currently, the EU perspective position is to promote competition while developing and subsidising low carbon technologies through continued and expanded use of flexible market mechanisms and energy efficiency, without impairing economic growth. On the other hand, the automotive product market is fairly standardized and new automotive technologies concern mostly hybrid hydrogen vehicles development, last generation diesel engines promotion and utilization of bio fuels. The power market is completing the shift from coal to gas - CHP/ clean coal technologies, peak shaving mechanisms and tariffs are implemented for all EU countries and differentiated between household and industry, wind generation facilities are subsided and spreading at a good pace, the trading emission market is quite active. The EC has published the Green Paper on a European Strategy for Sustainable, Competitive and Secure Energy, which aims to ensure environmental sustainability, competitiveness and security of supply.
Central Asia has significant energy resources. Fossil reserves are huge, both offshore in the Caspian Sea as well as on the territory of Kazakhstan, Turkmenistan and Uzbekistan. Kyrgyzstan and Tajikistan have a vast potential for hydropower production, which is only partly utilised to cover mainly domestic needs.
From an emission point of view, the Central Asian countries besides lacking normative and rules have an obsolete automotive car fleet, very different fuel and safety standards. The most advanced country is Kazakhstan, where strict rules and normative exist concerning the safeguard of the environments, although these rules mostly neglect gas and products transport sectors. Massive oil production and big volumes of the associated gas, which is currently flared, present a serious danger to the environment. The environmental regulations on gas flaring have been toughened recently, although there are no adequate technical solutions found.
Environmental standards are normally responsibility of Ministries of Ecology. Turkmenistan, Uzbekistan and Kyrgyzstan have ratified the Kyoto Protocol, Kazakhstan has signed but not yet ratified. There are no tax incentives in any country linked to Brownfield redevelopment. Things are more complicated by the absence of long term plans as far as energy diversification policies and incentives. All countries have effective non-compliance and non-selective systems of fines, which are however limited in scope.


  1. DESCRIPTION OF THE ASSIGNMENT




  • Global objective

The overall objective of the project is to improve the capacity of Central Asian countries to access European markets for oil and gas, promoting increased efficiency and environmental protection of the gas/oil networks. The project is also aimed to find ways to engage the countries of Central Asia in a policy related to climate change by further promoting energy efficiency and energy saving taking also into account possible emission trading schemes.




  • Specific objective

The specific objective of this assignment is to provide a relevant expertise to the Delegation of the European Commission in Almaty in preparation of a Terms of Reference (ToR) for the regional project “Enhancement of environmental protection measures in the oil/gas industry of Central Asia” under the Central Asian Action Programme 2006.




  • Requested services, including suggested methodology

The Terms of Reference of the Project, including the logical framework will be drafted in strict compliance with the template used by EuropeAid Co-operation Office which can be found on the following web site:


http://ec.europa.eu/europeaid/work/procedures/documents/execution/services/b8annexiitor_en.doc
The attached Project Fiche should serve as a baseline for further elaboration of the Terms of Reference. The indicative project operational duration is of maximum 36 months. The project budget breakdown for services is the following:

Services € 3 000 000, including

Technical Assistance € 2 950 000

Final Evaluation € 50 000


This assignment is aimed at the preparation of the Terms of Reference for the Technical Assistance’s component. There would be a separate tender organised by the Commission’s services for the supply component. The ToR for technical assistance should include an activity to prepare technical specifications for equipment/materials to be purchased and to provide assistance to the EC Delegation to carry out and to supervise the supply tender.


The following tasks will be completed in order to achieve the objectives set out in this Terms of Reference:
Task 1. Fact Finding Mission to the region
1.1 Preparation to the mission

  • Mission scheduling and visa arrangements for all five countries in Central Asia

  • Preparation, in consultation with the European Commission Delegation in Almaty, of an indicative list of the meetings to be held during the visit. Preparation of draft letters requesting a meeting with all the relevant organisations in the region, including the government and non-government organisations, business and donor organisations. Such letter should have a clear list of issues to be discussed with each organisation, including list of documents to be obtained. The draft letters have to be sent for approval and further distribution to the responsible Project Manager in the EC Delegation prior to the mission.

