Independent commercial review of biomass supply agreement (bsa) – SAFCOL RFQ

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{"name":null,"email":"[email protected]","phone":"013 754 2700","department":null,"address":"ust complete in full the RFQ document and ensure that quotation is"}

Returnable Documents: Fully completed and signed RFQ, Official Quotation on the company letter head, Latest Tax Clearance, Latest BBBEE certificate- SANAS Accredited or sworn affidavit for EME/QSE, CSD Report or (MAAA number ), ID copies of company directors I, the undersigned, for and on behalf of the Service Provider, hereby confirm that I/we understand the information as stated above and that I/we will comply with all of the above. .......................................... ........................................ Name (print) Signature ............................................ ....................................... Capacity Date

Service providers must complete in full the RFQ document, ensure quotation is on company letterhead, and submit all SBD documents signed and sent back with the quotation. Proof of previous experience and references must be provided. For specific goals, documentation such as South African Identification Document, proof of residence (Municipal Bill or letter), and fully completed SBD 6.2 for local content must be submitted. The bidder's disclosure form must be completed.

Bidders must complete the RFQ document in full and submit a quotation on company letterhead. Must submit B-BBEE Verification Certificate from a SANAS-accredited agency or a sworn affidavit for EME/QSE. Must submit latest tax clearance (SARS pin or certificate), CSD report or MAAA number, ID copies of company directors, and all signed SBD forms. Must provide at least one valid reference letter for similar services in a forestry environment. Bidders will be disqualified for non-compliance with tax status (7 working days to rectify), fraudulent or untrue information, false declarations, being listed on the National Treasury's restricted suppliers database, or failure to quote in line with the specification. Joint ventures must submit a consolidated BEE certificate. Bidders must confirm adherence to the SAFCOL Supplier Code of Conduct.

SAFCOL (SOC) Ltd (“SAFCOL”) is involved in the proposed development of a 10 MW Biomass

Combined Heat and Power (“CHP”) plant adjacent to the Timbadola Sawmill.

SAFCOL and Makhado Bioenergy (Pty) Ltd (“the Developer”) have developed a proposed

Biomass Supply Agreement (“BSA”) in terms of which SAFCOL will supply biomass to the project

for the commissioning and operation of the CHP facility.

The proposed transaction is long-term, with a contract term of approximately 20 years, and

involves SAFCOL’s biomass resources, land, forestry and sawmill operations, as well as the

generation and use or sale of electricity and steam.

Given the strategic and long-term nature of the transaction, SAFCOL requires an independent

commercial review to assess the commercial viability of the proposed arrangements, the value to

SAFCOL and the allocation of material commercial risks.

The commercial review will complement, and not replace, the legal and other specialist reviews

undertaken by SAFCOL.

2. Purpose of the assignment

SAFCOL seeks to appoint an independent and suitably qualified service provider (“Service

Provider”) to undertake a commercial review of the proposed BSA and relevant related project

arrangements.

The purpose of the review is to enable SAFCOL to determine:

• whether the proposed transaction is commercially viable and sustainable;
• whether SAFCOL is receiving appropriate commercial value for its biomass, land,

resources and other contributions;

• whether the pricing, value allocation and commercial mechanisms are appropriate;
• whether material commercial risks are appropriately allocated and mitigated;
• whether the BSA and related agreements operate together in a commercially coherent

manner; and

• what amendments, protections or alternative arrangements should be considered before

SAFCOL proceeds.

3. Documents to be reviewed

The Service Provider will review the BSA and relevant supporting documentation made available

by SAFCOL, which may include:

• the BSA and schedules;

• the Biomass Supply Term Sheet;

• the Energy Purchase Term Sheet;

• the Sublease and Operations Term Sheet;

• the project financial model and key commercial assumptions;

• relevant biomass and project information; and

• any other information reasonably required for the review.

The Service Provider must consider the relevant agreements and arrangements as an integrated

transaction and not assess the BSA in isolation.

