Fillable Printable Standardised Power Purchase Agreement for Renewable Energy Generators

Standardised Power Purchase Agreement for Renewable Energy Generators

Standardised Power Purchase Agreement

for Renewable Energy Generators greater than

10 MW

Standardised PPA for large renewable energy generators (greater than 10 MW)

AGREEMENT FOR POWER PURCHASE

DATED

Between

(as “the Seller”)

- AND -

THE KENYA POWERAND LIGHTING COMPANY LIMITED

(as "the Buyer ")

POWERPURCHASE AGREEMENT

Standardised PPA for large renewable energy generators (greater than 10 MW)

THIS AGREEEMENT is made this ……………………..day of ……………………20…

BETWEEN

…………….acompany incorporated in theRepublic of Kenya[a limited partnership incorporated

under the Limited PartnershipsAct, Chapter 30 of the Laws of Kenya] with its registeredoffice at

……………………, and of Post office Box Number………..(hereinafter referredto as “the Seller”),

whichexpression shall, where thecontext soadmits, includeits successors in title andassigns) of

the one part ;

AND

THE KENYA POWERAND LIGHTING COMPANY LIMITED, acompany incorporated in the

Republic of Kenyawith its registered office at Stima Plaza along Kolobot Road in Nairobi and of Post

Office Box Number 30099 – 00100, Nairobi,(hereinafter referredto as “the Buyer” whichexpression

shall, where the context so admits include its successors and assigns” of the third part.

WHEREAS:

1.The Buyer is licensed topurchase, transmit, distribute and supply electricity in the Republic of

Kenya;

2.The Seller intends to construct a ……………..MW ……………..power generation plant at

……………… of which ……….is for captive use and the rest for sale to the Buyer and

3.The SellerandtheBuyer haveagreedtoenter into an powerpurchaseagreement (beingthis

Agreement) for the sale of ……..MW to the Buyer pursuant to the Feed – In – Tariffs Policy.

NOW IT IS AGREED AS FOLLOWS

1.DEFINITIONSAND INTERPRETATION

1Defined Terms

In this Agreement, unless thecontext requires otherwise, the followingwords shall havethe

following meanings –

“Appendix A”: Description of the Plant

“AppendixB (1)”: The standardisedtariffs and escalators for purchase and sale of Net Electrical

Output applicable to this Agreement.

“Appendix B (2)”: The computation of Deemed Generated Energy Payments.

“Appendix C:” Designation of the Interconnection Facilities and Requirements

“Appendix D:” Contents of Seller’s Invoice

“Appendix E:” Designated address and contact persons for each Party.

“Appendix F:” Transfer Amount specified in Clause 11.3

“Appendix G:” Particulars of the Lenders

Standardised PPA for large renewable energy generators (greater than 10 MW)

Annual dependable output:

"Change inLaw" means any of the followingevents occurringafter the SignatureDate, and which

despite the exerciseof Prudent Operating Practice by the Seller or THEBUYER (i) results in a

material increasein the operatingcosts orcapital expenditureincurred by the Sellerin performing

its obligations under this Agreement or (ii)imposes requirements for the design, construction,

operation or maintenance of the Plant or the Buyer’s System that are materially more onerous than

the requirements in effectas of the Signature Date, andthat affect the Seller's performanceunder

this Agreement, , or that affect the Buyer's performance under this Agreement:

a. a changein, orin the interpretation (by a governmental authority), applicationor

enforcement of, or theenactment or adoptionof or promulgation, bringingintoeffect of,

repeal, amendment of, any legal requirement; or

b. any changeinany authorization required in connection with this Agreement or any

additional requirements or conditions imposedby any governmental authority in connection

with theissuance, extension, replacement, variation or renewal of any authorization required

in connection with this Agreement provided that in respect of the issuance, extension,

replacement, variation or renewal of any authorizationrequiredin connection with this

