Typical PPA terms and risk allocation

To the extent corporate PPAs are deployed, in whose favour will the risks typically be balanced?

Volume risk

The risk is born by those who not comply with rule applicable to the specific situation.

Change in law

Usually, when changing legislation, users and distributors are given a period to prepare and adapt to this mentioned change of legislation. Hence, when there is a change in law non complied with, the risk is born by those who have not complied with the rule in place.

Increase / reduction of benefits

Again, similar to the change in law, the risk is born by those who not comply with rule applicable to the specific situation.

Market liberalization (if applicable)

Not applicable.

Credit risk

The risk is born by those who not comply with rule applicable to the specific situation.

Imbalance power risk

The risk is born by those who not comply with rule applicable to the specific situation.

Production profile risk

The risk is born by those who not comply with rule applicable to the specific situation.

Last modified 9 Feb 2021

Volume risk

Customer.

Change in law

Customer or shared.

Increase / reduction of benefits

Customer.

Market liberalisation (if applicable)

Customer or shared.

Credit risk

Customer.

Imbalance power risk

Customer or shared.

Production profile risk

Generally, generator.

Last modified 16 Dec 2020

Volume risk

Information not publicly available.

Change in law

Information not publicly available.

Increase / reduction of benefits

Information not publicly available.

Market liberalisation (if applicable)

Information not publicly available.

Credit risk

Information not publicly available.

Imbalance power risk

Information not publicly available.

Production profile risk

Information not publicly available.

Last modified 16 Dec 2020

Volume risk

There is no market standard structure currently in place for this type of commercial arrangement in Belgium.

Change in law

There is no market standard structure currently in place for this type of commercial arrangement in Belgium.

Increase / reduction of benefits

There is no market standard structure currently in place for this type of commercial arrangement in Belgium.

Market liberalization (if applicable)

There is no market standard structure currently in place for this type of commercial arrangement in Belgium.

Credit risk

There is no market standard structure currently in place for this type of commercial arrangement in Belgium.

Imbalance power risk

There is no market standard structure currently in place for this type of commercial arrangement in Belgium.

Production profile risk

There is no market standard structure currently in place for this type of commercial arrangement in Belgium.

Last modified 25 Feb 2021

Not applicable.

Last modified 9 Feb 2021

Volume risk

If the generator falls short of the contracted power amount, it will need to acquire the necessary amount in the market to comply with the PPA.

Change in law

Neither party. Generally, corporate PPAs contain a provision establishing that in the event of change in law that affects the contract, the parties shall renegotiate its conditions in good faith.

Increase / reduction of benefits

Given the private nature of contracts, it is difficult to generalise on this across Brazilian market, however where the reduction of benefits is caused by a change in law, this may be covered by a change in law clause.

Market liberalisation (if applicable)

Not applicable.

Credit risk

Offtaker or generator, depending on the credit rating of the parties involved.

Imbalance power risk

Not applicable.

Production profile risk

Offtaker or generator, depending on the PPA structure and generator’s and consumer’s production and consumption profiles, respectively.

Last modified 16 Dec 2020

Volume risk

Generator.

Change in law

It is not applicable. When the law changes, both Parties will be subject to the law of the contract. 

If the law that has changed involves public, then usually both parties agree to renegotiate the terms of the PPA.

Increase / reduction of benefits

Both parties.

Market liberalisation (if applicable)

Not applicable.

Credit risk

Off-taker.

Imbalance power risk

Generator.

Production profile risk

Generator.

Last modified 16 Dec 2020

A CPPA could be sold to a corporate buyer via a utility company or through a self-generation scheme.

Volume risk

CPPA via utility company: Offtaker.

CPPA through a self-generation scheme: Generator

Change in law

Offtaker.

Increase / reduction of benefits

Generator

Market liberalisation (if applicable)

Not applicable.

Credit risk

Offtaker.

Imbalance power risk

CPPA via utility company: Offtaker.

CPPA through a self-generation scheme: Generator

Production profile risk

CPPA via utility company: Offtaker.

CPPA through a self-generation scheme: Generator

Last modified 16 Dec 2020

Volume risk

Where a PPA is based on fixed volume, the producer bears the risk. Conversely, with a pay-as-produced PPA, the off-taker bears the risk.

Change in law

The PPA will usually include change in law provisions, as this will usually prevent the PPA from being frustrated in the event of a significant change in law.

