Grant Agreement between the Government of the United States, acting through 8 the U.S. Trade and Development Agency (TA), and the Municipality of Krasnoyarsk­26 (Grantee). TA agrees to provide the Grantee under the terms of this Grant Agreement not to exceed U.S. dollars $780,000 to assist in funding the cost of a feasibility study on the Krasnoyarsk­26 replacement power and steam project.

It is further agreed between TA and the Grantee that:

1. Terms of Reference

The terms of reference for the study are attached as Annex I to this Grant Agreement. The study will examine the technical, financial, and environmental aspects of the proposed project.

2. U.S. Dollar/Local Currency Funding

The funding to be provided under this Grant Agreement shall be used to fund U.S. dollar and local currency costs for professional and technical services as required by the terms of reference, and performed by a competitively selected U.S. firm (the contractor) in preparing the study. The funds provided under this Grant Agreement are the only funds that will be made available to Grantee by TA for the study, unless otherwise agreed in writing.

3. Additional Funding

TA shall not provide any funds in addition to those provided under this Grant Agreement which may be required to fund components of the study other than those specified in the terms of reference.

The Grantee shall provide necessary administrative support, including office space, consulting expertise, and secretarial support for the contractor performing the study.

4. Most Favorable Conversion Rate

The funds provided under this Grant Agreement for the purposes of carrying out the obligations hereunder shall be convertible into local currency at the highest rate which is lawful in the Russian Federation at the time the conversion is made.
 

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5. Effective Date and Completion Date

This Agreement shall take effect upon signature by both parties. The completion date for the study, which is eighteen months from the effective date of this Grant Agreement, is the date by which the parties estimate that all services funded under this Grant Agreement will have been furnished.

6. Prohibition Against Funding Before Effective Date and After

Completion Date

No funds may be disbursed under this Grant Agreement for services which are provided under orders and contracts entered into prior to the effective date of this Grant Agreement, except as the parties may otherwise agree in writing. TA will not issue or approve documentation which would authorize disbursement of grant funds for services performed subsequent to the completion date of this Grant Agreement, except as TA may otherwise agree in writing.

7. Taxes

Funds provided under this Grant Agreement shall not be used to pay any taxes, tariffs, duties, or other levies imposed under laws in effect in the territory of Grantee. To the extent that any contractor funded by this Grant Agreement, including any consulting firm or any personnel of such contractor, and any property or transaction relating to such contract funded under this Grant Agreement are not exempt from taxes, tariffs, duties or other levies imposed under laws in effect in the territory of Grantee, the contractor funded by this Grant Agreement will pay the same with funds other than those provided under this Grant Agreement. Neither the Grantee nor the contractor will seek reimbursement from TA for such taxes, tariffs, duties, or other levies.

8. Disbursement Procedures

The Grantee may obtain disbursement of funds under this Grant Agreement for the costs of services required under the terms of this Grant Agreement by submitting to TA requests for disbursement for such services. Such requests shall consist of the following:

(1) A contractor's invoice. The invoice shall include a signed statement by the contractor that the amounts involved do not include taxes or fees imposed under the laws of the Russian Federation; and

(2) Grantee's approval of the contractor's invoice, certifying that the services for which disbursement is requested have been performed satisfactorily, and are in compliance with the terms of this Grant Agreement.

A photocopy of the signed TA­approved contract outlining the services for which payment is requested must accompany the initial request for disbursement of funds.

Requests for payment shall be submitted by courier or mail to:

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U.S. Trade and Development Agency

FM/CMP/DCB

Room 700, SA­2

515 22nd Street, N.W

Washington, D.C. 20522­0209

9. Time Limitation on Disbursement

Final disbursement of funds provided under this Grant Agreement for services performed will be made within six months after the completion date or such other period as TA agrees to in writing.

10. Use of U.S. Air Carriers

Transportation by air of persons or property funded under this Grant Agreement shall be on U.S. flag carriers in accordance with the Fly America Act, 49 U.S.C. 1517, to the extent service by such carriers is available, as provided under U.S. Government regulations.

11. Nationality, Source and Origin

All goods and services provided under this Grant Agreement shall have their nationality, source, and origin in the United States or in the Russian Federation. In no case shall goods and services having their nationality, source, and origin in the Russian Federation exceed 20 percent of the amount of the funding provided by TA.

12. Selection of Contractor

Contracting for professional and technical services shall be carried out by the Grantee according to acceptable procedures for the competitive selection of Contractors, subject to prior approval of those procedures by TA. Pursuant to these procedures, the Grantee shall have the authority to carry out all aspects of the procurement, including the ranking and selection of firms based on technical qualifications; price shall not be a factor in evaluation or selection.

