Energy and related services

Tender description

Mendip District Council is seeking to award one (1) suitably experienced, qualified and competent consultant a contract for the provisions of consultancy support services. The authority is seeking to pursue energy investment projects that drive a commercial return for the authority with up to twenty million pounds (GBP 20 000 000) of debt finance being available. A consultant is required to support the Authority in its energy investment projects. Important note: South Somerset District Council (SSDC) are hosting and leading this procurement process on behalf of Mendip District Council (MDC). Please note only Mendip District Council will award a contract for the provision of the Services described within this procurement exercise. Mendip District Council is seeking to award one (1) suitably experienced, qualified and competent consultant a contract for the provisions of consultancy support services. The authority is seeking to pursue energy investment projects that drive a commercial return for the authority with up to twenty million pounds (GBP 20 000 000) of debt finance being available. A consultant is required to support the authority in its energy investment projects. The authority wishes to acquire a secure, good quality and long term income stream from projects in order to protect the authority’s medium- to long-term financial position, and to enable it to meet its strategic objectives as set out in its corporate plan. The authority’s high-level investment criteria: 1.1 are flexible on matters of the type and manner of the investment; type of project; geographic location; use classes; and lot size. 1.2 from a financial perspective are that the Investment is likely to generate a target net initial yield of 1.5 % nett return (after borrowing costs) (‘minimum target return’), The ‘high-level criteria’. The authority’s preference is to acquire stand-alone projects/be the sole investor but it is prepared to consider other appropriate transaction structures to achieve its objective. Energy investment consultant’s scope of duties A. Financial and commercial due diligence 1) Identify commercial opportunities, both on- market and off-market that meet the high level criteria. 2) Review any unsolicited particulars that are sent to the authority direct. All direct approaches will be forwarded to the consultant without receipt having been acknowledged. 3) Prepare a high level business case (‘OBC’) for each commercial opportunity that is identified that meets the high-level criteria and send the OBC with the investment particulars to the authority’s commercial transformation manager. 4) Where requested by the board in respect of a commercial opportunity, prepare a detailed report authority setting out and explaining the risks and opportunities attached to the relevant commercial opportunity (‘Report and Investment Appraisal’) and providing a financial model for the Investment which identifies the potential for achieving the minimum target return (with risk and scenario modelling where appropriate).. 5) Where required, seek credit reports and other insight into possible target, partner or tenants’ financial standing and business prospects, and support the authority’s finance manager in adequately appraising associated risks and opportunities. 6) Recommend which further reports should be obtained to meet prudent due diligence requirements and liaise with specialists in the consultant’s firm/practice who will be instructed (at additional fees to be agreed) to provide or procure them. 7) Where there are reports in existence which have not been produced to provide a duty of care to the authority, advise on which and should be novated to the authority. 8) Assist the authority’s officers in the preparation of board reports recommending that investments should be made and progressing through to financial close. 9) Attend board meetings in Shepton Mallet when each commercial opportunity will be considered. B. Support legal due diligence 1) Act as the authority’s financial and commercial adviser during the process up to financial close, negotiating with the seller, target and other relevant third parties (and in each case each of their representatives) on behalf of the authority to agree the price and other terms and conditions, of each acquisition. 2) Provide detailed heads of terms for the proposed Investment commercial opportunities in respect of which the OBC has been approved by the authority. 3) Support the authority’s legal advisers in the preparation and despatch of formal offers to make an Investment (including provision of reasonable assistance to finalise such documents. 4) Liaise with and support the authority’s lawyer and officers to ensure that all issues relating to the acquisition are resolved to required timescales. 5) Work alongside the authority’s legal and other professional advisers and offer reasonable assistance to aid those legal and other professional advisers to fulfil their duties in respect of progressing the matter through to financial close. 6) Advise the authority on whether it is necessary to enter into option agreements, lock-out agreements, and non-disclosure agreements for each commercial opportunity. 7) Facilitate the provision of all legal papers, drawings, property, and technical information required for the Investment to be appraised and analysed in detail (or access to a data room where appropriate). C. General 1) Provide effective and timely advice at all times. 2) Act as the authority’s representative in all dealings with the sellers and their advisors, including arranging access for inspections; requesting further information; and general care and attention throughout. D. Strategic investment advice 1) Advise the authority on strategic opportunities to increase the value of the commercial opportunity if an investment were to be made, including an appraisal of the risks in implementing those proposals. 2) Where knowledge of the authority’s interest in a commercial opportunity may cause a risk of de stabilising or raising prices unnecessarily, to advise the authority, and if so requested, to keep the identity of the authority as potential investor in project and/or commercial opportunity confidential. 3) Advise the authority on price reductions that should be specified, or conditions that should be imposed, to take proper account of any unusual risks or constraints identified by it or reported to it during the due diligence process. 4) Having regard to point 4 above, the need to ensure there is a robust portfolio, provide where practicable/manageable a realistic and robust delivery timetable and milestones pre- and post-acquisition. This may include a good occupier/development/marketing strategy for a mixed investment portfolio. 5) At the outset and as the authority’s portfolio of investments grows, advise the authority on which investments provide a suitable blend of investments to achieve a balance between spreading of risk across different types of projects and maximising opportunities to create efficiencies (and increased returns) by investing in similar types of project. Important note: South Somerset District Council (SSDC) are hosting and leading this procurement process on behalf of Mendip District Council (MDC). Please note only Mendip District Council will award a contract for the provision of the Services described within this procurement exercise.