Funding Opportunities

Request for Proposals – Online and Offline Pay-As-You-Go (PAYG) LPG Project for Clean Cooking Alliance Partner

Summary
The United Nations Foundation’s Clean Cooking Alliance is accepting proposals for a technical and economic evaluation project that compares various PAYG LPG solutions present in East Africa, for its partner, M-KOPA Labs (“Labs”).

Background
A number of companies are currently offering PAYG LPG solutions in East Africa, with some gaining sales traction in the market. However, the majority have also faced significant challenges in establishing a sustainable business model based on their core technology – a “smart valve” – to remotely secure customers’ usage and corresponding repayment via mobile money.

The “smart-valve” is a valve that is embedded with Internet-of-Things (IoT) communications that not only transmits data to suppliers based on customers’ LPG repayment and usage, but also be remotely controlled to ‘lock’ the LPG cylinder in times of customers’ non-payment.

However, the smart-valve technology faces several challenges in low-income markets. LPG is a very high-volume, low margin product. Offering LPG on a PAYG basis requires pre-financing many thousands of cylinders, valves, and liters of LPG and distributing these into many thousands of houses and businesses. Small margins must be earned-back over weeks and months in small amounts – making the busines model challenging for any business that does not already have involvement in LPG supply chains, and requiring considerable resources to invest in up-front costs.

The purpose of this project is to explore four key challenges facing LPG value-chain actors:

• accurately measuring the volume and value of LPG sold to customers,
• monitoring the usage of LPG by customers to enable efficient re-filling and distribution,
• making customers’ payments transparent against the LPG used, and
• securing and tracking cylinders to prevent theft/loss.

Background of Organizations
The Clean Cooking Alliance (“CCA”) works with a global network of partners to build an inclusive industry that makes clean cooking accessible to the three billion people who live each day without it. Established in 2010, CCA is driving consumer demand, mobilizing investment to build a pipeline of scalable businesses, and fostering an enabling environment that allows the sector to thrive. Clean cooking transforms lives by improving health, protecting the climate and the environment, empowering women, and helping families save time and money.

M-KOPA Labs is the research and development unit of M-KOPA. Labs works with partners to unlock new energy access and financial inclusion opportunities that address the evolving needs of low-income customers in Africa, and beyond. While based in the UK, Labs closely collaborates with M-KOPA Kenya (HQ) and M-KOPA Uganda offices to ensure future products and services are fit-for-market and incorporate the voice of the customer at every step of the product development journey.

Objective
The objective of the project is to evaluate the technological and economic pros and cons of an online or offline PAYG gas locking valve and recommend the design of the appropriate solution. Ultimately, the solution must be safe and in line with the latest gas safety regulations and is expected to pass the gas safety certification, if necessary. The design needs to be secure as well, tightly integrated with the standard market cylinders to prevent tampering with the system.

There are no limitations to where the Consultant(s) is based, although experience/knowledge of the East African context is a plus. Due to the restrictions of remote working, this project will be all desk-based.

Online versus offline solutions
While displacing charcoal with LPG fuel for cooking provides many social and environmental benefits for customers, this modern cooking fuel remains out-of-reach for many households in the target markets. M-KOPA seeks to reverse this trend by enabling customers to affordably finance the cost of an LPG cylinder and repay slowly with daily micro-payments based on customers’ usage of gas.

Similar to how M-KOPA made PAYG solar lighting, TVs and refrigerators affordable, customers will pay for units of pre-paid credit to ‘unlock’ a set amount of gas for cooking. Therefore, reasonably accurate gas usage tracking needs to be implemented. When pre-paid credit on the valve runs out, the valve must lock the supply of gas until further payment is received and credit is remotely synced with the device via IoT communication for an online solution or Radio-Frequency (RF) communication for an offline solution. The present gas amount and amount of pre-paid credit needs to be visualized for the end user. To make the product commercially viable, the target Bill of Material (BOM) cost of the whole design (electronics and mechanical enclosure) must be a target percentage of cylinder cost (to be defined during the scoping phase).

An online valve needs to be able to connect with the M-KOPA’s cloud-based PAYG platform to receive credit for operation, while an offline valve needs to receive credit information through keypad or local RF communication.

Using GSM connectivity, the online ‘smart’ valve solution must be capable of:

• accurately measuring the volume and value of LPG sold to customers,
• monitoring customers’ usage of LPG to inform future re-filling,
• making the customers’ payments transparent against the LPG used, and
• remotely securing cylinders to prevent theft/loss.