Increase / reduction of benefits

Depends on the specific PPA wording.

Market liberalization (if applicable)

Czech Republic liberalised its electricity market through its Energy Act. As such, this is not a risk for CPPA parties.

Credit risk

Given the private nature of contracts, it is difficult to generalise on this across market, however depending on the relative strength of the parties, one party may wish to seek performance security from a party with lower creditworthiness.

Imbalance power risk

Depends on the specific PPA wording.

Production profile risk

Usually, this risk is allocated to the buyer, who acquires any missing volume from the market. Under the CPPA, a third party may also take responsibility for providing the missing electricity in order to manage this risk.

Last modified 26 Jul 2021

Not applicable.

Last modified 18 Feb 2021

Volume risk

Where a PPA is based on fixed volume, the producer bears the risk. Conversely, with a pay-as-produced PPA, the off-taker bears the risk. Our experience is that Finnish PPAs have so far mainly been concluded on the take-or-pay basis.

Change in law

Given the limited number of PPAs concluded so far, it is not possible to ascertain a standard approach to the risk of a change in law at this stage.

Increase / reduction of benefits

Given the limited number of PPAs concluded so far, it is not possible to ascertain a standard approach to the risk of an increase/reduction of benefits at this stage.

Market liberalisation (if applicable)

Not applicable.

Credit risk

The use of conventional security and guarantee instruments is common but, due to low volume of signed PPAs, standard practice is hard to ascertain with accuracy.

Imbalance power risk

Imbalance power risk refers to the risk that the produced amount of electricity differs from the predicted amounts with the result that the production and consumption are imbalanced on intraday or balancing energy markets.

In that scenario, the costs of balancing energy may be high and therefore significantly increase the costs of the party bearing that risk. A party may be better placed to bear this risk if, for example, it has existing energy sources which can be used for balancing in its portfolio.

Production profile risk

The consumption profile is usually more stable than the production profile. Usually this risk is allocated to the buyer under a PPA and the buyer acquires any missing volume from the market. Under the PPA, a third party may also take responsibility for providing the missing electricity in order to manage this risk.

Last modified 16 Dec 2020

Volume risk

To date there have been very few corporate PPAs deployed in Germany and there is a lack of publicly available information on the specifics of relevant transactions.

In many cases, corporate PPAs have only been used for marketing the production and sale of renewable energy from existing installations that – after 20 years following their commissioning – fall outside the support scheme. Therefore, at this stage, it is difficult to comment on general trends.

Change in law

As above.

Increase / reduction of benefits

As above.

Market liberalisation (if applicable)

As above.

Credit risk

As above.

Imbalance power risk

As above.

Production profile risk

As above.

Last modified 16 Dec 2020

Volume risk

Volume risk is generally borne by the seller. The parties may mitigate such risk by including in a corporate PPA a take-or-pay clause, so that risks related to changes in the market demand or economic conditions of the offtaker may be eliminated.

Change in law

A change in the law may favour any of the parties, depending on its nature.

The parties may mitigate such rick by including in a corporate PPA: (i) a liability cap in favour of the weaker party of the contracts; (ii) a provision by operation of which the change in law risk is borne 100% by the producer on the first year of the term and 100% by the offtaker in the last year of the term; or (iii) a provision referring the matter to a technical expert in order to maintain a contractual balance of the undertakings.

Increase / reduction of benefits

An increase in benefits favours the buyer. A reduction in benefits favours the seller. This risk generally does not affect PPAs signed with private counterparties.

Market liberalisation (if applicable)

Market liberalisation benefits the buyer.

Credit risk

Credit risk is generally borne by the seller. The producer may mitigate such risk by signing a corporate PPA with a jointly-liable energy-demand aggregator (e.g. industrial clusters).

Imbalance power risk

Depending on how the PPA is set up, the imbalance risk for a physical PPA can sit with either the seller or the corporate buyer.

It is common to pay an appropriate third party (such as a utility or wholesale market trader) to manage the risk.

Alternatively, a large enough developer may have access to balancing tools within its wider group and hence offer to manage this risk (i.e. not outsource to a third party).

Production profile risk

Depending on how the PPA is set up: i.e.: (i) in “Pay as produced” PPA, with the same price every hour, even if volume differs, the purchaser takes the risk; or (ii) in “Take or Pay” PPA, consumers buy a base load for each time period, thus the seller takes the risk if volume differs.

