The Power Purchase Contract serves as the cornerstone agreement for power generation projects in the United Arab Emirates, establishing the commercial and operational framework for electricity sales. This document is essential for independent power producers, utilities, and large industrial consumers engaging in power purchase transactions under UAE law. The agreement typically covers a long-term period (15-25 years) and includes detailed provisions for power supply obligations, pricing mechanisms, performance standards, and risk allocation. It must comply with both federal UAE energy regulations and specific emirate-level requirements, particularly those of the relevant regulatory authority (such as DEWA in Dubai or DoE in Abu Dhabi). The document is crucial for project financing and typically incorporates provisions for both conventional and renewable energy projects, reflecting the UAE's growing focus on sustainable energy development.
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1. Parties: Identification of the power producer/seller and the power purchaser/offtaker, including their legal status and authority to contract
2. Background: Context of the agreement, including project overview, facility location, and relevant regulatory framework
3. Definitions: Comprehensive definitions of technical and legal terms used throughout the agreement
4. Sale and Purchase Obligations: Core obligations regarding the sale and purchase of electricity, including minimum take-or-pay provisions
5. Term and Termination: Duration of the agreement, conditions for extension, and termination rights
6. Price and Payment: Tariff structure, payment terms, invoicing procedures, and payment security mechanisms
7. Metering and Testing: Requirements for measuring delivered electricity, testing procedures, and dispute resolution for measurements
8. Construction and Commercial Operation: Requirements for facility construction, testing, and achieving commercial operation date
9. Operating Requirements: Performance standards, dispatch requirements, and maintenance obligations
10. Force Majeure: Definition of force majeure events and their consequences
11. Default and Remedies: Events of default, cure periods, and available remedies
12. Representations and Warranties: Standard and specific representations and warranties from both parties
13. Insurance: Required insurance coverage and related obligations
14. Assignment and Change of Control: Restrictions and conditions for transfer of rights or change in ownership
15. Dispute Resolution: Procedures for resolving disputes, including governing law and jurisdiction
16. Confidentiality: Protection of confidential information and permitted disclosures
17. Notices: Process for formal communications between parties
18. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments
1. Environmental Attributes: For renewable energy projects - handling of renewable energy credits, carbon credits, or other environmental attributes
2. Interconnection: Required when the facility needs specific interconnection arrangements with the grid
3. Fuel Supply: For thermal power plants - arrangements regarding fuel supply and quality
4. Government Support: When government guarantees or support mechanisms are involved
5. Local Content Requirements: When specific UAE local content obligations apply
6. Storage Facilities: For projects involving energy storage components
7. Capacity Payments: When separate payments for available capacity are required
8. Islamic Finance Provisions: When project involves Islamic finance structures
1. Technical Specifications: Detailed technical parameters of the generating facility
2. Performance Standards: Specific performance requirements, including availability and output guarantees
3. Testing Procedures: Detailed procedures for testing and commissioning
4. Metering Specifications: Technical requirements for metering equipment and procedures
5. Tariff Calculation: Detailed methodology for calculating the tariff, including adjustments
6. Form of Performance Security: Template for required performance bonds or guarantees
7. Insurance Requirements: Detailed specification of required insurance coverage
8. Grid Code Requirements: Applicable grid code compliance requirements
9. Site Description: Detailed description and drawings of the facility site
10. Construction Schedule: Milestone dates for construction and commissioning
11. Operating Procedures: Detailed procedures for day-to-day operation and maintenance
12. Emergency Procedures: Procedures for handling emergency situations
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