Description
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HOFOR Forsyning Holding P/S (“HOFOR”) hereby invites interested parties to submit a tender for the award of a concession contract re. the 1) right to establish a carbon capture facility (“Facility”) and subsequently extract and utilize CO2 from the flue gas of Amagerværket blok 4 (AMV4) and 2) the establishment of a co-ownership of a Joint Company between HOFOR and a private party (“Concessionaire Company”). The Concessionaire Company will be entitled to optimise the sale and use of the carbon to the joint benefit of the parties. The purpose of the Facility is to capture CO2 emissions from the flue gas generated by AMV4, when producing heat and power by burning biomass (wood chips). The right to establish the Facility and subsequently extract and utilize CO2 from AMV4’s flue gas collectively comprises the concession subject. Placement of the Facility may be at a location identified by HOFOR and made available to the Concessionaire Company or another place chosen by the Concessionaire Company. The Joint Company shall establish the Facility either through project financing and/or financing provided by the owners directly or indirectly, leasing if the financing of the project is based on a lease structure or other relevant financing or performance-based delivery model to be decided during the Development Phase. The Joint Company shall be co-owned by HOFOR (minority shareholder with a 30% ownership stake) and the Concessionaire Company (70 % ownership stake). The Facility shall be designed to intake flue gas with a CO2 quantity content in the range between min. 500,000 and up to approx. 900,000 tonnes of CO2 per year from the flue gas of AMV4, which currently has a total annual emission of approx. 1 million tonnes of CO2. Please note that indicative tenders shall be based on a full-scale Facility, cf. appendix 3 and 4 of the Tender Specifications. The full-scale assumption is subject to adjustment within the range indicated in the foregoing during the tender process and after conclusion of the contract(s). Further specification of the possibilities for adjustments is found in the tender material. The Concessionaire Company alone will be entitled – and obliged – to optimise the sale and use of the captured CO2 to the joint benefit of the parties. In this regard, the Concessionaire Company shall be responsible for ensuring sufficient ongoing revenues (financial contributions) to cover the operations of the Facility throughout the concession period and to ensure sufficient accruals for decommissioning costs at the end of the concession period (if relevant). The contractual set up for the project comprises a Main Concession Agreement and the following supporting agreements: Early Works Agreement, Access, Construction and Proximity Agreement, Plot Lease Agreement, Partnership and Shareholder’s Agreement, Flue Gas Availability Agreement, CO2 Offtake Agreement and Critical Systems Operations Agreement The contracts contain provisions on e.g. (1) Principles of Priority governing the relationship between activities under AMV and the Facility respectively allowing for a balanced right of priority. (2) Joint Company shall be a Danish limited company; in Danish: aktieselskab (A/S) (3) Obligation to conduct project maturation activities, including pre-feed and/or feed studies in order for the parties to make the final irrevocable investment decision (FID), which for HOFOR will be related to FID for the project, and which for Concessionaire Company will be related to FID for the entire value chain project. (4) The Partnership and Shareholders’ Agreement governs and regulates the long-term relationship between the parties as shareholders of the Joint Company, defining their rights and obligations to ensure the proper governance, management, and operation of the Joint Company. The Partnership and Shareholders’ Agreement details, inter alia, the terms related to financing, decision-making processes, dividend distribution, restrictions on and processes for share transfers, and other critical matters concerning the Joint Company and its activities, as well as provisions to protect HOFOR as a minority shareholder in the Joint Company. (5) The contracts contain provisions allowing the parties to terminate the project under certain circumstances due to legislative, commercial, financial and/or technical reasons and to agree on certain measures in case of a total breakdown of AMV4 and/or the Facility (6) The liability caps in the contracts are subject to negotiation under the tender procedure and will be determined with certain adjustment measures prior to the deadline for best and final tenders. The contracts will however include a mechanism to allow for subsequent upward adjustment of the set caps by up to 200% if this is a requirement from one or more financing banks. (7) The contract(s) contain provision on a Revenue Sharing mechanism. Furthermore, HOFOR will enter into an internal agreement to ensure HOFOR the necessary rights to fulfil its obligation under the contracts. The tender procedure is subject to the necessary legislative changes in order to allow for HOFORs investments and engagements in achieving strategic goal of carbon capture within the framework of a concession. FID will inter alia be conditioned upon necessary legislative changes being made, including to allow for a potential financial contribution from HOFOR to the Joint Company (if any and if relevant) whether this is in relation to the establishment of the Joint Company or as potential security for any obligations of HOFOR under the Concession Contract (if relevant). Prior to signing of the Concession Contract after award, HOFOR will incorporate a subsidiary “HOFOR CC Holding A/S” which shall be the legal entity entering into the respective contracts. For the purpose of this tender procedure HOFOR A/S will represent HOFOR in the ongoing communication with the Tenderers via the electronic tendering system.
Main features of the procedure
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The concession tender process is conducted as an open tender procedure with negotiations under directive 2014/23/EU. The procedure is divided in four phases: Phase 1: Contract Redlining Phase Phase 2: Tender and negotiation Phase (INDO/BAFO) Phase 3: Evaluation of tenders Phase 4: Final negotiations In order to facilitate and incorporate as much market feedback as possible, HOFOR invite all interested Tenderers to submit comments on the published contracts in phase 1 (Contract Redlining). All interested Tenderers are invited to submit comments regarding the tender material in Phase 1. Comments should be submitted at the latest on 18 November 2024. Submitting comments to the tender material is voluntary, however, all Tenderers who have submitted comments within the deadline set out in the foregoing will be invited to participate in a negotiation phase, where the Tenderer and HOFOR will engage in negotiations relating to the submitted comments. The redlining-negotiation phase will take place from the 19th of November 2024 to the 5th of December 2024. Phase 2 begins with the submission of an initial tender (INDO) based on the draft version of the Master Concession Agreement and supporting contracts as well as the tender specifications (regardless of any input provided during the redlining period). The initial tender and ESPD shall be submitted no later than the deadline stated in this notice and the Tender Specifications. Following the receipt of the initial tenders, negotiations with the Tenderers who have submitted an initial tender will be conducted as negotiations/feedback rounds. HOFOR reserves the right to also include other topics in the feedback rounds to the extent this is found relevant in order to ensure more efficient competition and/or compliant tenders. HOFOR explicitly reserves the right to call for one or more initial tenders and to conduct further negotiations/feedback rounds if considered necessary. After having called for final tenders ("BAFO"), HOFOR reserves the right to resume to the feedback rounds and ask the Tenderers for an extra BAFO if this is found to be possible in a given situation under the applicable Public Procurement rules. Phase 3 covers the evaluation of the submitted BAFO(s) and the award of the contract. The award of the contract will take place on the basis of the award criterion best price-quality ratio. HOFOR may in the final phase (phase 4) carry out final clarifications and contract negotiations with the successful Tenderer. Whether or not any negotiations will be conducted is solely at HOFOR’s discretion, and the Tenderers cannot rely on such negotiations being conducted. For further description of the phases, see Tender Specifications.