Last modified 16 Dec 2020

Corporate PPAs in Kenya do not currently have a prescribed form, such that a number of these risks can be negotiated on a commercial basis.

Volume risk

Unknown – in traditional PPA would sit with offtaker.

Change in law

Unknown – in traditional PPA tends to sit with offtaker up to a certain threshold.

Increase / reduction of benefits

N/A as benefits are not readily available. In a traditional PPA, where a change in law or change in tax would result in an increase/reduction in costs, this typically results in an adjustment to the tariff.

Market liberalization (if applicable)

Unknown – in a traditional PPA would sit with offtaker.

Credit risk

Unknown – in a traditional PPA would sit with IPP.

Imbalance power risk

Unknown – in a traditional PPA would sit with offtaker.

Production profile risk

Unknown and also not covered by traditional PPAs.

Last modified 18 Feb 2021

Volume risk

There is no volume risk. Consumers maintain their supply contract with the CFE utility. If the renewable supply is short, the supply from the CFE utility kicks in, at the CFE standard rates.

Change in law

Equally balanced.

Increase / reduction of benefits

Equally balanced.

Market liberalisation (if applicable)

Equally balanced.

Credit risk

The generator assumes the credit risk.

Imbalance power risk

Equally balanced.

Production profile risk

Equally balanced.

Last modified 16 Dec 2020

Volume risk

Generator.

Change in law

Usually the change in law is qualified as force majeure event.

Increase / reduction of benefits

Generator.

Market liberalization (if applicable)

Not applicable.

Credit risk

Generator.

Imbalance power risk

Generator.

Production profile risk

Generator.

Last modified 10 Feb 2021

Volume risk

Off-taker

It is usually expected that the off-taker shall pay for what has been produced, therefore permitting that the project company meets its capital costs (debt service, return of equity and fixed operating costs).

Change in law

National utility company if it is the Off-taker/Government.

The government usually takes responsibility for the risk of change in law, and in some circumstances, considers it a political risk. To some extent and subject to the government’s approval, the project company may negotiate protection against the change in law, namely a stabilisation clause, which provides that changes in law shall only apply to the project if such change results in a benefit to the project.

Increase / reduction of benefits

Off-taker.

Market liberalization (if applicable)

Off-taker.

Credit risk

Off-taker.

Imbalance power risk

Off-taker.

Production profile risk

Off-taker.

Last modified 1 Feb 2021

Volume risk

There is no market standard structure currently in place for this type of commercial arrangement in the Netherlands.

Change in law

As above.

Increase / reduction of benefits

As above.

Market liberalisation (if applicable)

As above.

Credit risk

As above.

Imbalance power risk

As above.

Production profile risk

As above.

Last modified 16 Dec 2020

Volume risk

This risk does not typically arise because most contracts are for limited volume. Baseload contracts can expose producer to risk, but this is usually offset with balancing floating power purchase agreements with e.g. utilities.

Change in law

This risk is increasingly assumed by producers, but tendency also to have a balanced/neutral approach combined with economic equilibrium.

Increase / reduction of benefits

Leading off-takers are attempting to place this risk on producers. However, there has been push back from producers and financing banks.

Market liberalisation (if applicable)

Not applicable.

Credit risk

...

Imbalance power risk

...

Production profile risk

...

Last modified 16 Dec 2020

Volume risk

In general terms, local PPAs usually assign risks in an equitable manner.

As PPAs are freely agreed between parties, these tend to assign risks to the party best suited to mitigate them. 

Having said this, volume risk is usually allocated with customers, as they are the ones demanding the service.

Change in law

Changes in law are commonly and partially absorbed by generators through energy prices.

Increase / reduction of benefits

The increase or reduction of benefits is usually borne by distribution companies and final customers (due to regulatory limitations rather than by standard PPA terms and conditions). 

Market liberalisation (if applicable)

Non applicable.

Credit risk

Generators.

Imbalance power risk

Generators and suppliers.

Production profile risk

Generators.

Last modified 16 Dec 2020

Volume risk

Where a CPPA is based on fixed volume terms, the generator generally bears the risk. Conversely, where an offtaker agrees to purchase whatever energy is produced under the CPPA, the offtaker bears the risk.