  • Study the relevant documentation, including the Project Fiche and other available documents, including the relevant Tacis Inogate reports (see www.inogate.org).


1.2 Mission to Central Asia

  • Meetings with the relevant national counterparts, including the ministries of energy and the ministries of environment, meetings with the donors and international financial institutions;

  • Briefing and debriefing of the EC Project Manager*

* The list above is not exhaustive and the experts may be advised by the Project Manager and/or Beneficiary to meet other officials/experts. During the preparation phase and mission the consultant would have to liaise with the Tacis National Coordinating Units in Uzbekistan and Turkmenistan.


The second Expert will assist in arranging meetings, collecting information, drafting minutes of the meeting and providing other necessary support.
Task 2. Prepare draft Terms of Reference
2.1 Preparation of the draft ToR
The ToR should be prepared in accordance with the specific template as mentioned above. In general, the ToRs have to be clear, consistent and specific; the results should be realistic to be achieved in a given time and financial frameworks of the project.
In particular the following questions have to be answered:


  • Who should be a main project partner in each country? Who are the other important parties to be involved?

  • What is the current situation in the oil and gas sector with the environmental protection? What are the main problems and obstacles? Are they common for the region?

  • Is there plan/strategy to use Clean Development Mechanisms?

  • Is there a serious concern on a national level? If so, is there a national or company strategies/action programme to improve it? What has been done in a recent past by the Government?

  • Is there any other donor/international and regional organisation active in the field? What has been done and achieved by other projects?

  • What should be a scope of the proposed EU project, taking into account the available budget and the given timeframe?

  • Preliminary recommendations should be provided in regards to the supply component of the project.



2.2 Mission to Central Asia
The second mission to the Central Asian States has to take part to discuss the draft Terms of References with the key beneficiaries in each country.
The key beneficiary in each of the Central Asian countries has to approve the ToR by signing a Statement of Endorsement. Template of SoE will be provided by the EC Project Manager.
The final drafts of the project Terms of Reference and Logical Framework have to be submitted to the Project Manager in the EC Delegation, together with the signed SoEs.
Task 3: Assistance for the tender
This task would imply assisting, if requested, the EC Delegation during the tender. It includes assistance in providing clarifications to tenderers and participation at the evaluation sessions.


  • Required outputs

The Terms of Reference strictly according to the format used by the EuropeAid Co-operation Office, including the Logical Framework grid.


The Contractor is expected to provide a Russian translation of the abovementioned documents.



  1. EXPERTS PROFILE




  • Number of requested experts per category and number of man-days per expert

1. Category II Team leader (45 w/d)

2. Category III Second expert (27 w/d)


  • Profile required (education, experience, references and category as appropriate)


1. Team Leader (Category II)
Qualifications and skills

  • University degree in petroleum engineering, or similar

  • Excellent drafting skills

  • Fluent written and spoken English

  • Sufficient knowledge of Tacis rules, Project Management Cycle and drafting of EC ToRs and Logical Frameworks

  • Knowledge of Russian would be an important asset


Professional experience

  • Minimum of 8 years professional experience in the area of oil and gas industry

  • Working experience in the oil and gas industry, preferably, in the EU

  • Strong proven project management capabilities and proven ability in liaising successfully with institutions

  • Experience in design and conceptualisation of projects

  • Knowledge of pipeline operations practices NIS and/or Central Asia would be an asset




  • Working language(s)

English
2. Second Expert (Category III)


Qualifications and skills

  • University degree, would be an asset if in the field of environmental protection

  • Practical knowledge of the local situation in the Central Asian region with regard to the petroleum industry, as well as knowledge of other donors’ projects in the field

  • Good spoken and written English, ability to read and absorb the documents and to draft minutes, contribute to ToR drafting.

