Year in review 2013

Appendix 1: GET FiT Uganda Operational Guide-lines / Governance Structure (as of March 2013)

 

ARTICLE 1
Eligibility Criteria


1.1    Objective of the GET FiT Premium Payment Mechanism
The main objective of the GET FiT Premium Payment Mechanism (“GET FiT Mechanism”) is to fast-track a portfolio of up to 15 small-scale (1-20 MW) renewable energy generation Projects promoted by private developers (IPPs) with a total installed capacity of roughly 125MW and approximately 780GWh production/ year, contributing to a transformation of Uganda’s energy mix within a period of 3-5 years. Scope and implementation of the GET FiT Mechanism is guided by these Operational Guidelines (“Guidelines”), as adopted (and from time to time amended) by the Steering Committee.


1.2    Eligible Projects
In order to be eligible to receive financial assistance from the GET FiT Premium Payment Mechanism, Projects (each, a “Project”) must comply with the eligibility criteria recorded in the Guidelines. These eligibility criteria include:

  • Applicants must be a renewable energy generation Project covered by the Renewable Energy Feed-in Tariff System of Government of Uganda. 
     
  • Successful application for a permit from ERA;
     
  • Financial and economically sustainability;
     
  • Compliance with IFC Performance Standards (ESG) requirements.
     
  • Compliance with all necessary KfW legal and financial due diligence standards.

The Projects must respond to the GET FiT Request for Proposal. 


1.3    Scope of GET FiT Premium Payment Operations 

1.3.1    Finance from the GET FiT Mechanism will be made available to Projects in support of the development of new renewable energy generation capacity supplying electricity to the Ugandan national grid. FiT Premium Payments will be structured as additional payments per kWh to private RE developers, above the regulated REFiT tariff levels as published by ERA. Payments will be availed on a grant basis.

1.3.2    The scope of the FiT Premium Payments for different RE technologies as well as the disbursement approach are defined in the KfW August 2012 Financing Proposal (Annex II to this Cooperation Agreement). 


ARTICLE 2
Governance of the GET FiT Premium Payment Mechanism

2.1    Steering Committee 
The strategy of the GET FiT Mechanism will be informed and guided by the Steering Committee. The Steering Committee has the mandate to adopt and, from time to time, review these Guidelines, to receive regular summaries of GET FiT Mechanism activities and to comment on the GET FiT Mechanism Annual Report (based on documentation specified in Section V.1 of the Cooperation Agreement). However, the Steering Committee will not intervene in the choice of individual GET FiT Mechanism Operations (which is the responsibility of the Investment Committee) or the day-to-day running of the GET FiT Mechanism, which is the responsibility of the GET FiT Secretariat. 


2.2      GET FiT Investment Committee
The Investment Committee decides on the allocation of funds for individual GET FiT Mechanism operations.
The roles and the functioning of the Investment Committee is further set out in Article 4 below.


2.3     GET FiT Secretariat
The GET FiT Secretariat is responsibility for the day-to-day operation of the GET FiT Mechanism. The Secretariat is hosted by ERA, and supported by an Implementation Consultant. The roles and functioning of the GET FiT Secretariat is further set out in Article 5 below.
 

ARTICLE 3
GET FiT Steering Committee 


3.1     Composition and role of the Steering Committee

3.1.1    Membership:  A Steering Committee will be established, comprising two categories of participants:

  • Voting Participants (each a “Steering Committee Member”)
  • the GET FiT Secretariat, the Electricity Regulatory Authority (ERA), the World Bank and KfW (all having non-voting status). 

Steering Committee Members will be one representative of each Donor which has signed a Delegated Cooperation Agreement (or equivalent financing agreement) with KfW for support of the GET FiT Mechanism, and one representative of Government of Uganda. Government of Uganda shall not vote on issues where there could be a conflict of interest, as defined by development partners represented on the Steering Committee.

3.1.2     Representation: Each Voting Participant shall be represented in the Steering Committee by a named representative (Member). Each such Member:


(a)    May have one named Alternate, who shall represent the Participant in the event the named Member is unable to attend; and

(b)    May be accompanied by no more than two advisory staff.

3.1.3    Remuneration/Costs: No Steering Committee Member (or related staff) shall receive any form of remuneration from the GET FiT Mechanism and all Steering Committee Members shall bear all costs associated with this status including all costs incurred by them in relation to travelling to and attending Steering Committee meetings.


3.2     Role and responsibilities of the Steering Committee
The Steering Committee, acting through the Steering Committee Members, governs the GET FiT Mechanism and in particular is the body responsible for:

(a) approval of these Operational Guidelines for the  GET FiT Mechanism;
(b) approval of Members of the Investment Committee (while recognizing that the Investment Committee should maintain the character of an independent technical body);
(c) acceptance of the Terms of Reference for the Implementation Consultant to be procured by KfW in the name of and on behalf of the Republic of Uganda for the  GET FiT Mechanism;
(d) acceptance of the Terms of Reference for the Monitoring & Evaluation Consultant to be procured by KfW in the name of and on behalf of the Republic of Uganda for the  GET FiT Mechanism;
(e) reviewing the effectiveness of the activities financed with the resources of the GET FiT Mechanism; 
(f) ensuring that appropriate visibility is given to the activities financed by the  GET FiT  Mechanism and the Donors; 
(g) receiving and approving the annual progress report (format to be agreed after start of Programme implementation), the annual financial statement of the Programme, the audit report of the preceding  fiscal year, the work plan and budget for the subsequent fiscal year (as noted in ParagraphSection  V.1 of the Cooperation Agreement);
(h) approving proposed amendments to these Rules.