Change in law

The CPPA will usually include a change in law provision to ensure that the parties are rebalanced to reflect their original economic intentions. In our experience, this risk often sits with the offtaker (particularly where the change in law results in an increased cost etc).

Increase / reduction of benefits

Given the private nature of contracts, it is difficult to generalise on this across the South African market. However, where the reduction of benefits is caused by a change in law, these may be covered by the change in law clause (see above) and borne by the offtaker.

Market liberalisation (if applicable)

Given the private nature of contracts and the subjective nature of the application of this on contracting parties, it is difficult to generalise on this across the South African market. In our experience, this is likely to be dealt with as a change in law event (see above, as the liberalisation is likely to involve regulatory reform) or can specifically be allocated to the offtaker or generator (and may find application as a result of an effect of the market liberalisation).

Credit risk

Given the private nature of contracts and the subjective nature of the credit worthiness of contracting parties, it is difficult to generalise on this across the South African market. The offtaker under the CPPA may be required to provide credit support (a parent company guarantee, letter of credit etc) to mitigate payment risk, which is ultimately dependent on the credit worthiness of the offtaker and/or may be driven by the requirements of the financiers of the project/facility.

Imbalance power risk

This is likely to be a risk for the offtaker in South Africa as the offtaker is often forced (under structures typically in use in South Africa, see above) to procure any required power in excess of that generated by the IPP from the utility (see above) and Eskom manages this risk, as balancing authority (see below).

Production profile risk

In our experience, it is often the buyer who bears this risk, as it may be forced (under structures in use in South Africa, see above) to procure any required power in excess of that generated by the IPP from the utility (see above and below).

Last modified 16 Dec 2020

Volume risk

Where a PPA is based on “as consumed” structure, the producer bears the risk (such risk is reduced with the possibility to sell the surplus to the market). Conversely, with a “as generated” PPA, the off-taker bears the risk (however this risk may be balanced through the use of a sleeving agreement with an electricity supplier which may then cover any shortfall).

Change in law

The PPA will usually include change in law provisions, as this will usually prevent the PPA from being frustrated in the event of a significant change in law. Thgis clause generally applies to both parties.

Increase / reduction of benefits

Given the private nature of contracts, it is difficult to generalise on this across Spanish market, however where the reduction of benefits is caused by a change in law, this may be covered by a change in law clause.

Market liberalisation (if applicable)

In Spain the electric market is liberalized.

Credit risk

Generally in favour of the producer/seller.

Imbalance power risk

Balancing is performed by the system operator, Red Eléctrica de España (REE). REE organizes and coordinates a market in which power plants compete to offer the operation reserve service (secondary reserve) and also an additional tertiary reserve market. Secondary reserve is remunerated by means of market mechanisms via two concepts: availability (control band) and usage (energy). It is equivalent to the European product known as aFRR – automatic Frequency Restoration Reserves. Tertiary reserve is an optional service managed and remunerated by market mechanisms.

Production profile risk

The consumption profile is usually more stable than the production profile. Usually this risk is allocated to the buyer under a CPPA and the buyer acquires any missing volume from the market. Under the CPPA, a third party may also take responsibility for providing the missing electricity in order to manage this risk.

Last modified 16 Dec 2020

Volume risk

Where a PPA is based on fixed volume, the producer bears the risk.

Conversely, with a pay-as-produced PPA, the off-taker takes this risk. However, we would expect this risk to be balanced through the use of a sleeving agreement with an electricity supplier which may then cover any shortfall.

Change in law

The PPA will usually include change in law provisions, as this will usually prevent the PPA from being frustrated in the event of a significant change in law. The risk of such a change in law is balanced against the party receiving the GoOs or renewable benefit, however a change in law clause seeks to rebalance the original economic intentions of the parties. In recent years offtakers have increased the focus on change of law clauses and terms in this respect have tightened from the vantage point of producers.

Increase / reduction of benefits

There is no set rule with regards to allocation of this risk. We often see the value of benefits included in the general contract price for electricity. Accordingly, in this case, the risk of a reduction in benefits would be borne by the offtaker (subject to change in law provisions).

Whether the agreement will concern the sale of future benefits is a point for negotiation with no standard allocation of risk.

Market liberalisation (if applicable)

This is not a risk in the Swedish market which is liberalized.

Credit risk

Credit risk is almost always mitigated with the inclusion of credit support documentation, often provided by both parties.