  • Fluent Russian


Professional experience

  • Proven ability in liaising successfully with institutions

  • Minimum of 5 years’ relevant professional experience

Each expert shall have to declare that:




  • S/he does not have commercial associations which may affect his/her neutrality during the duration of the assignment.

  • S/he undertakes not to divulge any information obtained during the assignment to any outsiders, unless given express clearance by the European Commission.

S/he will not exploit, or seek to exploit any information obtained during the currency of the assignment, unless given written clearance by the European Commission. S/he shall not allow him or herself to be put forward on any proposal to provide the services relating to the project covered by the assignment.
During all contacts with the national authorities in Central Asian countries or any other organisations, the experts will clearly identify themselves as independent experts, and not as official representatives of the European Commission.


  1. LOCATION AND DURATION



  • Starting period

Indicative starting date is mid September 2007


  • Foreseen finishing period or duration

Indicative end date is September 2008


  • Planning


Indicative Activity Plan


Activity

Working days

(Expert 1)



Working days

(Expert 2)



Task 1 Fact Finding Mission to Central Asia (preparation + travel + meetings with beneficiaries and donors in Almaty and Astana, Ashgabat, Bishkek, Dushanbe and Tashkent, briefing and de-briefing in EC Delegation Almaty)

20

15

Task 2 Preparation of the draft ToR

(first draft of ToR submitted 14 calendar days after return + Amendments & corrections of the draft ToR following comments from the Project Manager, submission to the beneficiaries of the English and Russian translation of ToR + travel + meetings to obtain Statement of Endorsement from the beneficiary)



20*

10*

Task 4: Assistance for the tenders during the tender clarifications and evaluations (if requested)

5

2

Total calendar days

45

27

Reserve (to be approved by the Project Manager)

5

TOTAL

72 (+ 5 reserve)


Notes:

* The draft ToR has to be submitted to the Beneficiary for the comments and approval in maximum 1 month and minimum 2 weeks in advance. 3 days have been allocated to incorporate the Project Manager’s and Beneficiaries’ comments into the ToR.



  • Location(s) of assignment

Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Turkmenistan and Republic of Uzbekistan




  1. REPORTING




  • Content

1. Debriefing to the Project Manager in Almaty and copy of minutes held with the beneficiaries and the donors. This should include an information on any deviations from the planned schedule, and include the copies of any relevant documents received from the national authorities or other actors. Minutes of the meeting should clearly indicate names of the person met and provide the detailed report on the content and issues of discussion.

2. The draft Terms of Reference and Logical Framework grid
3. The final draft Terms of Reference, Logical Framework grid and the signed Statements of Endorsement


  • Language

English for all outputs, draft ToR should be translated into Russian by the Contractor.




  • Submission/comments timing




Task/Responsibility

Description/Action

Timing

Tentative deadline

Contractor

Submission of the tentative mission time schedule, request for a visa support

Beginning of the assignment

September 2007

EC Project Manager (PM)

Provision of the relevant documents to the Team Leader

Beginning of the assignment

September 2007

Contractor

Submission of the list of the organisations to meet, and of the draft letters of request for a meeting

At least two weeks prior to the fact finding mission

September-October 2007

Contractor

Debriefs EC project manager on results of the meetings with the national authorities and other relevant actors

Last day of the field mission

October 2007

Contractor

Submits ToR and Logframe to the responsible EC Project Manager in electronic form.



Max 14 days after the completion of the fact finding field mission.

November 2007

Project Manager


Makes comments/suggests corrections

Max 1 week after receiving the draft ToR

November 2007

Contractor

Incorporates comments/corrections of the PM into the ToR

Max 4 days after receiving Project Manager’s comments

November 2007

Contractor


Arranges for translation of ToR into Russian

Max 8 days after sending the ToR (EN), incorporating required comments

November 2007


PM/Contractor

PM/Contractor sends Russian ToR to beneficiary, asking to comment and informing regarding the second mission to the filed.

