Epc Contracts For Wind Energy Projects - South African Re Ipp Programme - Lessons Learned From Phases 1 And 2 (October 2012) Part 2

Achieved Capacity and Contracted Capacity

Under clause 4.8 of the PPA (save for the Landfill Gas PPA which is discussed in more detail below), if the Achieved Capacity of the Facility on the Commercial Operation Date is less than the Contracted Capacity for the Facility (being the anticipated capacity of the Facility), the Contracted Capacity will be permanently reduced to the Achieved Capacity of the Facility reached as at the Commercial Operation Date. Regardless of any further testing performed, the Seller will not be entitled to increase the installed capacity of the Facility above the new Contracted Capacity at any time in the future for any reason, and accordingly this restriction poses a substantial risk to a project's bankability.