4. Scope of the review

The review must provide an independent and objective assessment of the following key areas:

4.1 Commercial structure and value

Assess whether the overall commercial structure is balanced and whether SAFCOL receives

appropriate value for its contributions, including its biomass resources, land, long-term feedstock

commitment and integration with existing forestry and sawmill operations.

4.2 Pricing and financial arrangements

Assess the commercial appropriateness of the key pricing and financial mechanisms, including

biomass pricing, escalation and indexation, electricity and steam arrangements, land-related

consideration and other material revenue or value-sharing mechanisms.

The Service Provider should undertake appropriate sensitivity or scenario analysis to identify

material factors that could affect the commercial outcome over the proposed term.

4.3 Risk allocation

Assess whether material commercial risks are allocated to the party best able to manage or

mitigate them, including risks relating to biomass availability, construction and commissioning,

plant performance, operations, electricity markets, changes in law, force majeure, liability, default

and termination.

Material risks and their potential commercial impact must be clearly identified, together with

appropriate mitigation or contractual protections.

4.4 Long-term sustainability

Assess whether the proposed commercial arrangements are sustainable over the approximately

20-year term, taking into account foreseeable changes in biomass availability, operating costs,

market conditions, electricity tariffs, inflation, regulatory requirements and other material factors.

The review should identify whether appropriate adjustment, review or relief mechanisms are

required.

4.5 Related agreements and strategic interests

Assess the interaction between the BSA and relevant related agreements, including the energy

purchase and sublease/operations arrangements, and identify any material inconsistencies, gaps

or unintended commercial consequences.

The Service Provider must also consider provisions affecting SAFCOL’s strategic assets and

operations, including access to SAFCOL property, forestry operations, assignment, lender or

step-in rights, security and termination.

4.6 Benchmarking and commercial best practice

Where reliable information is available, benchmark material commercial terms against

comparable biomass, forestry, renewable energy, CHP, feedstock supply or similar transactions.

Any limitations in available benchmarking information must be identified.

5. Deliverables

The Service Provider must provide a concise but sufficiently detailed Commercial Review

Report containing:

1. an executive summary and overall assessment of the transaction;

2. key commercial findings and material risks;

3. assessment of pricing, value allocation and financial sustainability;

4. assessment of the allocation of material commercial risks;

5. identification of material concerns arising from the BSA and related agreements;

6. recommended amendments, protections or areas for negotiation; and

7. a clear recommendation on whether SAFCOL should:

o proceed with the transaction;

o proceed subject to specified amendments or protections;

o renegotiate material commercial terms; or

o reconsider the transaction in its current form.

The Service Provider must present its findings to SAFCOL management and/or relevant

governance structures if required.

6. Approach and stakeholder engagement

The Service Provider must adopt a practical, objective and evidence-based approach.

The Service Provider may consult relevant SAFCOL stakeholders, including representatives from

Commercial, Finance, Forestry, Operations, Legal, PMO and Executive Management, as

reasonably required.

The Service Provider must identify any material information gaps, assumptions or limitations that

may affect its conclusions.

7. Required experience and capacity

The Service Provider must demonstrate relevant experience and expertise in:

• commercial and financial due diligence;

• project finance, financial modelling and commercial valuation;

• biomass, forestry, renewable energy, energy infrastructure or comparable transactions;

• long-term supply agreements and commercial structuring;

• commercial negotiations and risk allocation; and

• public-sector and/or SOE transactions of a similar nature, scale or complexity.

The proposed team must comprise suitably qualified and experienced personnel.

Law firms and other suitably qualified professional service providers are eligible to submit

proposals, provided they can demonstrate the required commercial, financial and transactional

expertise and suitably qualified personnel.

8. Independence and conflicts of interest

The Service Provider must be independent of the parties to the proposed transaction and must

disclose any actual, potential or perceived conflict of interest.

The Service Provider must maintain its independence and objectivity throughout the assignment.

9. Exclusions

The assignment is a commercial review and does not replace SAFCOL’s legal, tax, accounting,

regulatory or technical due diligence.

