Understanding Power Purchase Agreements

November 3, 2014 - November 7, 2014
Handbook Cover - Understanding Power Purchase Agreements

The Handbook

Electricity drives the engine of opportunity in the modern world. It allows our children to study by light. It powers the innovation in our factories. From telecommunications to transportation, power is essential to virtually every aspect of our increasingly dynamic and interconnected world. As a result, investment in power infrastructure is a key element of economic development. In order to promote this investment, governments, utilities and private companies have developed a contract that cements the predictability and durability that is needed for any long-term power projects. This agreement is called the Power Purchase Agreement (PPA) and it has helped to drive the development of independent power projects around the world.

In early November 2014, CLDP (in partnership with the African Legal Support Facility) brought together a group of international experts to draft and publish a PPA handbook. The handbook is intended to provide an overview of PPAs and the obligations, risks and remedies that are found within them.  The handbook was produced using the Book Sprint (http://www.booksprints.net/) method, which allows for the drafting, editing and publishing of a complete product by experts in just five days. The group of experts, all whom contributed their time on a pro-bono basis, included contributors from governments, development banks, private banks and leading international law firms. The hope is that by providing perspectives from all sides of the PPA negotiation process, the handbook can present the reader with a balanced understanding of the challenges involved in PPAs and an insight into the practical reality of overcoming these challenges when negotiating these complex agreements.

Version 1.0 of the handbook was published on the final day of the Book Sprint and was immediately hailed by the power community. Version 1.3, which includes improvements to readability and additional logos, is now available on this site both in EPUB and PDF format. A French version of the handbook is also available on this site in PDF format. The handbook is published under the Creative Commons License. Please contact Mohamed Badissy with any questions regarding the handbook. Photos from the drafting workshop can be found here and a blog posting by BookSprints on the event can be found here.

The following is a list of authors who contributed to the handbook (in alphabetical order):

Mohamed Badissy, Attorney Advisor (International), Office of the General Counsel, Department of Commerce (United States)

Mahib Cisse​, Chief Investment Officer, African Development Bank (Cote D'Ivoire)

Patrick M. Dougherty, Senior Counsel,The World Bank (United States)

Alex Evans, Assistant General Counsel, Overseas Private Investment Corporation (United States)

Nnaemeka Ewelukwa, General Counsel and Company Secretary, Nigerian Bulk Electricity Trading PLC (Nigeria)

Jay Govender, Director – Projects and Infrastructure, Cliffe Dekker Hofmeyr Inc. (South Africa)

Ryan T. Ketchum, Partner, Hunton & Williams LLP (United Kingdom)

Allen B. Leuta, (​formerly) Head - Legal: Africa, Standard Bank (South Africa)

Anastas P. Mbawala, Director of Electricity, Energy and Water Utilities Regulatory Authority (Tanzania)

Eluma Obibuaku, Vice President - Power, African Finance Corporation (Nigeria)

Toyin Ojo, Senior Legal Counsel, African Legal Support Facility (Cote D'Ivoire)

Tim Scales, Partner, Allen & Overy LLP (United Kingdom/France)

Amir Shaikh, Chief Legal Officer, African Legal Support Facility (Côte D'Ivoire)

Michael Tam, Partner, Berwin Leighton Paisner LLP (Hong Kong)

 

 

Background

President Obama’s Power Africa Initiative aims to increase access to electrical power throughout Africa by bringing together resources from both the private sector and public sector. As part of the initiative, CLDP is working at the direction of USAID to improve the legal and regulatory environment for power projects in Power Africa countries.  CLDP’s technical assistance is focused on streamlining the project development process by identifying PPA best practices and improving understanding of the core provisions in PPAs and related documents. CLDP is working with a variety of Power Africa stakeholders including the World Bank, the African Development Bank, the African Legal Support Facility (ALSF), the Overseas Private Investment Corporation (OPIC), the Initiative for Global Development (IGD) and law firms from around the world.

In order to begin the process of identifying PPA best practices, CLDP conducted a series of expert consultations in the U.S. and Africa. In March 2014, CLDP hosted a consultative workshop that brought together leading power project and energy experts from firms in Africa, Europe and the US. CLDP then organized regional consultations in West Africa (Abuja, June) and East Africa (Dar es Salaam, July) in order to gather the perspectives of government officials and other local stakeholders such as banks and domestic law firms. CLDP also organized a forum alongside the US-African Leaders Summit in August to gather insights from developers, banks and other private companies focused on power projects in Africa. The insights gathered from these consultations formed the foundation upon which the “Understanding Power Purchase Agreements” handbook was developed. CLDP would like to thank the experts listed below (in alphabetical order) for contributing their wisdom and for building the momentum behind this program:

Andrew Alli, President & CEO, Africa Finance Corporation (AFC)

Yesufu Alonge, Head, Power Procurement & Power Contracts, Nigerian Bulk Electricity Trading Plc (NBET) 

Sam Amadi, Chairman/CEO, Nigerian Electricity Regulatory Commission (NERC) 

Justin Antonipillai, Deputy General Counsel, US Department of Commerce

John J. Beardsworth, Jr. , Partner, Hunton & Williams LLP

Joseph C. Brandt, President & CEO, ContourGlobal

Michael Boyd, Senior Energy Advisor, Economic Growth Office (Tanzania), US Agency for International Development (USAID)

Rosanne Casey, Policy Coordinator - Power Africa, Africa Bureau, US Agency for International Development (USAID)

Brian Christaldi, Associate General Counsel, Project Finance, Overseas Private Investment Corporation (OPIC)

Nnamdi Ezera, Senior Counsel, Commercial Law Development Program, US Department of Commerce

Carl Fleming, Associate, Akin Gump Strauss Hauer & Feld LLP

Cephas Galley, Division Manager, Contracts (Legal Counsel), Electric Company of Ghana, Ltd

John. L. Garrison, Energy Advisor, Africa Bureau, US Agency for International Development (USAID)

Andrew Gray, Senior Legal Consultant, Trinity LLP

Kenneth Hansen, Partner, Chadbourne & Parke LLP

Andrew M. Herscowitz, Coordinator for Power Africa and Trade Africa, US Agency for International Development (USAID)

Paul Hinks, CEO, Symbion Power LLC

William H Holmes, Partner, K&L Gates LLP

David Hunt, Principal Consultant, Legal and Project Finance, Nexant, Inc.

Robert F. Ichord, Jr., Deputy Assistant Secretary, Bureau of Energy Resources, US Department of State 

James Kamau, Managing Partner, Iseme Kamau & Maema Advocates

Zahra Omar, Partner, Iseme Kamau & Maema Advocates

Astri Kimball, Senior Advisor to the President & CEO for Policy and Operations, Overseas Private Investment Corporation (OPIC)

Mohamed Loraoui, Intl. Program Specialist, Commercial Law Development Program, US Department of Commerce

Rwabangi Luteganya, Investment Manager, Tanzania Electric Supply Company (TANESCO)

Elise McDonald, Senior International Program Specialist, Commercial Law Development Program, US Department of Commerce

Stephen Mallowah, Partner, MMC Africa Advocates

Patrick Mbengwalu, Director and Head, Debt and Infrastructure Financing, FBN Capital 

Decklan Mhaiki, Deputy Managing Director, Tanzania Electric Supply Company (TANESCO)

Robert Mosbacher, Jr., Chairman of the Board, Initiative for Global Development (IGD)

Amyn Mussa, Partner, Anjarwalla & Khanna Advocates

Professor Chinedu Nebo, Honourable Minister of Power, Federal Republic of Nigeria

Dr. Mima S. Nedelcovych., President & CEO, Initiative for Global Development (IGD)

Lisa O'Brien, Partner, Freshfields Bruckhaus Deringer LLP

Crispine Odhiambo, Partner, Kiptiness and Odhiambo Associates

Nicholas Okafor, Partner, Udo Udoma & Belo-Osagie

Imeh Okon, Power Africa, USAID Nigeria

Dozie Okpalaobieri, Special Advisor to the Coordinating Minister for the Economy and Honourable Minister of Finance (Nigeria)

Sharon Pauling, Director - Economic Growth and Environment, US Agency for International Development (USAID)

Kwame Parker, Executive & Head, Power and Infrastructure, East Africa, Stanbic Bank

David Powers, Partner, Baker Botts LLP

Jeremy Schwer, Partner, Akin Gump LLP

Adeola Sunmola, Senior Associate, Udo Udoma & Belo-Osagie

Nils Tcheyan, Director, Government Affairs and Policy, Africa, General Electric Company (GE)

Aniekan Ukpanah, Partner, Udo Udoma & Belo-Osagie

Sheryl Weisflog, Attorney Advisor, Commercial Law Development Program, US Department of Commerce

Kelly R. Welsh, General Counsel, US Department of Commerce 

Julie Wenah, Special Advisor to the General Counsel, US Department of Commerce 

Rumundaka Wonodi, Managing Director & CEO, Nigerian Bulk Electricity Trading Plc (NBET) 

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July 26, 2016

CLDP Law Clerks visited the White House for a tour of the East Wing. They had a chance to tour through the Library, Green, Blue, and Red Rooms, as well as the State Dining and Diplomatic Reception Rooms.

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