Agreement, the Party requiring therelevant authorization has first diligently attemptedto

obtain suchauthorization and if theprocesses required by suchduty of diligencehavenot

been exhausted, suchprocesses havebeen andare still being diligently pursued by that

Party;

“Commissioning:” Conduct of testsnecessary to put aunit or the Plant (as the casemaybe) into

operation and the term “Commission” shall be construed accordingly;

"Deemed GeneratedEnergy": Theelectrical energyexpressed in kWh that as a result of the Buyer’s

System Interruption is not generated and/or delivered to the Buyer at the Delivery Point;

"Deemed Generated Energy Payments" has the meaning given in Clause 6.16;

“Default Rate:” Two percentage points above LIBOR;

“DeliveryPoint:” Thepoint of commoncoupling as shown inAppendix C at whichthe Net Electrical

Output from the Plant is delivered to the Buyer;

“Emergency:” A condition or situation that in the reasonable opinion of either Party does materially or

adversely, or is likely materially or adversely to –

a.Affect the ability of eitherParty to maintain asafe, adequateor continuous supply of

electrical energy to its customers; or

b.Does or is likely to present a physical threat to persons or property or security integrity

or reliability of the Buyer’s System or the Plant;

“Effective Date:” Has the meaning subscribed to it in Clause 3.1;

"Environmental Attributes": Any andall Carbon Credits and any and all fuel, emissions, air quality or

other environmental characteristics,credits, benefits, reductions,offsets and allowances arising out

of any international, national or other laws or regulations (and whether now existing or enacted in the

future), including any suchlaws or regulations relating to oxides of nitrogen, sulphur orcarbon,

particulate matter, soot or mercury, resultingfrom thegenerationof energy or theavoidanceof the

emissionof any gas,chemical or other substancetothe air, soil orwater attributable to such

generation;

Standardised PPA for large renewable energy generators (greater than 10 MW)

“Feed – In –Tariffs Policy:”TheFeed – In –Tariffs Policy on Wind, Biomass, hydro, Geothermal,

Biogas andSolar Resource GeneratedElectricity first issued by the Ministry of Energy onMarch

2008 and subsequently revised;

“First Commissioning Date:” Has the meaning subscribed to it in Clause 5.6;

“Force Majeure:”Has the meaning ascribed to it in Clause 10;

“Full Commercial Operation Date:”The date notified by the Seller in accordance with Clause 5.7;

“GeneratingLicence:” Has the meaning ascribed to it in theEnergyAct, (or anysimilar licenceor

other authorisation pursuant to legislation replacing the Energy Act;

“Interconnection Facilities:”The point where the Seller’s Net Electrical Output line or electric system

feeds into theBuyer’s electricsystem andfacilities requiredtoconnect the plant to thebuyers

system;

“Interconnection Point”: thepoint at whichtheinterconnection equipment andprotection equipment

is located as shown in Appendix C.

“the Buyer’s System:” Thetransmissionsystem operated bytheBuyer andthedistribution systems,

and ancillary plant and equipment connected to such transmission system;

“kW:” Kilowatt;

“kWh:” Kilowatt hour being three million six hundred thousand(3,600,000) Joulesas definedinISO

100.1992(E);

“Lenders:”The financial institutions specified in Appendix E, which term includes their successors

and assigns;

“LIBOR:” Means in respect of any day –

a.The rate per annum equal to the arithmetic mean (roundedupwards, if necessary,to

the nearest whole multiple of onesixteenthof one percent (1/16%) of the offered

rates per annum for deposits of aprincipal sum equivalent tothe sum inquestion in