Maximum 1 month and minimum 2 weeks prior to the mission

November 2007

Contractor/Beneficiary

Contractor obtains comments and signature of the SoE from the beneficiary during the second mission




December – January 2008

Contractor

Debriefs EC project manager on results of the meetings with the beneficiary

Last day of the field mission

January 2008

Contractor

Provides final documents:

1) endorsed ToR in English and Russian;

2) Logframe Matrix in English and Russian





January 2008

Contractor

Assistance during the tender




May 2008

All documents shall be submitted by the Contractor to the responsible Project Manager in electronic form. The Project Manager is solely responsible for approving the ToR and Logframe.


6. ADMINISTRATIVE INFORMATION


  • Other authorised items to foresee under ‘Reimbursable’

  • International and local travel, including visa costs

  • Services (interpretation, translation)




  • Tax and VAT arrangements

VAT and other local taxes and duties are excluded from Community financing based on the specific regulations governing the EC Tacis external aid programme.




  • Interim payment(s) modalities, if any (only for a rider)

No interim payment is to be made under the contract.




  • Others

n/a
Annexe: Project Fiche

Project Fiche 3


Title

Enhancement of environmental protection measures in the oil/gas industry of Central Asia

Total cost

€ 5 000 000 (EC Contribution)

Aid Method

Project approach Centralised management

DAC-code

88070

Sector

Energy



  1. Rationale


    1. Strategic framework

The general objective of the Central Asia Indicative Programme 2005-2006, as far as the energy sector is concerned, is to improve capacity to access European markets for gas/oil, promoting increased capacity, reliability, efficiency, safety and security of the gas/oil supply and networks linking Central Asia to the European Union.

In particular, it stresses the importance of improving policies and legal frameworks in the gas/oil sector, promoting the attraction of investments and ensuring the reliable performance of network operations; adoption and implementation of international standards for gas/oil production, transport, as well as gas/oil installations and pipeline operation, including safety and environmental parameters.

The present project, which is in line with the above mentioned objectives, aims at developing the environmental protection measures within the beneficiary gas and oil companies. This will be done mainly through the provision of institutional support for the adoption of harmonised environmental standards and possibly the elaboration of a proposal for setting up legal measures to be initiated by the national authorities. Furthermore, actions will also be undertaken in order to promote the attraction of investments and the application of environmental mechanism such as the clean development mechanism.

The INOGATE Secretariat is the platform on which representatives of energy ministries from the 5 beneficiary countries have discussed and agreed upon the present project.

The project, through its components, responds to the priorities of the INOGATE Programme (Interstate Oil and Gas Transport to Europe). INOGATE is an international co-operation programme, funded by the Tacis regional programmes, aiming at promoting the regional integration of the pipeline systems and facilitating the transport of oil and gas both within the greater NIS region and towards the export markets of Europe, while at the same time acting as a catalyst for attracting private investors and international financial institutions to these pipeline projects.


    1. Lessons learnt

Reflecting the interests expressed by the CA countries and progress made under CA IP 2002-2004, IP 2005-2006 steps up EC assistance programmes for cooperation between neighbouring countries amongst others on the gas and oil sectors and the environment.

Following a thorough analysis and a mid term review, done by the Commission, which indicated that the Regional Strategy Paper remains fully valid today, the Regional Strategy Paper for Central Asia 2002-2006 established that regional cooperation is the most effective, if not the only, way to deal with problems like terrorism, drugs, water, energy and environmental degradation, and unsustainable exploitation of the huge energy resources of the region.

EU policies on the environment are specifically considered in the regional cooperation track (see “Review of EC Commitments as reflected in the Indicative programme 2005-2006”). N.B: The assessment done for the mid-term review of the CASP, conducted in the first half of year 2003, concluded that the main parameters considered for the definition of priorities had not changed and that a revision was not required.

