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Power Purchase Contract Template for Nigeria

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Key Requirements PROMPT example:

Power Purchase Contract

"I need a Power Purchase Contract for a 50MW solar power plant in Lagos State, Nigeria, where I'm selling power to the Nigerian Bulk Electricity Trading Plc with commercial operations starting March 2025."

Document background
The Power Purchase Contract is a fundamental document in Nigeria's electricity sector, essential for establishing long-term power supply arrangements between generators and off-takers. This agreement is typically used when independent power producers or utilities seek to sell electricity to bulk traders, distribution companies, or large industrial consumers. The document must comply with Nigerian regulatory requirements, particularly those set by the Nigerian Electricity Regulatory Commission (NERC) and the Electric Power Sector Reform Act 2005. It includes comprehensive provisions for power supply, pricing, technical standards, and operational requirements, while addressing specific challenges in the Nigerian electricity market such as grid stability, payment security, and foreign exchange considerations. The agreement is crucial for project financing and typically forms part of the security package for power project lenders.
Suggested Sections

1. Parties: Identification of the power producer/seller and the buyer/off-taker, including their legal status and registered addresses

2. Background: Context of the agreement, including project overview, facility location, and regulatory framework

3. Definitions and Interpretation: Detailed definitions of technical and legal terms used throughout the agreement

4. Sale and Purchase Obligations: Core obligations of the parties regarding the sale and purchase of electricity

5. Term and Effectiveness: Duration of the agreement, conditions precedent, and effective date

6. Construction and Development: Requirements and timeline for facility construction and commissioning

7. Operation and Maintenance: Standards for facility operation, maintenance requirements, and performance obligations

8. Metering and Testing: Requirements for measuring electricity delivery and testing procedures

9. Billing and Payment: Payment terms, invoicing procedures, and dispute resolution for payments

10. Force Majeure: Definition of force majeure events and their consequences

11. Default and Termination: Events of default, cure periods, and termination rights

12. Liability and Indemnification: Allocation of risks and responsibilities between parties

13. Dispute Resolution: Procedures for resolving disputes, including arbitration provisions

14. Governing Law: Specification of Nigerian law as governing law and relevant jurisdictions

15. Miscellaneous: Standard legal provisions including notices, amendments, and assignments

Optional Sections

1. Grid Connection: Required when the facility needs to connect to the national grid, specifying connection requirements and responsibilities

2. Carbon Credits: Include when parties wish to address the allocation of carbon credits or environmental attributes

3. Local Content: Required when specific Nigerian local content requirements apply to the project

4. Step-in Rights: Include when lenders require rights to take over the project in case of default

5. Insurance: Detailed insurance requirements section when not covered in schedules

6. Security Package: Required when specific performance security or parent company guarantees are needed

7. Change in Law: Detailed provisions for handling regulatory changes when significant regulatory risk exists

Suggested Schedules

1. Technical Specifications: Detailed specifications of the power facility, including capacity and technology

2. Testing and Commissioning Procedures: Detailed procedures for facility testing and commissioning

3. Metering Specifications: Technical requirements for metering equipment and procedures

4. Tariff and Payment Calculations: Detailed formula and methodology for calculating payments

5. Performance Standards: Specific performance requirements and guarantees

6. Interconnection Requirements: Technical specifications for grid connection

7. Form of Performance Security: Template for required performance bonds or guarantees

8. Insurance Requirements: Detailed list of required insurance coverage

9. Environmental and Social Requirements: Environmental and social standards to be maintained

10. Operating Procedures: Detailed procedures for day-to-day operation and maintenance

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions





























































Clauses









































Relevant Industries

Energy & Utilities

Power Generation

Renewable Energy

Industrial Manufacturing

Mining

Oil & Gas

Infrastructure

Public Utilities

Commercial Real Estate

Relevant Teams

Legal

Commercial

Operations

Finance

Risk Management

Regulatory Affairs

Technical Operations

Environmental Compliance

Business Development

Procurement

Project Management

Corporate Strategy

Relevant Roles

Chief Executive Officer

General Counsel

Energy Project Manager

Power Plant Manager

Commercial Director

Chief Financial Officer

Regulatory Compliance Officer

Technical Operations Director

Risk Manager

Contract Manager

Business Development Director

Environmental Compliance Manager

Power Trading Manager

Infrastructure Finance Manager

Legal Counsel

Energy Procurement Manager

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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