An offline solution must have the ability to physically lock the cylinder, relying on a combination of other (lower cost) technologies for cylinder security, with an adjusted business model. These alternative, offline technologies include:

• Employing Quick Response (QR) coding systems, or Radio-frequency identification (RFID) tagging systems to enable cylinder tracking throughout the distribution chain.
• GPS tags of customers’ houses to identify the location of the cylinders (at time of delivery) and to enable subsequent refilling deliveries and collections.
• Digitally connected weighing scales to validate the volume (by weight) of LPG at the point of sale and/or point of collection.
• Digitally connected weighing scales to monitor the use of LPG by customers and provide alerts for refills.

Scope of Work and Deliverables
Exploring offline and online solutions to control the flow of LPG gas at valve-level, the Consultant(s) will liaise with the client for an initial scoping discussion to outline key hypotheses related to the following factors:

1. Safe electronic gas valve operation and remote control of the valve
2. Ability to reliably monitor gas consumption (via gas flow counter, ultra-sonic technologies, etc.)
3. Safe mechanical design that is tightly integrated with market standard gas cylinders
4. Secure mechanical design that minimizes the risk of tampering and fraudulent use
5. Lowest-price BOM for online and offline solutions
6. Design with low or ultra-low power operation
7. Offline valve: Ability to receive credit through offline vouchering method & ability to receive credit reliably from an online platform through GSM technology.
8. Online valve: Ability to transmit basic system telemetry to an online platform.

Exploring both the smart locking valve (online solution) and the alternative technology option (offline solution) summarized here, the consultant will provide the following key deliverables at the end of the project:

• Prototype design consisting of the following:
  • System block diagrams
  • Electronic design files (schematics, BOM, PCB layout)
  • Mechanical design files (CAD files and drawings)
• Narrative reports on the rationale for the design, its strengths, weaknesses, and tests to validate the design
• High level product unit economics when combined with the gas cylinder, and projection of per-unit margins
• Product R&D budget

Project Period of Performance
It is envisaged the Consultant(s) will have 4 months from contract execution to define, test, and validate key hypotheses for the LPG gas monitoring technologies.

Technical Requirements

• Excellent understanding of gas safety requirements within electronic designs.
• Experience in electronic and printed circuit board (PCB) design and access to electrical computer-aided design (CAD) tools.
• Experience in mechanical design and access to CAD tools.
• Experience in firmware development, specializing in connectivity and security, with access to firmware development software and tools.
• Understanding the safety aspects of battery powered systems.
• The ability to test and validate the prototype.

Timeline

Budget
A detailed budget in US Dollars must be submitted with the proposal. Budget should include both pre-tax and net of tax values. The budget should include direct costs (Personnel, Fringe Benefits, Travel, Sub-Agreements, Equipment, Supplies, etc.), as well as indirect costs (overhead). For indirect costs, please indicate a list of expenses covered by the indirect rate. For all direct cost, please include assumptions that were made to arrive at line item costs (e.g., 2 trips @ $1,500/trip = $3,000 or 20 staff hours @ $40/hour = $800).

If a bid has a mathematical discrepancy, CCA may correct the discrepancy and notify the Consultant of the adjustment. In such circumstances, the Consultant may choose to withdraw their bid.

The budget should not exceed USD$50,000.

Evaluation process
CCA will review all written proposals and may request a phone or in-person interview and/or updated submission to address questions or provide clarification.  CCA will use the following criteria in our evaluation.

Intent and disclaimer
This RFP is made with the intent to identify a Consultant to deliver results as described in this RFP.  UNF/CCA will rely on the Consultant’s representations to be truthful and as described.  CCA assumes it can be confident in the Consultant’s ability to deliver the product(s) and/or service(s) proposed in response to this RFP.

If CCA amends the RFP, copies of any such amendments will be sent to all respondents to the proposal.

Proposal Guidelines and Requirements

• This RFP is open to multiple partners and is a competitive process.
• Proposals received after March 11, 2021 and 23:59 EST will not be considered.
• The price provided should be in US dollars, and should contain both pre-tax and net of tax values. If the process excludes certain fees or charges, the applicant must provide a detailed list of excluded fees with a complete explanation of the nature of those fees.
• CCA prefers a single point of contact who manages deliverables. If the execution of work to be performed by the Consultant requires the hiring of sub-contractors, the Consultant must clearly state this in the proposal. Sub-contractors must be identified and the work they will perform must be defined. Subcontractors are subject to vetting and approval of UNF/CCA.
• CCA will not refuse a proposal based upon the use of subcontractors; however, we retain the right to refuse the sub-contractors you have selected.
• Provisions of this RFP and the contents of the successful responses are considered available for inclusion in final contractual obligations.