In the environmental field, complementarity will also be sought with funds earmarked in the Regional Tacis IP 2004-2006, for instance to support the EU Water Initiative including assistance to the Caspian Sea Convention or other water issues of regional interest.

The evaluation study on the INOGATE programme, recommends strengthening regional Programme management, especially in Central Asia, and the creation of a functioning relationship with IFIs for the promotion of significant investments, where INOGATE could provide valuable project and risk mitigation support. In order to achieve this objective, special focus has to be placed on institutional strengthening.

This regional project takes these recommendations into consideration (i.e. creation of a functioning relationship with IFIs for the promotion of significant investments and cooperation between neighbouring countries) putting together an institutional and legislative strengthening component with an investment attraction component, specifically addressing the application of environmental protection measures to the energy sector.

Energy and environment issues are indeed inherently linked. Energy production, exploitation of fossil elements, processing of raw oil and gas in addition to transportation in the CA countries all have a high negative impact on environment conditions. In order to ensure the sustainability of EC cooperation in the energy sector it is important for the INOGATE programme to focus more on integrating environmental considerations into each and every project.


    1. Complementary actions

One of the project’s objectives is to give continuity to past and on-going EC intervention both in the energy and environmental sectors and to build upon the results of these actions in Central Asia.

Recently, the EC has financed an environmental project (Global Climate Change, CA2002) aiming at enhancing public awareness in Central Asia on Climate Change, the Kyoto Protocol and on opportunities related to Clean Development Mechanism (CDM) / Joint Implementation (JI) and Green House Gas (GHG) emissions mitigations.

The project, which will end in October 2006 and will be followed by a second phase project financed under the TACIS Regional AP2006, has confirmed that the oil/gas sector can provide a host of opportunities for emission reduction projects.

The present project will elaborate on this conclusion and contribute to the identification and preparation of a number of emission reduction projects.

Thanks to the Kyoto Protocol, emission reduction projects may attract the interest of potential investors, like International Funding Institutions, local or international private companies.

In the energy sector, attraction of investment is, as previously said, one of the main priorities of EC cooperation in Central Asia and in the whole of the TACIS Region. The INOGATE programme has gained a considerable experience in this area, through the Investment Attraction Campaign carried out in 2003-2004 under the INOGATE Support Group.

Two INOGATE projects are going to be implemented in 2006/2007, both aiming at stimulating and increasing IFIs financing in the oil/gas sector. These are:


  • Rapid Response expert facility (CA2004)

  • IFI Support Fund (REG2004)

These investment preparation facility projects will be the basis for establishing effective cooperation between the EC, the local oil and gas companies, the IFIs and the private sector.

The present project will give continuity to this cooperation, targeting in particular the issue of environmental protection in the gas and oil industry.



    1. Donor coordination

In the energy sector effective donor coordination does not exist in Central Asia.

The EC and EBRD have established as of 2006 a regular working level dialogue, in order to enhance the effectiveness of their technical and financial assistance in the TACIS region. This dialogue will address issues of common interest to both parties, in the energy sector in particular.

The above mentioned investment preparation facility projects, as well as the present project, are the operational basis on which to develop effective cooperation between the EC and EBRD as well as with other donors and the private sector.

In particular, the INOGATE Secretariat is exploring possibilities of cooperation between the EC and Asian Development Bank. ADB is in fact intervening in the oil/gas sector in Central Asia through the Central Asia Economic Cooperation programme. The main objective of this cooperation is to rehabilitate and expand the regional energy infrastructure (investment projects), and to help establish the economic and institutional conditions for the optimal use of such infrastructure (technical assistance).

As far as the project is concerned, donors’ coordination is seen as an important tool for improving governmental prioritisation and optimising the use of available resources, from the national budget and donors.

  1. Regional context


    1. Cooperation related policy of beneficiary country

Central Asia’s newly independent states ten year experience has shown that uncoordinated efforts by separate sectors, countries or international organizations neither lead to expected results nor resolve serious environmental and regional development issues. The Aral Sea ecosystem catastrophe, mountain ecosystems degradation, land productivity reduction, irrational water use and other negative events are an obvious example.