Unless otherwise agreed, the Service Provider is not required to provide:

• formal legal opinions;
• tax, accounting or regulatory opinions;
• technical due diligence of the CHP technology;
• independent verification of biomass availability; or
• detailed legal drafting or clause-by-clause redrafting.

The Service Provider may, however, identify legal, regulatory, technical or financial matters where

these have a material commercial impact on the transaction.

10. Duration

The assignment is expected to be completed within six (6) weeks from the date of appointment.

Bidders must submit a proposed workplan and delivery timetable with their proposals.

The review must provide a clear, independent and defensible commercial assessment, covering the project financial model, key commercial assumptions, pricing and financial mechanisms, material risks (including biomass availability, construction, commissioning) and their mitigation or contractual protections, and sustainability over the proposed term. The Service Provider must present findings to SAFCOL management, adopt a practical, objective and evidence-based approach, and may consult relevant SAFCOL stakeholders. The assignment is a commercial review and does not replace legal, tax, accounting or technical reviews, but may identify material commercial impacts. Any work outside the agreed scope requires SAFCOL's prior written approval.

be verified with Central Supplier Database(CSD) or through SARS’s e-Filing. Service

providers will be given 7 working days to rectify their tax compliance status with SARS. If

the tax status is still non-compliant after 7 working days, the service provider will be

disqualified from further evaluation.

2. Submitted information that is fraudulent; factually untrue or inaccurate for example

membership that do not exist; B-BBEE credentials; experience etc.

• Be issued on the client’s official letterhead;
• Be dated;
• Clearly describe the services rendered;
• Be signed by an authorised representative of the client;

and

• Relate to services similar to those required under this RFQ.

The Service Provider must provide a minimum of one (1) valid

reference letter as proof of relevant previous experience.

Phase 3: Price and Specific Goals Evaluation

Total price (incl VAT) must be provided. All prices quoted must be firm and inclusive of VAT. The 80/20 preference point system applies, with a maximum of 80 points for price.

tax compliance status will

tax compliance status with SARS

CSD Report or (MAAA number )

Central Supplier Database(CSD) or through SARS’s e-Filing

Central Supplier Database (CSD), if not registered

• Latest Tax Clearance
• CSD Report or (MAAA number )

3. Proof that tax matters with SARS are in order( SARS Pin Number/ Tax Clearance
4. Proof of company registration documents( e.g Pty;Trust; CC etc)
5. Registration with National Treasury Central Supplier Database (CSD), if not registered

on CSD, successful bidder must register within 7 working days of award

Points Allocation: 00 points

B-BBEE Details: [email protected] RFQ responses to :

Please use the RFQ Number on the subject of the email when

responding to this RFQ

Submissions/quotations not sent to

[email protected] will not be considered

Name of service provider:__________________________________________

Total price (incl VAT):______________________________________________

Conditions of this RFQ

• Service providers must complete in full the RFQ document and ensure that quotation is

on the company letterhead.

• Quotations must be e-mailed to the address provided herein All service providers must

submit their B-BBEE Verification Certificates from Verification Agencies accredited by the

South African Accreditation System (SANAS) OR an EME/ QSE sworn affividavit signed

by the EME representative and attested by a Commissioner of Oaths

• Late and incomplete submissions will not be accepted.
• Any bidder who has reasons to believe that the RFQ specification is based on a specific

brand must inform SAFCOL before RFQ closing date.

• All SBD documents must be always signed and sent back with the quotation

Special conditions of this RFQ

• Accepted RFQ’s will be communicated by way of an official purchase order or a promisory

note signed by a duly authorised official . Accordingly no goods; services or works must

be prepared or delivered before an official purchase order or a promisory note is received

by the respondent, .

• All prices quoted must be firm and be inclusive of Value Added Tax (VAT), where

applicable

• The lowest or any offer will not necessarily be accepted and SAFCOL reserves the right

to accept any offer either in full or in part.