Imbalance power risk

The PPA will allocate this risk, often in exchange for a defined fee. In the absence of specific allocation the liability would remain with the generator.

Production profile risk

The consumption profile is usually more stable than the production profile. Usually this risk is allocated to the buyer under a CPPA and the buyer acquires any missing volume from the market. Under the CPPA, a third party may also take responsibility for providing the missing electricity in order to manage this risk.

Last modified 16 Dec 2020

Not applicable.

Last modified 9 Feb 2021

Volume risk

Generally with the Generator.

Change in law

Balanced.

Increase / reduction of benefits

Balanced.

Market liberalization (if applicable)

Balanced.

Credit risk

Generator.

Imbalance power risk

Not applicable.

Production profile risk

Generator.

Last modified 21 Jan 2021

Volume risk

Where a PPA is based on a fixed volume delivery to the offtaker, the generator bears the risk. With a pay-as-produced PPA, the offtaker bears the risk, however, this may be mitigated through the use of a sleeving agreement with an electricity supplier which may then cover any shortfall.

Change in law

The PPA will usually include change in law provisions, as this will usually prevent the PPA from being frustrated in the event of a significant legislative or network code change or court judgment. The risk of such a change in law is balanced against the party receiving the GoOs or renewable benefit, however, a change in law clause seeks to reopen the agreement in order to rebalance the original economic intentions of the parties.

Increase / reduction of benefits

Given the private nature of contracts, it is difficult to generalise on this across GB market, however, where the reduction of benefits is caused by a change in law, this may be covered by a change in law clause.

Market liberalization (if applicable)

GB liberalised its electricity market through the Electricity Act 1989. As such, this is not a risk for cPPA parties.

Credit risk

Given the private nature of contracts, it is difficult to generalise on this across GB market, however depending on the relative strength of the parties, one party may wish to seek performance security from a party with lower creditworthiness. As low creditworthiness most strongly affects the party obliged to pay, the risk is balanced against the party expecting payment.

Imbalance power risk

Balancing in GB is done by Elexon in accordance with the Balancing and Settlement Code (BSC). There is, however, no restriction on either party to a cPPA acting as balancing party. As the costs of balancing energy following under or over delivery may be high and may, therefore, significantly increase the costs of the party bearing that risk, a party which is better placed to bear this risk should be selected. This may be the case if, for example, it has existing energy sources which can be used for correcting the imbalance in its portfolio.

Production profile risk

The consumption profile is usually more stable than the production profile. Usually this risk is allocated to the offtaker under a cPPA and the offtaker acquires any missing volume from the market. Under the cPPA, a third party may also take responsibility for providing the missing electricity in order to manage this risk.

Last modified 16 Dec 2020

Volume risk

The offtaker typically receives some compensation for a consistent and material shortfall in performance.

Change in law

Agreements vary. The generator sometimes gets some risk-sharing or other protection for changes in law.

Increase / reduction of benefits

Neither party. Incentives or benefits such as tax credits or RECs are typically allocated to a specific party and any changes impact only the designated party.  

Market liberalization (if applicable)

Not applicable.

Credit risk

Each party bears credit risk as to the other party. For this reason, credit support or creditworthiness requirements typically apply. 

Imbalance power risk

Varies by transaction type and delivery point.

Production profile risk

Buyer.

Last modified 24 Mar 2021

Angola

Angola

To what extent are corporate PPAs presently deployed and what sort of structure do they take?

Corporate PPAs remain uncommon in Angola. 

Article 48 of the Electricity General Law provides that outside the scope of the public electric system, the conditions of sale of electric energy will be established by the parties.

Article 15 of the Executive Decree No. 122/19 of May 24 (electric energy sales tariffs) provides special arrangements for the sale of electricity by means of special or bilateral contracts between producers and distributors and those with final customers, under the terms set out in the Tariff Regulations (Presidential Decree No. 4/11 of January 6) shall be authorized by an order of the Minister of Energy and Waters, after hearing the regulatory authority.

All the contracts with National Transportation Network ("RNT" as a sole buyer must comply with certain requirements specified in Article 11 of the Presidential Decree No. 4/11 of January 6 as amended by Article 11 of the Presidential Decree 178/20 of June 25, in order to their prices are allocated to tariffs.

Do the country's regulators allow corporate owners to purchase (1) directly from a facility, or (2) from a choice of suppliers?

