Ministry of Agriculture Irrigation and Livestock Agriculture Market

Ministry of Agriculture, Irrigation and Livestock Agriculture Market Infrastructure Project (AMIP) Lease PPP Contracts for the Operation, Maintenance and Management of Slaughterhouses in Kabul Reshkhor, Kabul Shakardara, Herat, Mazar and Kunduz Pre-Application Meeting 13 th November 2019

Project Objective Afghanistan through the Ministry of Agriculture, Irrigation and Livestock will enter into Lease PPP contracts for each of the slaughterhouses. There will be 5 contracts, one for each lot. The Private Operator will operate, maintain and manage the slaughterhouse pursuant to the terms of the project agreement. Procurement process for 4 lots is on-going: Kabul Reshkhor, Kabul Shakardara, Herat and Mazar.

Broad Framework Ministry of Agriculture, Irrigation and Livestock is constructing the slaughterhouses. Kabul Reshkhor Slaughterhouse is complete whilst the others are at varying stages of completion. The Private Operator will be responsible for sourcing livestock, operating the facility, selling the packaged meat and maximizing the value of the by-products.

PPP Model Central Partnership Authority Independent Consultant Contract Reporting Ministry of Agriculture, Irrigation and Livestock Veterinary Surveillance Lease Agreement Project Company Supply Agreement Livestock Trader Equity Investment Agreement Investors Ministry of Finance Lease Payments Loan Agreement Operator Agreement Slaughterhouse Operator Joint Venture / Sub-Contracting Model Lenders Sales Agreement Meat Product Trader

PPP Model Proposed lease term: 10 years Government’s responsibility � � Land provision Finance development of Slaughterhouse Construction commissioning achieved prior to start of lease period Contract monitoring during lease period

PPP Model Private party’s responsibility � � � � Operate, maintain and manage slaughterhouse to meet laws, regulations contract procedures Manage livestock and meat trading business Provide performance security Procure required licenses and permits Finance working capital Maintain spare part inventory Make lease payments to government

Project Location Kabul Reshkhor Slaughterhouse • Char Asiab District, Gul Bagh Area, Rishkhor Kabul Shakardara Slaughterhouse • Shakar Dara District, Karez-e Mir Area Kunduz Slaughterhouse • Dasht-e Alchin Area Mazar Slaughterhouse • Near the road from Mazar to Dasht-e Shor District Herat Slaughterhouse • Adjacent to Herat Islam Qala Road, near the old Herat slaughterhouse

Afghanistan’s PPP Process Identificatio n Preparation Procureme nt Contract Manageme nt

Completed Phases Identification: � � Planning Pre-feasibility Study (2008) Preparation � � Feasibility Study (2016) Approval by HEC and Cabinet for Procurement Phase

Procurement Phase (Stage 1) Prequalification Stage (Request for Qualification - RFQ) Registered Entities will submit their Prequalification Responses Evaluated on the basis of requirements set out in PART E Pre-qualified Applicants shortlisted in accordance with criteria and process set out in RFQ (maximum of 5 for each Lot) Applicants are to submit an Application for a Lot on its own, clearly indicating which Lot has been applied for

Procurement Phase (Stage 2) Proposal Stage (Request for Proposal - RFP) Competitive process that follows Prequalification Stage to result in the selection of a Preferred Bidder for each Lot. Only the Shortlisted Bidders will be invited to submit Proposals shall be opened and evaluated in accordance with the terms of the RFP and the Preferred Bidders selected. Bid Security will need to be submitted at the RFP Stage. MAIL sign a Lease PPP Agreement with the Preferred Bidder’s Project Company for each Lot to implement the Project

Pre-Qualification Stage The Registered Entities will submit their Prequalification Responses in accordance with the terms and conditions of the Prequalification Document. The Prequalification Responses shall be evaluated on the basis of the pre-determined Pre-qualification Requirements.

Pre-Qualification Stage The pre-qualified Applicants will then be shortlisted in accordance with the shortlisting criteria. To ensure the quality of the Shortlisted Bidders that progress to RFP Stage, the number of Shortlisted Bidders for each Lot is limited to a maximum of [5 (Five)].

Pre-Qualification Criteria • Applicants must satisfy all the Prequalification Requirements • Applicants must submit a complete Application, including all required Forms and supporting documents and information

Legal Criteria Single Applicant / Consortium (not more than 5 (five) Members) Consortium: Lead Member will hold at least 26% equity in the Project Company, will be the largest shareholder Each Non-Lead Member will hold at least 10% equity shareholding in the Project Company

Financial Criteria Applicant / Consortium � � Applicant (Consortium) to meet Financial Criteria based on the pro-rate of proposed shareholdings Each member submits Form 5 A Financial Nominee (any one of the Consortium Members) � � Financial Nominee is appointed to meet all Financial Criteria Financial Nominee submits Form 5 A, others submit Form 5 B

Financial Criteria Applicant / Financial Nominee � Must have had net-worth (assets minus liabilities) of at least USD 500, 000 at the end of each of the last 3 years � Have been a profitable and a going concern over the past 3 years � Be able to demonstrate that it has raised at least USD 1 million in third party debt for 1 (one) project in the last 3 (three) years OR Must have had annual turnover of at least USD 1 million at

Financial Criteria Applicant / Financial Nominee (cont’d) � Free Cash Flow to Equity (FCFE) of at least USD 500, 000 at the end of each of the last 2 years FREE CASH FLOW TO EQUITY (FCFE) = PROFIT AFTER TAX + DEPRECIATION - INCREASE IN NET WORKING CAPITAL (CURRENT ASSETS - CURRENT LIABILITIES) – CAPITAL EXPENDITURE + NEW DEBT TAKEN – DEBT REPAID

Financial Criteria Additional Requirement for Consortium � each Non-Financial Nominee should have a minimum of USD 100, 000 net-worth

Technical Criteria Contract Performance Criteria: The Applicant or, if the Applicant is a Consortium, each and all Consortium Members � shall not have been the subject of any court or arbitral award decision determined against the Applicant or Consortium Member (as applicable) in respect of any material contract to which the Applicant or Consortium Member was a party during the past 5 (five) years, � for which the Applicant or Consortium Member was or is required to pay damages in an amount that had or could reasonably be expected to have a material adverse effect on the business or condition (financial or otherwise) of the Applicant or Consortium Member (as applicable).

