WALK-THROUGH THE LEGAL STRUCTURE OF PPA S عرض الهيكل القانوني التفاقيا شراء الطاق
Agenda What is a PPA? Timeline Bankability PPA Development of the Jordanian PPA PPA Main Components Purpose and Duration Construction/Commissioning/Interconnection Commercial Operation Date Sale & Purchase of Electrical Power Boilerplate clauses
What is a PPA? PPA is defined as a contract to buy the electricity generated by the power plant and it refers to the purchaser of the generated electrical power as the off-taker. Main Components: Purpose and Duration Construction/Commissioning/Interconnection Commercial Operation Date Sale & Purchase of Electrical Power Boilerplate clauses
Timeline Bid Bond Performance Bond Reduced Performance Bond Decommissioning Bond Signing FC COD Expiry Project Developer must procure: Generation License Environmental Approvals (EIA Report) Financing for the Project Grid Impact Study Project Developer constructs the facility Off-taker constructs the Interconnection Facilities Commissioning of the facility by IE Operation and Maintenance of the facility Decommissioning
Bankability PPA What is Bankability? Continuously used term No set definition No list of requirements to achieve bankability A project is considered bankable if lenders are comfortable and ready to finance the project on a project finance basis (limited or non-recourse basis) Link to proper risk allocation
Development of the Jordanian PPA IPP 1 - Conventional Generation (Gas, Diesel, HeavyFuel Oil) IPP 2 - Conventional Generation CEGCO Privatization PPA s for existing plants through conventional generation Bidding process relating to Al-Kamsha Wind Farm (aborted during negotiations) PPA based on IPPs Bidding process relating to Al-Fujeij Wind Farm (aborted during negotiations) PPA based on negotiated Kamsha PPA IPP 3 - Conventional Generation IPP 4 Peaking units of existing plants (Peak Hours) Tafila Wind Farm PPA Solar and Wind Projects PPA Rounds 1, 2 and 3 of Direct Proposals
PPA Main Components Purpose and Duration Purpose Establishing the basis for the sale and purchase of electrical energy generated by the renewable energy power plant facilities. Duration Commences on date of execution and subject to the occurrence of financial close typically remains in force for a period of 15 20 contract years following Commercial Operation Date.
PPA Main Components Construction/Commissioning/Interconnection Construction From Financial Close and up to the Commercial Operation Date, the Project Developer is responsible for the construction of the facility. Commissioning After construction, the Project Developer is required to commission the facility based on the testing and commissioning protocol which is approved by an independent engineer. The PPA includes provisions regarding delay and deemed commissioning. Interconnection From Financial Close and up to the Commercial Operation Date, the Off-taker is responsible for the construction of the interconnection facilities and the substation.
PPA Main Components Commercial Operation Date From Commercial Operation Date onwards the Project Developer is required to operate and maintain the facility pursuant to the following: Laws of Jordan Transmission System Grid Code Generation License Permits and authorizations Prudent utility practice Operating Protocol and Access Protocol
PPA Main Components Sale & Purchase of Electrical Power After Commercial Operation Date: Off-taker is required to pay for the energy output delivered at the Delivery Point in accordance with the tariff agreed Tariff will only be adjusted for exchange rate fluctuations affecting the foreign currency portion of the tariff. All the payments of the off-taker are guaranteed by the Government of Jordan under the Government Guarantee Agreement.
PPA Main Components Boilerplate clauses Curtailment of Delivery Annual Major Maintenance activities and maintenance in Emergency situations Metering, disputes on metering and un-availability of meters reading Invoicing, late payments and disputed payments Emission Reduction Credits Insurance (Construction Phase and Operations Phase) Force Majeure (Government FM Events and Other FM Events) Total/Partial Loss Restoration Change in Law Protection (one time vs. ongoing) Defaults, Termination and Consequences of Termination
PPA Main Components Boilerplate clauses (cont.) Relationship with lenders (Direct Agreements, Notices, Step-in Rights, Assignment. Etc.). Restrictions on transfer of shares in Project Company Decommissioning Dispute resolution: Expert (certain technical issues) and Arbitration for other disputes Applicable Law is state law
Questions & Answers Thank You By: Dina Issa Amman Jordan Tel: +962 6 5664750 E-mail: info@khalifehlaw.com d.issa@khalifehlaw.com