Short description
Appendix 1 – Terms of Reference
Study on Energy Efficiency (EE) in the “Textile” sector of Pakistan
Background and Context:
Textile is one of the most important manufacturing sectors of Pakistan and has the longest production chain, with inherent potential for value addition at each stage of processing, from cotton to ginning, spinning, fabric, dyeing and finishing, made-ups and garments.
Textile sector contributes nearly one-fourth of industrial value-added, contributes 8.5% of GDP and provides employment to about 40 percent of countries workforce. Barring seasonal and cyclical fluctuations, textile products have maintained an average share of about 62 percent in national exports. Textile exports of Pakistan in 2022 stood at about USD 20 Bio.
The textile industry retains a record of the lowest efficiency in energy utilization and is one of the major energy consuming industries.
Due to rising cost of energy, scarcity of water, gradual introduction of EU’s Carbon Border Adjustment Mechanism (CBAM) also linked to GSP+ status to Pakistan and focus of international brands/buyers on sustainability, the textile industry shall explore all possible ways to reduce its energy cost, save water and reduce its carbon footprint.
Tomorrow’s winners will be those who can produce more with less, keeping in mind the circular approach to production
The Trade Council believes that the Danish solutions are very well suited to support the Textile industry of Pakistan in achieving EE and reducing carbon footprint.
This is also in line with the Green Framework Engagement Agreement, signed between Pakistan and Denmark in creating stronger collaboration in areas such as climate change mitigation and adaptation, and a just and sustainable green transition.
Therefore, the Royal Danish Embassy is seeking to hire expert(s)/firm(s) to conduct a comprehensive market study on energy efficiency potential assessment within the textile industry of Pakistan.
Purpose:
The main purpose of this study is to increase Danish export of EE solutions to Pakistan and further strengthen green engagement between Pakistan and Denmark.
To achieve this, the Royal Danish Embassy/Trade Council in Islamabad intends to create “Energy Efficiency Alliance” (EEA) of Danish companies, complementing each other’s solutions within the EE domain. Moreover, Danish Financial Institutions, Export Credit Agency (EIFO) could also be engaged in financing EE/decarbonisation projects in the textile industry of Pakistan. Synergies with other development financial institutions (DFIs), international and local financial institutions (FIs) as well as development organization, foundations and textiles importers are not excluded.
Objectives:
The primary objective of this study is to verify and identify tangible business opportunities for Danish companies engaged in manufacturing and export of EE solutions.
Other key objectives are;
•To evaluate the current energy consumption patterns and energy efficiency practices in the textile industry.
•To identify technological advancements, best practices, and emerging trends in energy-efficient textile manufacturing.
•To assess the economic and environmental benefits of implementing energy-efficient measures.
•To provide actionable recommendations for textile industry stakeholders, Danish manufacturers & exporters of EE solutions, policymakers, and investors.
Scope of Work:
In view of the purpose and objectives of this study, the Royal Danish Embassy sets forth the following scope of work:
•Review of existing literature and relevant reports on energy efficiency in the textile industry of Pakistan.
•Review of Pakistan’s National Energy Efficiency and Conservation Policy 2023 w.r.t. textile sector and identification of untapped potential areas.
•To assess success of Pakistan’s previous Energy Efficiency policies and identify barriers in implementation/success of the policy.
•Data collection through surveys, interviews, and site visits to textile manufacturing facilities.
•Identification of energy intensive areas in the entire production chain of textiles
•Analysis of energy consumption patterns and energy-saving technologies in use.
•Potential areas and possible interventions to gain EE including water conservation
•Environmental observations and socio-economic gains (i.e. gender, job creation, etc.)
•Market size for EE solutions and for Energy conservation measures in the entire production chain
•Available solutions on the market (exporting countries, brands/companies, respective market share and local distributors)
•Current market practices/trends to sell EE solutions/undertake EE project (both from exporters of solutions and project sponsors’ side).
•Identification of major solution providers, system integrators, ESCOs and consultants.
•Identification of relevant Danish companies and their solutions (matching identified needs in the sector)
•Tariff regime for EE solutions (import duties, FTAs, other levies)
•Barriers to market entry/imports; i.e. imports restriction, unfair competition, counterfeits, illegal-imports, etc.)
•Regulatory framework and incentives for EE implementation
•Key stakeholders (public, private, international organizations, DFIs, FI, etc.)
•EE projects (public, private and DFIs) potentially relevant for Danish companies
•Financing of EE projects
•Carbon emissions reduction schemes identification through energy efficiency and conservation measure in textile industry in Pakistan.
•Key challenges/barriers to EE investments (i.e. financial, technical, institutional, behavioural, etc.)
•Possible ways to undertake EE projects by Danish companies
•Recommendations on market approach
•Upon completion of study, conduct workshops with key stakeholders in 2-3 cities of Pakistan to share knowledge, present findings and recommendations.
Deliverables (output):
Following the proposed/agreed timelines, the following deliverables shall be provided:
1Week-0Award of Contact and kick-off meeting
2Week-2Inception Report and Action plan: Brief report and presentation outlining service provider’s detailed plan for overall project implementation to achieve desired outcome and to ensure upfront alignment with the Royal Danish Embassy.
3Week-6Update/sparring meeting
4Week-9Submission of 1st draft of the study
5Week-14Submission of 2nd draft of the study
6Week-18Submission of final study/report
7Week-21/221st Workshop (proposed dates are tentative)
8Week-21/222nd Workshop (proposed dates are tentative)
The above listed deliverables should, when delivered, fully achieve the purpose and objective of the assignment.
Timing:
The study shall be completed within 6 months of the date of the award of the contract.
Suitability:
The service provider (an expert or firm) shall possess expertise in the energy efficiency and production chain of textiles.
Team and Organisation:
The service provider (an expert or firm) shall have at least:
•One expert on the textile production chain
•One expert in the energy efficiency domain
•One expert in environmental sciences
Qualifications and Competence of Staff:
The following qualifications and competences are required to support the project:
Specific qualifications & competences of team leader:
•Master or PhD degree in energy management, environmental engineering, textiles or relevant fields
• At least 10 years of experience working on energy auditing/accounting, sustainable energy and/or environmental resources management.
•Experience in carrying-out similar activities in developing countries/markets similar to Pakistan.
Specific qualifications & competences of team members:
•University degree in energy management, environmental engineering, textiles or relevant fields
•At least 5 years experience working on energy auditing/accounting, sustainable energy or environmental resources management and/or textile production.
•Experience in carrying-out similar activities in developing countries/markets similar to Pakistan.
General Qualifications & competences of team leader and team members
•Knowledge with strong insight in the Danish Energy efficiency sector and achievement obtained over last 5-10 years – in particular about Energy Efficiency projects undertaken by Danish companies in developing countries/markets similar to Pakistan.
•Knowledge of Danish companies & solutions in the Danish energy efficiency sector and their unique selling points
•Understanding of energy issues, especially perspectives about energy efficiency in private sectors in Pakistan;
•Understanding of different methods of measuring energy cost in Pakistan and in the world;
•Clear analytical style of writing in English language
•Able to identify pre-requisites, opportunities (low hanging fruits) and challenges for export of Danish Energy Efficiency solutions for industrial segment in Pakistan.
•Should make recommendations on market approach
•Proven experience with energy efficiency in industry sectors.
Budget and Level of Effort:
The maximum budget of the contract is DKK 350.000,- covering fees and expenses.
Since the contact has fixed budget, the competition is carried out based on qualitative criteria. Thus, it is up to the potential service provider to propose method and level of efforts by each team member to be assigned to execute this project.