The Governments of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, as well as UN System, Economic Commission for Europe (ECE), United Nations Development Programme (UNDP), United Nations Environment Programme (UNEP), and other intergovernmental organizations, agreed in establishing the Central Asian Initiative for Sustainable Development. The Central Asian Initiative’s (CAI) main goal is building favourable political, institutional, economical, information amongst other conditions for achieving sustainable development goals in Central Asia and to address priority environmental, social and economic problems in the sub-region, through the establishment of partner relations between governments and sectors in the process of development and implementation of the Central Asian Sustainable Development Strategy and Convention.

Central Asian countries are taking steps to effectively implement the WSSD in the framework of the CAI commitments. However, there is still a problem of dissociation of actions. In programmes and project, which are carried out in the framework of support to donors, governments, are not coordinated among them and are quite often duplicating efforts. Such dispersion of limited funds, does not promote performance of obligations CA on achievement of purposes CAI and MDG.


    1. Sector context

The challenges of globalisation and the need for integration of Central Asian economies into world markets require the development of energy network infrastructure. The Tacis Central Asia Cooperation Programme has been providing technical assistance for this purpose, through the implementation of the INOGATE programme.

The Strategy Paper 2002-2006 for Central Asia, which includes the Tacis Indicative Programme for Central Asia for the years 2002-2004, calls for an increased regional cooperation in the energy field as an essential tool to overcome important obstacles to economic development and encourage increased trade and investment flows.

At the Baku Ministerial Conference of November 2004, the representatives of the Governmental bodies of the Caspian Littoral States confirmed the importance of enhancing energy co-operation between the EU and the wider region around the Caspian Sea in an environmental friendly framework, enhancing safety and security of energy supplies.

Special attention is indeed needed as regards security and safety aspects as well as environment and health impacts. These are priorities for the EU but they are also highly relevant for the Central Asia countries, as they are bound by commitments in international and regional conventions and agreements. Moreover, harmonisation with EU standards becomes necessary in order to facilitate trade flows and avoid barriers to trade. Reliable statistics showing trends in this sector are also essential.

For the time being no specific environmental policy applied to the oil/gas industry in on place in the Central Asia Countries.

Assistance to the reform of energy policies is needed in addition to the provision of policy advice in relation to the implementation and enforcement of international agreements, like the Kyoto Protocol, whose mechanisms can create new opportunities as well as challenges for supporting energy projects with greater environmental rewards.




  1. Description


    1. Objectives

The overall objective of the project is to improve the capacity of Central Asian countries to access European markets for oil and gas, promoting increased efficiency and environmental protection of the gas/oil networks.
The specific objective is to enhance environmental protection measures in the energy sector in Central Asian countries.


    1. Expected results and main activities

1. Appropriate environmental legislation related to the energy sector introduced.

The activities to be implemented in order to develop this component could include:

- Develop and adopt a common strategy for environmental standards and practices in the oil/gas sector both on a national and regional level

- Define a legislative/regulatory framework for the adoption of environmental standards and practices in the oil/gas industry

- Implement information activities in order to create awareness among the oil/gas industry players on international environmental standards and mechanisms applicable to the oil/gas sector

2. Environmental and economic benefits of introducing environmental protection measures in the oil/gas industry demonstrated

The activities to be implemented in order to develop this component could include:

- Prepare a short/medium term action plan for the introduction of identified environmental protection measures

- Undertake cost/benefit analysis for projects introducing environmental protection measures

- Prepare feasibility studies for a number of specific environmental projects for the oil/gas industry that could apply for IFI investment. The application of environmental support mechanisms such as the Clean Development Mechanism of the Kyoto Protocol has to be stimulated.