Format for Proposals
Proposals must include the full legal name of applicant, as well as legal formation and ownership structure (e.g. incorporation certification, tax status and ID, etc.).

Contracting and Compliance
CCA will negotiate contract terms upon selection. A copy of the contract terms and conditions will be provided upon selection. All contracts are subject to review by the UN Foundation’s Business Services and Budget Reporting team. The project will start upon the complete execution of the contract. The contract will outline terms and conditions, scope, budget, and applicable flow down terms. Selected recipient(s) must comply with CCA, United Nations Foundation, and funder compliance requirements. The selected recipient(s) must also undergo detailed legal, financial, and commercial due diligence.

Release
The Consultant understands that CCA has chosen to solicit an RFP for consulting services, and that the Consultant’s response does not guarantee that CCA will enter into a new contract with the Consultant or continue any current contract(s) with the Consultant.

The Consultant agrees that CCA may, at its sole discretion:

• Amend or cancel the RFP, in whole or in part, at any time
• Extend the deadline for submitting responses
• Determine whether a response does or does not substantially comply with the requirements of the RFP
• Waive any minor irregularity, informality or nonconformance with the provisions or procedures of the RFP
• Negotiate with all Consultants UNF deems acceptable
• Issue multiple awards
• Photocopy the responses for evaluation/review

This RFP is not an offer to contract.  CCA assumes no responsibility for Consultant’s cost to respond to this RFP. All responses become the property of CCA.

The Consultant, by submitting a response to this RFP, waives all right to protest or seek any legal remedies whatsoever regarding any aspect of this RFP.

The Consultant represents that it has responded to the RFP with complete honesty and accuracy. If facts provided in the Consultant’s response change, the Consultant agrees to supplement its response in writing with any deletions, additions, or changes within ten (10) days of the changes. The Consultant will do this, as necessary, throughout the selection process.

The Consultant understands it may receive proprietary and confidential information from CCA during the RFP process (“Confidential Information”).  The Consultant and CCA agree to not use Confidential Information for any purpose other than the Consultant’s participation in the RFP process, and to not reveal Confidential Information directly or indirectly to any other person, entity, or organization without the prior written consent of the other party. The Consultant and CCA further agree to exercise all reasonable precautions to maintain the proprietary and confidential nature of Confidential Information where it can best demonstrate its value and capacity to delivery ecosystem-wide, meaningful value.

Grounds for Exclusion
Material misrepresentations, including omissions, may disqualify the Consultant from a contract award.

Submissions will be rejected in CCA’s sole discretion if it finds that the Consultant has engaged in any illegal or corrupt practices in connection with the award.

The Consultant will be excluded from participation for the reasons below. By submitting a proposal in response to the RFP, the Consultant confirms that none of the below circumstances apply:

• The Consultant is bankrupt or being wound up, is having their affairs administered by the courts, has entered into an arrangement with creditors, has suspended business activities, is subject of proceedings concerning those matters, or is in any analogous situation arising from a similar procedure provided for in national legislation or regulations.
• The Consultant or persons having powers of representation, decision-making or control over them have been convicted of an offence concerning their professional conduct by a final judgment.
• The Consultant has been found guilty of grave professional misconduct; proven by any means which CCA can justify.
• The Consultant has not fulfilled obligations relating to the payment of social security contributions or taxes in accordance with the legal provisions of the country in which they are established, or within the United States of America, or those of the country where the contract is to be performed.
• The Consultant or persons having powers of representation, decision-making or control over them have been convicted for fraud, corruption, involvement in a criminal organization or money laundering by a final judgment.
• The Consultant makes use of child labor or forced labor and/or practice discrimination, and/or do not respect the right to freedom of association and the right to organize and engage in collective bargaining pursuant to the core conventions of the International Labour Organization (ILO).

Principal Point of Contact
Roberta Bove: rbove@cleancookingalliance.org

Submission details
Please address your submission to Roberta Bove at rbove@cleancookingalliance.org and Katherine Owens at Katherine.owens@m-kopa.com.

Subject Line: RFP Submission_Alternative PAYG Locking Solution

Proposals are to be submitted in PDF form, with adjoining workplan and budget in Excel.

Deadline: May15, 2021