ESCO Projects in Serbia Main Challenges. Đ đ ć

Transcription

1 ESCO Projects in Serbia Main Challenges Đ đ ć

2 Legal Sources The most relevant primary legislation for energy performance contracting in Serbia : Law on Efficient Use of Energy Law on Energy Law on Planning and Construction Law on Public-Private Partnership and Concessions Law on Public Procurement Law on Budget System Law on Local Self-Governance Other laws and by-laws 2

3 Legal Framework for Model ESCO Contract Based on the Article 67 of the Law on Efficient Use of Energy, the Rulebook Determining Model Contract for Energy Services for Improving Energy Efficiency when Users are from Public Sector ( MC Rulebook ) has been enacted Energy Performance Contracting is considered as PPP agreement without elements of concession The duration of a PPP contract is between 5 and 50 years The Law on Public-Private Partnership and Concessions defines the obligatory elements of the public contract in Article 46 3

4 The inter-play between PPP and PP ESCO Contract is a Public Contract, involving ESCO company as a Private Partner and public entity as a Public Partner The Law on Public Procurement principally governs the procedure of ESCO Contract award, while the Law on Public-Private Partnership and Concessions principally governs the contract itself A quest for necessary flexibility ensuring adaptation of the project 4

5 Two Model Contracts The MC Rulebook provides for two model contracts: 1. Model Contract for Energy Services for Energy Efficiency Improvement Measures in Public Facilities and Savings in Operating Costs 2. Model Contract for Energy Services for Energy Efficiency Improvement Measures and Savings in Operating Cost in Public Lighting 5

6 The Main Periods of the ESCO Contract Under the MC Rulebook, there are three main periods of the ESCO Contract: 1. Preparatory Period - planning and designing activities 2. Implementation Period - implementation of ESMs 3. Guarantee Period - utilizing the energy saving potentials Obligation of both Private Partner and Public Partner to cooperate 6

7 Financing/Collaterals The Private Partner (ESCO company) as a Contractor undertakes to provide funds necessary to cover the costs of the Project, from its own funds [optionally: and/or loans and/or other sources of finances] OR [optionally, in case the Client participates in the Project financing: "Funds for financing the costs of ECMs implementation in the Contracted Facility shall be provided by the Contractor and the Client jointly ] 7

8 Financing/Collaterals Securing fulfilment of Client s obligations: Authorization for debiting sub-account of the budget of the consolidated account of the Treasury and/or Promissory notes Securing fulfilment of Contractor s obligations: Performance bond corresponding to the amount of between 5% and 10% of the amount of the Guaranteed Savings 8

9 Liability & Insurance The Client's right of compensation for (i) damages caused by the Contractor and (ii) for failure of the Contractor to fulfil obligations from the Bid and the Contract The Contractor shall contract for, for the duration of the Contractual Period, the insurance of ESMs to their replacement value against fire and all other risks regularly covered under a comprehensive policy. The Client and the Contractor shall be joint holders of the policy The Contractor's right to compensation for failure of the Client to provide support during the implementation of ESMs In addition, the Contractor shall procure joint insurance policies made out to the Contractor and the Client, for the (i) damage to the Contracted Facility and for the (ii) personal injury or death 9

10 Incentives, Grants & Rebates The Contracting Parties are obliged to cooperate with each other in order to apply for, any grants, incentives, financing or rebates. The Contractor shall apply for, or assist the Client in applying for, any incentives, financing, refunds, rebates and trade discounts for which the ECMs are eligible and reduce the investment costs defined in Appendix 4 (Winning Bid). 10

11 Assignment & Disposal By entry into ESCO Contract, the Client gives its consent that the Contractor shall be authorized to assign receivables deriving therefrom to a financier/bank in accordance with the law regulating public-private partnership and concessions and other applicable laws of the Republic of Serbia. The Client shall be entitled to freely dispose of the Contracted Facility in whole or in part and towards one or several contracting parties. The Client shall have no other liabilities with respect to such an assignee (financier/bank). If the Guaranteed Savings are not achieved in accordance with the Contract, the Client shall have the right of recourse against the Contractor including (without limitation) through compensation/penalties for non-achieved Guaranteed Savings Disposal of the Contracted Facility by the Client shall not affect the rights and obligations of the Contractor under this Contract 11

12 Force Majeure Failure of the parties to meet any of the obligations shall not give rise to a claim by one party against the other, nor shall it be deemed as a breach, if such failure is a consequence of force majeure Any unforeseen or unavoidable event beyond the control of the parties and shall include any event, circumstance or a combination of events and circumstances falling outside the scope of regular events and circumstances, beyond the control of a party, that is, events and circumstances not caused by the fault or negligence of the party, which have an impact on the exercising of rights and fulfilment of obligations stemming out of ESCO Contract, and the impact of which, despite reasonable care, the parties could not have been foreseen, prevented, eliminated or mitigated Comprehensive notification mechanics 12

13 Termination & Dispute Resolution Termination of the ESCO Contract due to justified reasons Termination notice Damage compensation on the ground of unilateral termination Resolution of technical disagreements General disputes resolution regular courts and arbitration 13

14 Main challenges in practice (so far) Regulation gaps Clarity/Information gaps Flexibility gaps Organizational gaps Financial attractiveness gaps 14

15 Thank you for your attention! Contact us for further information: Đorđe Popović Tel: / Djordje.Popovic@cms-rrh.com 15

16 CMS Legal Services EEIG (CMS EEIG) is a European Economic Interest Grouping that coordinates an organisation of independent law firms. CMS EEIG provides no client services. Such services are solely provided by CMS EEIG s member firms in their respective jurisdictions. CMS EEIG and each of its member firms are separate and legally distinct entities, and no such entity has any authority to bind any other. CMS EEIG and each member firm are liable only for their own acts or omissions and not those of each other. The brand name CMS and the term firm are used to refer to some or all of the member firms or their offices. CMS locations: Aberdeen, Algiers, Amsterdam, Antwerp, Barcelona, Beijing, Belgrade, Berlin, Bratislava, Bristol, Brussels, Bucharest, Budapest, Casablanca, Cologne, Dubai, Duesseldorf, Edinburgh, Frankfurt, Geneva, Glasgow, Hamburg, Istanbul, Kyiv, Leipzig, Lisbon, Ljubljana, London, Luxembourg, Lyon, Madrid, Mexico City, Milan, Moscow, Munich, Muscat, Paris, Podgorica, Prague, Rio de Janeiro, Rome, Sarajevo, Seville, Shanghai, Sofia, Strasbourg, Stuttgart, Tirana, Utrecht, Vienna, Warsaw, Zagreb and Zurich. 16