In accordance with Article 11 of the General Electricity Law, the use of the facilities and networks that incorporate the Public Electricity System is allowed under the conditions provided for in the aforementioned regulation or agreed between the interested parties and their holders, as long as the supervisory body approves it after prior validation by the regulatory authority.

Hence, corporate owners are allowed to purchase directly from a facility or a choice of suppliers, as long as it has been approved by the supervisory body and has effectively gone through a prior validation from the regulatory authority.

Other than the generator and the off-taker, are any third parties commonly party to the PPA structure (e.g. a utility or other market agent)?

In addition to the electrical energy provided by the Company ENDE E.P (National Electricity Distribution Company) that comes from hydraulic dams and private generators, so far, there are no other third parties as a common party to the cPPA structure.

Is a generator permitted to sell electricity directly to an end user? If so, do they require a licence or other form of authorization?

As previously stated, Article 48 of the Electricity General Law provides that outside the scope of the public electric system, the conditions of sale of electric energy will be established by the parties.

Last modified 9 Feb 2021

Angola

Angola

What are some of the technical, political, financial or regulatory challenges to corporations adopting green energy in the short/medium term in your country and how have these challenges been overcome (or how can they be overcome)?

More incentives and benefits need to be created for companies that want to implement green energy systems. Facilitating the process of importing and accessing currencies to pay for equipment to implement the projects related to renewable energy is necessary. Governments should create incentives for companies that are implemented across the country, thereby creating employment and facilitating greater acceptance of new technologies in rural areas.

Last modified 9 Feb 2021

Angola

Angola

Are there any anticipated regulatory changes which will alter the regulatory landscape for corporate green energy and corporate PPAs?

International development partners are providing technical support to the Angolan government to establish a regulatory framework which includes negotiating power purchase agreements with independent power producers (IPPs) and design of a feed-in-tariff scheme for renewables.

Last modified 9 Feb 2021

Angola

Angola

What is the corporate appetite for green energy, including any political or financial incentives available to corporates to adopt green energy?

Even though national and international companies have been showing interest to develop green energy structures in Angola, this is still something that has to be well studied and thought through it. However, there are already small dimensions of solar energy structures being developed, for example, but only for particular purposes.

What are the key local advantages of the corporate PPA model which can benefit our clients?

The key local advantage of the corporate PPA model in Angola is energy security and easier access to financing having the corporate PPA as collateral.

What subsidies are applicable to the generation and sale of renewable energy?

This information has not been made public.

Does your country implement a national support scheme with tradable green certificates (such as guarantees of origins)?

Not yet, as green energy has not yet been implemented.

Last modified 9 Feb 2021

Angola

Angola

To the extent corporate PPAs are deployed, how are prices, terms and risks affected?

Do prices tend to be floating or fixed?

According to Article 26 of the Presidential Decree 178/20 of June 25, the tariff structure is applied by the RNT concessionaire and by the distribution companies to users connected to their networks. Along these lines, this same diploma, on its article 27, establishes that the tariff structure reflects the costs to which users give rise, according to the characteristics of consumption and the level of tension to which they are connected, regardless of their social or legal character and the final destination give to the energy consumed. 

Hence, the prices are fixed considering the elements above mentioned.

What term is typically agreed for the PPAs?

There is not a fixed-term for cPPAs it all depends on the activity to be exercised. However, it is important to mention that the tariff regime is, in general terms, in force in a four-year tariff regime. Alongside with that, the tariff period is defined by a specific diploma by the Sector Regulatory Entity, which must be multiannual, as established on Article 28-A of the Presidential Decree 178/20 of June 25.

Are the PPAs take-or-pay or limited volume?

Not applicable.

Are there any other typical risks?

Not applicable.

To the extent corporate PPAs are deployed, in whose favour will the risks typically be balanced?

Volume risk

The risk is born by those who not comply with rule applicable to the specific situation.

Change in law

Usually, when changing legislation, users and distributors are given a period to prepare and adapt to this mentioned change of legislation. Hence, when there is a change in law non complied with, the risk is born by those who have not complied with the rule in place.

Increase / reduction of benefits

Again, similar to the change in law, the risk is born by those who not comply with rule applicable to the specific situation.

Market liberalization (if applicable)

Not applicable.

Credit risk

The risk is born by those who not comply with rule applicable to the specific situation.

Imbalance power risk

The risk is born by those who not comply with rule applicable to the specific situation.

