Renewables and power | Leela Works

Renewables and power

Keeping the PPA, the EPC contract and the supply agreement aligned.

A project is a package of agreements that have to fit together: the PPA sets the delivery and performance obligations, the EPC contract and the equipment supply agreement have to carry them, and the financing conditions sit over all of it. Leela reviews each agreement to your positions and reads them together, so a guaranteed availability in the PPA that the EPC contractor has not guaranteed, or a delay damages cap that does not cover the PPA's delay remedy, is found before financial close.

Leela Received. I am reading the EPC return against your positions and the executed PPA. 4:21 PM

Reviewed against the PPA: 3 obligations no longer backed, 9 other issues

Dear Renata

Three obligations in the PPA are no longer backed by the EPC contract after the contractor's changes, and there are 9 other issues.

The PPA at clause 6.3 guarantees a commercial operation date of 30 June 2027 with delay damages to the offtaker of $18,000 per day. The EPC contract at 12.2 now sets the guaranteed substantial completion date at 31 July 2027, and the delay damages at 12.4 are capped at 8 percent of the contract price, which is exhausted after 94 days. The PPA's availability guarantee at 9.1 is 97 percent; the EPC performance guarantee at Schedule 7 has been reduced to a performance ratio test at completion, with no availability guarantee during the warranty period. The PPA's curtailment provisions at 8.5 assume the plant can be remotely curtailed within 10 minutes; the contractor has deleted the control system specification that provides for it.

I have redlined the completion date and the delay damages cap to your positions, restored the availability guarantee and the control specification, and quoted the PPA clause beside each. The other 9 issues are in the issues list, 6 of them within the fallback.

Leela

W Larkspur EPC - issues list (round 3).docx84 KBW Larkspur EPC - redline.docx628 KBW Larkspur EPC - PPA conformance memo.docx61 KB

Performance guarantees

Availability, performance ratio and the test regime, read against what the PPA promises the offtaker. A guarantee that was there at completion and gone in the warranty period is found and restored.

Project interfaces

The completion date, the delay damages and their cap, the curtailment and control specification. Each EPC term checked against the PPA remedy it has to cover.

Financing conditions

Assignment to lenders, step-in, direct agreements and the security package, held consistent across the PPA, the EPC contract and the supply agreement.

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