CONTRACT STRUCTURE

BOO-IPP Power Plants

Construction Turnkey Contract between the Developer and the Construction Company/Joint Venture is to establish a fixed-in-time (for commissioning and satisfaction of the Financing Performance Completion Test) and fixed-in-price contract. Liquidated damages cover less than standard availability and heat-rate performance of the power station and buydown payments are made if this persists.

Fuel Supply Agreements between the Developer and the fuel provider locking in the supply over the required life at an escalation rate mirrored in the PPA. Natural gas/coal reserves may need to be assured. Even if fuel is provided free-cost, a supply contract is required.

O&M Agreement between the Developer and the O&M Contractor (usually a well-established Operator) with provision for guaranteed availability and turbine overhauls.

Power Purchase Agreement ("PPA") between Developer and the customer/utility laying down the purchase quantities, tariff, and escalation procedures.

Thermal Supply Agreement between Developer and the host giving the thermal specifications, quantities, and pricing. Scheduled plant down time to be used for scheduled O&M.

Financing between Developer and financiers/export-credit agencies which rely primarily on the PPA with the other contracts and assets as collateral.

Insurance between Developer and its insurers covering the usual construction and site insurances but also with comprehensive delay-in-startup insurances.