USDollars foraperiod commencing onsuch day and endingseven(7) dayslater

which appear onthe Dow JonesMarkets Screenat or about eleveno’clock in the

morning(11.00a.m) London timetwo (2) business days prior to such day,provided

alwaysthat at least two offered rates appearon theDow Jones Markets Screen

Page; or

b.If at least two(2) offeredrates donot appear on theDow Jones Markets Screen

Pageas contemplatedby the provisoto paragraph(a)of this definition, the rateper

annum,( roundedupwards if necessary, to the nearest whole multiple of one

sixteenth of one percent (1/16%) per annum of theinterest rateper annum offered at

approximately eleveno’clock in themorning(11.00a.m) Londontime by at least

three (3)referencebanks(selected by the Party entitled toreceive thepayment

due)two (2) businessdays prior to suchday and for delivery onsuchday, tomajor

banksin theLondon Interbank Market for deposits in US Dollars in theamount of the

sum in question;

Standardised PPA for large renewable energy generators (greater than 10 MW)

“Long Stop Full Commercial Operation Date”: the date falling within twenty four (24) months after the

EffectiveDate orany extensionthereof fallingwithin thirty six months (36) after the EffectiveDate

agreed between the Parties;

“Material”.

“Mwh:” Megawatt hour being one thousand (1000)kWh;

“Must Take Facility”: A facility where the Buyer must take and purchase the Net Electrical Output, not

exceeding the annual dependable output, equivalent to 75% of net electrical output, to begenerated

at the Plant and deliveredandsold to the Buyer, subject only to such necessary directions or

protocols as may be issued by the Buyer for protection of its electric system.

“Net Electrical Output:” Energy from thePlant measured in kilowatt hours (kWh) which is generated

at the Plant and delivered to the Buyer at the Delivery Point;

“Non – Default Rate:” LIBOR;

“Parties:” the Buyer and the Seller;

“Plant:” All the Seller’s electrical prime movers and generators, together with all protective andother

associatedor auxiliary equipment of the Seller, and rights toown or useland associated with the

electrical primemovers and generators, necessary to producethe Net Electrical Output pursuant to

this Agreement;

“Prudent OperatingPractice:” Inrelation toeither Party, standardsof practice obtainedbyexercising

that degree of skill, diligence, prudence and foresight which could reasonably be expected from a

skilled and experienced person engaged in the same type of undertaking;

“Scheduled Outage:”An outage at the Plant whichis scheduled in advance for thepurposeof

performing maintenance of the Plant;

"Signature Date": The date of this Agreement;

“Large FIT Power Project:” A project of any capacity that generateselectric energy from renewable

energy sources and sells pursuant to this Agreement over ten (10) MW of such output;

“Target Effective Date:” ………….. (Insert actual date);

“Term:” Theperiodfrom the Effective Date until the expiry of this Agreement in accordance with

Clause 2 or earlier termination;

“Tariff:” Thecharge rate per kilowatt hour (kWh) definedin the FiTs tariff policyand specified in

Appendix B: (1);

“The EnergyRegulatoryCommission:”TheEnergy Regulatory Commissionestablishedunder

section 4 of the Energy Act; and

“The Energy Act:”The Energy Act, No.12 of 2006, of the Laws of Kenya.

2Interpretation

Standardised PPA for large renewable energy generators (greater than 10 MW)

In this Agreement, unless the context otherwise requires –

1Referencetoabusiness day is referencetoany day which is not aSaturday,

Sunday or recognised public holiday in the Republic of Kenya;

2Referenceto a day, week ormonth is referencetoacalendar day, week or

month;

3Referenceto Clauses,Appendices orparagraphs or figures are reference to

clauses, paragraphs and figures of and to this Agreement;

4Words inthe singular shall beinterpreted as referring to theplural and vice

versa, andwords denotingpersons shall be interpreted as referring to natural

and legal persons;

5The term including shall be construed without any limitation;

6A requirement that payment bemadeon a day whichis not a business day shall

be construedas a requirement that thepayment be made on the next business

day;

7Headings arefor convenienceonly and shall not affect the construction of this

Agreement; and

8Unlessotherwiseprovidedherein, whereaconsent or approval is required by

oneParty from the otherParty, suchconsent or approval shall not be

unreasonably withheld or delayed.

