Power Purchase Agreement
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amu power Kenya Power POWER PURCHASE AGREEMENT AMU POWER COMPANY LIMITED AND THE KENYA POWER AND LIGHTING COMPANY LIMITED POWER PURCHASE AGREEMENT FOR 981.5 MW COAL-FIRED POWER PLANT _J+_n+ _Au__G _u_S�I _,2017 2 TABLE OF CONTENTS Clause !:Definitions and Interpretation 6 Clause2: Scope and Duration 26 Clause3: Conditions Precedent and Effective Date 27 Clause4: Site 31 Clause 5: Construction 32 Clause6: Commissioning and Testing 36 Clause7: Operating and Despatch Procedures 43 Clause8: Maintenance and Repair 46 Clause9: Sale and Purchase of Electricity and Fuel Procurement 51 Clause10: Invoicing and Payment 61 Clause 11: Metering 65 Clause12: Insurance 67 Clause13: Undertakings and Warranties of the Parties 68 Clause 14: Force Majeure 73 Clause 15: Termination and Default 80 Clause16: Indemnification and liability 89 Clause 17: Confidentiality 90 Clause18: Dispute resolution 92 Clause 19: Maintenance of Operating Records 96 Clause 20: Project Agreements 98 Clause 21: Miscellaneous 101 Clause 22: Governing Law 104 SCHEDULE 1: FACILITIES TO BE INSTALLED BY THE SELLER 106 SCHEDULE 2: METERING EQUIPMENT 128 SCHEDULE3: DELIVERY POINT 130 SCHEDULE 4: MAINTENANCE ALLOWANCES OF THE PLANT 132 3 fit' SCHEDULES: PROCEDURES 133 SCHEDULE 6: PAYMENT 148 SCHEDULE 7: CONSTRUCTION PROGRAMME 169 SCHEDULE8: PARTIES' ADDRESSES AND NOTICE DETAILS 170 SCHEDULE 9: INSURANCE 171 SCHEDULE10: TAXES 177 SCHEDULE 11: FORM OF KPLC FUNDING FM EVENT NOTICE 1 4 · THIS AGREEMENT is made the -- day of _____20 17. ' .:_1 1l+_ __ __A _u_G_._Gl_\s _·, �i BETWEEN Amu Power Company Limited a limited liability company incorporated in the Republic of Kenya under the Companies Act, Chapter 486 of the Laws of Kenya with its registered office at Floor Geminia Insurance Plaza, P.O. Box 61872-00200 Nairobi, Kenya (hereinafter4th referred to as "the Seller", which expression shall, where the context so admits, include its successors in title and assigns) of the one part; AND The Kenya Power and Lighting Company Limited, a company incorporated under the Companies Act, CAP 486, of the Laws of Kenya in the Republic of Kenya with its registered office at Stima Plaza, P.O. Box 30099-00100 Nairobi, Kenya (hereinafter referred to as "KPLC" which expression shall, where the context so admits include its successors and assigns) of the other part WHEREAS (A) KPLC is licensed to purchase electricity and to transmit and distribute electricity in the Republic of Kenya; (B) The Government of Kenya (hereinafter "GOK") through its Min istry of Energy and Petroleum (hereinafter "MOEP") has issued a Request for Proposals ("RFP") dated 27th January, 2014 for the design, financing, supply, construction, testing, commissioning, operation and maintenance of a 981.5 MW coal fired power plant on a Build, Own and Operate (BOO) arrangement (hereinafter the "Project"); (C) In accordance with the RFP, the Seller is expected to enter into a power purchase agreement with KPLC for the implementation of the Project; This Agreement is the power purchase agreement agreed between the Parties (D) pursuant to the RFP. 5 IT IS HEREBY AGREED as follows: Clause 1: Definitions and Interpretation 1.1 Defined terms: In this Agreement, unless the context requires otherwise, the following words and expressions shall have the following meanings: "Abandonment" or "Abandoned": cessation of operation of the Plant, and the withdrawal of all, or substantially all, personnel by the Seller from the Site or the Plant for reasons other than an event of Force Majeure; provided, however, that the Seller shall not be deemed to have Abandoned the Plant so long as it is using all reasonable effo rts to reinstate such operation; "Agreement" or "PPA" : this power purchase agreement together with all schedules hereto as the same may be supplemented or amended from time to time; "Applicable Engineering and Environmental Standards": the codes, practices and standards specified in Part A of Schedule 1; "Authorisation": any approval, consent, license, permit, authorisation or other permission to be granted by a Governmental Authority required for the enforcement of rights or performance of obligations under any Project Agreement, Financing Agreement and/or the Project, and including any approval required to be given by the Energy Regulatory Commission; "Availability": the ability of the Plant or any Unit (as appropriate) at a particular instant or over a particular period of time, to deliver electricity to the KPLC System at the Delivery Point and the terms "Available" and "Unavailable" shall be construed accordingly; "Available Capacity": the Capacity Available in any Settlement Period being the Declared Capacity unless there has been an