Course Description

THE RATIONALE

This comprehensive and interactive training course gives participants clear explanations of the new models of PPA risk allocation, of designing and managing competitive power markets, attracting private investments in renewable energy, through a series of real case examples of contracts and markets. Case Studies from Africa, Asia, Middle East, Australia, Europe and North America will stimulate independent thinking and discussion among participants.

The future of electric power development in emerging market is grossly undetermined. Unlike the past Independent Power Project models, which featured standardized take-or-pay contracts – today’s market demands more innovative incentives to ensure better availability, better performance, as well as more attractive and sustainable mixtures of fuel sources. Economies throughout developing countries urgently need to master the key tools, models, and lessons learned for transforming and strengthening today’s electricity sector. These include the latest models in negotiating Power Purchase Agreements (PPAs), in designing and managing new competitive power markets, as well as attracting the right mix of renewable energy sources.

This course is beneficial for workers from these sectors: Electric Regulators & Ministries, Power & Utility Companies, IPP Developers & Renewable, Banks / Investors, Energy Supply Companies (Oil, Gas, Coal and Renewable), Law Firms & Consultancy.

THE COURSE OBJECTIVES:

By the end of this training, participants will be able to learn:

• The essentials of different PPAs
• Fair and sustainable PPAs negotiation
• Theory and practice of pricing and tariff design
• How to structure successful PPAs based upon your own company’s risk profile and risk allocation needs
• Analyze the relationship between Public, Private, and Government sector
• Explore a PPA relationship with EPC, O&M, Fuel Supply, and Interconnect Agreement
• Expose to the frontiers of international experience in IPP development
• Perform a policy and risk analysis of PPA contracts
• Identify how financial derivatives can be used as an effective hedge of financial and electricity market based risks
• The tools and models in directing your country’s electricity transformation and market design plans
• Improve your awareness of the common pitfalls and mistakes to avoid in today’s private power investments and lead successful power project finance transactions

THE COURSE OUTLINE

The course will cover the following:

MODULE 1: POWER PURCHASE AGREEMENT – ANALYSING THE MAIN FEATURES

• Introduction to Energy Industry and the role of the PPA
• Profile of the Project – Parties
• Different Project Structures & Business Models – Lease, License, Concession, BOT, BOO, BOOT
• Special Purchase Vehicle (SPV) Purpose and Role
• Generator Covenants
• Assignments Rights
• Metering, Measurement and Verification
• Indemnifications
• Purchaser Covenants
• Price and Payment
• Avoided Peak Demand Payments
• Liquidated Damages

MODULE 2: ESSENTIAL CLAUSES IN A PPA

• Term and Extension
• Performance Guarantees
• SPV’s Construction & Development Obligations
• Contracted Capacity & Energy
• Representations & Warranties
• Insurances Required
• Maintenance and Scheduled Outages
• Commissioning and Commercial Operations Commencement
• Early Termination Rights & Events of Default
• Off-taker Step-in Rights
• Force Majeure Provisions
• Disclaimers and Limitations of Liability & Indemnification
• Subsidies
• Change in Law
• Transfer of Ownership Rights & Assignments
• Law & Jurisdiction

MODULE 3: RISK ASSESSMENT IN A PPA

• Liquidated Damages – Delay and Performance
• Performance Bonds
• Retentions
• Variation Orders and Cost Overruns
• Dealing with Political Risk
• Dealing with Currency Exposures
• Minimum & Maximum Delivery Obligations
• Sovereign Risk
• Change in Tax Law
• Buyer Default
• Seller Default

MODULE 4: COMMERCIAL ASPECTS OF A PPA

• Price, Volume & Tariffs
• Metering
• Take or Pay Obligations
• Shape or Profile Risk
• Balancing Risk
• Credit Risk
• Tenor Risk
• Managing Lender Expectations

MODULE 5: NEGOTIATION OF PPA & DISPUTE RESOLUTIONS IN PPA

• Negotiate the Best PPA
• Prepare a Term Sheet
• Set Framework for Negotiations
• Balance Buyer’s and Seller’s Needs
• Know your BATNA
• Focus on Interests not Positions
• Reach Sustainable Agreement
• Negotiate on Key Milestones to be Achieved & Penalties for Failures
• Negotiate Performance Guarantees
• Dispute Resolution
• Types of Dispute Resolution

TARGET AUDIENCE

• Business analysts
• Business development and marketing managers
• Commercial & Contract managers
• Economists
• Consultants
• legal counsel
• Corporate and project financing personnel
• Accountants
• Engineers

Delivery Method: Combines lectures, discussions, group exercises and illustrations

Venue:

Fee:

Duration: 1 week

Course Date: Feb 20th – 24th 2023