Technical Criteria ELIGIBLE PROJECTS CRITERIA The Applicant must have developed at least 1 (one) Eligible Project Each Applicant shall be permitted to submit up to a maximum of 5 (five) Reference Projects as potential Eligible Projects

Technical Criteria An Eligible Project is a project where the: Applicant or any of Consortium members were involved in the operations, maintenance and management of a slaughterhouse, abattoir, meat processing plant, byproducts facility, poultry or agriculture produce processing facility with a minimum output of 1, 500 MT/year � Applicant or any of Consortium members held at least 26% in the equity shareholding in the relevant special purpose vehicle, joint venture company, partnership or other corporation or business organisation �

Shortlisting Criteria "A" – number of Eligible Projects � Awarded 5 (five) marks for each Eligible Project submitted Shortlisting Criteria "B" – min. output of 3, 000 MT/year � Awarded additional 5 (five) marks for each Eligible Project operating with a minimum output of 3, 000 MT/year for 3 consecutive years over the past 10 years

Shortlisting Criteria "C" – livestock sourcing/meat distribution � Awarded additional 5 (five) marks for each Eligible Project with involvement in livestock sourcing and packaged meat distribution Shortlisting Criteria “D" – PPP projects � Awarded additional 5 (five) marks for each Eligible Project that was implemented on a PPP basis

Shortlisting Criteria Maximum allowed number of referral projects One Eligible Project may meet multiple Shortlisting Criteria. Applicants are encouraged to submit the maximum allowed number of Reference Projects (being up to 5 (five) Reference Projects for the purposes of satisfying the Eligible Projects Criteria and Shortlisting Criteria "A" to “D"

Shortlisting Criteria Pre-qualified applicants shall be ranked on the basis of their shortlisting scores and the 5 (five) highest ranked prequalified applicants shall be shortlisted per Lot to submit a proposal in response to the RFP as the "shortlisted bidders“. In the event of a tie in the shortlisting scores of 2 (two) or more pre-qualified applicants, the sum of the output (MT/year) of all eligible projects submitted by each of the tied pre-qualified applicants shall be calculated and the tied pre-qualified applicants with the higher aggregate reference project total output (MT/year) shall be ranked higher.

Prequalification Response Checklist There are 10 forms with the RFQ document that Applicants need to fill up completely Please let us know if you have any questions about any of the forms No. 1 2 3 4 5 6 7 8 9 Form Description Prequalification Document Submission Identification Sheet Letter of Application including all required enclosures: Particulars of Applicant including all required attachments Particulars of Eligible Projects including all required attachments Particulars of Financial Capability including all required attachments Letter of Authorisation for Lead Member of Consortium Authorisation to a representative Certificate of Compliance Certificate by Affiliate of Applicant or Consortium Member of Willingness to Participate including all required attachments

Guidance: Filling the Forms Filling up the Forms with Dummy. docx

Guidance: Establishing a Consortium Assess yourself against the criteria What do you lack and how can you meet it? Lack financial criteria? � � Enter partnership with company that will enable you meet the criteria Either as pro-rate shareholding or Financial Nominee

Guidance: Establishing a Consortium Lack technical expertise? � � Enter partnership with a company that will be technical partner in the consortium Technical partner does not need to be lead firm, i. e. it can be a nonlead member with at least 10% shareholding Technical partner shareholding does not have to be in cash, it can granted for technical inputs in lieu of cash or as value of goodwill for the expertise and profile being provided Consider the whole spectrum of expertise from livestock sourcing, Slaughterhouse operation, meat packaging, by-products processing, trading, marketing, sales, distribution and environmental management

Guidance: Establishing a Consortium Note requirements � � � � Minimum 26% for lead member Minimum 10% for non lead member Up to 5 companies can be in a Consortium Member of a Consortium should not join another Consortium or apply as a Single Applicant in the same Lot Letter of intent to execute a Joint Venture Agreement (“JVA”) in the event of a successful bid shall be signed by all Consortium Members Letter of Authorisation for Lead Member of Consortium (Form 6) Authorisation to a Representative (Form 7)

Indicative Timetable Activities Prequalification Notice issued Pre-application meeting End of period for questions or requests for information (see clause 3. 2 of Part D) Deadline for Entity to respond to any questions or requests for information (see clause 3. 2) of Part D Prequalification Responses Submission Date Formal notification of prequalified Applicants Expected date for issue of RFP Date 23 rd October 2019 13 th November 2019 14 days before the Submission Date for the Prequalification Response [in accordance with clause 3. 2 of Part D] 7 days before the Submission Date for the Prequalification Response [in accordance with clause 3. 2 of Part D] 4 th December 2019 25 th December 2019 8 th January 2020

Thank You Entity’s Contact Person: Habibullah Habibi Private Sector Development Director Ministry of Agriculture, Irrigation and Livestock Jamal Mina, Karte Sakhi Kabul, Afghanistan E-mail: habibullah. habibi@mail. gov. af habibullah. habibi@hotmail. com