At TA's request, the Grantee shall furnish to TA for its approval any specifications, terms or reference or documents related to the prequalification of Contractors, and to the solicitation of bids or proposals for services to be funded under this Agreement.

13. TA Prior Approval of Contracts and Contractors

It is understood by the parties that TA has reserved certain rights such as, but not limited to, the right to approve the terms of the contract and any subcontracts thereunder or amendments thereto, the selection of all contractors and subcontractors, the terms of reference, and any or all documents related to any contract funded under this Grant Agreement. The parties hereto further understand and agree that TA, in reserving any or all of the foregoing approval rights, has acted solely as a financing entity to assure the proper use of United

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States Government funds, and that any decision by TA to exercise or refrain from exercising these approval rights shall be made as a financier in the course of financing this effort and shall not be construed as making TA a party to the contract. The parties to this Grant Agreement understand and agree that TA may, from time to time, exercise the foregoing approval rights, or discuss matters related to these rights and the project with the parties to the contract, jointly or separately, without thereby incurring any responsibility or liability to the parties to the contract or to any one of them. Any approval or failure to approve by TA shall not bar the Grantee or TA from asserting any right, or relieve the contractor of any liability which the contractor might otherwise have to the Grantee.

14. Mandatory Contract Clauses

Contracts, subcontracts, contractors, and subcontractors funded under the Grant Agreement for the provision of professional and technical services, and any amendments thereto, including any changes in the terms of reference, must be agreed to by TA in writing before execution or amendment of the contracts or subcontracts. All such contracts and subcontracts shall include the following mandatory clauses:

"A. It is understood by the parties that TA has reserved certain rights such as, but not limited to, the right to approve the terms of the contract and any subcontracts thereunder or amendments thereto, the selection of all contractors and subcontractors, the terms of reference, and any and all documents related to this contract or any subcontracts funded under the Grant Agreement dated

1994. The parties hereto further understand and agree that TA, in reserving any or all of the foregoing approval rights, has acted solely as a financing entity to assure the proper use of United States Government funds and that any decision by TA to exercise or refrain from exercising these approval rights shall be made as a financier in the course of financing this effort and shall not be construed as making TA a party to the contract. The parties hereto understand and agree that TA may, from time to time, exercise the foregoing approval rights, or discuss matters related to these rights and the project with the parties to the contract or related subcontracts, jointly or separately,~without thereby incurring any responsibility or liability to the parties to the contract or related subcontracts or to any one of them. Any approval or failure to approve by TA shall not bar the Grantee or TA from asserting any right, or relieve the contractor of any liability which the contractor might otherwise have to the Grantee. A copy of the TA­approved contract and any subcontracts thereunder must be provided to TA before any payments will be released by TA.

"B. All goods and services provided by the contractor or any subcontractor shall have their nationality, source and origin in the United States or the Russian Federation. In no case shall goods and services having their nationality, source, and origin in the Russian Federation exceed 20 percent of the amount of the funding provided by TA.

"C. The feasibility study report, while aiming at optimum specifications and characteristics for the project, shall identify the availability of U.S. sources of supply so as to maximize their use in implementation of the project.

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"D. The contractors funded under the Grant Agreement shall maintain books, records, documents, and other evidence, and shall apply generally accepted accounting principles and practices sufficient to reflect properly all transactions under or in connection with the contract. The foregoing constitutes "records" for purposes of this clause.

(1) Such records shall be maintained during the contract term and for a period of three years after final disbursement by TA.

(2) All records maintained by the contractor shall be subject to inspection and audit by TA, or its authorized agents, at all reasonable times. The contractor shall afford TA proper facilities for such inspection and audit.

"E. Transportation by air of persons or property funded under this Grant Agreement shall be on U.S. flag carriers in accordance with the Fly America Act, 49 U.S.C. 1517, to the extent service by such carriers is available, as provided under U.S. Government regulations.

"F. The contractor shall provide adequate Workman's Compensation Insurance coverage under service contracts funded by TA.

"G. After completion of the contract, the contractor shall advise TA by letter at six month intervals, for a period of two years, as to the disposition of the follow on work resulting from the TA­funded feasibility study. If, at any time, the contractor receives follow­on project work from the Grantee, the contractor shall so notify TA, and

1 ) designate the contractor's contact point including name, telephone, and fax number; and

2) agree with TA upon a method for TA to receive from the contractor timely and accurate procurement information about the project, which TA may make publicly available.

"H. The contractor shall provide 3 copies of the final report, in English, to TA for its use and public distribution. The final report must be paginated."

