The two main types of projects for which lenders may be willing to lend to project companies that take the price risk (and, if any, volume risk) for their products are projects with natural resources and « commercial electricity projects » in the electricity market. In particular, the PPP contract provides that the project company provides a certain amount of electrical energy each day; the buyer, on the other hand, is required to make a minimum purchase and to pay a fee, part of which is fixed and partly variable. In the United Kingdom, on the other hand, electricity producers sell their production through a power pool, which then transfers that energy to local distributors who buy on the same exchange. The power pool is managed by the National Grid Company (NGC); Producers offer this company energy on the basis of fixed prices and indicate whether the facility is operational or on hold. The NGC assumes the responsibility of regularly classifying power plants, based primarily on the price of supply, but also on the facility`s ability to respond quickly to NGC`s demand and geographic location. Energy needs are passed on to NGC through regional electricity companies (RECs) that base their purchase prices on local needs. In the British model, producers do not know exactly what price they are receiving for electricity supply. The same goes for RETs, who do not know in advance what price they will pay for the power supply. It is therefore a market model in which prices depend on the ability of supply to meet demand. Pacificorp Power Purchase Contract (AAE) for large power plants (pdf) – Pacificorp`s proposed power purchase contract for power plants with a net capacity of more than 1000 kilowatts – relatively short agreement. Designed in the context of the U.S. regulatory structure. Figure 3.10 shows how the AAE rate is determined and field 3.2 shows an example of agreement on AAEs.
A takeover agreement is generally defined as a contractual agreement by which a third party agrees to acquire all or part of the project and, as a rule, long-term. It is therefore clear that party-taking agreements are of the utmost importance to the structure of a project financing operation. Cash is the king of project financing, and offline agreements are the instruments under which cash flow is generated by the project company. However, on the basis of such a definition, it is clear that there may be projects without offline agreements and we will attempt to describe such cases at the end of this section. a supply contract. B of fuel, under which coal or natural gas are made available for the fuel supply of the plant`s turbines; This type of contract maximizes the financial leverage of the SPV, because one of the cornerstones of project financing is fully updated: the risk is assigned to players who, in each particular case, are in the best position to control it. Finally, it should be noted that, in the case of toll structures, the risks are borne primarily by the toll.