- Provide direct support to environmental demonstration projects that support the introduction of specific environmental protection measures (e.g. supply of monitoring equipment on quality surveillance of atmospheric air, water and ground stationary chromatography, gas analyzers, dosimeters etc. or software on environment monitoring)


    1. Stakeholders

This project will be implemented in Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan, and Uzbekistan

The key stakeholders of the project include:

- Relevant Ministries of Energy and Environment in above-mentioned countries.

- State gas and oil companies in beneficiary countries.

On behalf of each country, the project partners will be the ministry of energy and the ministry of environment, which are responsible for imposing specific measures for mitigating the environmental impacts which are a consequence of the various industrial (exploitation and any initial raw oil and gas treatments and/or refining) and transportation/transmission processes.

The Central Asian Ministries of Oil and Gas are actively participating in the INOGATE programme and will be a partner in the implementation of the project. The contribution and capacity of other relevant environmental ministries will be identified during the preparation phase of the project.

Main partners will be the state gas and oil exploitation, refining and transportation companies, which are the responsible parties for any industrial and/or transportation/transmission operations that have impact on environmental conditions in the region. These companies will also carry the main responsibility in implementing the specific measures for mitigating environmental impacts.

Central Asia’s Gas companies (Turkmnegas, Uztransgas, Intergas, Kyrgyzgas) have actively participated to past and on-going projects, providing the project teams with the required technical support staff.

A Steering Committee, lead by the EC, will be created at the beginning of the project. Its final composition will be defined during the preparation phase of the projects; indicatively it should be composed by:

- EC representative

- Gas and Oil Companies representatives

- Relevant Ministries representatives

- INOGATE representative

The participation of IFIs and/or Private Sector representatives as members and/or observer has to be evaluated during the inception phase of the project.



    1. Risks and assumptions

The project’s success will depend on the following:

  • Demonstrated willingness of beneficiary countries to extend regional cooperation for environment protection,

  • Willingness of the beneficiary countries Parliaments to approve a proposed legislative/regulatory framework for the adoption of environmental standards and practices in the oil/gas industry.

  • Positive attitude of the IFIs and the banking sector in providing financial support in environment protection oriented projects;

  • Interest of targeted industries and of the oil & gas sector for such investments.

In order to manage risk and avoid negative impact on the project:



  • The INOGATE Secretariat has to play an active role in ensuring the necessary coordination between the stakeholders of the beneficiary countries

  • The EU-CA Environmental Conference in Almaty, April 06, is to be considered as a valid basis for developing a Central Asia regional dialogue on environmental issues.

  • Regional conferences are to be organised by the INOGATE Secretariat in order to raise the interest of private sector and IFIs



    1. Conditionalities

N/A


    1. Crosscutting issues

Good governance - The identification of the required legislative/regulatory reforms will create the basis for improving good governance in the environmental protection sector.

The nature of the actions proposed is closely related to both the environmental and the energy sectors. Bearing in mind the importance of energy production and the transport sector in the economies of Eastern and Western European countries, the proposed project is clearly linked to world economy integration.

Existing conflicts between the oil/gas production/transmission and environmental protection will be smoothened and the project, through a comprehensive action plan, shall combine both energy production/processing/transmission and thus economy development and prevention of environment.

  1. Implementation issues


    1. Implementation method

Centralised management through the signature of a Financing Agreement with the Beneficiary Government for the actions covered by TRACK 1.

Implementation will be carried out by the European Commission through the signature of service and supply contracts following calls for tenders.

Preferably one single service contract will be signed for the provision of technical assistance services. It is estimated that one single supply contract will be used, but this will be confirmed during the inception phase of the project, based on the evaluation of the needs of each beneficiary and on the analysis of potential pilot projects.


    1. Budget and calendar

The total amount allocated to this project is EUR 5 000 000.