15. Cooperation Between Parties and Follow­Up

The parties shall cooperate to assure that the purpose of this Grant Agreement will be accomplished. To this end, the parties, at the request of either, will exchange views on the progress of the study, the performance of obligations under this Grant Agreement, the performance of any consultant or contractor engaged in the study, and other matters relating to the study. Furthermore, for five years following completion of the final report, the Grantee or its representative agrees to respond to an annual questionnaire from TA about the status of the project.
 

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In accordance with this Agreement, both parties will take all possible measures, while the feasibility study is under way, to attract financial institutions to finance construction of the Krasnoyarsk­26 replacement power and steam project.

16. Implementation Letters

To assist the Grantee in the implementation of this Grant Agreement, TA may, from time to time, issue implementation letters that will provide additional information about matters covered in this Grant Agreement. Both parties may also use jointly agreed upon implementation letters to confirm and record their mutual understanding of the implementation of this Grant Agreement.

17. Books and Records

The Grantee agrees to maintain, in accordance with consistently applied accounting principles and practices, books, records, and documents relating to the study and this Grant Agreement adequate to show, without limitation, the receipt and use of services acquired under this Grant Agreement. Such books and records shall be maintained for three years after the date of the final disbursement by TA. The Grantee shall afford TA or its authorized representatives the opportunity at reasonable times to review books, records, and other documentation relating to the feasibility study and this Grant Agreement.

18. Representation of Parties

For all purposes relevant to the Grant Agreement, the Grantee will be represented by its Mayor and TA will be represented by the United States Ambassador in Moscow, each of whom may, by written notice, designate additional representatives for all purposes under this Grant Agreement.

19. Addresses of Record for Parties

Any notice, request, document, or other communication submitted by either party to the other under this Grant Agreement shall be in writing or through a wire or electronic medium which produces a tangible record of the transmission, such as a telegram, cable or facsimile, and shall be deemed duly given or sent when delivered to such party at the following:

To: Krasnoyarsk­26

Russian Federation

To: U.S. Trade and Development Agency

SA­16, Room 309

Washington, D.C. 20523­1602

Telephone: (703) 875­4357

Fax: (703) 875­4009
 
 

All such communications shall be in English, unless the parties otherwise agree in writing. In addition, the Grantee shall provide the Commercial Section of the U.S. Embassy a copy of each communication sent to TA.

Any communication relating to this Grant Agreement shall include the following fiscal data:

Appropriation No.: 11X1001

Budget Plan: 2TDX­95­71004­DG71

Project No.: 95­807B

Obligation No.: 5713111

TA No.: TA­5807­G­00­5184­00

20. Termination Clause

Either party may terminate this Grant Agreement by giving the other party 30 days advance written notice. The termination of the Grant Agreement will end any obligations of the parties to provide financial or other resources for the study, except for payments which they are committed to make pursuant to noncancellable commitments entered into with third parties prior to the written notice to terminate.

21. Non­waiver of Rights and Remedies

No delay in exercising any right or remedy accruing to either party in connection with this Grant Agreement shall be construed as a waiver of such right or remedy.

22. Statement by Grantee

In recognition of TA's efforts in funding the feasibility study, the Grantee shall, under otherwise equal conditions, give priority to U.S. suppliers in procuring the technology and equipment needed for the project.

IN WITNESS WHEREOF, the U.S. Trade and Development Agency and the Municipality of Krasnoyarsk­26, each acting through its duly authorized representative, have caused this Grant Agreement to be signed in the English language in their names and delivered as of the day and year written below.

For the U.S. Trade and For the Municipality

Development Agency of Krasnoyarsk­26

For the Ministry of Atomic

Energy

Dated:

OBJECTIVE OF STUDY:

The objective of this project is the generation of a "Feasibility Study" consistent with the requirements of (Western) financial institutions to obtain financing of replacement power for the Krasnoyarsk­26 reactor scheduled for shut­down by the year 2000. A phased approach has been adopted. IN ADDITION TO THE MAJOR OBJECTIVE, A DETERMINATION WILL BE MADE TO IDENTIFY WHICH OF THE TWO SOLUTIONS; 1) COMPLETION OF THE SOSNOVOBORSK POWER PLANT, OR 2) CONSTRUCTION OF DISTRIBUTED BOILERS WITHIN THE CITY OF K­26, IS OPTIMAL.

BACKGROUND:

The closed city of Krasnoyarsk­26 (K­26) has approximately 100,000 inhabitants and is located in the south central section of the Krasnoyarsk KRIE. K­26 reactor provides thermal and electrical power to the city of K­26 and associated high tech industry. KRIE has under construction a coal fueled power plant called Sosnovoborsk which is approximately 10 percent completed.