2.EFFECTIVENESS AND TERM

1.Effectiveness

The Parties’ obligations shall commence from full commercial effective dateandshall unless

earlier terminated in accordance with its term continue infullforceand effect for a periodof

twenty (20) years.

2.Extension of Term

The term may be extendedsubject to agreement inwritingby the Parties to suchextension at least

twelve(12) months prior toits expiry and on such terms as theParties may agree, andprior consent

from the Energy Regulatory Commission.

3.Scope

In accordance with and subject to the terms and conditions this Agreement:

1.The Seller will finance, design, procure, construct, install, test, commission, operateand

maintain thePlant in accordancewith Prudent Operating Practice, supply and install theMain

Metering Equipment and the Back-Up MeteringEquipment, supply and install Buyer’s

Connection Facilities,transfer totheBuyer the Buyer ConnectionFacilities andtheBack Up

Metering Equipment and sell the Net Electrical Output to the Buyer; and

2.The Buyer willtakedelivery of Net Electrical Output and pay Energy Charges for suchNet

Electrical Output.

3.CONDITIONS PRECEDENT

1.Conditions

Standardised PPA for large renewable energy generators (greater than 10 MW)

Except for the Parties’ respective obligations in Clauses 3.2, 3.3 and3.4or as otherwise

provided herein, the Parties’ obligations hereunder shall commence on the date (“the Effective

Date”) on which the last of the following conditions shall have been satisfied –

1This Agreement is approved by the Energy Regulatory Commission.

2The Generating Licence in respect of the Plant is issued to the Seller; and

1The Seller’s Conditions

The Seller shall useallreasonable endeavours to facilitate thesatisfaction of the conditions in

Clause3.1prior to theTarget EffectiveDate or such otherdateas the Parties may agreein

writing.

2The Buyer’s Conditions

The Buyer shall use all reasonable endeavours tofacilitatesatisfaction of theconditions in

Clause 3.1 on or prior to the Target Effective Date or such other date as the Parties may agree

in writing.

3Progress Review

The Parties shall jointly review progress made towards achieving satisfaction of the Conditions

Precedent ona monthly basis and shall notify eachother promptly of any anticipateddelay in

the Effective Date occurring beyond the Target Effective Date.

4Non- Satisfaction of Condition Precedent

If any of the Conditions Precedent shall not havebeen satisfiedwithin six (6)months from the

Target EffectiveDate or such later dateas the Parties may agreein writing, then this

Agreement shall terminate at such date, in which event this agreement shall bedeemed null

andvoidab initioand neither Party shall haveany liability whatsoever tothe otherParty under

this Agreement.

3INTERCONNECTIONWITH THE BUYER

1Interconnection Facilities

The Seller shall make all arrangements at its own expensenecessary to transmit anddeliver

the Net Electrical Output totheBuyerat theDelivery Point: the Buyer shallcooperate with the

Seller in these arrangements.

2The Seller’s Responsibility

The Seller shall at theSeller’s own cost design, purchase, construct, operate and maintain the

Interconnection Facilities priorto commissioning; the Seller shall pay for the upgrading of

equipment in the buyersystemnecessary to enablethe delivery of the net electrical output

into thebuyerssystem. The design of the InterconnectionFacilities shall be compliant with the

Buyer’sequipment, transmissionanddistribution requirements and standards, including

interconnection guidelines.

1Upon completion andcommissioning of InterconnectionFacilities, theSeller shall

transfer to theBuyer, and theBuyer shall accept, ownandmaintain theinterconnection

facilities, as beneficial owner all rights title and interestthereinfree of any

encumbrances together with all the applicable warranties and guarantees in respect

thereof andthe Seller shallnot beliable to theBuyer in respect of theInterconnection

Facilities from the date of such transfer, provided that –

2The cost of undertaking the design, purchase, construction, installation, testingand

commissioning of Interconnection Facilities is deemed included in the Tariff;

Standardised PPA for large renewable energy generators (greater than 10 MW)

3The Seller shall at all times,prior tothe transfer to the Buyerof the Interconnection

Facilities in accordancewith Clause 4.2, retain responsibility for ensuring the

Interconnection Facilities meet the Buyer’s specifications.