Availability Failure in respect of the Plant in that Settlement Period in which event the Available Capacity shall be the Net 6 Electrical Output delivered in response to a Despatch lnstruction(s) for that Settlement Period multiplied by two; "Availability Failure": in respect of the Plant in any Settlement Period, a failure to deliver electricity in accordance with a valid Despatch Instruction other than as a result of a KPLC System Interruption; "Average Availability": the average of the Available Capacity in any given period; "Average Sea Water Temperature": the temperature determined in accordance with cia use 4.1.4; "Back-Up Metering Equipment": the equipment for check metering and monitoring the output of the Plant to be provided by and installed by the Seller and transferred to KPLC pursuant to Schedule 2; "Ba nkruptcy Event": the occurrence of any of the fo llowing events in respect of a Party ("Affected Party"), unless such event is capable of being and is set aside and requ isite proceedings to have it set aside are filed with the appropriate court within fou rteen (14) days: (a) there is entered against the Affected Party a decree or order by a cou rt adjudging the Affected Party bankrupt or insolvent, or approving, as properly filed by or on behalf of the Affected Party, a petition seeking reorgan isation, arrangement, or reconstruction, or appointing a receiver, liquidator, trustee, sequestrator (or other similar official) of the Affected Party over a substantial part of its property or assets, or ordering the winding up or liquidation of its affairs; or (b) the institution by the Affected Party of proceedings to be adjudicated bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or consent 7 seeking relief from its creditors generally under any applicable law, or the consent by it to the filing of any such petition or for the appointment of a receiver, liquidator, trustee, sequestrator (or other similar official) of the Affected Party or of any substantial part of its property, or the admission by it in writing of its inability to pay its debts generally as they become due; or (c) any other event shall have occurred which under any applicable law would have an effect analogous to any of the events referred to in (a) and/or (b) above; "Bid Security": an on demand performance bond issued by Co-operative Bank of Kenya Limited dated 17th April 2014 in the amount of US Dollars Five Million (US$ 5,000,000) provided to GOK by the Seller as part of the Proposal dated 23rct April 2014; "Black Start Test": the test specified in Section 4(b)(vi) of Part A of Schedule 5; "Capable": has the meaning ascribed to it in the definition of "Capacity"; "Capacity": the ca pacity of any Unit or the Plant expressed in MW to generate and deliver electricity and "Capable" and cognate expressions shall be construed accordingly; "Capacity Demonstration Test": a test to demonstrate the Capacity of each Unit conducted in accordance with Section 2 of Part A of Schedule 5; "Capacity Payments": the amounts payable by KPLC to the Seller in respect of the Contracted Capacity starting from the Full Commercial Operation Date in accordance with Clauses 9.1, 9.7 and 14.6 and calculated in accordance with Part D of Schedule 6·, "Change in Law": any of the events specified in paragra ph (a) or (b) of this definition occurring after the Signature Date and which despite the exercise of Prudent 8 l(jS" Operating Practice by the Seller or KPLC: (i) results in an increase in the operating costs or capital expenditure incurred by the Seller in performing its obligations under this Agreement or any other Project Agreement; or (ii) imposes requirements for the construction, operation or maintenance of the Plant or of the KPLC System that are more onerous than the requirements in effect as of the Signature Date and that affect the Seller's performance under this Agreement, the Lease or any other Project Agreement, or that affect KPLC's performance under this Agreement or LAPSSET performance under the Lease; or (iii) results in a decrease in the operating costs or capital expenditure incurred by the Seller in performing its obligations under this Agreement; or (iv) results in a reduction in the Capacity which the Seller may ma ke available in complia nce with all Legal Requirements; or (v) makes the Seller unable to make its Capacity Available, generate electricity and/or perform its obligations under this Agreement; (a) a change in, or in the interpretation {by any Governmental Authority in the Republic of Kenya), application or enforcement of, or enactment, or the enactment with retroactive application or adoption of, any Legal Requirement, or a Change in Tax; (b) any change in any Authorisation required in connection with this Agreement,