SCOPE:

This project is segmented into four phases:

PHASE I: Characterization of the Energy Supply and Demand

PHASE II: Identification of Energy Production/Efficiency Options and Financing

PHASE III: Draft Document Assembly and Review by Financial Institution with Interest in Financing the Project

PHASE IV: Revision and Production of the Final Document

PHASE I: Characterization of the Energy Supply and Demand

(identify customer requirements)

Proposed Start Date: February 15, 1995

Proposed End Date: March 31, 1995

Scope: 1) Data collection, fact finding, and verification

2) Identify fuel resources

3) Scope potential energy efficiency options

4) Identify time lines and deliverables

OUTLINE:

A) Review of existing reports, facilities, and other presently available information WITH SPECIAL EMPHASIS ON COMPLETION OF THE SOSNOVOBORSK PLANT OR CONSTRUCTION OF DISTRIBUTED BOILERS WITHIN K­26. Focus should be on: ­Needs assessment ­Information on costs, labor, consumption, pricing,

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etc.

B) Characterization of present energy supply system

­Energy generation (electrical and thermal)

­Energy distribution (thermal)

­Electric (energy management) distribution

C) Characterization of types of energy supply available

­Coal, including alternative sources (present/future)

­Oil and/or other fossil fuels

D) Characterization of related energy infrastructure needs

­Roads/Rail lines

­River/Barge delivery

­Other

E) Characterization of Environmental Needs and Concerns

­Boiler emissions

­Waste discharge/disposal

­Regulations (present/trends)

F) Characterization of customer base, in terms of present/ future demand profiles

­residential

­industrial /commercial

G) Characterization of impacts of potential energy efficiency improvements.

­Thermal energy distribution system

­Lighting improvement ­Advanced power generation technologies

­Insulation for residences and commercial buildings

­Heat exchangers and heaters

­Others

H) Characterize socio­economic change/mitigation when K­26 reactor is closed down, and

identify need job retraining requirements.

PHASE II: Identification of Energy Production/Efficiency Options & Financing

Proposed Start Date: April 1, 1995

Proposed End Date: June 30, 1995

Scope: PHASE II(a) Energy Production (Power Plant) Options:

­ Evaluation and Recommendation

­ Justification of Recommendation

Scope: PHASE II(b) Financial Analysis:

[Note: This activity is to be done in parallel, where possible, with Phase II(a)].

­Identify Revenue

­Mechanism for repayment and returning profit to investors

OUTLINE:

PHASE II(a) Energy Production/Efficiency

A) Pulverized coal­fueled power generation

B) Other types of coal­fueled power generation

­Fluidized bed combustion

­Other

C) Other options

­Supplemental boilers for thermal energy

Central

Distributed

PHASE II(b) Financial Analysis

A) Identify and characterize costs (present/expected future)

­Fuels

Cost (heat content basis)

Transportation

­Waste disposal

-Operating and maintenance costs

­Capital cost

­Project risk insurance

Loss/Casualty

Bonding requirements

Other

­Taxes

B) Identify and characterize revenues (present/expected future)

­Energy sales (residential)

­Energy sales (commercial)

­By­products (e.g. sale of ash)

­Subsidies (?)

­Other sources of income

C) Finance description

­Capitalization schedule

­Income and cash flow models

­Introduction of energy efficiency

­Debt service schedule

­Assumptions regarding effect of inflation

­Assumptions regarding effect of imposed pricing

D) Assess risks

­Financial

­Other

PHASE III: Draft Document Assembly and Review by Financial

Institution with Interest in Financing the Project

Proposed Start Date: III(a) Draft Document Assembled­ July 1, 1995

Proposed End Date: III(a) July 15, 1995

Proposed Start Date: III(b) Review by Financial Institution July 16, 1995

Proposed End Date: III(b) Receive Comment from Financial Institution August 31, 1995.

OUTLINE:

A) Identify least cost option from work done in Phases I and II consistent with the earliest shutdown of the K­26 reactor

B) Prepare a "bankable" document reflecting input from at

least one major international financial institution

C) Review by financial institution(s)

PHASE IV: Revision and Production of the Final Document:

Proposed Start Date: September 1, 1995

Fixed End Date: September 15, 1995

OUTLINE:

A) Revise based on comments received from financial institutions and other interested parties

B) Produce final documents which are submittable/acceptable to financial institutions

1. Submit document to selected financial institutions.

Source: URL: http://www.eia.doe.gov/gorec/gcc11.html
Comments or questions? Contact Cristina Chuen at MIIS CNS: Cristina.ChuenATmiis.edu

This material is produced independently for NTI by the Center for Nonproliferation Studies at the Monterey Institute of International Studies and does not necessarily reflect the opinions of and has not been independently verified by NTI or its directors, officers, employees, agents. Copyright © 2002 by MIIS.

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