Production profile risk

The risk is born by those who not comply with rule applicable to the specific situation.

Last modified 9 Feb 2021

Angola

Angola

Does your country operate a balancing responsibility scheme?

Not applicable.

If your country operates a balancing responsibility scheme, who is the balancing authority and do the generator and offtaker typically undertake balancing themselves?

Not applicable. 

Last modified 9 Feb 2021

Angola

Angola

What significant transactions/deals have taken place in the last 12-18 months?

Laúca Hydroelectric Power Plant

According to the Government, Laúca Hydroelectric Power Plant (“AH Laúca”) is the largest work in the country today. The Project was commissioned by the Angolan Executive, represented by the Ministry of Energy and Water, and is carried out by ODEBRECHT. COBA and LA MAYER carry out the supervision of the implementation of the project. When AH Laúca is 100% operational, it will produce more than twice as much energy as the other two dams already operating on the Kwanza River. This energy potential will serve 8 million people. AH Laúca will produce 8,643 GWh (gigawatts) of electricity, representing an installed capacity of 2,070 MW (megawatts).

The realization of the project demands great infrastructure support. Because of this, AH Laúca is today a city that is composed by: Leisure area; Sports area; Accommodations; Kitchen and Cafeterias and Medical Center.

AH Laúca is a pole of job and income generation. The project is also committed to providing opportunities for national talent. Today, the enterprise has 8,458 Members. Of these, 8,035 are national, which represents 95% of the entire productive force involved in the execution of the work. The remaining 423 are expatriates, a number that represents 5% of total members.

Through the Acreditar Program, the project offers basic and specific training to AH Laúca Members and also to the residents of the communities surrounding the construction site.

AH Laúca is 86% ahead of Civil Works, 72% ahead of Electromechanical Assembly and 14% in the Energy Transport System. Always overcoming challenges and fulfilling all the goals set with safety, quality and productivity.

2nd Hydroelectric Power Plant of Cambambe and Dam Alignment

With the conclusion of the Cambambe 2nd Power Station and the Dam Raising, it was possible to obtain an additional power of 780MW. This power is helping to reduce the energy supply deficit in the Provinces of Luanda, Kwanza Sul, Malanje, Uige, Kwanza Norte and Bengo.

It will also allow the interconnection of the North-Central Systems with the Benguela Province link, thus reducing production costs and the consumption of diesel for energy production.

More than 10,000 construction posts have been created as part of the temporary work in the rehabilitation, modernization and extension of the hydroelectric complex. The construction owner was GAMEK (Gabinete de Aproveitamento do Médio Kwanza) and the contractor was ODEBRECTH.

Solar village program

The main objective of the Solar Village Programme is electrification, through the installation of autonomous solar photovoltaic systems (isolated) in infrastructures Social, including: Schools; Medical Posts; Police Posts; Administrative Buildings; and, Social Jangos, including Public Lighting Posts.

In the 1st phase of the Programme, awarded to the company Elektra Electricidade e Águas, Lda, 11 localities were selected from 4 Provinces in the country: Bié, Kuando Kubango, Malange and Moxico. This phase has been completed since 2011, with a total of 156,660 Wp of 42 systems and 70 public lighting posts implemented.

In some cases, a system provides electricity to more than one infrastructure. So far, 50 infrastructures have benefited from the electricity supply, namely: 15 schools, 18 medical posts, 1 maternity ward, 1 police station, 1 police station, 9 administrative residences, 1 nurse's residence, 3 administrations.

In the 2nd phase of the Solar Village Programme, four companies were selected for the installation of a total of 75 systems and 160 streetlights.

As part of the 3rd phase of the Solar Village Programme, the project has already started after the Auto de Consignation signed with the Company LTP Energias S.A. The project will benefit the provinces of Kwanza Sul, Cuando Cubango and Lunda Sul, whose aim is to supply electricity to the communities with Solar Photovoltaic Systems of Auto-consumption Kits and Public Photovoltaic Lighting.

It is part of the energy and water sector action plan 2018-2002, to continue the Solar Village Programme and to ensure adequate maintenance of its infrastructure and test a new concept of a 100% solar mini network, based on batteries, to electrify the most isolated municipality headquarters, avoiding fuel logistics.

What transactions/deals are anticipated to come to market in the next 12-18 months?

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Last modified 9 Feb 2021