Public procurement notice: Contract Notice
Published: 2016-11-25
Buyer: Greater London Authority (GLA)
Country: UK
Region: UNITED KINGDOM
Contract type: Services
Procedure: Competitive dialogue
CPV classification: 66000000 | 66100000 | 66120000 | 66122000 | 66140000
Estimated value: 25000000 EUR
Submission deadline: 2017-01-05
Award criteria: The most economic tender
EU fund: ERDF

Technical requirements: The Greater London Authority (the ‘GLA’ or ‘Contracting Authority’) is seeking to enter into a contract with a Fund Manager to manage and invest by way of loans (senior, junior or mezzanine) and equity investment, the capital which is to be committed to a new fund, which the winning bidder will establish and which will be called the Mayor of London's Energy Efficiency Fund MEEF (the ‘Fund’). The Contracting Authority is not specifying any particular legal structure for the Fund. It is envisaged that 90 % of the capital will be invested by way of loans and no more than 10 % by way of equity. The Fund will be established to invest in technologies relevant to energy efficiency such as:
— Production and distribution of low carbon energy, including combined heat and power, tri-generation and communal / district heating generation and/or networks; and
The Greater London Authority (the ‘GLA’ or ‘Contracting Authority’) is seeking to enter into a contract with a Fund Manager to manage and invest by way of loans (senior, junior or mezzanine) and equity investment, the capital which is to be committed to a new fund, which the winning bidder will establish and which will be called the Mayor of London's Energy Efficiency Fund MEEF (the ‘Fund’). The Contracting Authority is not specifying any particular legal structure for the Fund. It is envisaged that 90 % of the capital will be invested by way of loans and no more than 10 % by way of equity and bids must be submitted on this basis. The contract for the Fund can include provisions to allow for loans to increase to up to 100 % of the capital with consent from all investors in the Fund.
— Production and distribution of low carbon heat, including combined heat and power, tri-generation and communal / district heating generation and/or networks; and
The Fund Manager is required to make the investments and then administer the Fund, including monitoring and managing drawdowns (see the Specification for further information)
The Fund Manager must ensure that all investments are made in a State Aid compliant manner and are in accordance with all applicable laws.
The Contracting Authority will initially allocate up to £43m of European Regional Development Fund (ERDF) to the Fund. This initial allocation may be increased, by an additional amount of public money not exceeding £75m, during the life of the Fund. This could come from further ERDF (or other public resource) monies, returns from the existing London Green Fund (in which GLA invested) or other GLA resources. The ERDF and returns from the London Green Fund (LGF) allocated to the Fund will be on terms analogous to an equity investment but other resources from the GLA may be invested in other forms. The European Investment Bank (EIB) has provisionally indicated a willingness to provide up to 100 000 000 GBP of senior debt financing to the Fund, subject to its own due diligence including on the selected Fund Manager, and internal approval processes. It is the intention of the GLA to consult with the EIB throughout this procurement exercise to help in this regard. The term of the EIB loan is expected to be in line with the life of the Fund and EIB's contribution will rank senior to the ERDF. The Fund Manager will be required to invest at least 1 % of the Fund's initial capital (£143m, assuming the EIB invests) from its own cash resources to ensure that their interests are aligned with those of the GLA's.
Additional funding from other investors (including banks and other institutions), and/or project promoters of at least 260 000 000 GBP European company must be secured by the Fund Manager, at the underlying project levels and/ or, where possible, at Fund level. At least 60 % of the total additional funding secured should be from private sector sources. At least 43 000 000 GBP of additional funding secured must be eligible to be used as match funding for ERDF. It is envisaged that the duration of the contract with the Fund Manager, i.e. the winning tenderer, will be 20 years. The contract will specify an investment period which will terminate approximately 5 years from the point the contract is awarded to the Fund Manager and a post investment period which will commence from the end of the investment period and will end on the termination date of the contract i.e. 20 years from the commencement date of the contract. Please refer to section II.2.11 for information regarding options to extend.
Please refer to the procurement documents for a further description of the procurement, in particular the Specification document.
Options: The investment period may be extended by up to 2 years without a corresponding increase to the Fund's life, with the agreement of the investors in the Fund if this does not result in any ERDF monies being invested beyond 31 December 2023. Separately, the life of the Fund may be extended for a period or periods which in total can extend the overall life of the Fund for 2 years giving the Fund a maximum term of 22 years, only with the consent of the investors in the Fund.
Bidders must be authorised by the Financial Conduct Authority (‘FCA’) as a full scope UK AIFM or a small authorised UK AIFM; or be a full scope EEA AIFM (as each of those terms is defined in the Alternative Fund Managers Regulations 2013 (SI 2013/1773). If not, Bidders will be required to confirm that they will have the relevant authorisations before contract award or will have appropriate arrangements with a regulatory hosting or umbrella organisation. Please see the procurement documents for more information and in particular regarding relying on a regulatory hosting or umbrella organisation for the authorisation.
The Contracting Authority (or the Greater London Authority (GLA)) has four ‘functional bodies’ (as defined by the section 424 of the GLA Act 1999) and the GLA and its functional bodies have a number of subsidiaries https://www.london.gov.uk/about-us.TfL is one of the functional bodies of the GLA and is leading the procurement on behalf of the GLA.
The Contract resulting from this procurement may be awarded by and/ or be for the benefit of the GLA, any of its subsidiaries and GLA functional bodies.
Responsible Procurement Policy: the GLA group has defined ‘responsible procurement' as the purchase of goods, works and services in a socially and environmentally responsible way that delivers value for money and benefits to the Contracting Authority.
The Contracting Authority encourages their suppliers, and those companies interested in tendering for its contracts to undertake their activities in line with the principles contained in its Responsible Procurement Policy.

Eligibility requirements: Bidders must be authorised by the Financial Conduct Authority (‘FCA’) as a full scope UK AIFM or a small authorised UK AIFM; or be a full scope EEA AIFM (as each of those terms is defined in the Alternative Fund Managers Regulations 2013 (SI 2013/1773). If not, Bidders will be required to confirm that they will have the relevant authorisations before contract award or will have appropriate arrangements with a regulatory hosting or umbrella organisation. Please see the procurement documents for more information and in particular regarding relying on a regulatory hosting or umbrella organisation for the authorisation.

Award value: 25000000