Without the reliable supply of electricity, developed countries would quickly grind to a halt. Business and governments depend upon power being available on a 24 x 7 basis. But continuity of supply is not taken for granted in many parts of the world, including in West Africa. Power outages are common in many developing countries and organisations are faced with difficult choices of either creating their own power expensively, using private diesel generators, or reducing their hours of manufacture or operation to the limited times when power is available from the grid. Filling this gap between supply and demand needs a variety of creative approaches. The “Power Purchase Agreement” between an independent power producer and a public sector power “off-taker” purchaser is one such solution.
This three-day online training course examines holistically how Power Purchase Agreements operate. It will set out the main issues that must be addressed to create an effective and efficient contractual mechanism between the parties, and provide guidance to participants when they are considering the contractual framework for the next PPA.
The course will include:
- how does the power market function, including the roles and responsibilities of the various parties
- the key factors that must be taken into account to make a power project attractive to potential investors or lenders
- the main risks associated with a project involving an independent power producer and public sector power purchaser, and the contractual and other tools and techniques available to manage and mitigate those risks
- the essential contractual provisions that must be included in a PPA, such as the obligations to provide the contracted capacity and output levels and the reciprocal obligations to pay; clauses about default, liability, indemnities; dispute resolution; term and termination; Force Majeure and changes in the law.
WHO SHOULD ATTEND?
This Developing Power Purchase Agreements online training course aims to enable participants to:
- Achieve a familiarity with the commercial, legal, financial and operational risks associated with PPA’s
- Understand the context of PPA’s and how they contribute to growing power capacity, especially in developing countries
- Develop an understanding of the contractual framework of a PPA
- Analyse the key clauses in model power purchase agreements
- contribute to the management and resolution of claims and disputes
The Developing Power Purchase Agreements online training course will be delivered live, online, using a suitable virtual training platform. It will combine presentations with interactive practical exercises, video materials, activities and case studies. Delegates will be encouraged to participate actively in relating the subject matter to the particular needs of their workplace.
The Developing Power Purchase Agreements online training course covers the context for power purchase agreements and in particular the workings of power generation markets. It will look at how power projects are financed and examine case studies of successful and failed power projects. Specific examples from sub-Saharan Africa will be included. The course will look at the different types of risk including risks during the development and construction and risks associated with operations. We will look at key contractual provisions of the power purchase agreement and including buyer and seller default, and the resolution of disputes.
Day 1 : Principles of Power Purchase Agreements
- The Power Market - Key Features and context
- When is a PPA a suitable mechanism for filling the demand / supply gap?
- The need for Project “Bankability” to finance power projects
- Alternative procurement strategies for developing power infrastructure
- The project phases of creating power infrastructure
- Environmental and Social requirements
- Typical tariff structures
- Taxation and PPAs
Day 2 : Essential contractual provisions in the PPA
- What are the key risks to the power producer?
- What are the key risks to the power purchaser / Off-taker’?
- Seller obligation to provide the contracted capacity and output
- Buyer obligation to pay for the available capacity and output
- Payment and security for payment
- Scope for 3rd party sales
- Term of the contract
- Representations, warranties and undertakings
- Project Operation issues
- Liability and Indemnities
- Maintenance and outages
Day 3 : What happens when PPAs go wrong?
- Default by the parties
- Liquidated damages
- Damages for Underperformance in production
- Force Majeure
- Change in Law
- Buyout price
- Lender Rights
- Dispute Resolution
VAT Announcement: The Government of UAE have introduced Value Added Tax (VAT) on goods and services from 01-January-2018. In compliance with the legislation issued by the UAE Government, we will be applying a 5% VAT on the fees for all our programs and services offered from January 2018 as applicable and stipulated in the FTA circulars.