Developing Power Purchase Agreements – A Holistic Perspective

INTRODUCTION

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.