3The Buyer’s Responsibility

The Buyer shall provideto theSeller thedetails for theInterconnectionFacilities to enable

design, purchase, construction and commissioning of the Interconnection Facilities.

4Connection to the Buyer’s System

The Seller shall liaise with the Buyer for the connection of the Plant to the Buyer System at the

Delivery Point.

5Information

The Seller shall keepthe Buyer informed of theprogress of the design, financing, supply,

constructionand installation of the Interconnection Facilities and equipment to beinstalled by

it pursuant toClauses 4.1 and 4.2, andevery monthshall providea progress report in respect

thereof.

6Monitor Progress

The Seller shall-

1Ensure that theBuyer andany representatives appointed by theBuyer, are afforded

reasonable access to the Site upongiving the Seller reasonablenotice providedthat

such accessdoes not materially interfere with theconstruction works or expose any

person on the Site to any danger;

2Makeavailable for inspectionat the Site copies of all plans and designs, other thanany

proprietary information of the Seller or any subcontractor, in relationto the

construction, or any part thereof; and

3Within three(3) months of thePlant commissioning date, supply the Buyer with one(1)

set of reproducible copies andtwo(2) sets of white print copies or equivalent of all “as

built” plans and designs relating to the operation or maintenanceof the Interconnection

Facilities as the Buyermay reasonably require. TheSellershall also providetothe

Buyer two (2)copies of theoperation andmaintenancemanuals inrespect of the

Interconnection Facilities.

7Disclaimer

The Seller

1Accepts that any information providedby theSeller under Clause4.5or any

engineering review or inspectionconductedby the Buyerunder Clause4.6is solely for

the Buyer’s own information and accordingly, the Buyer’s review or failureto review or

carry out any inspection under Clause4.6.2 shall not be construed as constituting any

approval or acceptanceof Interconnection Facilities or the Plant, and theBuyer makes

no representation as to theengineering soundness of the Interconnection Facilities or

the Plant nor shallit betreated as havingaccepted Interconnection Facilities or the

Plant as fit to meet the terms of this Agreement.

2Shall in no way represent to any third party that the buyeris responsible for the

engineering soundnessof theplant as a result of any review or inspectiondone by the

buyer.

3Shall, subject to theother provisions of this Agreement, besolely responsiblefor the

economic and financial feasibility, operational capacity and reliability of the Plant.

Standardised PPA for large renewable energy generators (greater than 10 MW)

4COMMISSIONING AND TESTING

1The Seller’s Obligations

The Seller shall carry out commissioning in accordancewith Prudent Operating Practice and

any procedure agreed on by the Parties.

2Notifications

The Seller shall giveat least seven(7) day’s prior noticeto the Buyer of the date

commencement of commissioning and testing of the first unit.

3The Buyer’s Attendance

The Buyer shall, in respectof the Interconnection Facilities, have theright to bepresent at the

Siteon each occasion, on whichthe test is being conducted, andtoinspect andwitness the

test, and to receive, within fifteen (15) days after the test, a written copy of the test reports.

4Appointment of Independent Engineer

The Seller shall not less thanfourteen(14) daysprior tothecommencement of the

commissioning, appoint an independent suitablyqualified professional engineer or firm

acceptableto the Buyer(“ the Independent Engineer”) who shall among other things witness

the commissioning andTesting of the Interconnection Facilities. All fees and costs payable to

the Independent Engineer (includingthoseincurred inmaking suchappointment) shall be

borne by the Seller.