3.3     Meetings of the Steering Committee 

3.3.1    Annual meeting: The Steering Committee shall meet at least once each year. Meetings of the Steering Committee should preferably be in-person meetings in Kampala, Uganda but can also be organized by other suitable means (e.g. video conference, phone conference). 

3.3.2    Other Meetings: In addition to the annual meeting, the Steering Committee shall meet whenever necessary. Special meetings of the Steering Committee may be called by the Chair at any time or shall be called by the Chair if so agreed by the Steering Committee, or at the request of at least two Donors.

3.3.3    Chair:  The Steering Committee Member for the Government of Norway shall chair the meetings of the Steering Committee during the first 12 (twelve) months of GET FiT Mechanism operations. The Chair may subsequently be rotated amongst Members representing Donors that have made a contribution to the GET FiT Mechanism. 

3.3.4    Location of meetings:  Physical meetings of the Steering Committee shall normally be held at the premises of ERA in Kampala (Uganda). The Chair may propose that a meeting takes place in another location. 

3.3.5    Secretariat: To ensure the fulfilment of its role, the Steering Committee will be assisted by the GET FiT Secretariat referred to in Article 5. Once established, this Secretariat will organise meetings of the Steering Committee, and prepare and distribute the Agenda and the Minutes.


3.4     Mode of Decision

3.4.1    The Steering Committee decides on the basis of consensus.  

 

ARTICLE 4
Investment Committee

4.1    Membership:  
An Investment Committee will be established, comprising two categories of participants:

  • 5 Voting Participants (each an “Investment Committee Member”)
  • Non-voting Participants (each an “Investment Committee Observer”)

Investment Committee Members and Investment Committee Observers will be appointed by the Steering Committee. 

The Steering Committee will decide on selection criteria for Investment Committee Members. However, as a general rule, and following these Guidelines, Investment Committee Members shall be independent experts and serve in their individual capacity. 

KfW will have one representative on the Investment Committee who also serves as the Chair.


4.2     Mode of Decision 
The Investment Committee will take decisions with a simple majority. The Chair will maintain a veto right. This veto right is necessary in recognition of the fact that KfW will have to sign Developer Financing Agreements, thus assuming the main legal and fiduciary risks associated with these agreements. 

4.3    Remuneration/Costs 
Investment Committee Members will receive appropriate remuneration for their services, in addition to reimbursement for travel costs associated with participating in Investment Committee meetings. Remuneration levels are defined in the Guidelines which are approved by the Steering Committee.

No Investment Committee Observer (or related staff) shall receive any form of remuneration and shall bear all costs associated with this status including all costs incurred by them in relation to travelling to and attending Investment Committee meetings


4.4    Role and responsibilities of the Investment Committee
The Investment Committee is the body responsible for 

(a) appraisal and approval of  GET FiT Mechanism support to RE Projects in accordance with the Guidelines; 
(b) from time to time, reviewing the appraisal criteria for the FiT Premium Payment Mechanism, as defined in the Guidelines, and recommending changes – if appropriate – to the Steering Committee;


4.5    Conflicts of interest
Members of the Investment Committee will be required to sign a declaration that potential conflicts of interest will have to be made transparent. Members of the Investment Committee will be disqualified to serve on the committee if it has been determined that they have failed to properly disclose such conflict of interest. Members will also be disqualified to serve on the Investment Committee if they have been convicted for corruption or impropriety (whether or not in the context of the GET FiT Mechanism). Membership on the committee will rest in case an investigation for corruption or impropriety is on-going. 
 

ARTICLE 5
GET FiT Secretariat

5.1     Financing  
The GET FiT Secretariat will be staffed by the Implementation Consultant contracted by KfW on behalf of and in the name of Republic of Uganda. All administrative costs related to the day-to-day management of the GET FiT Programme shall be covered by the Implementation Consultant.

5.2    Role  
The Secretariat will inter alia: 

 (a)     Support the Steering Committee and the Investment Committee: help ensure effective operations of the GET FiT Mechanism through:

  • Organization of Request for Proposal process for GET FiT Mechanism
  • Appraisal of applications submitted to the GET FiT Request for Proposals, as defined in the Guidelines, and preparation of reports for decision by Investment Committee
  • Organisation of meetings: organise all meetings of the Steering and Investment Committees, including documentation and logistics;
  • Production of Annual report: prepare within 100 (two hundred) days of the end of each calendar year, including a narrative and financial description of all Operations financed during the relevant year 
  • Support to KfW in negotiating Financing Agreements with RE Projects deemed eligible for support from the GET FiT Mechanism by the Investment Committee

 (d)    Monitoring Report: the Secretariat shall organise a Progress/Evaluation Report system informing on the GET FiT Mechanism operations
 (g)    Statistical analyses: Prepare any statistical analyses in respect of Operations financed that may reasonably be requested by Members of the Steering Committee.
 (h)    Press coverage:  Ensure that RE Projects supported through the GET FiT Mechanism are providing visibility for the GET FiT Mechanism and its Donors in their publications, websites, etc. Follow comment on the GET FiT Mechanism in the international press, and transmit copies of relevant press articles, internet sites, etc. to members of the Steering Committee. 


5.3    Terms of reference and recruitment  
KfW will elaborate the terms of reference for the GET FiT Secretariat. Once the terms of reference have been endorsed by the Steering Committee, KfW will recruit the required firm/ person(s) in accordance with its own procedures, in the name of and on behalf of Republic of Uganda. The configuration of the Secretariat can be modified to reflect the size and activity of the GET FiT Mechanism.
 

5.4    Location  
The GET FiT Secretariat will be based in Kampala, Uganda unless otherwise agreed by the Steering Committee.