The indicative project operational duration is of maximum 36 months as from the signature of the Financing Agreement




Budget Breakdown

EC Contribution

Beneficiary

Contribution

Other donors

Contracting/Paying Authority

Services

3 000 000

N/A

N/A

EC

Technical Assistance

2 950 000










Final Evaluation

50 000










Supplies

2 000 000

N/A

N/A

EC

TOTAL

5 000 000

N/A

N/A

EC



    1. Procurement and award of grants procedures

All contracts implementing the financing agreement must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question.

All programme estimates must respect the procedures and standard documents laid down by the Commission, in force at the time of the adoption of the programme estimates in question.



    1. Performance monitoring

Regular monitoring will be a continuous process as part of the Commission's responsibilities. External impact monitoring might be also carried out by independent consultants recruited directly by the Commission in accordance with EC rules and procedures on specifically established terms of reference.

    1. Evaluation and audit

Evaluations (mid-term, final, ex post) and audit arrangements are integral part of the contractual arrangements with the selected contractors.
External evaluations and audits might be also carried out by independent consultants recruited directly by the Commission in accordance with EC rules and procedures on specifically established terms of reference.


Annex:

Logframe
LOGFRAME 3 (CA AP 2006) - Enhancement of environmental protection measures in the oil/gas industry of Central Asia **





Intervention logic

Objectively verifiable indicators/benchmarks of achievement

Sources and means of verification

Assumptions and risks

Overall objective

The overall objective of the project is to improve the capacity of Central Asian countries to access European markets for oil and gas, promoting increased efficiency and environmental protection of the gas/oil networks.






  • Demonstrated willingness of beneficiary countries for a regional cooperation in environmental protection field

Project Purpose

Enhanced environmental protection measures in the energy sector in Central Asian countries


  • Implementation of legislative measures and environmental mitigation actions

  • Number of protection measures implemented

  • Laws or proposal for laws and measures

  • Reports on measures and actions taken

  • Good cooperation between stakeholders

  • The environmental protection gain political importance for the governments of the beneficiary countries

  • IFIs are involved in the implementation of the project

Results

The introduction of appropriate environmental legislation related to the energy sector is supported.
Practical environmental protection measures, aiming at demonstrating the environmental and economic benefits that can result from the increased uptake of such measures in the oil/gas industry are developed

  • Legislation is in place or has been drafted

  • Oil/gas players aware on international environmental standards and mechanisms applicable to the oil/gas sector

  • Number of environmental measures undertaken

  • Number of projects proposed for developing environmental measures

  • Number of projects suitable to be financed by IFIs

  • Project Reports

  • Minutes of Meeting

  • Records from Parliament or relevant Committees

  • Copy of the drafted Road Map

  • Endorsement letters for Road Map

  • Action Plan

  • Endorsement letters for Action Plan

  • Reports of 3 feasibility studies

  • ToR for supply of environmental protection monitoring equipment

  • List of projects proposed for developing environmental measures

  • List of projects suitable to be financed by IFIs

  • Competent Authorities to adopt the proposed legislative and regulatory framework

  • Parliaments to adopt the drafted legislation and drafted Road Map

  • Qualitative preparation of project/studies

  • Oil/gas stakeholders to cooperate in implementing the international environmental standards and mechanisms applicable to the oil/gas sector

  • Good cooperation between stakeholders

  • IFIs are involved in the implementation of the project

Activities

  • Develop and adopt a strategy for environmental standards and practices in the oil/gas sector both on a national and regional level

  • Support the definition of a legislative/regulatory framework for the adoption of environmental standards and practices in the oil/gas industry

  • Undertake information activities in order to create awareness among the oil/gas industry players on international environmental standards and mechanisms applicable to the oil/gas sector

  • Prepare a short/medium term action plan for the introduction of identified environmental protection measures

  • Prepare feasibility studies for a number of specific environmental projects for the oil/gas industry that could apply for IFI investment. The application of environmental support mechanisms such as the Clean Development Mechanism of the Kyoto Protocol has to be stimulated.

  • Provide direct support to environmental demonstration projects that support the introduction of specific environmental protection measures









**: OVIs will be finalised during the inception phase








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