5The Interconnection Facilities

The Seller shall testandcommission the InterconnectionFacilities inaccordancewith the

Commissioningand Testing procedures set out in Appendix C andfurther procedures agreed

or determined pursuant to Clause5.1andin accordancewith Prudent OperatingPracticenot

later than one (1) month before the First Commissioning Date. TheSeller shall before the First

Commissioning Date ensure that the Interconnection Facilities are available for operation.

6First Commissioning Date

The First Commissioning Date shallbethe date notifiedtothe Buyeras the target date for the

start of commissioning of the first unit.

7Plant Commercial Operation Tests

Upon satisfactory completion of the Plant Commercial Operations Test, theSeller shall

procure the issue of acertificate of the Independent Engineer certifying, without any material

qualification, that thePlant’s Commissioning has been completedandthat the Plant is

available forcommercial operation. TheSellershall, upon issue of the certificate, give notice

to the Buyer of a date (“the Full Commercial Operation Date”) beingadate not later than

twenty one (21) days after completion of commissioning.

8Synchronization

1The Seller shall ensure that thePlant has adequate protectionequipment prior to

synchronizationwiththe Buyer System. TheSeller and theBuyershall inspectand

verify theprotection equipment of the Plant togetherwith the settingand operation of

the protectionrelay equipment of the Plant andswitchgear prior to synchronization and

commencement of delivery of the Net Electrical Output by theSeller to theBuyer.

Standardised PPA for large renewable energy generators (greater than 10 MW)

NeitherParty shall be liableto the other for any damage which may be caused to their

Plant or equipment during such synchronization.

2The Seller shall notify the Buyer inwritingat least thirty (30) dayspriortosynchronizing

or operating thePlant for the first time in parallel with theBuyer’ssystem, and

coordinatesuchcommencement of operationwith theBuyer at this first time and in

future times that theSellerresynchronizes or begins again to operate after a cessation

of operation in parallel with the Buyer’s grid.

9The Buyer’s Cooperation

The Buyer shall, subject toany constraints on theBuyer System, cooperatewith theSeller so

as toenable the Seller to commissionthe Plant in accordance with this Clause5 and in

particularwill authorize connectionto the Buyer System and dispatchthePlant to the extent

reasonably required by the Seller for such purpose.

10Interconnection Liability

The Seller shall accept all liability andreleasetheBuyer fromand indemnify the Buyer against

anyliability for faults or damageto theSeller’s Interconnection Facility, theBuyer’s electric

system andthe public as aresult of any usageof theSeller’s Interconnection Facility whichis

in any manner inconsistent with Prudent Operating Practice.

11Commissioning and Testing Output

The Buyer shall pay energy charges to the Seller for all Net Electrical Output supplied from the

Plant during Testing and Commissioning at therate of thefeed-in tariff as specified in

Appendix B(1).

12The Buyer’s Right To Terminate

If the Full Commercial Operating Dateis not achieved by the LongStop Full Commercial

Operation Date, other than in the circumstances described in Clause 11.1.1 of this Agreement,

the Buyer shallbe entitled to terminate the Agreement.

5DELIVERY, SALE AND PURCHASE OF ELECTRICITY

1Delivery of Net Electrical Output

From the full commercial operation date and thereafter, the Seller agrees to deliver and sell to

the Buyer theNet Electrical Output for theterm of thisAgreement specified inClause2and at

the price specified in Clause 6.15.

2Acceptance and Purchase of Net Electrical Output

From the full commercial operationdate and thereafter, theBuyeragrees and covenants to

accept into its transmission system and to purchase for the term of this Agreement as

specifiedin Clause 2and at the pricespecifiedin Clause6.15, the Net Electrical Output when

deliveredby theSeller. The Buyer shallpay for theNet Electrical Output as ascertainedand

determined by the metering equipment in accordance with Clause 7.5.

3Environmental Attributes

Any environmental attributes recognizedunder any international, national or otherlaws or

regulations, associated with the ownership or generation of power from the Plant, including but

not limited to carboncredits or attributes created pursuant to the KyotoProtocol orany