• The offer shall remain binding and open for acceptance by SAFCOL during the validity

period indicated and calculated from the closi

Local Content Requirement: 100%

by SAFCOL, which may include:

• the BSA and schedules;

• the Biomass Supply Term Sheet;

• the Energy Purchase Term Sheet;

• the Sublease and Operations Term Sheet;

• the project financial model and key commercial assumptions;

• relevant biomass and project information; and

• any other information reasonably required for the review.

Authority (NPA) for criminal investigation and or may be restricted from conducting

business with the public sector for a period not exceeding ten (10) years in terms

of the Prevention and Combating of Corrupt Activities Act No or any

other applicable legislation.

I CERTIFY THAT THE INFORMATION FURNISHED IN PARAGRAPHS 1, 2 and

mitigate them, including risks relating to biomass availability, construction and commissioning,

plant performance, operations, electricity markets, changes in law, force majeure, liability, default

and termination.

purchase and sublease/operations arrangements, and identify any material inconsistencies, gaps

or unintended commercial consequences.

The Service Provider must also consider provisions affecting SAFCOL’s strategic assets and

operations, including access to SAFCOL property, forestry operations, assignment, lender or

step-in rights, security and termination.

4.6 Benchmarking and commercial best practice

4.3. Name of

company/firm...............................................................................

4.4. Company registration number:

.....................................................................

4.5. Type of company/ firm

 Partnership/Joint Venture / Consortium

 One-person business/sole propriety

 Close corporation

 Public Company

 Personal Liability Company

 (Pty) Limited

 Non-Profit Company

 State Owned Company

[Tick applicable box]

4.6. I, the undersigned, who is duly authorised to do so on behalf of the company/firm,

certify that the points claimed, based on the specific goals as advised in the

tender, qualifies the company/ firm for the preference(s) shown and I

acknowledge that:

i) The information furnished is true and correct;

ii) The preference points claimed are in accordance with the General Conditions

as indicated in paragraph 1 of this form;

iii) In the event of a contract being awarded as a result of points claimed as

shown in paragraphs 1.4 and 4.2, the contractor may be required to furnish

documentary proof to the satisfaction of the organ of state that the claims are

correct;

iv) If the specific goals have been claimed or obtained on a fraudulent basis or

any of the conditions of contract have not been fulfilled, the organ of state

may, in addition to any other remedy it may have –

(a) disqualify the person from the tendering process;

(b) recover costs, losses or damages it has incurred or suffered as

a result of that person’s conduct;

(c) cancel the contract and claim any damages which it has

suffered as a result of having to make less favourable

arrangements due to such cancellation;

(d) recommend that the tenderer or contractor, its shareholders

and directors, or only the shareholders and directors who acted

on a fraudulent basis, be restricted from obtaining business

from any organ of state for a period not exceeding 10 years,

after the audi alteram partem (hear the other side) rule has

been applied; and

(e) forward the matter for criminal prosecution, if deeme

necessary.

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Signature(s) of tenderer(s)

Surname and name: ................................................................

Date: ...............................................................

Address: ...............................................................

...............................................................

...............................................................

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Accepted RFQs will be communicated by way of an official purchase order or a promissory note. All prices quoted must be firm and inclusive of VAT. The lowest or any offer will not necessarily be accepted; SAFCOL reserves the right to accept any offer in full or in part, and not to make an appointment. Service providers bidding as a Joint Venture must provide a Consolidated BEE certificate. Service providers will be disqualified for non-compliance with tax status after 7 working days, false declarations on Standard Bidding Documents, or being listed on the National Treasury's Database of Restricted Suppliers. The RFQ is subject to the general conditions of the RFQ, National Treasury's general conditions of contract (GCC), and any other special conditions of contract (SCC).

Additional evaluation criteria include: whether the proposed transaction is commercially viable and sustainable; whether SAFCOL is receiving appropriate commercial value for its biomass, land, resources and other contributions; whether pricing, value allocation and commercial mechanisms are appropriate; whether material commercial risks are appropriately allocated and mitigated; and whether the biomass supply agreement and related agreements operate together effectively. The review must also consider any amendments, protections or alternative arrangements before recommending whether to proceed or reconsider the transaction.